Land and Environment Court of New South Wales CITATION : Cranky Rock Road Action Group Inc v Cowra Shire Council and CPC Land and Peter Grant Crampton & Brian John Pattinson [2006] NSWLEC 159 APPLICANT Cranky Rock Road Action Group Inc PARTIES : FIRST RESPONDENT Cowra Shire Council THIRD RESPONDENT Peter Grant Crampton & Brian John Pattinson FILE NUMBER(S) : 40106 of 2005 CORAM: Pain J KEY ISSUES: Costs :- whether discretion should be exercised not to award costs against unsuccessful incorporated association - whether public interest issues raised Cowra Development Control Plan – Guidelines for Rural Development Cowra Local Environmental Plan 1990 LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s78A Environmental Planning and Assessment Regulation 2000, cl 50; sch 1 Land and Environment Court Act 1979 s69(2) Cranky Rock Road Action Group Inc v Cowra Shire Council and Ors [2005] NSWLEC 674; Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No 2) (2004) 136 LGERA 365; Latoudis v Casey (1990) 170 CLR 534; CASES CITED: Oshlack v Richmond River Shire Council (1998) 193 CLR 72; Oshlack v Richmond River Shire Council (1994) 82 LGERA 236; Plumb v Penrith City Council (2003) 126 LGERA 109 ; Showground For Sydney Inc v Minister for Urban Affairs and Planning (1998) 105 LGERA 254; Williams v Barrick Australia [2004] NSWLEC 306 DATES OF HEARING: 31/03/2006 DATE OF JUDGMENT: 04/04/2006 APPLICANT Mr P Clay (Barrister) SOLICITORS Environmental Defender's Office FIRST RESPONDENT LEGAL REPRESENTATIVES: Ms H Irish (Barrister) SOLICITORS Minter Ellison THIRD RESPONDENT Mr I Hemmings (Barrister) SOLICITORS W.G. McNally & Co Solicitors JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Pain J 4 April 2006 40106 of 2005 Cranky Rock Road Action Group Inc v Cowra Shire Council and Peter Grant Crampton and Brian John Pattinson JUDGMENT ON COSTS 1 Her Honour: There are three notices of motion before the Court in relation to the costs order that should be made in these proceedings, which were determined by Bignold J on 9 December 2005 (Cranky Rock Road Action Group Inc v Cowra Shire Council and Ors [2005] NSWLEC 674). The Applicant argued that there should be no order as to costs, while the First and Third Respondents argued that the Applicant should pay their costs of the proceedings and of the motions. The motions were heard concurrently. The Second Respondent played no part in these proceedings. 2 The Applicant is an incorporated association formed on 2 November 2004, with its objectives stated on the relevant form as being to act as an advocate for farmers with local government in relation to property development. The Council granted consent on 13 September 2004 to a development application lodged on behalf of the Third Respondent in relation to his property known as lot 105 Deposited Plan 750370 at No 249 Oak Road Canowindra to subdivide that land into 28 lots of various sizes ranging between six and 29 hectares. 3 In the substantive proceedings, commenced on 17 May 2005, the grounds argued by the Applicant were as follows: (i) that the Development Application was not accompanied by a statement of environmental effects ("SEE") contrary to the requirements of the Environmental Planning and Assessment Act 1979 , ("the EP&A Act") s78A, and cl 50 and Schedule 1 of the Environmental Planning and Assessment Regulation 2000 ; and (ii) in granting the development consent, the Council had failed to take into consideration various material considerations including cl 14(4) of the Cowra Local Environmental Plan 1990, cl 2.1(c) of Cowra Development Control Plan – Guidelines for Rural Development, impacts of the proposed development and public submissions relating to this. 4 The Applicant was unsuccessful on both grounds. The matter took one hearing day before his Honour. 5 The evidence relied on by the Applicant included affidavits of William Robert Wanless, president of the Applicant group, sworn 17 March 2006; Robert Watt, a member of the group, sworn 21 March 2006; and Ilona Claire Millar, solicitor for the Applicant in these proceedings, sworn 15 December 2005. The affidavit of Robert Wanless states that the principal activities of the Group are: To comment on development applications for rural/residential subdivision in the Cowra Shire; To act as an advocate for farmers who are likely to experience land use conflict as a consequence of rural/residential subdivisions; and To promote the development of local environmental plans that meet the objectives of sustainable agriculture and create viable farming communities. The Council relied on the affidavit of its General Manager, James Anthony Roncon, sworn 29 March 2006, which refers to the submissions Council received from the Applicant in relation to development applications for rural/residential subdivisions in the Cowra Shire. 6 The evidence shows that since the Applicant's incorporation, the Council has received seven submissions by way of comment on three development applications for rural/residential subdivisions in the Cowra Shire. The Applicant did not make submissions to the Council in relation to a proposed amendment to the LEP. Draft LEP Amendment No 14 aimed to control escalating levels of inappropriate "rural-residential development" by implementing a minimum lot size for such development as an interim measure to allow the Council to undertake more comprehensive strategic planning and community consultation. The draft LEP provides for a minimum 300ha standard for new rural residential subdivisions and dwelling-houses. A report of the Council's Director of Environmental Services dated 14 June 2005, recommending that Council adopt the draft LEP Amendment No 14, contains a summary of submissions which shows that several individual members of the Applicant lodged submissions on the Council's draft LEP Amendment No 14. Additional correspondence between Mr Wanless and the Department of Infrastructure, Planning and Natural Resources ("DIPNR") about progress on the making of the draft LEP Amendment No 14 was also tendered by the Applicant. Applicant's Submissions 7 The Applicant relied on findings in relation to costs in public interest litigation in Oshlack v Richmond River Shire Council (1998) 193 CLR 72, Plumb v Penrith City Council (2003) 126 LGERA 109 and Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No 2) (2004) 136 LGERA 365. Significant public interest issues raised 8 The Applicant submitted that there was general public interest demonstrated by these proceedings, which should preclude costs being awarded against it. The Applicant had argued that a SEE is an important element in the decision-making processes of consent authorities, and in allowing public participation in these processes. Therefore it is a requisite part of any development application. This case raised issues about public processes in planning, namely, whether the public is entitled to be informed, as part of the notification processes of a development application, by a statement of environmental effects. This is a broad public interest question not limited to the Applicant or the Council in these proceedings. 9 The Applicant also argued that the case concerned the enforcement of public law obligations. It sought to argue that the Council did not require, and the applicant for the development application the subject of these proceedings did not comply with, an obligation to provide a SEE with the development application. 10 The Applicant submitted the argument about the SEE was a novel and important point for the purposes of the requirement for special circumstances set out at [15] in Engadine. As a result of the argument raised, the Court has made an important decision about planning processes. That the judgment is adverse to the Applicant's arguments is irrelevant. The important issue is the analysis of the law that was required to have been undertaken because of the novel arguments raised by the Applicants. Issue affects the wider community 11 The Applicant also submitted that relative to the size of the community surrounding the area the subject of these proceedings, the development application attracted broad local interest, and was not limited to the neighbours immediately surrounding the relevant land. 12 The Applicant also submitted that its members had no pecuniary interest in these proceedings. The oral evidence of Mr Wanless regarding the potential for impact of rural residential development on the value of adjacent farming land and the limitation it may impose on farm expansion does not imply that a pecuniary interest of the Applicant was at stake in these proceedings. 13 Further, the co-incidence between the personal interests of various members of the Applicant group, and the broader public interest, does not disqualify the Applicant from having a favourable costs outcome. It will often be the case that with the avenues open to public interest groups to begin litigation in this court there will be co-incidence between public and personal interests. Letters from Mr Wanless to the Council and the Director General of DIPNR, illustrate the group's broad public interests by reflecting concerns about the planning processes in the Shire, sound planning ideals, and past planning issues. Council's Submissions 14 The Council relied on the substantive judgment of Bignold J in these proceedings to argue that the failure to lodge a SEE was a technical breach of the EP&A Act, and did not result in any declarative or injunctive relief. The Council argued that the Applicant failed in respect of the whole of its claim for relief and it was therefore entitled to have its costs paid by the Applicant. Significant public interest issue not raised 15 The case did not raise an issue which was novel and significant. Only one of the alleged grounds of invalidity of the development consent is asserted to be so by the Applicant. This related to there being no SEE accompanying the development application. The Council submitted that Bignold J wondered at [67]-[68] of his judgment whether this was even the relevant question. The Council argued that it is not surprising this argument had not been raised previously, because as pointed out by Bignold J at [64] of his judgment …it appears to be both logical and legitimate to distinguish between (i) a development application (including information that it must contain) and (ii) documents which must accompany a development application. The Applicant also challenged unsuccessfully the development consent on the second ground raised. The findings of the Court in these proceedings do not resolve an important issue of law, and even if they did, this is not enough to deprive Council of its costs. Issue affects the wider community 16 The Applicant's members are a small group of people in the immediate and general vicinity of the development in question. The Council submitted that the Applicant failed to demonstrate that it represents anything more than a local interest, confined to eight farming families. Its interest is confined to issues relating to the use of farming land in the Canowindra area of the Cowra Shire, and specifically, to conflicts in land use that may arise by placing rural and rural-residential zones alongside each other. Although the Applicant has made submissions on three other development applications in the locality, it did not make any submissions on the draft LEP Amendment 14. 17 The Council also submitted that the proceedings involved private gains to the litigants. 18 Furthermore, the Applicant has not claimed financial hardship. To the contrary, its record of financial affairs suggests it will be able to pay its debts as and when they fall due. 19 Finally, it was submitted that broad planning issues should not be pursued by litigating particular development applications. There are other forums in which to achieve changes in this regard, including lobbying to the Council or the Minister, which should be pursued over litigation. Third Respondent's submissions 20 Relying on the substantive judgment of Bignold J in these proceedings it is clear that the Applicant had no prospect of success in the proceedings so that the issue was not finely balanced. As pointed out by his Honour at [67], the Applicant could have approached the questions it put before the Court differently. Significant public interest issues raised 21 The Third Respondent also argued that based on the test set out in Plumb, the Applicant has failed to meet threshold standards for an award of costs on the basis of the public interest. The Applicant has a clear private interest in the matter. It achieved no success in the substantive proceedings, and there was no contribution to the law as a result of the arguments put forth by them during the substantive proceedings. At [79], Bignold J stated that the Applicant's arguments at best, made a "very modest contribution" to the area of law in question. Issue affects the wider community 22 There is no evidence of the public interest nature of the group, involving as it does only eight families. A combination of numerous private interests cannot be totalled up to achieve a public interest concern. Finding 23 Under s 69(2) of the Land and Environment Court Act 1979 costs may be awarded in accordance with the exercise of the discretion of the Court. That discretion while unfettered must be exercised judicially. A successful party in Class 4 proceedings is generally entitled to its costs as costs are compensatory: Latoudis v Casey (1990) 170 CLR 534. There is no disentitling conduct alleged on the part of either of the Respondents. Accordingly, unless the Applicant can satisfy the Court that it satisfies the public interest criterion recognised in Oshlack and other cases, and is therefore a valid reason for a judge to exercise his or her discretion not to award costs, the usual order that the Applicant pay the First and Third Respondents' costs would be made. 24 In Oshlack v Richmond River Council (1998) 193 CLR 72, the High Court found that the Land and Environment Court was entitled, when awarding costs, to consider whether the litigation brought was in the public interest and upheld Stein J's decision at first instance to do so. It was recognised that the Court had unfettered discretion to award costs. Kirby J said at 121 that: …Judicial descriptions of a statutory discretion to awards costs as "absolute and unfettered", "unqualified", "uncontrolled" or "unconfined" cannot be taken at face value. Because the discretion is typically conferred upon a court or tribunal obliged to act judicially, fetters, confinement and controls of a sort are provided by law… In the same case, Gaudron and Gummow JJ stated at 80, in relation to public interest litigation, that: …The "traditional rule" that, despite the general discretion as to costs being "absolute and unfettered", costs should follow the event of the litigation "grew up in an era of private litigation". There is a need to distinguish applications to enforce "public law obligations" which arise under environmental laws lest the relaxation of standing by s 123 have little significance…the characterisation of proceedings as "public interest litigation" with the "prime motivation" being the upholding of "the public interest and the rule of law" may be a factor which contributes to a finding of "special circumstances" but is not, of itself, enough to constitute special circumstances warranting departure from the "usual rule"; something more is required… 25 The High Court did not identify the features of public interest litigation but did refer to the six matters referred to by Stein J in arriving at his decision that the proceedings were public interest in nature as being matters of relevance, at [20]. 26 In Plumb, Pearlman J considered Oshlack and set out eight factors to consider as follows: (a) the discretion conferred upon the Court under s 69(2) is wide and unconfined; (b) it is a discretion which must be exercised judicially, that is to say, not by reference to irrelevant or extraneous considerations, but upon facts connected with or leading up to the litigation; (c) ordinarily, costs follow the event; that is, costs are awarded to the successful party as compensation for the costs it has incurred; (d) but the principle that costs follow the event is not a fixed or absolute rule; (e) the Court must take into account all relevant factors, which, in proceedings that have been brought pursuant to the open standing provision contained in s 123 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"), may include factors which have a public interest nature; (f) the consideration of all relevant factors may lead to a finding that special circumstances exist for departing from the general rule that costs follow the event and may lead to a consequent determination that there be no order for costs; (g) public interest factors are not determinative factors; they are merely relevant factors to consider; (h) nor is it necessary that the Court characterise the litigation as "public interest litigation". What is required is the consideration of all relevant factors, including factors of a public interest nature. 27 Plumb involved a case where the respondent council sought costs from the applicant following the failure of a challenge to a development consent it had granted to the third respondent. The applicant had argued that the development consent was invalid on the grounds that it was made in relation to a threatened ecological community and lacked the requisite species impact statement, public exhibition and Director-General's concurrence. It succeeded in establishing that Cumberland Plain Woodland (CPW) was present on the site. However it failed to establish that the development application would affect this. Justice Pearlman dismissed the application for costs by the successful party. Her Honour held at [11] that there was a high level of public interest in the proposed development and a general public interest in the protection of a threatened ecological community. It was further held at [12] that the applicant had no personal interest in the proceedings. The applicant was successful in proving the existence of CPW on the site, and hence bringing the application was justified. The proceedings raised novel matters regarding the construction of the EP&A Act and the proper interpretation and application of the eight-part test. At [26] it was further held that the basis of the challenge was arguable and not specious, and had a real chance of success. 28 The factors identified in Plumb were applied by Lloyd J in Engadine. In that case his Honour held that the proceedings were public interest litigation and that there were special circumstances which justified exercising his discretion not to award costs to the successful party because the matter raised novel and significant issues. 29 The relevant matters in Plumb were again considered by Pearlman J in Save the Showground For Sydney Inc v Minister for Urban Affairs and Planning (1998) 105 LGERA 254, where her Honour added the finding that a "shopping list" approach should be avoided and the factors which Stein J (as he then was) took into account in Oshlack v Richmond River Shire Council (1994) 82 LGERA 236 are not to be elevated to a fixed list. Application of these factors has been adopted in other cases such as Williams v Barrick Australia [2004] NSWLEC 306. 30 Ultimately each case must be considered on its own facts to determine if the Court should exercise its discretion in a particular way in light of the guidance provided in the cases I have referred to. Was a significant public interest issue raised? 31 The principal ground relied on by the Applicant in argument as being both novel and significant, is that related to the "No SEE ground". This ground was argued unsuccessfully before Bignold J. There is no doubt the matter is novel as Bignold J identified the parties' submissions to that effect at [46]. Novelty of itself is not sufficient to ground a claim of public interest nor did the Applicant argue that. The basis on which the matter was argued before his Honour was that the parties agreed that there was a breach of the EP&A Act because of the failure to provide a SEE. The issue was whether this rendered the development application in question invalid. His Honour concluded that it did not. I do not consider that the Applicant's case was hopeless and I note that the Respondents conceded that the case was arguable. The issue concerns the conduct of the planning process under the EP&A Act and raises a fundamental point about its operation, in my view and I accept the Applicant's submissions in this regard. I consider the issues raised were concerned with the enforcement of public law in relation to the processes undertaken for the approval of development applications under the EP&A Act. The fact that Bignold J held decisively against the Applicant does not diminish the significance of the issue in my view. 32 The second issue raised was also unsuccessful before Bignold J. The Applicant has not argued that that issue raised novel and significant issues and clearly the usual costs order would apply in relation to that issue. Are the proceedings "public interest" in nature? 33 The Applicant argued its objectives were, inter alia, to change the Cowra LEP to stop ad hoc rural-residential subdivision occurring and these issues were of wide community interest in the Cowra Shire. 34 The report of the Council's Director of Environmental Services dated 14 June 2005, tendered in evidence, states that ad hoc rural-residential development poses a problem in Cowra Shire because it results in the following: · Loss and fragmentation of agricultural land with its replacement with rural-residential land-use. · Increasing conflicts between rural activities and rural-residential dwellers over traditional agricultural activities, e.g. ploughing, stock movement, water access, pesticide application etc. · Inadequate and costly servicing of rural subdivisions, including roads, water supply, rural lands protection, emergency services, soil conservation services, ordinance and weeds functions, subsidized school bus service, etc which are subsidized by the wider general community. · Loss of the rural landscape, its scenic appeal and associated cultural values. · Environmental degradation through loss of habitat, pollution and erosion. · Decrease in active land management raising problems, particularly with absentee landholders, with hazards such as bushfire management, noxious weeds controls and domestic animals affecting stock and native fauna. · A range of social problems such as isolation from health, education and community services as well as isolation from areas of employment. · A negative influence on agricultural productivity, which in turn leads to less employment opportunities in the agricultural sector and impacts upon reliant agri-businesses. · Land price increases beyond farmers' means as values for rural-residential development potential not agricultural value. 35 The report of 14 June 2005 identifies that these concerns were brought to the attention of the Council by Shire residents and various government departments in mid to late 2004. 36 It is also clear that the Applicant group, and its members in their own right, undertook activity related to the objective referred to at [33]. The Applicant wrote to the Council in relation to several individual development applications and individual members made submissions in relation to the draft LEP Amendment No 14. A letter from Jennifer Westacott, the then Director-General of the Department of Infrastructure, Planning and Natural Resources, dated 11 November 2005 refers to a meeting which occurred between herself and the members of the group about the issue of ad hoc rural-residential subdivision. 37 The Respondents were at pains to distinguish between the activities conducted in the name of the Applicant group and the individual members of the group. For example, the Applicant group did not make a submission to the Council about draft LEP Amendment No 14 but several individual members did. I consider it is artificial to separate the activities of a non-profit volunteer community association from that of its individual members, where those members are pursuing the same objectives as the group of which they are a member, when assessing the level of activity undertaken by the group. Clearly the activities of the individual members are also relevant to consider when considering the group's activities. 38 It is clear that the interests of the members of the group could be in part private in that changes to neighbouring farms through rural-residential subdivisions could have potential impact on the value of their properties, and could have potential impact on their ability to expand their farms. Presumably they could also benefit financially from an ability to subdivide their properties for rural-residential subdivision which they are prepared to forgo in supporting draft LEP Amendment No 14 which, if implemented, would prohibit rural-residential development of the type at issue in these proceedings. The affidavit evidence of Mr Wanless and Mr Watt is that they have no pecuniary interest in the outcome of these proceedings. 39 It is clear that ad hoc rural-residential subdivision in the Cowra Shire presents a number of problems which are of public concern in terms of the wider Cowra community. It is not material here that it is an issue which also potentially affects private property interests. The Applicant incorporated in November 2004, in the period which the report of the Council's Director, Environmental Services identified as the time when concerns about ad hoc rural-residential subdivisions were raised with the Council. The Applicant and its members have undertaken several activities in pursuit of the Applicant's objectives, including writing submissions and letters to local and state government departments and attending meetings over a period of several months, as well as commencing these proceedings in May 2005. I consider this is litigation concerning a significant public interest issue and is public interest in nature. There are special circumstances justifying a variation to the usual costs order. 40 Given that two grounds were pursued and one is not argued to be novel and significant I consider that the appropriate award of costs is that the Applicants pay half the First and Third Respondents' costs of the hearing. Each party should pay its own costs of the costs hearing on 31 March 2006. Orders 41 The Court makes the following orders: 1. The Applicant must pay half of the First and Third Respondents' costs in these proceedings. 2. Each party is to pay its costs of the costs hearing on 31 March 2006. 3. Exhibits are to 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.