Land and Environment Court of New South Wales CITATION : Telstra Corporation Limited v Holroyd City Council [2006] NSWLEC 711 APPLICANT PARTIES : Telstra Corporation Limited RESPONDENT Holroyd City Council FILE NUMBER(S) : 10262 of 2006 CORAM: Pain J KEY ISSUES: Costs :- Class 1 - whether fair and reasonable to order costs - where consent orders entered into Environmental Planning and Assessment Act 1979 s 82A, 97 LEGISLATION CITED: Land and Environment Court Act 1979 s 69 Land and Environment Court Rules 1996 Aldi Foods Pty Limited v Holroyd City Council [2005] NSWLEC 338; Grant v Kiama Municipal Council [2006] NSWLEC 70; Hunter Development Brokerage v Pty Ltd v Cessnock City Council 63 NSWLR 124; CASES CITED: Latoudis v Casey 170 CLR 534; Raiti v Leichhardt Municipal Council (1990) 72 LGRA 333 ; Telstra Corporation Ltd v Holroyd City Council [2006] NSWLEC 527; Telstra Corporation Limited v Hornsby Shire Council [2006] NSWLEC 133 DATES OF HEARING: 9/11/2006 DATE OF JUDGMENT: 11/10/2006 APPLICANT Mr A Galasso SC SOLICITORS LEGAL REPRESENTATIVES: Mallesons Stephens Jacques RESPONDENT Mr A Pickles (Barrister) SOLICITORS Abbott Tout JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Pain J 10 November 2006 10262 of 2006 Telstra Corporation Limited v Holroyd City Council JUDGMENT 1 Her Honour: By Notice of Motion dated 23 August 2006, the Applicant sought orders that the Council pay the Applicant's costs of these proceedings and costs of the motion. This is a Class 1 appeal under s 97(1) of the Environmental Planning and Assessment Act 1979 (the "EP&A Act"). Commissioner Moore delivered judgment on 10 August 2006; Telstra Corporation Ltd v Holroyd City Council [2006] NSWLEC 527 upholding the appeal on the basis of the parties' consent orders. Background 2 The proceedings related to the proposed installation of a mobile telecommunications facility, involving the replacement of an existing RTA camera pole at Coleman Street and the Great Western Highway, Mays Hill. The development application was lodged with the Respondent Council on 25 October 2004. The application was refused by the Council on 5 April 2005, for reasons of visual impact and concerns about electromagnetic emissions (EME) impacts. On 8 February 2006, the Applicant lodged with the Council an application for review pursuant to s 82A of the EP&A Act. On 24 March 2006, Preston J delivered judgment in Telstra Corporation Limited v Hornsby Shire Council [2006] NSWLEC 133 ("Telstra v Hornsby"), which primarily concerned the issue of EME. Class 1 proceedings were commenced in this Court on 3 April 2006. The statement of issues filed by the Council on 22 May 2006 included EME impacts, in that the Holroyd Interim Telecommunications Code was not complied with and visual impacts. The s 82A review was refused on 6 June 2006 on the ground that, inter alia, the application did not comply with the Council's EME standards in the Holroyd Interim Telecommunications Code. On 11 July 2006, after receiving the preliminary report of the court appointed expert on EME impacts, Dr Black, the Council determined to enter into consent orders with the Applicant. On 17 July 2006, the proceedings were before Preston J for case management on the issue of whether Dr Black should prepare a final report. Preston J ordered that it should be completed. At the consent order hearing before Commissioner Moore an objector gave oral evidence and the final report of Dr Black was relied on in Court. Evidence 3 The Applicant relied on the affidavit of Marc Nathan Jaku, solicitor for the Applicant, sworn 19 October 2006, and its accompanying exhibits, being the s 82A application and the final report of the court appointed expert, Dr David Black. The affidavit provided evidence of the history of the proceedings and attached various documents relating to this. 4 The Council relied on two affidavits of Lesley Finn, the solicitor for the Council, sworn 1 November 2006 and 6 November 2006. The affidavit of 1 November 2006 attached correspondence between the Applicant and Council, and the affidavit of 6 November 2006 attached a transcript of the mention before Preston J on 17 July 2006. Applicant's Submissions 5 The Applicant submitted it is fair and reasonable that the Council pay the Applicant's costs because the Council pursued the s 97 appeal despite the result in Telstra v Hornsby which it should have known would mean that the EME issue was without foundation. It also refused to reconsider the grant of development consent under the s 82A review despite Telstra v Hornsby. The Council raised issues of visual impact which were later abandoned, and maintained the EME issue which was without foundation, incurring unnecessary legal costs. The agreement to enter into consent orders was far too late. 6 The Applicant further submitted that the Council should have abandoned its position before the preliminary report of the court appointed expert, Dr Black, was received by the Council. On 18 May 2006, the Applicant's solicitors directed the Council to the decision in Telstra v Hornsby, suggesting that the Council change its position on the s 82A review to reflect the current law relating to EME impacts. The Applicant submitted the Council was put on notice that since the maximum predicted EME levels in the subject appeal were less than those in Telstra v Hornsby, it could not maintain the issue of EME impacts. Notwithstanding the fact it was put on notice of the Telstra v Hornsby decision, the Council continued to maintain its position, and a court appointed expert was retained. Although the Council agreed to consent orders after Dr Black's preliminary report was received, its conduct still resulted in the Applicant unnecessarily incurring legal costs to come to court in relation to the issue of the consent orders. The hearing took one day, and the fact that it ultimately ended with consent orders does not resolve the question of costs. 7 The Applicant considered that subparagraphs (d)(i), (f) and (g) at [15] of Grant v Kiama Municipal Council [2006] NSWLEC 70, which refer, respectively, to unreasonable delay in making proper concessions, proceedings defended with poor prospects of success and where a party contests an appeal not on a rational basis, applied. Council's Submissions 8 The Council submitted that it did not act unfairly or unreasonably in the proceedings. The relevant conduct to consider was not the s 82A review but its conduct in the s 97 appeal which resulted in consent orders. The two processes involve separate statutory powers being exercised. The s 82A review process is distinct from the current proceedings as it involved the Applicant paying a separate fee to the Council unrelated to the development application. Therefore, the Council's conduct in the s 82A review has no bearing on the s 97 appeal to the Court and is not "conduct in the proceedings" which can be considered in relation to whether costs can be imposed. 9 The Council's decision to enter into consent orders is the only relevant conduct in the s 97 appeal. The Council acted expeditiously in entering into the consent orders only a few days after receiving Dr Black's preliminary report. This was not unreasonable conduct that would warrant a costs order against it. 10 The Council submitted that the circumstances were unlike those in Raiti v Leichhardt Municipal Council (1990) 72 LGRA 333 or Telstra v Hornsby. The councils in those cases fully defended the proceedings without adequate evidence and the circumstances here are quite different. 11 The Council also argued that the decision in Telstra v Hornsby is not determinative of this case as it involved different land in a different municipality. The EME issue raised by the council in Telstra v Hornsby was general in nature, whereas in the present proceedings, the Council raised specific issues related to non-compliance with its interim Code. Whether or not the interim Code was incorrect should have no bearing on costs. The fact that the Council's Code may have had inappropriate controls was not adjudicated in the Court and the Council was entitled to reject an application for development on the basis of non-compliance with the Code. When it did receive the preliminary report of Dr Black it promptly decided to enter into consent orders. 12 The Council argued, in relation to the Applicant's reliance on subparagraphs (d), (f) and (g) at [15] in Grant v Kiama, that these do not apply because the Council did not unreasonably delay in making concessions but entered into consent orders shortly after it received Dr Black's report, it did not continue to conduct proceedings with little chance of success, and it did not proceed on an irrational basis. The Council had developed a Code which it believed the Applicant did not comply with. On receiving advice that the policy was flawed the Council resolved not to pursue it. In relation to visual impacts, no substantial costs were incurred in relation to this as no expert was appointed. The Council acted appropriately in deciding not to pursue that issue and entered into consent orders. Finding 13 Section 69(2)(a) of the Land and Environment Court Act 1979 (the "Court Act") provides that costs are in the discretion of the Court. As these are Class 1 proceedings, Pt 16 r 4(2) of the Land and Environment Court Rules 1996 (the "Court Rules") also apply. This provides that in Class 1 proceedings: No order for the payment of costs will be made in proceedings to which this Rule applies unless the Court considers that the making of a costs order is, in the circumstances of the particular case, fair and reasonable . 14 At [14], Grant refers to Talbot J's finding in Aldi Foods Pty Limited v Holroyd City Council [2005] NSWLEC 338 at [5], where he stated: The Rules make it plain that the approach to an application for an order for costs in class 1 proceedings is fundamentally unchanged from the historical position to the extent that the underlying principle is that there will generally be no order as to costs. Accordingly, unless it is in the circumstances of the particular case otherwise fair and reasonable, the Court will approach the exercise of its discretion on the basis that parties are to remain confident they may commence or defend proceedings without the onerous threat of incurring liability for costs other than their own, even if they are not the successful party. In other words costs will not be awarded in the proceedings referred to in Part 16, rule 4 unless it is fair and reasonable to depart from the underlying assumption in the circumstances of the particular case. Reasonableness is to be determined according to the ordinary sense of the word. The award for costs has to be fair as well as reasonable. Thus not only must it be reasonable for costs to be awarded but it must also be just and equitable. 15 This approach was confirmed recently in the Court of Appeal in Hunter Development Brokerage Pty Ltd v Cessnock City Council 63 NSWLR 124. In that judgment, Baston JA reiterated that costs are to be decided on a case by case basis, at the discretion of the judge. He held at [50] that: …in relation to (Pt 16 r 4), the preferable approach is to treat the power granted to the Court to depart from the general principle as one to be exercised in relation to a particular case, dependent upon the conduct of those proceedings. The rule itself does not distinguish categories of Class 1 proceedings: rather it provides a general approach subject to the Court otherwise ordering "in the circumstances of the particular case". This language provides an indication that a general alternative approach was not intended to be adopted for particular categories of cases within Class 1, 2 or 3. 16 The circumstances identified in Grant v Kiama at [15] are a useful guide to situations where in a particular case costs have been awarded where it is fair and reasonable to do so. Those situations are not described in the judgment as categories. They continue as a useful reference in costs matters. 17 When considering costs the Court must focus on the conduct of the parties in the proceedings. I agree with the Council's submissions that here, the relevant proceedings are the s 97 appeal, and not the Council's determination of the s 82A review. Whether the Council behaved reasonably or not in how it dealt with the s 82A review is not material and I draw no conclusions in that regard. 18 In the appeal proceedings, the Council was entitled to apply the Holroyd Interim Telecommunications Code. This was described in the preliminary report of the court appointed expert, Dr Black, as stricter than the relevant Australian EME standard. The Council moved quickly to agree to consent orders and raised before Preston J whether further expense in relation to the court appointed expert Dr Black should be incurred. He held the final report should be finalised and available for the consent orders hearing as there were numerous objectors to the development application who had raised concerns on this issue. In these circumstances I do not consider the Council delayed unreasonably in making proper concessions and agreed appropriately to consent orders when it knew it had poor prospects of success in these proceedings. Nor can it be said that it acted on an irrational basis in terms of its behaviour in the appeal. 19 Telstra v Hornsby required the Court to consider the issue of EME impacts broadly and ultimately Preston J held that the concerns raised in that case on that issue were irrational and lacked foundation. While it can be seen as having broad application at a general level, in this case the Council had its own interim Code which it had applied and obviously the appeal concerned a different facility in a different location to that in Telstra v Hornsby. The Council agreed that the court appointed expert should be Dr Black, the same expert as was retained in Telstra v Hornsby. On receipt of his preliminary report it became clear to the Council that he considered the Council's Code was much stricter than the Australian Commonwealth Standard RPS3. The Council resolved not to pursue the appeal shortly thereafter. Given that there were numerous objectors who had raised concerns on the EME issue, as recognised by Preston J in the case management hearing, and the Council had an interim Code in place, this behaviour is not unreasonable. 20 No additional expense appears to have been incurred unreasonably in relation to visual impact because the consent orders were entered into. I agree that this case is unlike the circumstances in Raiti and Telstra v Hornsby. 21 Costs are only to be awarded under Pt 16 r 4(2) if it is fair and reasonable to do so. The circumstances do not justify a conclusion that the award of costs in the Applicant's favour would be fair and reasonable. It follows that I do not consider the Applicant's notice of motion should succeed nor should it be awarded its costs of the motion. Orders 22 The Court makes the following orders: 1. The Applicant's Notice of Motion dated 23 August 2006 is dismissed. 2. 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.