Land and Environment Court of New South Wales CITATION : Beaton v Leichhardt Municipal Council [2002] NSWLEC 98 APPLICANT: Mark Beaton PARTIES : RESPONDENT: Leichhardt Council FILE NUMBER(S) : 10159 of 2001 CORAM: Lloyd J KEY ISSUES: Costs :- in class 1 - discontinuance - reasonable conduct in the circumstances - no order as to costs LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s 82A Land and Environment Court Rules 1996 Pt 11 r 5 Aspect North v Lismore City Council [2001] NSWLEC 288; Bennette v Byron City Council (2001) 116 LGERA 235; Kentgreen Dural Pty Ltd v Hornsby Shire Council (1999) 103 LGERA 219; CASES CITED: Manly Wharf Pty Ltd v Manly Council (1997) 98 LGERA 245; McDonald Industries Limited v Sydney City Council (1980) 43 LGRA 428; Menangle Sand & Soil Pty Ltd v Wingecarribee Shire Council (2000) 108 LGERA 209; Outdoor Australia Pty Limited v Auburn Council (1996) 89 LGERA 365; Rio Pioneer Gravel Co Pty Limited v Warringah Shire Council (1969) 17 LGRA 153 DATES OF HEARING: 19/11/2001 and 28/02/2002 EX TEMPORE JUDGMENT DATE : 02/28/2002 APPLICANT: Mr M Fraser (barrister) SOLICITORS: Surry Partners LEGAL REPRESENTATIVES: RESPONDENT: Mr A D Simpson SOLICITORS: Pike Pike & Fenwick JUDGMENT: 4 . IN THE LAND AND Matter No.: 10159 of 2001 ENVIRONMENT COURT Coram: Lloyd J OF NEW SOUTH WALES Decision date: 28 February 2002 Mark Beaton Applicant v Leichhardt Municipal Council Respondent EXTEMPORE JUDGMENT HIS HONOUR: 1. The respondent, Leichhardt Municipal Council ("the council"), applies by notice of motion for an order that the applicant pay its costs of an appeal brought by the applicant against the deemed refusal of a development application to carry out alterations and additions to a dwelling house. The appeal was subsequently amended to an appeal against the subsequent refusal of the council to consent to the development application. 2. The appeal had been set down for hearing over the three days commencing on 17 September 2001 but was discontinued by the applicant by the filing of a notice of discontinuance on 7 August 2001. 3. It has been the long-standing practice of the Court to make no order for costs in planning or building appeals unless the circumstances are exceptional. That practice is described in cl 10 of the Land and Environment Court Practice Direction 1993. That clause, however, is merely a restatement of the manner in which the judicial discretion as to costs has been exercised in planning and building appeals not only in this Court but in its predecessors, the Local Government Appeals Tribunal and the Land and Valuation Court of New South Wales: see Rio Pioneer Gravel Co Pty Limited v Warringah Shire Council (1969) 17 LGRA 153 at 174, McDonald Industries Limited v Sydney City Council (1980) 43 LGRA 428 at 445 and Outdoor Australia Pty Limited v Auburn Council (1996) 89 LGERA 365. 4. The present application for costs is made pursuant to the Land and Environment Court Rules 1996 Pt 11 r 5 which is as follows: (1) If a party to any proceedings discontinues them in whole or in part, the Court may, on the application of another party, order the discontinuing party to pay the costs of any party against whom the discontinued claim was brought and who does not consent to the discontinuance. (2) The costs payable to a party under any order made under this rule are to be the costs of the party occasioned by the discontinued claim and reasonably incurred before service on the party of notice of the discontinuance. (3) Nothing in this rule limits the Court's power to order costs if proceedings are withdrawn under rule 2. 5. It is accepted that the discontinuance of proceedings without the consent of the other party is either an exceptional circumstance or an established exception to the Court's practice which, without more, would normally be expected to result in an order for costs in favour of the non-consenting party: see Manly Wharf Pty Ltd v Manly Council (1997) 98 LGERA 245 and Kentgreen Dural Pty Ltd v Hornsby Shire Council (1999) 103 LGERA 219. 6. In Menangle Sand & Soil Pty Ltd v Wingecarribee Shire Council (2000) 108 LGERA 209, I said at 213: The question of costs has been considered in a number of cases where a planning or building appeal has been discontinued without the consent of the other party to the litigation. The following general principles emerge from those cases: (a) in planning and building appeals it is first necessary to look for some exceptional circumstance so as to found an order for costs. This is a direct consequence of the Practice Direction to which I have referred; (b) ordinarily, the filing of a notice of discontinuance without the consent of the other party to the litigation will satisfy the exceptional circumstance test. This is because the discontinuance usually represents an abandonment of the applicant's claim so that costs incurred by the other party are necessarily wasted or thrown away; (c) a relevant consideration in every case is whether the discontinuance was reasonable conduct on a part of the discontinuing party in the circumstances of the case, such as to negate the ordinary costs consequences of a discontinuance of the proceedings. Such conduct may be based on some action by the other party to the litigation or some supervening event beyond the parties' control. 7. The principles I described in Menangle Sand & Soil Pty Ltd have been accepted in subsequent cases in this Court: see for example Bennette v Byron City Council (2001) 116 LGERA 235 at 238. The cases in which costs have been awarded to a non-discontinuing party appear to be where the discontinuance has amounted to unreasonable conduct on the part of the discontinuing party. On the other hand, if the discontinuing party has conducted itself in a manner that could be reasonably expected of it then it will generally be appropriate for the Court to make no order as to costs against that party: see Aspect North v Lismore City Council [2001] NSWLEC 288 at par [11] per Cowdroy J. 8. It is necessary therefore to turn to the reasons for the discontinuance in the present case. This is best understood by reference to the following chronology of events. 9. In March 2000 the applicant exchanged contracts for the purchase of a terrace house at No. 141 Evans Street, Rozelle for the purpose of renovating and using it as his home. During the settlement period in about March 2000, he met the council's duty planner and discussed the council's requirements before going to the trouble and expense of preparing and lodging a development application. On 15 June 2000 the applicant lodged a development application for alterations and an addition to the rear of the house with the council. The officer handling the application within the council was Mr Gavin McConnell. After a protracted period during which not only the application was publicly exhibited, but also in which the plans were amended and then re-exhibited in consultation with the council, Mr McConnell prepared a report in February 2001 recommending refusal of the application on a number of grounds. 10. The recommendation was adopted by the council. The development application was refused. A notice of determination dated 13 February 2001 set out seven reasons for its refusal of the application. On 26 February 2001 the applicant filed his appeal application in Class 1 of the Court's jurisdiction. On 4 April 2001 the applicant amended his appeal in Class 1 of the Court's jurisdiction referring expressly to the refusal of the application on 13 February 2001. 11. On 14 March 2001 the applicant made an application to the council under s 82A of the Environmental Planning and Assessment Act 1979 for a review of the determination to refuse his development application. The applicant also made, as part of that application, further amendments to the plans. As a consequence, the further amended plans were publicly exhibited, and a report was then prepared by a different officer within the council, Mr Ben Hignett, who recommended that on review under s 82A the council uphold the refusal of the development application but on amended grounds. The amended plans which were the subject of the report by Mr Hignett were considered by him to contain amendments which were relatively minor. Nevertheless, the report of Mr Hignett raised for the first time an additional concern being the impact upon the privacy of the adjoining house and this became one of the amended grounds of refusal. The council adopted Mr Hignett's recommendation at its meeting on 19 July 2000. 12. In order to meet the new ground of refusal it would have been necessary to redesign the floor plans. Consequently, on 24 July 2001, eight weeks before the date fixed for the hearing of the appeal, the applicant's solicitors advised the council's solicitors that the applicant wished to discontinue the proceedings and prepared a notice of discontinuance which was faxed to the council's solicitors on that day. The council would not consent to the discontinuance unless the applicant agreed to pay its costs. As I have noted, the applicant then filed a notice of discontinuance on 7 August 2001. 13. In the light of these facts I have come to the view that there should be no order for the costs of the appeal. I have come to this view for the following reasons: (1) The applicant's conduct in discontinuing in the light of the belated and entirely new ground of refusal, which would require a complete redesign of the floor plans of the building, was reasonable conduct in the circumstances. This was not one of the original grounds of refusal and the applicant was entitled in the absence of a statement of issues filed by the council to assume that the original grounds of refusal were those upon which the council would rely. (2) The discontinuance was timely. It was effected immediately after the council's determination of the application for review under s 82A which resulted in the new issue being raised. (2) In any event the council was in default of filing a statement of issues. It had filed a draft statement of issues on 31 May 2001, but this was before it determined to rely upon the new issue raised in the report of Mr Hignett. A final statement of issues had not been filed by the council by 5 July 2001 in accordance with the Court's direction, nor by 19 July 2001 when it adopted the recommendation of Mr Hignett, nor by 24 July 2001 when the applicant advised that it wished to discontinue, nor by 7 August 2001 when the notice of discontinuance was filed. 14. Under these circumstances the applicant's conduct in discontinuing his appeal was both reasonable and timely. 15. I therefore make the following formal orders: (1) The respondent's notice of motion for costs is dismissed. (2) The respondent must pay the applicant's costs of the notice of motion. I hereby certify that the preceding15 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd. Associate 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.