Land and Environment Court New South Wales Medium Neutral Citation: Nada v Georges River Council [2017] NSWLEC 80 Hearing dates: 21 June 2017 Date of orders: 21 June 2017 Decision date: 21 June 2017 Jurisdiction: Class 1 Before: Molesworth AJ Decision: See orders at [37] Catchwords: COSTS – agreement of applicants to pay respondent's costs arising from amendment of development application pursuant to s 97B of the Environmental Planning and Assessment Act 1979 – agreement of applicants to pay respondent's costs arising from re-opening of proceedings – whether applicants should pay costs – whether respondent disentitled from costs due to delay – whether pursuit of agreed costs offends principle of finality – the Court should be able to rely upon assurances of legal practitioners – respondent entitled to costs Legislation Cited: Civil Procedure Act 2005, s 56 Environmental Planning and Assessment Act 1979, s 97B Land and Environment Court Act 1979, s 40 Land and Environment Court Rules 2007, r 3.10(2) Cases Cited: Burrell v The Queen (2008) 238 CLR 218; [2008] HCA 34 Fair Work Ombudsman v Valuair Ltd (No 3) [2014] FCA 1182 McCracken v Phoenix Constructions (Queensland) Pty Ltd [2013] FCAFC 87 Nada v Hurstville City Council [2015] NSWLEC 1300 Nada v Georges River Council [2016] NSWLEC 1302 Texts Cited: N/A Category: Costs Parties: Emad Nada and Eva Nada (Applicants) Georges River Council (Respondent) Representation: Counsel: Mr S Kondilios (solicitor) (Applicants) Ms J Hewitt (solicitor) (Respondent) Solicitors: Hall & Wilcox (Applicants) HWL Ebsworth (Respondent) File Number(s): 2016/00167898 Publication restriction: N/A EX TEMPORE Judgment 1. In this matter, the hearing commenced with a notice of motion brought by the Respondent Council, Georges River Council, dated 20 April 2017 and a competing notice of motion (cross-claim) brought by the Applicants, Emad Nada and Eva Nada, dated 29 May 2017. In both notices of motion, the respective parties sought orders for costs in relation to proceedings which were heard and determined by Commissioner O'Neill, being Class 1 proceedings involving a childcare centre proposed to be erected at 45 Ogilvy Street, Peakhurst in place of existing structures to be demolished. 2. In the Respondent Council's notice of motion, the three primary orders sought were: 1. That the Applicants pay the Respondent's costs of the re-opening of the proceedings pursuant to r 3.7 or the Land and Environment Court Rules 2007; 2. That the Applicants pay the Respondent's costs thrown away by reason of its amendment of the application on 4 June 2015 pursuant to s 97B of the Environmental Planning and Assessment Act 1979 ('EPA Act'); and 3. That the Applicants pay the Respondent's costs of the motion for costs. 1. In the Applicants' notice of motion, the five primary orders sought were: 1. That the Respondent pays the Applicants' costs of the application for the re-opening of the proceedings and the hearing following the re-opening application made with the consent of the Respondent; 2. That the Respondent pays the Applicants' costs thrown away by reason of the amendments to the application of 4 June 2015 in the circumstances of this matter; 3. That the Respondent pays the costs of the experts engaged by the Applicants in these proceedings from the date of the re-opening of the matter; 4. That the Respondent pays the Applicants' costs of the Respondent's notice of motion dated 20 April 2017; and 5. That the Respondent pays the Applicants' costs of its cross-claim. 1. In the course of the notice of motion hearing, after Mr Kondilios, appearing for the Applicants, made his primary submissions and after a necessary exchange with the Court – where the Court sought further clarification of the Applicants' position and put various propositions, indicating that the Court had some difficulty with the veracity of some of the matters put on behalf of the Applicants – Mr Kondilios confirmed that the notice of motion filed on behalf of the Applicants would be withdrawn, with none of the orders therein being pressed. 2. Subsequently, in the course of her submissions to the Court, Ms Hewitt, appearing for the Respondent Council, indicated that she had no forewarning that the Applicants' notice of motion might be withdrawn today. Clearly the Respondent Council came to the Court today in the expectation that it would need to put its case in response to the Applicants' motion. 3. The Class 1 proceedings before the Commissioner were protracted and had been preceded by a conciliation conference that failed to result in an agreement between the parties and was terminated on 24 March 2015. The proceedings came before the Commissioner in two stages, 4 and 5 June and 6 July 2015 and then again on 11 and 26 April 2016. The Commissioner's first decision was given on 28 July 2015 and her final decision was given on 21 July 2016. 4. There had been numerous interlocutory mentions before and between the primary hearings, which are summarised in the affidavit of Ms Lauren Smith, dated 20 April 2017, which was read into evidence by the Respondent Council. Although there were initially many aspects of the proposed development which were in dispute, the primary contentious matter that gave rise to extended hearings and successive amended plans related to stormwater management issues. The order for costs sought regarding the 2015 hearing 1. On the opening day of the hearing before the Commissioner on 4 June 2015, amended plans were accepted by the Court at the commencement of the hearing "… on the basis agreed by the parties pursuant to s 97B of the EPA Act": Nada v Georges River Council [2016] NSWLEC 1302 at [10]. Materially, subs (1) and (2) of s 97B of the EPA Act provide: (1) This section applies to proceedings if the Court, on an appeal by an applicant under section 97 allows the applicant to file an amended development application (other than to make a minor amendment). (2) In any proceedings to which this section applies, the Court must make an order for the payment by the applicant of those costs of the consent authority that are thrown away as a result of amending the development application. 1. It is the payment of the costs the subject of that agreement, made on the first day of the hearing before the Commissioner on 4 June 2015, which is the subject of the second order for costs sought by the Respondent Council today. My understanding of "the basis agreed by the parties pursuant to s 97B" is assisted by the affidavit of Ms Lauren Smith, which was unchallenged by Mr Kondilios. 2. No order as to costs was made by the Commissioner, although, in my view, she had clear power to do so, as is apparent from r 3.10(2) of the Land and Environment Court Rules 2007, which provides as follows: (2) Nothing in this rule prevents a Commissioner from making an order as to costs pursuant to the requirements of s 97B(2) of the Environmental Planning and Assessment Act 1979. 1. I fear that the exchange between the legal practitioners for both parties and the Commissioner might have confused the situation, being an exchange that in one sense obfuscated the issue. Be that as it may, there is no doubt in my mind that the Commissioner agreed that the s 97B costs should be paid. The transcript of the exchange before the Commissioner on 4 June 2015 made it patently clear that the Court proceeded on the basis of the agreement between the parties regarding costs, albeit there was a somewhat curious exchange regarding the word "undertaking" with Mr Kondilios. There is no doubt that the Commissioner relied on the Applicants' representation that the parties had agreed to the s 97B requirement, which arises in circumstances where amended plans featuring major changes are filed (Transcript, 4 June 2015, p 19). 2. There is no doubt in my mind, reading the Commissioner's 2015 decision and the affidavit of Ms Smith, that the changes to the plans were major. In other words, they were not "minor amendments" within the terms of s 97B, as they triggered the necessity for further public notification. Hence, following the hearing day of 5 June 2015, the matter was adjourned to allow for the notification exercise to occur, before resuming on 6 July 2015 for a further hearing day. 3. The transcript passage of relevance for 4 June 2015 appears at p 19, lines 9 to 21. The transcript first refers to Dr Berveling, counsel for the Respondent Council: BERVELING: Could I ask, also ask the Court to order that the Applicant pay? COMMISSIONER: I can't make those orders, is my understanding. We've had an undertaking from the Applicant that, on the basis of agreed or assessed costs, those plans would not be objected to. KONDILIOS: 'Undertaking' is a serious word, Commissioner, but there is an agreement. My client will agree to pay 97B, as agreed or assessed. If the Respondent is insistent on an order, I obviously agree with the discussion the Commissioner has given. I have not given an undertaking. I didn't use that language. But we agree, and I'm on record as saying, I'm instructed to agree to a s 97B order as a consequence of obtaining leave. I'm saying these words deliberately this morning 'as agreed or assessed'. COMMISSIONER: We all use our words deliberately, Mr Kondilios. 1. I will observe that in circumstances where legal practitioners appear before the Court and assure it that agreement has been reached between the parties regarding a matter such as, in this instance, an agreement that the usual costs consequences arising from s 97B of the EPA Act will occur, then I consider that such an assurance is tantamount to being an undertaking to the Court that the parties will do that which their legal practitioners have assured the Court will be done. I believe that the Commissioner was correct to use the word "undertaking" when Mr Kondilios assured the Court that an agreement between the parties would be fulfilled. I rhetorically ask: unless the Court can rely upon such assurances from legal practitioners that an agreement has the veracity that it purports to have, then surely proceedings before the Court have the potential to be seriously undermined. 2. The Commissioner's position is perfectly clear at [10] of her decision of 28 July 2015 (Nada v Hurstville City Council [2015] NSWLEC 1300), being her first decision, wherein she stated: Leave was granted by the Court for the applicant to rely on an amended proposal (exhibit J), at the commencement of the hearing, on the basis agreed by the parties pursuant to s 97B of the EPA Act. 1. Nothing the Applicants have put to me today in submissions weakens the reasonableness of the Respondent Council's submissions that it is entitled to its costs that were the subject of the agreement reached on 4 June 2015, costs which would, in the normal course, be the subject of a s 97B(2) order. The order for costs sought regarding the 2016 hearing 1. The first order sought by the Respondent Council relates to the subsequent hearing before the Commissioner on 11 and 26 April 2016. As mentioned above, the order sought is: 1. That the Applicants pay the Respondent's costs of the re-opening of the proceedings pursuant to r 3.7 of the Land and Environment Court Rules 2007. 1. An outcome of the first hearing before the Commissioner was, inter alia, a finding by her that she considered the Applicants' proposed approach to the management of stormwater to be unacceptable. She preferred the expert evidence called by the Respondent Council to that of the expert evidence called by the Applicants. She determined, as made clear at [64] of her decision of 28 July 2015 (Nada v Hurstville City Council), that the preferable approach to stormwater management would be for a downhill gravity flow approach to be adopted, requiring an easement across two abutting private properties, rather than the scheme that had been proposed by the Applicants. As a consequence of this decision, the Commissioner accepted at [65] that applications to the Court for an order imposing an easement over land pursuant to s 40 of the Land and Environment Court Act 1979 would be required. 2. Subsequently, those s 40 applications were initiated by the Applicants. However, prior to these applications being heard, the Applicants decided to revisit the stormwater management decision by proposing an alternative approach to that which the Commissioner had decided was preferable. 3. By affidavit dated 25 February 2016, Mr Kondilios supported an application to the Court to re-open the proceedings, so that the new alternative approach to stormwater management could be examined. Paragraphs 21 to 23 of this affidavit are relevant: 21. If the Court is minded to grant leave to re-open the matter before Commissioner O'Neill, the Applicant would request that the Commissioner have regard to the stormwater plan and flood mapping study. 22. If the Court is satisfied with the stormwater plan prepared by Mr Kenny and accepts the plan for the purpose of a development consent, then the two s 40 proceedings become redundant and would be discontinued. 23. The Applicant will pay the Respondent's reasonable costs associated with the review of this material and attendance at Court for the purpose of re-opening the matter. 1. Particular focus on what is stated in par 23 is warranted. That is: that the Applicant[s] will pay the Respondent's reasonable costs associated with the review of this material and attendance at Court for the purpose of re-opening the matter. 2. On 3 March 2016, the Commissioner, in hearing a notice of motion dated 25 February 2016 made, by consent, the orders sought to re-open the proceedings. The first order listed new material sought to be relied upon by the Applicants, including the new stormwater management plans. The second order of the Commissioner was that: "The Applicant[s] pay the Respondent's costs, occasioned by the reliance on the material 1(a) to 1(i) pursuant to s 97B of the Land and Environment Court Act 1979". 3. As a consequence, the proceedings were re-opened by the Commissioner, with the hearing re-commencing on 11 April 2016 and continuing on 26 April 2016. On 21 July 2016, the Commissioner, in her decision (Nada v Georges River Council), approved the Applicants' new stormwater proposal. 4. I accept the unchallenged evidence of Ms Smith, as set out in her affidavit, which provides the Court with a clear understanding of the appearances before the Court that were required by reason of the re-opening – in par 28 – and a clear understanding of the detailed assessment and preparation of documents by the Respondent Council's lawyers and experts (in response to the amended proposal, for the purpose of representing the Respondent at the re-opened proceedings). None of this evidence was disputed by Mr Kondilios. In fact, in the course of his oral submissions to the Court, he repeatedly assured the Court that the facts in this matter are not in dispute. 5. Before me, Mr Kondilios repeatedly argued that the orders for costs should not be made in favour of the Respondent Council due to their delay in taking steps to recover their costs, despite it being apparent to the Court that the Respondent Council was entitled to those costs, given the agreement between the parties and the basis on which the proceedings were re-opened. 6. In addition to the unchallenged evidence set out in Ms Smith's affidavit, Ms Hewitt placed into evidence, as Exhibit 1, a bundle of correspondence and attachments, which was correspondence between the solicitors for the Respondent Council and the solicitors for the Applicants. This material has left the Court in no doubt as to the efforts pursued by the Respondent Council in seeking its costs and their basis for so doing. 7. The sole basis for the Applicants' claim that the Court should not make the orders sought in the notice of motion is that the Respondent Council is alleged to have delayed for too long a period, said to be one year, in seeking the costs agreed to be paid by the Applicants. The Applicants argued that it would be contrary to the well-established principle of finality and public policy to now formalise this agreement through court orders. In so doing, Mr Kondilios cited a number of authorities (providing a summary sheet of the findings in each case) which confirm the desirability of proceedings achieving finality and not being re-agitated after determination. As an example of the well-established principles, I cite just one of the cases he referred to, Burrell v The Queen (2008) 238 CLR 218; [2008] HCA 34 (at [16]): … It is that the principle of finality serves not only to protect parties to litigation from attempts to re-agitate what has been decided, but also has wider purposes. In particular, the principle of finality serves as the sharpest spur to all participants in the judicial process, judges, parties and lawyers alike, to get it right the first time. Later correction of error is not always possible. If it is possible, it is often difficult and time-consuming, and it is almost always costly. 1. The Court pressed Mr Kondilios on whether he was actually saying that if a party was seeking, by an application to the Court, the payment of costs to which it was entitled by reason of agreement between the parties (or by statutory requirement after the judgment in the matter), that this would offend the principle of finality, in his view. Refining his submissions, Mr Kondilios said that his issue was really about the delay which he asserted had occurred. 2. I do not find that the Applicants have established that there has been any significant relevant delay. Rather I am satisfied that the Respondent Council has taken action in an appropriate period of time to give effect to the parties' agreement as to the costs presently at issue. 3. Moreover, I consider that the public policy considerations actually weigh against the Applicants in the present case. If there were to be some strict rule that an agreement as to particular costs during a hearing could only be relied upon if action was taken in a narrowly circumscribed period after the hearing, litigants might be significantly less likely to expeditiously resolve interlocutory cost issues. Consequently, litigation would likely become less efficient and more expensive, contrary to s 56 of the Civil Procedure Act 2005. 4. Although not strictly material, I suspect that significant delay would have been caused in this case, if the Respondent Council had contested the application to re-open the proceedings because of a concern as to the resulting legal costs. Instead, the Applicants, in making the decision to agree to pay legal costs, so as to secure consent to re-open the proceedings, were successful when they might not otherwise have been and the proceedings continued efficiently. 5. Similarly, it is also of some significance that the courts rely upon mutual trust between legal practitioners, I emphasise, as officers of the Court. If a commitment is properly (and often beneficially) made by an officer of the Court that his or her client agrees to pay costs, the opposing officer of the Court should be able to comfortably rely on this commitment. Of course, if there was some exceptional disentitling conduct, such as gross delay or a firm representation that the party benefiting from the costs agreement no longer wished to pursue that agreement, the position might be different. 6. In making my decision, it is highly significant that the notice of motion before me seeks orders relating to costs that were agreed to be paid by the Applicants in the substantive proceedings. Therefore, nothing that I have said is inconsistent with the normal guideline that applications for costs should be made in a timely fashion in circumstances where no costs order has been sought at, or shortly after, the time of the hearing: see McCracken v Phoenix Constructions (Queensland) Pty Ltd [2013] FCAFC 87 at [13]. 7. Indeed, if those were the circumstances here, Mr Kondilios' submissions would have been more apt. Alas, they are not. In fact, the Respondent Council did seek, at the time of the hearing, a formal order for costs with respect to the s 97B costs and was precluded from seeking such an order from the Commissioner with respect to the costs of re-opening the proceedings: cf the circumstances discussed in McCracken v Phoenix Constructions (Queensland) Pty Ltd at [18] and Fair Work Ombudsman v Valuair Ltd (No 3) [2014] FCA 1182 at [4]–[5]. The position of the Commissioner in this respect differed from her power to make an order pursuant to s 97B. Costs with respect to the motion for costs 1. The Respondent Council seeks a third order for costs, its costs arising from its notice of motion dated 20 April 2017, culminating in the hearing before me. Once it was apparent that the Applicants were withdrawing their notice of motion, Ms Hewitt submitted that the Respondent Council should be entitled to costs thrown away by reason of the late withdrawal of the Applicants' motion. 2. Mr Kondilios indicated that, upon reading the transcript of the 2015 proceedings before the Commissioner, reminding him of the precise words spoken in the course of that hearing, that this was the reason why the Applicants had decided to withdraw their motion. Although the Respondent Council's notice of motion was accompanied by Ms Smith's affidavit, both of which were dated 20 April 2017 (and it was to Ms Smith's affidavit that the transcript was annexed), I surmise that Mr Kondilios, given the normal pressures of practice, may not have had the opportunity to read the transcript until more recently, despite his clients' own notice of motion being dated 29 May 2017, some five weeks later. Mr Kondilios conceded that, should I find against the Applicants today, then he would expect costs of the motions to follow the event. Orders 1. In conclusion, in addition to the parties' agreement that the Applicants would pay the Respondent Council's costs of re-opening the proceedings, I am independently and additionally satisfied that, in all the relevant circumstances, it is fair and reasonable to make such an order under r 3.7 of the Land and Environment Court Rules 2007. Accordingly, for the reasons I have expressed, I make the following orders: 1. The Applicants are to pay the Respondent's costs of the re-opening of the proceedings pursuant to r 3.7 of the Land and Environment Court Rules 2007; 2. The Applicants are to pay the Respondent's costs thrown away by reason of its amendment of the application on 4 June 2015, pursuant to s 97B of the Environmental Planning and Assessment Act 1979; and 3. The Applicants are to pay the Respondent's costs of the motions for costs heard before Molesworth AJ on 21 June 2017. ********** Amendments 05 July 2017 - change to cover sheet 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. Decision last updated: 01 May 2018