National Australia Properties Pty Limited v Willoughby Council [2004] NSWLEC 758

Land and Environment Court of New South Wales

CITATION : National Australia Properties Pty Limited v Willoughby Council [2004] NSWLEC 758 PARTIES : National Australia Properties Pty Ltd (Appl/Resp on costs motion) Willoughby Council (Resp/Appl on costs motion) FILE NUMBER(S) : 10759 of 2004 CORAM: McClellan CJ KEY ISSUES: Costs :- Fair and reasonable costs Special circumstances LEGISLATION CITED: CASES CITED: DATES OF HEARING: 7 December 2004 EX TEMPORE 12/07/2004 JUDGMENT DATE :

T Smith (Appl/resp on motion in person)

LEGAL REPRESENTATIVES: H Irish (Barrister - Resp/Appl on motion) Mallesons Stephen Jaques (Sol - Resp)

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

McCLELLAN J

TUESDAY 7 DECEMBER 2004

10759/04 NATIONAL AUSTRALIAN PROPERTIES PTY LIMITED v WILLOUGHBY CITY COUNCIL

JUDGMENT 1 HIS HONOUR: This is an application by the Council for an order for costs in circumstances where a class one appeal has been withdrawn by the applicant. 2 The development application to which the appeal relates was for residential development. The appeal was lodged with the Court approximately 12 months after the development application had been lodged with the Council. The Council had repeatedly said during the course of that period of time that the information which it had from the applicant was not sufficient to enable an appropriate assessment to be conducted. 3 Be that as it may, matters were crystallised when the appeal was lodged. Negotiations between the parties continued and the Council identified a number of problems with the application. The applicant sought to respond to some of those problems and amended plans were prepared. One of the fundamental impediments to the proposal was a claim by the Council that development on part of the land was prohibited. 4 At one stage, the applicant believed the Council might relent and, as I understand it, an amending LEP may have been made to overcome the difficulty, however, this did not ultimately come to pass. At various stages, the applicant says that it was encouraged to believe by experts advising it that, having regard to the communications which had been received from the Council, there was some reasonable prospect of success in the appeal. However, it says that its hopes were dashed upon reading a report from the Council on 7 November. On 8 November instructions were given to the applicant's solicitors to withdraw the appeal. 5 The applicant had come to the conclusion at that stage that the appeal was most unlikely to succeed and, accordingly, it would be wasting money if it pursued it further. At that point, the Court had arranged for a court expert to be appointed, but no costs had been incurred by that person. The matter was also fixed for hearing but I am told that the Council has not incurred any expense by reason of the fact that the matter was so fixed. 6 The Council seeks an order for costs, submitting that although the normal order in class one proceedings is that an order will not be made, it is fair and reasonable in the circumstances of this case for the Council to receive an order in the sum of $11,000. It is said that that sum represents a compromise from the costs which the Council has actually incurred. It is also said that an order should be made because the Council has been put to the expense of managing the appeal and engaging in consultation with the applicant designed to see whether a common position could be achieved. The Council relies upon an understanding by Mr Stafford, a solicitor, of the motivation for the withdrawal of the appeal, which he says was communicated to him by Mr McKee, formerly a solicitor for the applicant. There is evidence before me that Mr McKee made the comment and that he allegedly did in circumstances which were privileged. Although further discussions have taken place between Mr Stafford and Mr McKee, no objection has been taken to my receiving the material into evidence, Mr Smith has given sworn evidence of the circumstances of the withdrawal today. 7 In that sworn evidence, which I accept, he makes plain that the fundamental motivation for the company withdrawing the appeal was that he came to the conclusion, having regard to the advice which he had received and the prospective evidence from the Council, that there were little prospects of success. Even if he had discussions with real estate agents about alternative developments, I do not believe that they played any significant part in his withdrawal of the appeal. 8 In these circumstances, this case is nothing other than the normal case where an applicant withdraws an appeal after forming a realistic appreciation of its prospects of success. There is, to my mind, no reason why the ordinary position adopted by the Court in relation to class one matters should not prevail. Although the rules of the Court have been changed to provide that an order for costs will be made where the Court is persuaded that such an order would be fair and reasonable, this does not mean that the ordinary rules in contested litigation apply. Costs do not follow the event. 9 If an applicant, after mature consideration of the prospects of success, decides to withdraw an appeal, in my opinion, it would be inappropriate to provide an order for costs. If the application upon mature consideration is believed to be unlikely to succeed, applicants should be encouraged to withdraw, thereby saving both public and private costs. The Court time would be saved and the Council's costs of further preparation and prosecution of defence to the appeal are saved. It would be contrary to the proper expression of the public interest to impose an order for costs upon a party which takes a commonsense position. 10 The outcome would be likely to be different in circumstances where the Council has incurred costs in preparation for the hearing which will be thrown away or, and in particular, where counsel may have been retained and an obligation to pay counsel's fees exists. However, those circumstances do not arise in relation to the present matter and, accordingly, I am satisfied that no order for costs should be made. 11 Accordingly, I allow the applicant to discontinue and there will be no order as to costs. **********