Land and Environment Court of New South Wales CITATION : Sky Design and Concepts Pty Limited v Pittwater Council (No.5) [2009] NSWLEC 174 APPLICANT Sky Design and Concepts Pty Limited PARTIES : RESPONDENT Pittwater Council FILE NUMBER(S) : 11186 of 2007 CORAM: Sheahan J KEY ISSUES: COSTS :- of unsuccessful appeal under s56A - principles to apply - costs discretion - "fixed amount" or "as assessed" orders Land and Environment Court Act 1979 LEGISLATION CITED: Civil Procedure Act 2005 Land and Environment Court Rules 2007 Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103; (2008) 158 LGERA 224 Grant v Kiama Municipal Council [2006] NSWLEC 70 Harrison v Schipp (2002) 54 NSWLR 738 JPR Legal Pty Ltd v Marrickville Council [2009] NSWLEC 156 CASES CITED: Latoudis v Casey (1990) 170 CLR 534 Port Stephens Council v Sansom (2007) 156 LGERA 125 Sky Design and Concepts Pty Limited v Pittwater Council [2008] NSWLEC 313 Sky Design and Concepts Pty Limited v Pittwater Council [2008] NSWLEC 1170 Sky Design and Concepts Pty Limited v Pittwater Council (No.4) [2009] NSWLEC 129 Wang v Blacktown City Council [2009] NSWLEC 114 DATES OF HEARING: 8 October 2009 EX TEMPORE JUDGMENT DATE : 8 October 2009 APPLICANT In person LEGAL REPRESENTATIVES: RESPONDENT Ms M Carpenter SOLICITORS Mallesons Stephen Jaques JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Sheahan J 8 October 2009 11186 of 2007 Sky Design and Concepts Pty Limited v Pittwater Council (No.5) EXTEMPORE JUDGMENT 1 His Honour: The only matter before the court for decision today is the respondent Council's Notice of Motion of 12 December 2008 seeking an order that the applicant company pay the Council's costs of the appeal the applicant brought under s56A of the Land and Environment Court Act 1979. 2 The Council also seeks its costs of the Notice of Motion itself. 3 As usual the applicant is represented today by its sole director, secretary and shareholder, Mr Stephen May. 4 The s56A appeal was decided on 26 November 2008 – see my judgment [2008] NSWLEC 313 – but there have been subsequent proceedings. See my judgment (No.4) of 10 August 2009, [2009] NSWLEC 129, for a detailed history of this litigation, and a summary of those recent proceedings. 5 As the applicant failed to provide security for costs in respect of its reopening application by 31 August 2009, that Notice of Motion to reopen was automatically dismissed with costs. 6 I gather than the applicant is currently appealing to the Court of Appeal against my decision of 10 August 2009. 7 As recorded in my judgment of 10 August 2009 (at [23]), the applicant has lately sought to argue that its initial development application was for a prohibited development, and that is the major submission Mr May makes today against the Council's request for costs. In this respect I allowed him to read today his affidavit of 19 December 2008 filed in his reopening application. 8 He draws attention to: (i) one of Council's contentions (No.7) before Hoffman C, (ii) a related oral submission made in Ms Carpenter's opening of the case before Hoffman C (T 12.2.08, p4, LL5-8), (iii) an acknowledgement of those contentions/comments in the Commissioner's judgment (at [2008] NSWLEC 1170 at [25]), and (iv) a comment made in par 40 of Ms Carpenter's filed written submissions on the company's ill-fated application to reopen both the proceedings before Hoffman C and those before me under s56A. 9 Regrettably for Mr May he is now totally bound by the way in which he argued his company's class 1 appeal and its s56A appeal, and that material is irrelevant to today's proceedings. There is no authority, upon which he or I could rely, which would preclude a costs order on this basis, should one be otherwise appropriate. 10 I turn, therefore, to that costs issue. 11 Costs are awarded as compensation to the successful party and not as some form of penalty against the losing party. Latoudis v Casey (1990) 170 CLR 534. In general terms they are awarded in class 1 proceedings only where it is "fair and reasonable" to do so. Civil Procedure Act 2005 s98(1), Land & Environment Court Rules 2007 rule 3.7; Grant v Kiama Municipal Council [2006] NSWLEC 70 at [15f]; and Port Stephens Council v Sansom (2007) 156 LGERA 125. 12 Costs are commonly ordered when a s56A appeal in class 1 is dismissed on all grounds, as in Wang v Blacktown City Council [2009] NSWLEC 114. However, the question of costs is often reserved, as here, or in JPR Legal Pty Ltd v Marrickville Council [2009] NSWLEC 156, when costs are not argued at the hearing. 13 A s56A appeal is, by its nature, litigation separate from the merits appeal from which it is brought. The so-called "no discouragement" principle operates in favour of no order for costs being made in the substantive problem-solving, merits review proceedings. See the discussion by Biscoe J in Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103; (2008) 158 LGERA 224, especially at [9]-[10]. 14 However, a s56A appeal is a serious adversarial proceeding involving argument of legal principles, in which the traditional "costs follow the event" is the more apposite principle, but an order must be found to be "fair and reasonable" in all the circumstances of the case. 15 The correspondence between the parties regarding both the lack of prospects and the risk of costs which attended this s56A appeal has been placed in evidence without objection – see affidavit of Trudy Sheehan dated 11 December 2008 – so Mr May was clearly on notice that the Council thought his s56A appeal would fail, and would probably pursue its costs if it did, as it did, in due course, on all grounds. See Rule 3.7(3)(f). 16 I have concluded that, in all the circumstances of the s56A appeal, and disregarding all other extraneous considerations touching upon this continuing litigation, it is fair and reasonable that the applicant be ordered to pay the respondent's costs of that appeal on a party-party basis. 17 Two other matters remain for decision. 18 Firstly, the respondent seeks also its costs in respect of this Notice of Motion. 19 An order has already been made in respect of costs thrown away when the hearing of the motion did not proceed on 23 September 2009, and the Registrar reserved costs on the further directions hearing held on 2 October, as a direct consequence of the applicant's failure to attend on 23 September 2009. The applicant should clearly be ordered to pay the costs of 2 October, and the only claim made in that regard is for counsel's fees of $125. 20 I have decided, however, that issues of fairness and reasonableness dictate that, in the court's discretion, each party should otherwise pay its own costs of the Notice of Motion before the court today. The question was reserved by me, and each party was entitled to put its case. 21 Secondly, the respondent has asked that the costs of the s56A appeal be the subject of a "fixed amount" order – see Harrison v Schipp (2002) 54 NSWLR 738 – and has sought an amount of $11,575.62. 22 Several "fixed amount" orders have previously been made in this litigation, but the applicant, when asked, requested that the court make an "as assessed" order if today an order were to be made at all. While the amount claimed may well prove appropriate, I am content to agree to Mr May's request, but the company should have a residual opportunity to agree upon the amount of costs if it so chooses. 23 Accordingly, the orders of the court will be: 1. The respondent's Notice of Motion of 12 December 2008 is upheld. 2. The applicant is ordered to pay the respondent's costs of the s56A appeal in this matter, as agreed, or as assessed according to law. 3. The applicant is ordered to pay the respondent's costs in the amount of $125 in respect of the directions hearing on 2 October 2009. 4. Each party is to otherwise pay its own costs of the Notice of Motion of 12 December 2008. 24 I will publish these reasons later today. 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.