Land and Environment Court of New South Wales CITATION : Unomedical Pty Ltd v Pittwater Council [2007] NSWLEC 862 APPLICANT Unomedical Pty Ltd PARTIES : RESPONDENT Pittwater Council FILE NUMBER(S) : 10720 of 2007 CORAM: Jagot J KEY ISSUES: Costs :- whether costs order fair and reasonable in circumstances of particular case - no order as to costs - costs of notice of motion LEGISLATION CITED: Land and Environment Court Rules 1996 DATES OF HEARING: 10 December 2007 EX TEMPORE JUDGMENT DATE : 10 December 2007 APPLICANT Mr D T Miller with Ms Michelle Castle SOLICITORS DLA Phillips Fox LEGAL REPRESENTATIVES: RESPONDENT Mr T G Howard SOLICITORS Mallesons Stephen Jacques JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Jagot J 10 December 2007 10720 of 2007 UNOMEDICAL PTY LTD Applicant PITTWATER COUNCIL Respondent JUDGMENT Jagot J: 1 This is an application for costs by the Council in relation to proceedings commenced by Unomedical Pty Ltd against a prevention notice issued on 26 July 2007 with respect to Unomedical's operations from certain premises in Mona Vale. 2 The parties accept that the proceedings are subject to Pt 16 r 4 of the Land and Environment Court Rules 1996 which provides that no order for the payment of costs will be made in proceedings to which the rule applies unless the Court considers that the making of a costs order is, in the circumstances of the particular case, fair and reasonable. 3 The parties have helpfully provided detailed written submissions setting out their respective positions. Those submissions disclose that the parties accept that Pt 16 r 4 subr (2) provides a presumption that there shall be no order for costs and that the circumstances of the particular case must be such as to displace that presumption by making it fair and reasonable that there be a costs order (in this case, relevantly, to compensate the Council). 4 I do not propose to repeat the detailed written and oral submissions of the parties other than to note that the Council relied upon two critical matters as supporting the displacement of the presumption. First, that the conduct of Unomedical before the prevention notice was issued warranted the description of unreasonable conduct because Unomedical was always subject to a legal obligation to minimise the emission of air pollutants from its operations but had not done so. Secondly, that after the prevention notice had been served Unomedical complied with the substance of the notice by installing a catalytic converter. The effect of this was to reduce the toxic air emissions which precipitated the Council serving the notice. 5 In short, the Council characterised the circumstances as ones in which Unomedical had simply done after service of the prevention notice what it always had a legal obligation to do. Accordingly, the Council should never have been put to the trouble and expense of having to serve the prevention notice in the first place and defend the appeal where (according to the Council) there was no real challenge to the terms of the prevention notice and no real prospects of success in any event. 6 For its part Unomedical submitted that the Council's characterisation of the facts and circumstances was simply inaccurate and did not reflect what truly had occurred. The events disclosed full co-operation by Unomedical at all times with all relevant authorities as part of an agreed process for resolution of concerns which had arisen for the first time many years after Unomedical had obtained a development consent, and in circumstances where that consent had clearly disclosed the nature of the process, how it would be carried out, and the use of various chemicals within that process. According to Unomedical, the service of the prevention notice without any forewarning was outside the context of the agreed process. The installation of the catalytic converter was in substance a supervening event which meant that the legality and merits of the prevention notice never needed to be tested. 7 The context of the application for costs needs to be understood. First, the order required immediate and ongoing compliance in circumstances where had Unomedical failed to comply it would have been exposed to potential criminal liability. 8 Secondly, there has been no resolution of the legality or the merits of the Council's prevention notice. The reason for this is that rather than Unomedical's appeal being resolved the parties sensibly focussed their energies on a non-litigious resolution of all of the issues between them. This led to the installation of the catalytic converter in or about August 2007. 9 I am satisfied having regard to the evidence and competing submissions in this case that the availability of the catalytic converter and its urgent installation was a supervening event that enabled the substantive resolution of this matter without any testing of the legality or merits of the notice. 10 Further, I am not satisfied that the appeal by Unomedical was necessarily hopeless either by reference to the legality or the merits of the notice in fact served. These are different issues from those matters which led me to observe on 27 July 2007 that this was obviously a matter best suited to resolution by some sensible expert process rather than litigation. 11 Although the Council has characterised Unomedical's conduct before the issue of the prevention notice as unreasonable when considered in context of Unomedical's ongoing obligation to minimise air pollution, that characterisation cannot be assessed in isolation from all relevant circumstances. As I have said those relevant circumstances show that the development was approved in or about 2001 on the basis of information clearly disclosing the industrial processes involved. When the Council responded to a complaint (apparently first from the New South Wales Fire Brigade) a process was established by which the concerns of the Council and New South Wales Health would be resolved through a cooperative regime. 12 It seems to me to be clear that the position of various authorities developed over time but Unomedical consistently, on the available evidence, co-operated with those authorities with the objective of resolving their concerns. Indeed only a couple of days before the prevention notice was issued a meeting had been held at which an alternative regime appears to have been suggested by the Council, and yet within forty-eight hours of that meeting the prevention notice (in quite different terms) was served without any apparent forewarning to Unomedical. That is not to say the Council was not justified in so doing having regard to whatever information it had available to it at the time including the correspondence from New South Wales Health. It is merely to recognise that Unomedical's undoubted obligation to minimise emission of pollutants cannot be looked at in isolation from all other circumstances. 13 It is also the case that the availability of the catalytic converter and Unomedical's capacity to take urgent action was fortuitous. It allowed Unomedical in substance to satisfy the concerns of the Council and New South Wales Health on an urgent basis, and thereby coincidentally also satisfied the notice. But it seems to me to be clear that this supervening event meant that the legality and merits of the notice itself never needed to be tested. 14 For these reasons I accept Unomedical's submissions that this is not a case where the presumption has been displaced. That is, the circumstances of this particular case do not make it fair and reasonable that there be an order for the payment of the Council's costs. Rather, the presumption in accordance with the rule applies with the consequence that there should be no order as to costs in the proceedings. [Discussion re cost of motion – costs of motion agreed between parties] 15 The orders are: (1) The notice of motion filed 5 October 2007 is dismissed. (2) Order the respondent to pay the applicant's costs of the notice of motion agreed in the amount of $5,000. **************************** 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.