> Land and Environment Court of New South Wales CITATION : Randwick City Council v Athens Holdings Pty Limited and Anor [2003] NSWLEC 87 APPLICANT Randwick City Council FIRST RESPONDENT PARTIES : Athens Holdings Pty Limited (ACN 001 166 552) SECOND RESPONDENT Peta Athens FILE NUMBER(S) : 40135 of 2003 CORAM: Pain J KEY ISSUES: Costs :- Class 4 proceedings - whether costs should be awarded - subject matter of one order sought removed before hearing - whether Pt 15 r 7 of Court Rules applied - parties settled in relation to second order sought after all evidence and submissions were heard - whether Court could look at merits of case in deciding costs issue Environmental Planning and Assessment Act 1979 s 121H LEGISLATION CITED: Land and Environment Court Act 1979 s 69 Land and Environment Court Rules 1996 Pt 15 r 7 Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194; CASES CITED: Joanou v Randwick City Council (1999) 105 LGERA 237; Re the Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997)186 CLR 622 DATES OF HEARING: 12/02/2003, written submissions - 13, 19, 21/02/2003, DATE OF JUDGMENT: 02/26/2003 APPLICANT Mr AJJ Thompson (barrister) SOLICITORS Bowen & Gerathy LEGAL REPRESENTATIVES: RESPONDENTS Mr S Levitt (solicitor) SOLICITORS Selby Levitt JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 40135 of 2003 Pain J 26 February 2003 RANDWICK CITY COUNCIL Applicant v ATHENS HOLDINGS PTY LIMITED (ACN 001 166 552) First Respondent PETA ATHENS Second Respondent Judgment Introduction 1. Randwick City Council commenced Class 4 proceedings seeking the following in its Amended Class 4 Application: 1. An order that the Respondent remove from the property at 40 Coogee Bay Road, Randwick all signs which have not been granted development consent. 2. That the Respondents be restrained from erecting or causing to be erected any sign at or about 40 Coogee Bay Road, Randwick without first obtaining development consent. 3. Costs 4. Further or other Orders. 2. I should note the words "or causing to be erected" in Prayer 2 were added by the Amended Class 4 Application which was handed up by the Council's counsel at the outset of the hearing on 12 February 2003. I will briefly set out the history of the matter before me before going into the arguments presented in relation to the costs issue. 3. An application was made by the Council for interlocutory orders in similar terms to those sought in the Amended Class 4 Application on 7 February 2003 and the matter came before me as Duty Judge. On 7 February, a Friday, I granted an application for an adjournment to the Respondents and listed the matter for hearing on 12 February 2003. Prior to the matter recommencing on Wednesday 12 February, the signs which were the subject of Prayer 1 were apparently removed. I was informed that was on or about 10 February 2003. Consequently only Prayers 2 and 3 were sought on the day of hearing, that is on 12 February, Prayer 1 at that stage being no longer relevant. 4. I also note the words "where required" were proposed to be added to the end of Prayer 2 by the Council before lunchtime in the course of hearing on 12 February. After this was considered over lunch by Mr Levitt, the Respondents' solicitor, an alternative form of words which formed the basis of consent orders were proposed shortly after lunch and the parties settled the substantive matter on the basis of the consent order which stated that: The Respondents be restrained from erecting of causing to be erected any sign at or about 40 Coogee Bay Road, Randwick without first obtaining development consent if under current planning instruments and controls, development consent for the erection of such sign be required. 5. I should note this agreement was reached at virtually the conclusion of the hearing and that all of the evidence and all the submissions were completed before me. Consent orders having been arrived at, the award of costs is now the only issue. 6. I must consider competing claims for costs. The Council is seeking its costs of the application and the Respondents are also seeking their costs in the matter. Council's submissions 7. The Council submitted that Pt 15 r 7 of the Land and Environment Court Rules 1996 (the Court Rules) should apply to the first order sought in the Amended Class 4 Application. This 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. 8. The Council argued the proceedings were commenced on Friday 7 February 2003 and adjourned for hearing until 12 February 2003, during which time the signs the subject of Prayer 1 were removed. Accordingly the Council's claim has been largely satisfied and costs should follow the event in the sense that Pt 15 r 7 ought to apply. 9. In relation to the second order sought, the Council submitted that the Respondents resisted making consent orders until after lunch on the day of the hearing and at virtually the hearing's end. The consent orders agreed were in essentially the form of the order sought by the Council, as amended prior to lunch on 12 February. Costs should be paid by the Respondents in relation to Prayer 2 also. 10. The Council also submitted I should put from my mind evidence in the matter in deciding costs issues. In particular the decision of Bignold J in Joanou v Randwick City Council (1999) 105 LGERA 237 was said to be applicable. That case concerned a challenge to the validity of a development consent in which the Council offered to conclude a matter at the outset and its offer was not accepted. His Honour referred to the matter of Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194 in which Hill J set down numerous propositions referred to by Bignold J in his decision in Joanou. One proposition adopted by Bignold J is that: it will rarely, if ever, be appropriate, where there has been no trial on the merits, for the Court determining how the costs of the proceedings should be borne to endeavour to determine for itself the case of the merits 11. It was noted that in Joanou Bignold J refused to form any view as to the merits of the matter and it was said by the Council's counsel this should apply in this case. I do not, however, accept that submission given that I heard all of the argument in the matter and the settlement came at virtually the end of the entire hearing. 12. The Council also disputes there was an offer to enter into consent orders by the Respondents at the outset of the hearing on 12 February 2003 as the Respondents' solicitor has submitted, but rather referred to the course of negotiations over the day of hearing on 12 February which eventually resulted in the parties agreeing to consent orders. Respondents' arguments 13. The Respondents submitted that Pt 15 r 7 of the Court Rules did not apply. Firstly, because the Council's Amended Application Class 4 sought an order restraining the Respondents which, it was submitted, was not competent for the Court to order because the form of the order was too broad. Secondly, the Respondents' dismantling of the signs at the premises after proceedings were commenced was not due to the Council's Class 4 proceedings but rather was in conformity with a s 121H notice issued under the Environmental Planning and Assessment Act 1979 (the EP&A Act) by the Council to one of the Respondents seeking removal of the signs. I should note, and I will return to this, there was no evidence of this matter but rather this was a submission made from the bar table by the Respondents' solicitor. 14. The alternative orders sought by the Council were only communicated to the Respondents before lunch on 12 February, the day of hearing, at virtually the end of all the evidence and submissions. The Respondents agreed to a form of words which simply embraced their position taken at the hearing all along, that is, that the Respondents should be subject to no greater restraint than any other rate payer in Randwick. The Respondents accordingly entered into consent orders because this form of order had been proposed by the Respondents at the outset of proceedings as an order that would be consented to. 15. It was said the Council had the responsibility to draft appropriate orders, not the Respondents, and the agreement to enter into the consent orders was effectively a discontinuance of the Council's application to obtain interlocutory relief from this Court. 16. Further, the Respondents' solicitor submitted the Council acted prematurely. Class 4 proceedings were commenced before the time for compliance with the s 121H notice had expired. The Respondents submitted that the primary reason for bringing the proceedings was that the signs were politically embarrassing for the Council's mayor. 17. There was no evidence presented by the Council of objection from any neighbours in relation to the signs which had been removed. An affidavit relied on by the Respondents, dated 11 February 2003, of Mrs O'Loughlin, a neighbour, stated that the signs that had previously been at the premises were not offensive. 18. Joanou should be distinguished on its facts because the situation was different here given that the hearing was virtually at an end when settlement was reached. 19. In conclusion it was said that in the present case there had been an agreement reached which effectively resulted in discontinuance which was essentially by the Council not the Respondents. Accordingly, the Respondents are entitled to their costs. Findings 20. I have formed the view that I should deal with the costs for Prayer 1 separately to costs for Prayer 2. Prayer 1 21. The Respondents have chosen to remove the signs the subject of Order 1 after these proceedings were commenced and an adjournment was granted, but before any argument was heard by the Court. This was submitted by the Respondents' solicitor to be in response to the Council's notice issued under s 121H of the EP&A Act, not because of court proceedings. 22. There was no evidence presented from the Respondents' solicitor to justify that submission which he made from the bar table. I should note that Mr Levitt stated in his written submissions that the signs were taken down before the court proceedings were commenced, although I think his oral submissions were slightly to the contrary. I simply note my record of the proceedings is that I was informed the signs were demolished after the commencement of proceedings but before the hearing on 12 February and that demolition was on or about 10 February 2003. There is no direct evidence of when the signs were removed apart from being informed from the bar table of the date. Mrs O'Loughlin's affidavit does not specify when the signs were removed, only that when she took photos on 10 February 2003 the signs were no longer there. 23. It seems to me that the inference is therefore open that the signs were removed because of these court proceedings and this would normally entitle the Council to its costs pursuant to Pt 15 r 7. 24. The Respondents' argument, that the order sought in Prayer 1 was too broad, I do not accept in relation to that part of the Council's Class 4 application. I therefore think it is appropriate that Council have its costs in relation to Prayer 1. Prayer 2 25. I will now deal with the costs order in relation to the second order sought by the Council, which sought to restrain the future erection of signs at the relevant premises. 26. I will deal firstly with the competing submissions received from the respective parties about whether or not Mr Levitt, the Respondents' solicitor, made an offer to enter into consent orders at the commencement of the hearing on 12 February. My understanding is as follows. Mr Levitt did state after Mr Thompson's (counsel for the Council) opening address that Prayer 2 was too broad, ultra vires and that it purported to treat his client differently to other Randwick residents and that his clients could have no grounds to object to an order which did not discriminate against the Respondents. 27. His submission was not couched as a formal offer to enter into consent orders, nor were draft consent orders provided to Mr Thompson or the Court at that stage. As I understood Mr Levitt's words they were more in the nature of legal submissions. I do not think that Mr Levitt made a firm offer to settle at that point and I do not draw any adverse conclusion in relation to the Council not settling the matter at that point. 28. I do not consider this to be a substantive issue in my determination on the costs sought in relation to Prayer 2 in any event. Obviously if there had been a settlement earlier in the day on 12 February there may have been less costs at issue between the parties, but as the parties were already present in Court and had presumably prepared for argument that day there would still have been costs incurred even if an early settlement had been achieved. 29. Where parties are granted consent orders in circumstances where the merits of the case are not yet known and the parties have acted reasonably, a likely order would be that each party pay its own costs and that is essentially an application of the oft-quoted case of Re the Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997)186 CLR 622 at 624 - 5. At 625 McHugh J stated: …If it appears that both 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 or its further prosecution became futile, the proper exercise of the costs discretion will usually mean the court will make no order as to the cost of the proceedings. 30. However, because I did hear all the evidence and submissions in the matter prior to the consent orders being arrived at, I am able to form a preliminary view on some of the issues in the matter sufficiently to take these into account in considering costs. As I have already stated, I do not consider Joanou applies in the circumstances here for that reason. 31. Prayer 2 as originally sought by the Council was too broad in my view. I would have been unlikely to have made the order as drafted in the original or Amended Class 4 Application filed in Court on the morning of 12 February 2003. While the modification to the order as occurred later in the day on 12 February may appear minimal, I consider the change was important, as did the Respondents. I accept the Respondents' submission that had a differently worded order been sought by the Council a hearing may have been unnecessary. It is also unlikely that I would have awarded the interlocutory relief to the Council due to the lack of, amongst other things, sufficient demonstrated harm to found an interlocutory injunction. 32. I note in the Council's oral and written submissions that it is stated that the content of the signs was not the basis for its case in seeking Prayer 2, particularly given that the signs had been removed. If the primary basis on which an interlocutory order was sought was the breach of the planning laws, I do not consider the legal submissions of the Council were so evidently conclusive on the legal issues that it would definitely have prevailed at a final hearing. Given that I was being asked to consider this on an interlocutory basis, there was an absence of harm being caused by any signs likely to be erected which would have justified relief on an interlocutory basis, in my view. 33. In these circumstances, given the broad discretion I have under s 69 of the Land and Environment Court Act 1979 to consider matters in relation to costs, I think it is appropriate the Respondents have their costs in relation to Prayer 2 paid by the Council. Orders 34. The Court orders that: 1. The Respondents pay the Applicant's costs of the proceedings related to Prayer 1 of the original Class 4 Application filed. 2. The Applicant pay the Respondents' costs of the proceedings related to Prayer 2 of the Amended Class 4 Application. 3. 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. 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