Land and Environment Court of New South Wales CITATION : Shellharbour City Council v Dunmore Equestrian Centre Pty Limited and Anor [2009] NSWLEC 71 This decision has been amended. Please see the end of the judgment for a list of the amendments. APPLICANT Shellharbour City Council PARTIES : FIRST RESPONDENT Dunmore Equestrian Centre Pty Limited SECOND RESPONDENT John Kosseris FILE NUMBER(S) : 41223 of 2007 CORAM: Pain J KEY ISSUES: COSTS :- exercise of discretion where surrender by respondent to orders sought by applicant Environmental Planning and Assessment Act 1979 LEGISLATION CITED: National Parks and Wildlife Act 1974 Protection of the Environment Operations Act 1997 Uniform Civil Procedure Rules 2005 r 42.1 CASES CITED: Kiama Council v Grant (2006) 143 LGERA 441 Latoudis v Casey (1990) 170 CLR 534 DATES OF HEARING: 6 May 2009 EX TEMPORE JUDGMENT DATE : 6 May 2009 APPLICANT Mr J Johnson SOLICITOR LEGAL REPRESENTATIVES: Kells Lawyers FIRST RESPONDENT No appearance SECOND RESPONDENT No appearance JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Pain J 6 May 2009 41223 of 2007 Shellharbour City Council v Dunmore Equestrian Centre Pty Limited and Anor EX TEMPORE JUDGMENT 1 Her Honour: Shellharbour City Council, the Applicant in these proceedings, seeks its costs. Neither of the Respondents has appeared. The Second Respondent is the sole director of the First Respondent. Both Respondents are aware of the court proceedings and have been provided with the Council's submissions. I considered the matter should proceed at the outset of the hearing. I note that a copy of a letter dated 5 May 2009 from the Second Respondent to the Council handed up in Court stated that he was aware of the proceedings, agreed to the making of consent orders and wanted costs assessed as he considered they were excessive. The Council seeks amended orders as handed up at the hearing. 2 The Council supported its Notice of Motion by the following evidence. (i) Exhibit GMH1, pages 66-68 and photos following (ii) Affidavit of Kevin Mills sworn 22 April 2008, filed 23 April, paragraphs 1-7 (iii) Affidavit of Erina Murphy, sworn and filed 19 March 2008. (iv) Affidavit of Erina Murphy, sworn 7 January 2009, filed 9 January 2009, paragraphs 1-22 and 33-44. (v) Exhibit EM1: 47-56: Letter to Respondents of 1 July 2008 with outline of remediation required by council 101-108: Letter from geotechnical expert 109-114: Letters to resolve investigations 115-117: Agreements between experts 132-140: Settlement letters re costs (vi) Letter from Respondents to Kells, 30 January 2009. 3 The essential background facts supporting the Notice of Motion were contained in a useful summary in the Council's counsel's written submissions. These proceedings were commenced urgently on 5 December 2007 due to significant land clearing and road construction works carried out on the First Respondent's property without the necessary consent, according to the Council. Undertakings were given to the Court on 12 December 2007 to cease listed works, install erosion controls and remove machinery, inter alia. 4 The Respondents gave further undertakings when the matter was before the Court on 21 December 2007, having been relisted at the request of the Applicant. These required inter alia: (i) a confirmatory letter relating to urgent stabilisation works being provided to the Council by the Respondents' expert, Mr McVey; (ii) preparation of a draft Soil and Water Management Plan for the site; (iii) undertakings not to carry out or continue certain works 5 On 1 February 2008 further undertakings were given to the Court, including the carrying out of hydro-mulching to protect exposed batters from erosion and regular audits of sediment and erosion control measures. The Applicant was directed to file its points of claim by 22 February 2008 and affidavit evidence by 29 February 2008. The Respondents were to file their Points of Defence by 21 March 2008. 6 On 2 April 2008 the Applicant filed Points of Claim which referred to a possible breach of the Environmental Planning and Assessment Act 1979 (the EP&A Act), the National Parks and Wildlife Act 1974 (the NPW Act) and the Protection of the Environment Operations Act 1997 (the POEO Act). 7 On 1 July 2008 the Applicant wrote to the Respondents setting out the relief it sought, which was in relevant respects the same as the relief it disclosed it was seeking to the Respondents in a letter dated 19 February 2008 and to which no meaningful response had been received. Despite the direction of the Court made 25 June 2008 requiring the Respondents to respond to a letter from the Council setting out the relief sought, no response was received from the Respondents in writing (Affidavit of Murphy sworn 7 January 2009 par 21). 8 On 4 July 2008 the Respondents filed Amended Points of Defence. 9 Mediation took place over two days and on 28 July 2008 the Court was advised that a mediated agreement had been reached. 10 On 27 August 2008 the Applicant took the Court through the evidence and the Court made final orders in the terms of the mediated agreement. The mediated agreement effectively granted the practical relief sought in the Applicant's offer of 19 February 2008. It also included the making of declarations of breach, which had not been sought in the offer of 19 February 2008. 11 The Applicant submitted that there was surrender by the Respondents to the Applicant's demands in the proceedings. This is a basis for awarding costs in the Applicant's favour in the absence of disentitling conduct, see the statement of the principle by Preston J in Kiama Council v Grant (2006) 143 LGERA 441 at [80]. Finding 12 Costs in Class 4 proceedings are awarded under the Uniform Civil Procedure Rules 2005 (the UCPR) r 42.1 which provides: Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. 13 Latoudis v Casey (1990) 170 CLR 534 is authority that costs are compensatory not punitive. 14 In Kiama Council v Grant (2006) Preston J stated the following at [80]: The principles that emerge from these cases are that in a civil enforcement or judicial review case where there has been no hearing on the merits: (a) where one party effectively surrenders to the other party by: (i) discontinuing without the consent of the other party; or (ii) giving undertakings to the Court or submitting to the Court making orders against the party substantially in the terms or to the effect claimed by the other party; the proper exercise of the costs discretion will ordinarily be to make the usual order as to costs, unless there is disentitling conduct on the part of the other party; … 15 Although decided before the application of the UCPR in this Court, these principles continue to be relevant. The essential elements of what the Class 4 application sought are contained in the declaration of a breach of the EP&A Act and orders for extensive work required to be done in final orders made by the Court on 29 August 2008 (this is supported by the evidence relied on by the Council filed on 2 April 2008). The Council has been largely successful in the proceedings and the usual rule is that it should be awarded its costs. There is no disentitling conduct suggesting that it should not be awarded its costs. 16 While the declaration of a breach made by the Court on 27 August 2008 was of the EP&A Act and not also of the NPW Act or the POEO Act (as referred to in the Class 4 application and Points of Claim), the work which was required to be undertaken related to the issues alleged to arise under those Acts also. There is no basis to limit the Council's costs because declarations of breach were not made in relation to the Acts referred to in the Applicant's Points of Claim. 17 The usual order is that the parties responsible for paying costs do so on the basis of joint and several liability. There is no reason to vary the order from the usual. Orders 18 The Court orders that the First and Second Respondents are to jointly and severally pay the Applicant's costs of the proceedings finalised on 27 August 2008 as agreed or assessed, but limited as follows: (a) This costs order excludes the costs associated with joinder of the Third Respondent DLM Certification Pty Ltd (that is, costs associated with amending, filing and serving the Points of Claim and Class 4 application and appearance before the Court to argue for the joinder), in respect of which no order for costs is made. (b) This costs order does not include costs incurred by the Applicant after 9 July 2008, in respect of which no order for costs is made, except as provided in (c) below; (c) The First and Second Respondents are ordered to pay the costs of the Notice of Motion seeking costs heard on 6 May 2009. 09/06/2009 - key word omitted - Paragraph(s) coversheet 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.