> Land and Environment Court of New South Wales CITATION : Woollahra Municipal Council v Ferella [2003] NSWLEC 118 APPLICANT Woollahra Municipal Council PARTIES : RESPONDENT Angelo Ferella FILE NUMBER(S) : 40424 of 2003 CORAM: Cowdroy J KEY ISSUES: Costs :- ex parte application for urgent interlocutory relief - proceedings settled - assessment of circumstances justifying award of costs against respondent LEGISLATION CITED: Land and Environment Court Act 1979 s 69 Latoudis v Casey (1990) 170 CLR 534; CASES CITED: Ohn v Walton (1995) 36 NSWLR 77; Oshlack v Richmond River Council (1998) 193 CLR 72; Re The Minister for Immigration and Ethnic Affairs v The Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 DATES OF HEARING: 24/04/2003 DATE OF JUDGMENT: 05/30/2003 APPLICANT Mr M. Connell (Solicitor) SOLICITORS Michell Sillar Attorneys RESPONDENT LEGAL REPRESENTATIVES: Mr G. George (Barrister) SOLICITORS Sachs Gerace Lawyers JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 40424 of 2003 Cowdroy J 30/05/2003 Woollahra Municipal Council Applicant v Angelo Ferella Respondent Judgment Facts 1 The applicant ("the council") seeks an order pursuant to s 69 of the Land and Environment Court Act 1979 ("the Court Act") that the respondent pay the council's costs of its class 4 application and notice of motion filed 15 April 2003 for urgent ex parte interlocutory relief. 2 The council sought orders restraining the respondent from carrying out construction works on Lot 2 in Deposited Plan 389502 known as 1 Wingadal Place Point Piper ("the site") otherwise than in accordance with consent number 179/1998 ("the consent") and two construction certificates. The council granted the consent on 6 October 1998 and issued the construction certificates on 13 January 2003 and 19 February 2003. 3 In support of its application council relied upon the evidence from Mr Brett Daintry, council's Manager of Compliance and Mr Terry Coyne, the Project Manager for the development of an adjoining property known as 2 Wingadal Place Point Piper. Mr Daintry testified that the respondent breached the consent by over excavation of the site. Mr Coyne testified that the removal of support from 2 Wingadal Place Point Piper exposed the adjoining land to the risk of collapse. A letter from Taylor Thomson Whitting Pty Ltd, engineers, dated 15 April 2003 (incorrectly dated 15 April 2002) was tendered which confirmed that material had been excavated from the site and that the piles to the adjacent shoring wall had not been designed for such excavation. Such letter advised that the excavation to the site should be back filled immediately to avoid the collapse of the retained soil. Upon such evidence the Court was satisfied that a prima facie case was established, and the Court granted a restraining order on 15 April 2003. 4 The parties' engineers thereafter discussed the methods by which the works could be made to conform to the consent and construction certificates. The council and the respondent arrived at an agreed solution and orders were made by consent on 16 April 2003. Such orders required the respondent to reinstate immediately soil to the eastern and western boundaries of the site and to carry out other work under the supervision of a professional engineer. 5 Accordingly the only remaining issue for resolution is the question of costs. The council submits that it was clearly justified in instituting the proceedings and that it should be compensated for its costs. The respondent submits that each party should bear its own costs. The respondent says that the site is difficult, sloping and required excavation "to permit construction by it of retaining walls, a lift shaft, foundations and columns at level 1 to support a suspended level 2 slab". It is submitted that the sand was not sufficiently stable to make the site safe and that it was necessary to bench the site to allow a rig access to the site. The respondent further submits that the council's action was premature and that it did not intend to breach any consent or over excavate the site. Findings 6 The Court is granted a wide discretion to award costs by virtue of s 69 of the Court Act. The only restraint upon the exercise of the power is that such power must be exercised judicially: see Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72 per McHugh J at p 96. 7 The guiding principle to be followed when parties have resolved their differences, except as to costs, was stated by McHugh J in Re The Minister for Immigration and Ethnic Affairs v The Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 at p 624 as follows:- In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties ( Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201). To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action ( Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201). Accordingly the Court is entitled to review the events which lead to the application. 8 The evidence established that council harboured concerns that the excavation of the site might not be carried out in an appropriate manner. It also established that there were substantial departures from the plans and specifications. The excavation had exceeded, by a significant degree, the maximum prescribed excavation depth. In addition, the Court heard evidence of the likely collapse of a portion of the driveway of the adjoining property unless immediate action was taken. 9 The submissions of the respondent did not dispute that the maximum depth of excavation had been exceeded. Instead they provided reasons for departures from the approved plans. 10 The orders made by consent establish that the respondent has agreed to undertake remedial steps and to have such work supervised by a professional engineer. The Court is satisfied that the requirements of the consent and of the construction certificates had been breached. The evidence establishes there was a justified concern for the safety of the site unless prompt action was taken to remedy such breaches. 11 In Ohn v Walton (1995) 36 NSWLR 77 Gleeson CJ (as he then was) explained at p 79 the operation of judicial discretion to award costs as follows:- The point of Latoudis v Casey is that the purpose of an order for costs is to indemnify or compensate the person in whose favour it is made, not to punish the person against whom it is made. When legislation confers a power to order costs it is, in the absence of any contrary indication, to be understood as conferring a power to be exercised for that purpose. Two things follows: 1. The usual rationale of making a costs order is that it is just and reasonable that the successful party should be reimbursed for costs incurred, in the absence of grounds connected with the charge or the conduct of the proceedings which make it unjust or unreasonable that there should be such reimbursement. 2. The test of whether an order for costs should be made against an unsuccessful plaintiff or complainant is not whether he or she has done anything to warrant punishment. It is whether, in the circumstances, the defendant or respondent should be compensated. 12 In Oshlack McHugh J confirmed at p 97 that an award of costs is compensatory and not punitive. 13 The Court is satisfied that the application made by the council to the Court was necessary and that the council should be compensated for its costs. Orders 14 The Court makes the following orders:- (1) The respondent pay the applicant's costs of these proceedings, including the costs of the application for costs; (2) 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.