Land and Environment Court of New South Wales CITATION : Wei v Parramatta City Council [2010] NSWLEC 71 APPLICANT PARTIES : Xing Xing Wei RESPONDENT Parramatta City Council FILE NUMBER(S) : 10826 of 2009 CORAM: Pain J KEY ISSUES: COSTS :- whether fair and reasonable to award costs to applicant in exercise of court's discretion LEGISLATION CITED: Environmental Planning and Assessment Act 1979 Land and Environment Court Rules 2007 r3.7 Bailey v Oberon Shire Council [2007] NSWLEC 273 CASES CITED: Mahenthirarasa v State Rail Authority of New South Wales (2008) 72 NSWLR 273 Universal Childcare Pty Ltd v Leichhardt Municipal Council [2008] NSWLEC 277 Wei v Parramatta City Council [2010] NSWLEC 1046 DATES OF HEARING: 6 May 2009 EX TEMPORE JUDGMENT DATE : 6 May 2010 APPLICANT Mr M Baird SOLICITOR LEGAL REPRESENTATIVES: Barrak Lawyers RESPONDENT Mr P Marincowitz (solicitor) SOLICITOR Sparke Helmore JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Pain J 6 May 2010 10826 of 2009 Wei v Parramatta City Council EX TEMPORE JUDGMENT 1 Her Honour: In Wei v Parramatta City Council [2010] NSWLEC 1046 development consent was granted to the expansion of the Applicant's brothel in Rydalmere. The Applicant has filed a Notice of Motion dated 21 April 2010 seeking an order that his costs of the proceedings be paid by the Council. This motion is opposed by the Council. 2 Rule 3.7 of the Land and Environment Court Rules 2007 (the Court Rules) applies. Generally costs are not payable in Class 1 proceedings. Under r 3.7(2) costs are payable if the Court considers it is fair and reasonable to do so. Rule 3.7(3) sets out circumstances where the Court may consider it is reasonable to do so. The Applicant relies on r 3.7(3)(d) and (f). Rule 3.7(3)(d) and (f) state: (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, … (f) that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where: 3 Affidavits of Mr Barrack, solicitor, dated 21 April 2010 and Mr Marincowitz, solicitor, dated 29 April 2010 were read. These provide an outline of the events in the course of the litigation, exhibited the documents filed by the parties such as the Statement of Facts and Contentions and expert reports and correspondence between the parties. 4 A chronology was provided by the Applicant which the Council agrees is accurate, which follows: 28 May 2008 Court grants consent to 2 room brothel at 19 Brodie Street, Rydalmere 5 August 2009 Development application for expansion from 2 rooms to 3 rooms lodged with Council (DA/512/2009). 11 August 2009 DA/512/2009 referred to Council officers for comment and public exhibition. 4 November 2009 Applicant commences proceedings in the Land and Environment Court against deemed refusal. 5 November 2009 Letter Barrak Lawyers (page 08) to Council 11 November 2009 Application received by Council. Letter from Applicant's solicitor 05/11/09 received by Council. 13 November 2009 Letter Barrak Lawyers to Council (pages 12-13). 20 November 2009 Kerry Gordon Town Planning, retained by Council, requested to provide independent advice on the development application (page 43). 2 December 2009 Kerry Gordon Town Planning, retained by Council, advised Council that the recommendation of Council's Senior Development Assessment Officer was acceptable subject to conditions. 3 December 2009 First return date. By consent stood over to 17 December 2009. 14 December2 009 Matter considered by Council. Council resolved to defer consideration of the matter (PM1 – p.31) 17 December 2009 Matter listed for hearing on 19 February 2010. Expert Reports to be prepared by 3 February and Joint Reports by 10 February 2010. 22 December 2009 Council files Statement of Facts and Contentions (PM1 tab 2). 22 January 2010 Applicant subpoena issued to NSW Police. 22 January 2010 Response to Statement of Facts and Contentions filed by Applicant (PM1 tab 22) 25 January 2010 Letter from Barrak Lawyers enclosing Notice to Produce (p 24) 3 February 2010 Respondent served copy of report of Danny Jones. Barrak Lawyers write to Sparke Helmore requesting Mr Mamouzelos to be available for cross-examination 4 February 2010 Applicant served with copies of reports of Bradley Delapierre (town planner), Nicholas Mamouzelos (social impact and crime) and Rosemarie Barretto (traffic engineer) 5 February 2010 Draft conditions of consent provided to Applicant 10 February 2010 Letter from Sparke Helmore offering to settle proceedings on draft conditions of consent and no order as to costs (p 35) 10 February 2010 Letter from Barrak Lawyers (p 41) regarding conduct of proceedings 11 February 2010 Letter from Sparke Helmore withdrawing contentions 2-6 (p 40) 16 February 2010 Letter from Sparke Helmore confirming that Council presses contentions 1 and 7 and will seek to amend contention 8 19 February 2010 Hearing 17 March 2010 Judgment. Commissioner required work to be done. Further work requested by Commissioner. 1 April 2010 Callover 8 April 2010 Final orders issued by Commissioner Applicant's submissions 5 At the time of service of the Applicant's development application (DA) his solicitors wrote to the Council requesting that there be consideration of consent orders being entered into subject to appropriate conditions of consent. The Applicant's DA was assessed by a Council planning officer as suitable for approval subject to conditions. The Council commissioned an independent planning report by Ms Gordon, including her review of the comments of the Council's Strategic Crime and Corruption officer, Mr Mamouzelos, which was prepared and sent to the Council in time for its 14 December 2009 meeting. That report recommended that the application could be approved subject to an appropriate plan of management. At the Council meeting on 14 December 2009 when both planning reports were available, the Council deferred consideration of the matter. This was unreasonable as the Council had before it material on which to make a decision and it has a statutory duty to determine DAs before it. Its failure to finally determine the matter on 14 December 2009 was unreasonable and justifies an order for costs from that date. 6 By the time of the hearing the Council did not pursue contentions 2-6 in its Statement of Facts and Contentions and left in issue matters of traffic and parking and aspects of the management plan. Had the Council resolved these issues at the 14 December 2009 meeting there would have been no need for a contested hearing and the matter could most likely have been dealt with by consent orders. 7 The circumstances in Bailey v Oberon Shire Council [2007] NSWLEC 273 where an award of costs was made against a council are analogous. Further the Council should act a model litigant as referred to in Mahenthirarasa v State Rail Authority of New South Wales (2008) 72 NSWLR 273 at [21] and has failed to do so. 8 Alternatively, the Council should pay the Applicant's costs thrown away as a result of the Council including issues 2-6 in the Statement of Facts and Contentions filed on 21 December 2009 and then advising that these would not be pursued by letter dated 11 February 2010. Council's submissions 9 The Council acted reasonably throughout the proceedings. At the meeting of 14 December 2009 when the DA was deferred it had before it the planning officer's report, which attached the report of Ms Gordon the independent planner and the report of the Council's Strategic Crime and Corruption officer, Mr Mamouzelos. Contrary to the view of Ms Gordon he recommended the refusal of the DA because of concerns relevant to his position. The Council deferred consideration of the matter and there is nothing unreasonable in doing so in these circumstances. The Statement of Facts and Contentions was prepared based on the report of Mr Mamouzelos as identified in that document where the report is set out. After further consideration of contentions 2-6 following receipt of the Applicant's planner Mr Jones' report on 4 February 2010, the Council determined not to pursue contentions 2-6. This was advised by letter of 11 February 2010. 10 If any costs were thrown away as a result of contentions 2-6 not being pursued these would be relatively small. The Applicant had only one consultant planner who addressed all issues and the issues generally were of limited scope. While the Applicant issued two Notices to Produce to the Council no inspection of documents was undertaken. The subpoena issued to the NSW Police Department was in the same terms as a subpoena issued in other Class 1 proceedings also commenced by this Applicant against the Council in relation to the deemed refusal of another DA for the same premises. Finding 11 The Council referred to the principles relevant to costs considerations in Class 1 proceedings in Universal Childcare Pty Ltd v Leichhardt Municipal Council [2008] NSWLEC 277 (Sheahan J) at [5]-[10]. That decision refers to decisions made before the introduction of r 3.7 of the Court Rules on 28 January 2008 and usefully identifies the principles which continue to be relevant to the Court's consideration of costs under r 3.7. In particular the Court has wide discretion and should only exercise it to make an order for costs if it considers it fair and reasonable to do so. The circumstances in which the Court may award costs are set out in r 3.7 but this list is not exhaustive. 12 The Applicant commenced Class 1 proceedings on the basis of a deemed refusal by the Council of its DA, meaning that no decision was made in a specified time under the Environmental Planning and Assessment Act 1979 (the EP&A Act) so that an appeal right crystallised 40 days after lodgement of the DA. The Council proceeded to assess the DA obtaining reports of its planning officer, an independent planner and its Strategic Crime and Corruption officer Mr Mamouzelos. It had reports from all three on 14 December 2009 and deferred the matter at that meeting. This is criticised as unreasonable behaviour by the Applicant's counsel because the particular circumstance that an independent report which recommended approval, subject to certain conditions such as an amended plan of management, was available meant the Council should have considered and determined its view at that time. The requirement to do so was said to arise from a general obligation the Council has under the EP&A Act to determine DAs. That general duty, if it exists once a Class 1 appeal to the Court has been lodged an issue about which I make no finding, does not mean that a council which receives an independent expert's report must determine the matter finally at the next meeting after the receipt of such a report. 13 Even if the submission of unreasonable behaviour is confined to the particular circumstances of this matter, there is nothing unusual about how the Council has behaved to suggest unreasonable behaviour occurred when it deferred the matter on 14 December 2009. Nor was there unreasonable behaviour in the preparation of the Statement of Facts and Contentions in the overall circumstances of this case. Several contentions were abandoned nine days before the hearing after the consideration of the Council. 14 The Council is also criticised for failing to enter into consent orders as these would have been appropriate. This is an odd submission given that the Council sent an offer of settlement on 10 February 2010 which contained draft conditions of consent. That these were unacceptable to the Applicant does not suggest the offer was not genuine. There can be no criticism of the Council's actions on this basis. 15 At the hearing three contentions remained and were considered by the Commissioner in her judgment. No suggestion was made that the conduct of the matter before the Commissioner was unreasonable. There is no basis to apply r 3.7(f) to the Council's conduct. 16 The only basis on which costs could theoretically be ordered was that costs were thrown away by the abandonment of contentions 2-6 by the Council nine days before the hearing. This could amount to unreasonable behaviour under r 3.7(d). The matter appears to have progressed in the usual way of Class 1 proceedings, little cost would have been incurred in relation to these contentions by the Applicant and the circumstances do not suggest that it is fair and reasonable that the Council pay any costs of the Applicant. 17 It also follows from these findings that there is no basis for the Applicant's counsel's assertion that there was a failure by the Council to act as a model litigant. The circumstances in Bailey are quite different and it provides no guidance on what I should do in this matter. 18 The Applicant's Notice of Motion should be dismissed. As the Council has successfully defended the motion its costs ought be paid. Orders 19 The Court makes the following orders: 1. The Applicant's Notice of Motion dated 21 April 2010 is dismissed. 2. The Applicant is to pay the Respondent's costs of defending the motion as agreed or assessed. 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