Land and Environment Court of New South Wales CITATION : Rockdale City Council v Rougalas [2005] NSWLEC 525 APPLICANT Rockdale City Council FIRST RESPONDENT PARTIES : Theodoras Rougalas SECOND RESPONDENT Chrissanthi Rougalas FILE NUMBER(S) : 40624 of 2004 CORAM: Cowdroy J KEY ISSUES: Costs :- respondents substantially satisfied the claim of the applicant - quantum of costs - abortive hearings due to illness - party/party costs - impecuniosity Environmental Planning and Assessment Act 1979 s 80(1)(a), s 96 Land and Environment Court Act 1979 s 69(2) LEGISLATION CITED: Land and Environment Court Rules 1996 Pt 15 r 7 Rockdale Local Environmental Plan 2000 Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72; CASES CITED: 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) 103 LGERA 254; Tzavellas v Canterbury City Council and Anor (1999) 105 LGERA 262 DATES OF HEARING: 05/08/2005 EX TEMPORE JUDGMENT DATE : 08/05/2005 APPLICANT K Gerathy (solicitor) SOLICITORS LEGAL REPRESENTATIVES: Abbott Tout RESPONDENT H Nicolaou (agent) JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Cowdroy J 5 August 2005 40624 of 2004 ROCKDALE CITY COUNCIL Applicant THEODORAS ROUGALAS First Respondent CHRISSANTHI ROUGALAS Second Respondent JUDGMENT 1 Cowdroy J: By notice of motion dated 1 April 2005 Rockdale City Council ("the Council") seeks an order that the respondents pay its costs of these proceedings and this motion. The application is supported by the affidavits of Rajiv Shankar sworn 21 April 2005 and 22 July 2005, William Chick sworn 3 June 2004, and Albert Dymock White sworn 25 June 2004 and 21 April 2005. Background to the costs application 2 The respondents are the registered proprietors of land contained in folio identifier 320/11398, being lot 320 in deposited plan 11398 known as 62 Hollywood Street, Monterey ("the land"). The land is subject to the Rockdale Local Environmental Plan 2000 ("the LEP"). Pursuant to the LEP the land is zoned 2(a) – Low Density Residential zone. 3 On 22 November 2000 the Council granted development consent No 1211/00 ("the consent") subject to conditions for the construction of "an awning and glass enclosure" pursuant to s 80(1)(A) of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"). The plans for which approval was given showed a glass enclosure with a flat roof ("the structure") to be erected on the rear portion of the land. The terms of the approval included specific conditions concerning the location of the structure and materials to be used in its construction. The conditions of the consent relevantly contained the following requirements: 5. The building being located in the position shown on the approved plans. Failure to observe this requirement may result in demolition of non-complying development. 6. Sideline and overhang measurements on the plans being strictly adhered to. 7. Further alterations and/or additions to the subject building shall not be undertaken without first obtaining approval. This includes brick reskinning alterations to windows etc. Failure to comply with the condition may result in legal action being taken against you for unauthorised work. … 28. The roofing material being not-reflective. 29. All external glazing having a maximum reflectivity of 20%. 4 Subsequent to the grant of the consent the respondents erected the structure on their land. As constructed it did not correspond to the plans in several respects. Instead of a flat roof as shown in the plans, a pitched roof was constructed. There was no setback from the brick fence, as shown in the plans. The area of the structure, which was shown as 48 m2 on the plans, had been increased by 20 m2. Lastly the material placed upon the pitched roof was reflective. The reflection from the roof was the subject of complaints to the Council by the respondents' neighbour, Mr White. 5 As a consequence of the deviation from the approved plans the Council's solicitors wrote to the respondents on 2 June 2003. The letter requested an undertaking from the respondents that the discrepancies in the constructed premises be altered to conform with the approved plans. A response was received from the first respondent who indicated that he did not intend to make any of the changes requested. Subsequently on 20 June 2003 the respondents agreed to allow Council officers to enter the premises for carrying out an inspection to determine whether the structure complied with the consent. 6 On 2 February 2004 the Council's solicitors wrote to the respondents advising that the Council maintained its concern that the structure was erected without the requisite approval and was causing impact upon the adjoining properties, especially in relation to run-off and glare. The letter indicated that legal proceedings would be commenced unless the building was demolished by 5 March 2004. By a letter of the same date the respondents replied claiming that the Council had approved the drainage and rejecting the assertion that the structure's roof caused excessive glare. The letter continued:- The outbuilding is an inoffensive, aesthetic pleasing shelter that adds character and value to the premises and the aforementioned issues dealt with both in your letter and ours do not constitute grounds for demolition. 7 These proceedings were commenced on 27 May 2004. The commencement was notified by facsimile to Mr Homer Nicolaou who represents the respondents in Court today as their agent. 8 By letter dated 12 July 2004 the Council's solicitors wrote suggesting a "without prejudice" offer to meet with a view to attempting to resolve the difference and avoid a court hearing. The letter indicated that the Council would require demolition of the existing pitched roof with gable ends and construction of a flat Colorbond steel roof as shown in the plans for which approval had been given. 9 The proceedings returned to the Court for mention on 12 July 2004. There was no appearance by the respondents on that day due to the illness of the second respondent. The proceedings were adjourned until 19 July 2004. 10 On 19 July 2004 the respondents informed the Court that amended plans would be submitted to the Council on that day. Accordingly the Court directed that the matter be stood over for further call-over on 30 August 2004. 11 By letter dated 22 July 2004 the Council's solicitors requested that the amended plans be submitted to the Council as a matter of urgency by way of an application under s 96 of the EP&A Act ("a s 96 application"). The letter indicated that if the plans were not received by 23 July 2004 an approach would be made to the Court to have the matter re-listed to obtain formal directions. 12 On 27 July 2004 the respondents submitted to the Council a building certificate application with a plan. On 8 August 2004 the respondents submitted a s 96 application. 13 Mr Rajib Shankar, a development assessment officer employed by the Council, made an assessment of the s 96 application. On 10 September 2004 he wrote to the respondents advising that the plans submitted failed to comply with Single Unit Development Control Plan No 56 and the Council's Stormwater Design Code. The letter indicated the matters which required rectification which included a reduction of the area by 18.5 m2, a set back of 0.9 m from Chuter Street, the substitution of the existing roof for one made of a non-reflective material and alterations to the stormwater drainage. 14 On 22 September 2004 the respondents wrote to the Council agreeing to reduce the excess of 18.5 m2 and requesting a period of two months to resolve the reflection problem. The letter suggested that the stormwater and gutter had been found adequate by Mr Shankar. By letter dated 27 September 2004 Mr Shankar responded, stating that the extension of time would not be granted and that no comment upon the adequacy of the stormwater drainage had been made. 15 By letter dated 5 October 2004 Mr Shankar again wrote to the respondents stating that the s 96 application would be refused unless the information requested in the Council's letter of 10 September 2004 was supplied. 16 On 11 October 2004 the Court by consent adjourned the proceedings until 15 November 2004. 17 On 14 October 2004 the respondents submitted a plan to the Council. However that plan was the same as that which had been lodged with the Council on 27 July 2004. By letter dated 28 October 2004 the respondents were advised that a further plan would be required. 18 On 3 November 2004 a new plan was lodged ("the amended plan"). The amended plan showed a reduction in the size of the structure and a change in the roof form and materials. The s 96 application including the amended plan was approved by the Council on 3 November 2004. 19 The matter came before the Court again on 15 November 2004 and was adjourned until 2 February 2005 to allow the respondents time to complete the works in accordance with the amended plan. On 2 February 2005 the matter was adjourned until 2 March 2005 to allow more time to enable the respondents to complete the work. 20 On 2 March 2005 the Council indicated that it was satisfied that the work had been completed. The matter was adjourned to 21 March 2005 so the parties could attempt to reach agreement on the issue of costs. By letter dated 10 March 2005 the Council's solicitors made an offer of settlement of costs to the respondents. The respondents did not accept this offer. On 21 March 2005 when the matter returned to the Court, the respondent did not appear and the matter was adjourned until 1 April 2005. 21 On 1 April 2005 there was again no appearance by the respondents. The Court on that occasion made directions in relation to the filing and serving of evidence for the costs hearing. 22 The costs hearing was set down for 3 June 2005. On 31 May 2005 a letter was received by the Council from the respondents enclosing a medical certificate indicating that the first respondent was unable to attend court for medical reasons. The Council did not press for the hearing and on 3 June 2005 the proceedings were adjourned and listed for hearing on 22 July 2005. On 21 July 2005 the respondents again sought an adjournment on the ground of ill health and on 22 July 2005 the proceedings were adjourned until the hearing before the Court today. Application for costs 23 The current application is made under Part 15 r 7 of the Land and Environment Court Rules 1996 ("the LEC Rules"). Part 15 r 7 provides: The Court may order the respondent to pay the costs of the proceedings where a respondent satisfies or caused to be satisfied the claim of the applicant after the proceedings have been commenced. 24 The Council also relies upon the general discretion of the Court provided by s 69(2) of the Land and Environment Court Act 1979 ("the LEC Act"). Findings 25 Pursuant to s 69(1) of the LEC Act, the Court has unfettered discretion to award costs, subject only to the requirement that the power be exercised judicially. There are numerous authorities dealing with the Court's power to award costs: see for example Oshlack v Richmond River Council (1998) 193 CLR 72 and Save the Showground for Sydney Inc v Minister for Urban Affairs and Planning (1998) 103 LGERA 254. 26 The Council was justified in instituting these proceedings. The structure erected by the respondents purportedly pursuant to the consent bears little resemblance to the structure for which approval was granted as shown on the plans. The Council went to considerable lengths to avoid legal proceedings as evidenced by the correspondence between the Council or its solicitors and the respondents. The respondents did not act upon the requests of the Council. 27 The respondents have filed no defence nor any affidavits in the proceedings. The Court infers that the s 96 application was made solely in consequence of the fact that the proceedings had been commenced and were likely to result in orders against the respondents, possibly for the demolition of the structure. 28 The Court is satisfied that by the submission of the s 96 application and the subsequent amendments to the structure, the respondents have satisfied the Council's claim in these proceedings. Accordingly Pt 15 r 7 of the LEC Rules applies. The Council is to be regarded as a successful party and, absent disentitling conduct, is entitled to costs: see Oshlack; see also Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 at 624. 29 On the basis of the above, the Court finds that costs should be awarded in favour of the Council. The question remains as to the quantum of costs to be awarded. The current practice of the Court particularly in matters of this kind where the costs are not substantial, is to attempt to assess the costs in order to avoid the parties being engaged in further litigation. 30 An award of costs is compensatory and not punitive: see Latoudis v Casey (1990) 170 CLR 534 at 543 and Oshlack at 75, 97. The Council provided evidence of a letter of offer to settle the costs made to the respondents. The letter itemised costs in the amount of $10,363.70. These were assessed on a solicitor/client basis, which will need to be appropriately discounted to arrive at party/party costs. Ms Gerathy, who appears for the Council, has indicated and the Court accepts that party/party costs would normally be approximately two thirds of the amount of solicitor/client costs. 31 The itemised costs included costs incurred after 3 November 2004, on which date the Council approved the s 96 application. The dispute between the respondents and the Council effectively came to an end on that day. Whilst it may have been prudent for the Council to continue with these proceedings to ensure that the s 96 application was acted upon, it was not strictly necessary to do so. The Court considers that any costs incurred thereafter should not be awarded against the respondents. 32 According to the schedule of costs contained in the letter of offer to the respondents, the costs incurred prior to 3 November 2004 amount to approximately $9,300. A one-third discount should be applied to this figure to arrive at an approximation of party/party costs. On this basis the Court considers that a figure of $6000 is an appropriate amount for which the respondents should be liable. 33 An application is also made by the Council for its costs of the hearing today and of the two previous aborted costs hearings. The two previous hearings were aborted because of the illness of the first respondent. The Council assesses its costs of the two previous hearings and of today at $2,700, but indicates that it would agree to $1,000. 34 There has been no challenge to the medical certificate of the first respondent nor any suggestion that the first respondent's illness was not bona fide. In these circumstances the Court considers that each party should bear its own costs incurred by reason of the adjournments. 35 The hearing today, however, has been necessary, and the Court considers that the Council is entitled to the costs of this hearing. The hearing commenced at 2 pm, and will conclude at 4.15 pm. The Court considers that the appropriate award for today, on a party/party basis, is $750. 36 The respondents have submitted that they are impecunious. The Court has been informed that the first respondent is a building tradesman and that work is currently scarce. No other evidence of impecuniosity is offered. In Tzavellas v Canterbury City Council and Anor (1999) 105 LGERA 262 Bignold J determined that impecuniosity was no reason for the Court to decline to make an order for costs. However his Honour observed that it may be appropriate to require payment by instalments or otherwise postpone the payment of costs where a party is impecunious. The Court respectfully adopts his Honour's decision and considers that in the circumstances of the present case, the order for payment of costs should be postponed for a period for six months. The Court will grant leave to the respondents to apply for a further postponement at the end of that period in case it is necessary. 37 Therefore the Court makes the following orders: 1. The respondents are to pay the Council's costs of these proceedings, assessed in the sum of $6,750. 2. The payment of costs is to be suspended for a period of six months from today's date. 3. Liberty to apply is granted to the respondents to apply for a further extension of time in which to pay the costs. 4. The exhibits 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.