Land and Environment Court of New South Wales CITATION : CBD Prestige Holdings P/L v Lake Macquarie CC [2005] NSWLEC 572 APPLICANT CBD Prestige Holdings Pty Limited PARTIES : RESPONDENT Lake Macquarie City Council FILE NUMBER(S) : 11110 of 2004 and 11067 of 2004 CORAM: Bly C KEY ISSUES: Costs - Development Application :- residential subdivisions and housing Environmental Planning and Assessment Act 1979 LEGISLATION CITED: Land and Environment Court Act 1979 Land and Environment Court Practice Direction 1993 Aldi Foods Pty Ltd v Holroyd CC [2005] NSWLEC 338; CASES CITED: Kennedy & Anor v Woollahra MC [2005] NSWLEC 226 DATES OF HEARING: 29/08/2005 DATE OF JUDGMENT: 10/13/2005 APPLICANT Mr J. E. Robson, SC Instructed by: Mr I. Mitchell of Webster O'Halloran & Associates LEGAL REPRESENTATIVES: RESPONDENT Mr G. Newport, barrister Instructed by Mr G. Long of Lake Macquarie City Council JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Bly C 12 October 2005 11067 of 2004 and CBD Prestige Holdings Pty Limited v 11110 of 2004 Lake Macquarie City Council JUDGMENT Introduction 1 On 12 July 2005 the Court handed down its judgement in these matters, dismissing two Class 1 appeals, the first involving a 58 lot residential subdivision and the second involving an 8 dwelling small lot housing development with associated subdivision at Morisset. 2 The respondent council now, by notice of motion seeks the following orders: o That the applicant pay the respondent's costs thrown away as a result of the amendments to the development applications, o That the applicant pay the council's costs of this motion. 3 More particularly, in relation to costs thrown away, the council seeks expenses and costs as follows: o The additional costs of the Court appointed experts, o The additional costs of a drainage expert engaged by council, o The legal costs incurred in case management of the additional work. 4 On this basis the council seeks costs in the amount of $47,000 as follows: o Counsel's costs thrown away - $6,050.00 o Solicitor's costs thrown away - $7,200.00 o Exhibiting amended development applications - $255.00 o Experts' costs thrown away - $33,495.00 5 In response the applicant says that there should be no order for costs in favour of the council, instead an order for costs in favour of the applicant should be made for the costs of the preparation and conduct of the motion. History of applications 6 The essential elements of the history of these applications relevant to the council's costs application are as follows: o The two development applications were lodged with the respondent on 30 January 2004. The appeals were filed on the basis of the deemed refusals on 19 September 2004. o Statements of issues were served by the respondent on 14 October 2004 and amended statements of issues on 22 October 2004. Requested further particulars were provided by the respondent on 11 November 2004. o Court appointed experts were appointed on 10 November 2004 and the proceedings listed for hearing on 17 and 20 December 2004. o On 10 December 2004 meetings were held on the site between all expert witnesses. The subsequent draft town planning and traffic reports made certain recommendations in relation to each of the applications. o On 16 December 2004 the NSW Scientific Committee published its final determination in relation to the Swamp Sclerophyll Forest on Coastal Floodplain ("the committee's final determination"). o On 17 December 2004 the hearing dates (17 and 20 December 2004) were vacated. o On 9 February 2005 the applicant provided the respondent with amended plans for the small lot subdivision. o As required by the Court, on 4 March 2005 the applicant served its expert reports together with amended drawings for the large lot subdivision. o On 9 March 2005 and 16 March 2005 further amended statements of issues were served on the applicant. o On 14 March 2005 the Court directed that the amended plans and amended statements of issues be given to the Court appointed experts who were to report by 30 March 2005 and provide final report by 6 April 2005. Other experts were to provide joint reports by 20 Apr 2005. o Leaving aside the case management hearings, the hearing proper occurred on 12, 13, 16 and 19 May 2005. Council's submissions 7 Regarding the amendments to the plans, the council accepted these without objection on the assumption that costs thrown away would be recouped by a costs order in its favour. 8 As a consequence of the amendments to the proposal and the additional evidence, responses from the Court appointed experts: Dr Clements, Dr Smith, Mr Juradowich and Mr Hensen were required. Mr Jamieson (the council's drainage expert) also responded to the amendments and the additional evidence by the preparation, in conjunction with Mr Engelbrecht (the applicant's drainage expert) a joint report and subsequently another report. Readvertising was also required and later hearing dates were obtained. The associated additional costs would not have been necessary had the applicant provided at the outset details of a proper investigation of the site. 9 The council also submits that additional legal costs were incurred as a consequence of the resulting case management occurring on seven days between December 2004 and May 2005. The matter was listed for hearing at the applicant's insistence on 17 and 21 December 2004 and the vacation of these dates contributed to the need for additional case management together with amendments to the proposal. 10 More generally council accepts the evolutionary process involving case management as referred to in Aldi Foods Pty Limited v Holroyd City Council [2005] NSWLEC 338 ("Aldi"). However the additional costs to the council were unusually high and, in the present circumstances, were unjustified and unreasonable. Also, Relying on the findings of McClellan CJ in Kennedy & Anor v Woollahra Municipal Council [2005] NSWLEC 226 ("Kennedy") the costs resulting from the additional work by the Court appointed experts on the amended plans, were a disadvantage warranting an order for costs. Similarly the additional work by the council's drainage engineer should be compensated. Applicant's submissions 11 In rejecting the council's notice of motion the applicant based its submissions on the contention that the additional costs in the preparation of the applications for hearing resulted from: o The timing of the committee's final determination. o Amendments to the applications as a consequence of the views of the Court appointed expert witnesses. o The late unavailability of Dr Goldingay. 12 Otherwise the applications proceeded in an orderly and timely fashion in consideration of the size and complexity of the site and its surroundings and the development and environmental issues involved. The Court was to eventually deal with eleven discrete issues. Whilst the appeals were ultimately dismissed there were a number of findings in favour of the applications that would otherwise have met the primary objectives of the zones and were generally worthy of approval. 13 More generally the entire process, taking into account amended plans, the length and complexity of the issues, the preparation of the range of expert reports and the response to new information reflects an appropriate evolutionary process and appropriate case management techniques. 14 The applicant rejects the council's contention that the amount of additional work carried out as a consequence of the amendments to the applications was unusually high. The changes to the plans were relatively minor and were responsive to suggestions made by the experts. Instead it was the complexity of the issues and the manner in which the evidence was marshalled that was the more relevant consideration. Court's findings 15 The power to award costs is to be found in s 69 the Land and Environment Court Act 1979 ("the Act"). Part 16 r 4 of the Land and Environment Court Rules ("the Court's rules") is to control the unfettered costs discretion conferred by s 69(2) of the Act and enables the making of an order for the payment of costs where, in the circumstances of a particular case, it would be fair and reasonable to do so. This does not affect the general principle that costs are not normally awarded in planning/merit appeals. 16 Hence the question to be answered in this case is whether in the circumstances of this case it would be fair and reasonable to award the council's its costs as described in its notice of motion being costs thrown away as a result of the amendments to the development applications. 17 In Aldi, Talbot J in referring to the evolutionary process involving amended plans said (at 14): The generation of a succession of amended plans as a consequence of an evolutionary process involving management techniques recently adopted by the Court and the appointment of a Court Appointed Expert (CAE) is not necessarily of itself a matter for adverse comment in respect of reasonableness in the context of a costs application. 18 Shortly after the decision in Aldi, McClellan CJ in Kennedy said (at 3, 4 and 5): The Court has recently changed its general approach to amended plans and will, provided the interests of the council and any objectors are adequately protected, generally allow a party to bring forward amended plans for consideration in the appeal. However, apart from ensuring that the hearing is fair it is also necessary to recognise that particularly, when a court expert is appointed the council may incur costs beyond those which it should reasonably be expected to bear in consideration of the appeal. The Court will be concerned in every case to ensure that where a council could be disadvantaged in this way by an acceptance of amended plans an appropriate order for costs is made. 19 I agree that this is a case that reflects the evolutionary process as evidenced by the timely and relatively minor amendments to the plans as a result of recommendations contained in expert reports not previously available. In this context and in my opinion the application of the principle in Aldi to the facts in this case does not reveal any unreasonableness that might support the imposition of a costs order. 20 The decision of McClellan CJ deals with amended plans and complements the decision of Talbot J. Relevantly applied it asks two questions: o Whether there are any costs associated with a Court appointed expert beyond those, which the council should be reasonably expected to bear. o Whether the council is disadvantaged by accepting amended plans to the extent that an order for costs is warranted. 21 In relation to these questions I have been persuaded by the submissions made on behalf of the applicant. As for the first question I am satisfied that the costs resulting from the amended plans in this case should continue to be shared between the parties. I have reached this conclusion taking into account that the changes were responsive to expert opinion, were not in themselves excessive or unreasonable and were aimed at resolving identified concerns. This approach is consistent with that supported by the Court in allowing the consideration of amended plans. This is of course subject to fairness and there was no suggestion that this was not the case. 22 I also agree that, taking into account: the plethora and complexity of the issues; the number of experts and their breadth of expertise, and despite the need for case management and the extended timeframe, these matters do not indicate an unreasonableness that in this case supports a costs application. 23 As for the second question it is plain that, in a costs sense both parties were, disadvantaged by the amended plans. However I do not accept that the council was so disadvantaged as to warrant an order for costs. Again I have reached this conclusion in the light of the Court's approach in allowing amended plans with a view to achieving an appropriate outcome. In this context I have also considered the quantum of costs sought by the council. These seem to be high but this may be because of the number of issues and areas of expertise involved. Nevertheless, in my view the quantum of costs is largely irrelevant; instead the motion needs to be determined in terms of principles and what is, in that context, fair and reasonable. 24 As reflected in the decision of the Court, despite dismissing the appeals, the proposals were generally worthy of approval and could not be described as ambit claims. With the benefit of hindsight the further investigation of the proposals by way of amended plans and expert evidence was appropriate. 25 In all of the circumstances I have decided that it would not be fair and reasonable to support council's notice of motion. 26 Having been successful in its defence of the council's notice of motion seeking costs I agree with the applicant's submission that it be compensated for the expense to which it has been put, by reason of the proceedings. Such costs are of course separate to those incurred in relation to the power conferred by s 69 of the Land and Environment Court Act 1979 and are unfettered by Part 16 r 4 of the Court's rules. Provisional orders 27 The provisional orders of the Court (subject to the concurrence of the Chief Judge) are: 1) The notice of motion dated 22 July 2005 comprising an application for the applicant to pay the respondent's costs as a result of the amendments to the development applications is dismissed. 2) The applicant's application for an order for the costs of the preparation and conduct of motion is upheld, the respondent to pay such costs in the sum agreed, or failing agreement, as assessed. 28 In accordance with cl 10 of the Land and Environment Court Practice Direction 1993 (Directions 1 to 15), the parties are to advise the Registrar within fourteen (14) days whether they wish to make further submissions to the Chief Judge in relation to this matter. ___________________ T A Bly Commissioner of the Court ljr 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.