Land and Environment Court of New South Wales CITATION : Norton v Blacktown City Council [2009] NSWLEC 214 APPLICANT Chris Norton PARTIES : RESPONDENT Blacktown City Council FILE NUMBER(S) : 10144 of 2008 CORAM: Pepper J KEY ISSUES: COSTS :- application for costs in Class 1 proceedings - principles to be applied - costs ordered LEGISLATION CITED: Land and Environment Court Rules 2007 r 3.7 CASES CITED: Agonic Holdings Pty Ltd v Lithgow City Council [2009] NSWLEC 34 Coruhlu v Blacktown City Council [2009] NSWLEC 1270 DATES OF HEARING: 15 December 2009 EX TEMPORE JUDGMENT DATE : 15 December 2009 APPLICANT Mr R Newton SOLICITORS Puleo Lawyers LEGAL REPRESENTATIVES: RESPONDENT Ms P Hudson (solicitor) SOLICITORS Marsdens Lawyers JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES PEPPER J 15 December 2009 10144 of 2008 Norton v Blacktown City Council EX TEMPORE JUDGMENT 1 HER HONOUR: Before me are two notices of motion: (a) the first is a notice of motion filed 4 August 2009 by Blacktown City Council ("the council"), which seeks an order that the applicant, currently Mr Chris Norton, pay the council's costs incurred in the proceedings as previously agreed, fixed in the sum of $29,500 ("the costs motion"); and (b) the second notice of motion is that filed on 23 September 2009 by the currently named applicant, Mr Chris Norton, seeking the following orders ("the joinder motion"): 1 an order that Alf Coruhlu be joined as a party to the proceedings; 2 an order that the Respondent's costs incurred in these proceedings be paid by Alf Coruhlu in the sum agreed or as assessed; and 3 an order that Alf Coruhlu pay the Applicant's and Respondent's costs of this notice of motion and in respect of the notice of motion filed by the Respondent on 4 August 2009. Evidence of Notice 2 Given that Mr Coruhlu is not a party to the proceedings and as there was no evidence of service on Mr Coruhlu before the Court in respect of either of the two notices of motion, with leave Mr Norton gave oral evidence to demonstrate that Mr Coruhlu was aware that the notices of motion were being heard today. 3 His evidence was to the effect that: (a) at or about 2.30pm on 6 October 2009, he handed documents to the receptionist of Maddocks, the firm then representing Mr Coruhlu, for service upon Mr Coruhlu. The documents comprised: (i) copies of the notices of motion before the Court today; and (ii) copies of the affidavits in support of each of these notices of motion referred to below; (b) on 15 October 2009, when the matter came before the acting registrar of the Court for the purpose of setting down both notices of motion for hearing, Mr Winram, a solicitor from Maddocks, appeared on behalf of Mr Coruhlu and was present when the motions were set down for hearing on 15 December 2009; and (c) on 26 October 2009, Mr Norton's legal representatives, Puleo Lawyers, wrote to Mr Alf Coruhlu at his residential address stating that they noted that Maddocks had ceased to act for him, asking if Mr Coruhlu could advise them whether he proposed to instruct another firm of lawyers to represent him and noting that the hearing date of "our clients notice of motion which we seek an order that you be personally liable for the Blacktown City Council's legal costs and not our client is listed for hearing on 15 December 2009. On that day we propose to ask the Court to make the order as set out in our clients notice of motion". The letter included copies of the notice of motion and the affidavit of Mr Chris Norton. 4 Given this evidence I am satisfied that Mr Coruhlu was notified of the date of hearing of the applications before me today. He did not appear in Court when the matter was called. Accordingly, the motions proceeded in his absence. Adjournment of Joinder Motion 5 As a result of an issue identified during the course of discussion concerning the joinder motion, Mr Norton was permitted additional time to make further submissions on a discrete point concerning the jurisdiction of the Court to hear the motion. As a consequence, the joinder motion was adjourned to 17 December 2009 and is not dealt with in this judgment. Factual Background and Evidence of Ms McCullan 6 The costs application is supported by an affidavit of Ms Jodie Anne McCullan affirmed 3 August 2009. Her affidavit conveniently sets out the factual background of the proceedings giving rise to the motion. 7 In her affidavit she states the following: (a) she is the solicitor for the respondent in the proceedings; (b) the proceedings relate to an appeal commenced by the applicant, Mr Chris Norton, against the council's deemed refusal (and ultimate actual refusal) of a development application seeking consent for a 72 place child care centre at 8-12 Kilmore Street and 48 Clonmore Street, Kellyville Ridge; (c) the proceedings were initially listed for final hearing on 2 June 2008. However, as a result of a notice of motion filed by the applicant on 28 May 2008 seeking leave of the Court to substitute amended plans, the Court vacated the hearing date, reserving the question of costs. The council did not object to the substitution of the applicant's amended plans subject to the hearing date being vacated to allow for renotification of the amended plans and the preparation of an amended Statement of Facts and Contentions; (d) evidence in the form of joint reports between the parties planning, acoustic and traffic/parking experts had been prepared or was in the process of being prepared in anticipation of the hearing. Conditions of consent were prepared by the council and resident objectors had been notified of the hearing dates. Accordingly, some costs incurred in preparing for the hearing were thrown away; (e) the proceedings were subsequently listed for hearing on 29 September 2008 and were heard by Commissioner Murrell on that date and also on 2 October 2008; (f) at the commencement of the hearing on 2 October 2008, the applicant sought to substitute further amended plans which the Commissioner did not allow. The applicant sought a short adjournment of the proceedings following which he indicated that he wished to discontinue them. The council did not consent to the discontinuance; (g) leave was subsequently granted by Commissioner Murrell to the applicant to discontinue the proceedings noting the respondent's lack of consent. A notice of discontinuance was filed by the applicant on 3 October 2008; (h) between 7 October 2008 and 27 January 2009, a series of correspondence passed between the council's solicitors and the solicitors on the record acting for the applicant, Mr Norton, Horowitz & Bilinsky, seeking payment of the council's costs. In particular on 22 December 2008, Horowitz & Bilinsky made an offer on behalf of the applicant to pay costs fixed in the sum of $29,500 in full and final settlement of the costs of the proceedings (the council was seeking costs in the amount of $46,962). This was accepted by the council on 23 December 2008. The payment of these monies, however, was not forthcoming; (i) between 4 February 2009 and 15 May 2009, demands were then made to, and correspondence passed between, the solicitors for the council and Mr Alf Coruhlu. The correspondence referred to "the agreement reached between yourself and the Council" to pay the money. Mr Coruhlu did not state that he was not responsible for the payment of the costs nor did he resile from the agreed quantum in the correspondence. Still the costs remained unpaid; (j) consequently on 15 May 2009, the solicitors for the council wrote to Mr Alf Coruhlu stating that if it did not receive payment of the $29,500 within 14 days of the date of the letter it would file a notice of motion in this Court seeking an order that he pay the council's costs as agreed, in addition to the costs of the motion. Consideration of Costs Motion 8 At the hearing of the costs motion, Mr Norton did not dispute that the council was entitled to its reasonable costs pursuant to the discontinuance, irrespective of who the applicant was. That is to say, he effectively consented to the orders sought in the council's costs motion but contended that rather than he pay the council's costs, Mr Coruhlu ought to pay these costs as he was the driving force behind the litigation and he promised Mr Norton that he would ensure that any costs were paid. As indicated earlier, this submission was the subject of the joinder motion and does not form part of my consideration of the costs motion. 9 Mr Norton also agreed that there had been no disentitling conduct by the council (and no such evidence exists), and moreover, that no reason could be reasonably proffered as to why the council's costs ought not be paid. 10 These concessions, although properly made, are not the end of the matter. Rule 3.7(2) of the Land and Environment Court Rules 2007 (which applies to all proceedings in Class 1 such as the present proceedings by reason of r 3.7(1)(a)) ("the Rules") states the following: The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances. 11 Rule 3.7(3) sets out some of the circumstances in which the Court might consider the making of a costs order to be fair and reasonable. In particular r 3.7(3)(d) states: (3) Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following: … (d) that a party has acted unreasonably in the conduct of the proceedings… 12 In Agonic Holdings Pty Ltd v Lithgow City Council [2009] NSWLEC 34 Biscoe J set out the history of r 3.7(2) and the principles underpinning its infrequent application. He stated (at [5]): [5] The effect of the costs rule is that, in the ordinary case, costs will lie where they fall. This presumptive rule is not displaced unless the Court considers that the making of a costs order is fair and reasonable in the circumstances. The rationale of the presumptive rule was addressed in Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103, (2008) 158 LGERA 224 at [9] – [10] by me as follows: [9] In the context of the presumptive rule that there will be no order as to costs in planning appeals, the power to make a costs order is in the broadest of terms, that is, what is "fair and reasonable in the circumstances". All rational considerations are relevant to the formulation of that judgment. In the end, the question is whether, in the opinion of the Court, they are of sufficient weight to overcome the presumptive rule. Indicative guidelines for the exercise of the discretion are useful in promoting consistent decisions, but are not entitled to presumptive, let alone determinative, weight. These principles were identified in the context of the former Part 16 r 4 by the Court of Appeal in Port Stephens Council v Sansom at [48], [53] and [54] and Thaina Town (On Goulburn) Pty Ltd v Sydney City Council (2007) 156 LGERA 150 at [33] and [35]. Those judgments were delivered on the same day by an identically constituted Bench of five judges. Spigelman CJ delivered the leading judgment in each case. The presence of the words `in the particular circumstances of the case' in the old rule influenced his Honour to hold that a general characterisation of proceedings such as `merits review' or `capacity', cannot be determinative or, indeed, entitled to presumptive weight: Sansom at [60]. In the present case, there was no suggestion that the absence of these words from the new rule bears on the outcome. [10] One of the purposes of the costs follow the event rule in ordinary civil litigation is to encourage the parties to settle their disputes: Sansom at [26]; Thaina at [65]. In contrast, a no discouragement principle underlies the no costs rule in planning appeals, that is, that persons generally should not be discouraged from exercising their rights of appeal via the prospect of an adverse costs order: Sansom at [22]-[23]. This may be rationalised on the bases that a significant purpose of planning appeals is to improve the decision-making process and that those involved are not adversaries in the same sense as adversaries in conventional civil litigation. Spigelman CJ explained this in Sansom at [71]-[74]: 71 ...An appeal from a consent authority is similarly an element of the management of the scheme of the EPA Act by that authority. To treat such a review as equivalent to a lis between adversarial parties is, in most cases, a considerable oversimplification. In particular, it does not give weight to the public interest regulatory responsibilities of the consent authority, which should itself be anxious to ensure that it has made the correct decision. In such a context, characterisation of the proceedings either as merits review or as equivalent to adversarial litigation does not appear to me to be a particularly useful approach to the formulation of the judgment for which r 4(2) provides. 72 In my opinion, a significant purpose served by planning appeals is to improve the quality of the decision-making process. This is a purpose which any statutory consent authority should be presumed to be anxious to achieve as an incident of its exercise of the statutory powers which Parliament has reposed in it. Individuals and corporations who challenge such decisions do not have the same obligations. They do, however, have a legitimate expectation that the decision-making process will result in the correct or preferable decision. 73 One of the critical differences between ordinary civil litigation and planning appeals is the absence of a reciprocal relationship between the interests of the parties. They are not, or should not be, adversaries in the sense that can be said of the usual kind of civil litigation in courts. 74 Underlying Justice McClellan's approach [in Gee v Port Stephens Council (2003) 131 LGERA 325] is an assumption that each side in a planning appeal should be treated the same as a matter of fairness: whether the proceedings are classified as merits review or as raising an issue of capacity. In my opinion, a comparison of the interests to which I have referred at [71]-[73] of these reasons, suggest that an unsuccessful consent authority should be more likely to suffer an adverse costs order than an unsuccessful applicant. 13 In the present case the council submits that due to the unreasonable conduct by the applicant, the Court should conclude that it would be fair and reasonable to exercise its discretion to award costs to it. This unreasonable conduct includes the following: (a) that the council had agreed earlier to accommodate the amended plans being substituted with the consequence that the hearing date had to be vacated and further evidence had to be prepared and costs were thrown away; (b) that no reason for, or notice of, the attempt to tender the further amended plans was given by the applicant; (c) that no reason for, or notice of, the discontinuance was given by the applicant; and (d) that new proceedings were commenced in the Court by Mr Alf Coruhlu against the council covering the same subject matter, which were eventually dismissed ( Coruhlu v Blacktown City Council [2009] NSWLEC 1270). 14 No explanation was given by the council, or by Mr Norton, about the "agreement" or why it was that costs were not sought against Mr Coruhlu as the council indicated would occur in its correspondence. Whatever purported "agreement" was reached between the council and Mr Coruhlu in respect of costs is of very little weight without any further detail of it being given. Furthermore, it nevertheless remains the fact that it was Mr Norton who was the applicant: in whose name the proceedings were commenced; in whose name the proceedings were conducted; in whose name the proceedings were discontinued; and against whom the council incurred expense in defending the proceedings. 15 Consequently, in light of the circumstances of unreasonableness described by the council and absent any suggestion of disentitling conduct by the council, I find that the presumptive rule against costs in Class 1 proceedings has been displaced and that it is fair and reasonable that the council be entitled to an award of costs fixed in the sum of $29,500 as previously agreed. Orders 16 In relation to the disposal of the costs motion the orders of the Court are as follows: (1) the applicant is to pay the respondent's costs incurred in the proceedings fixed in the sum of $29,500; and (2) the applicant is to pay the respondent's costs of the motion. ********** 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.