Land and Environment Court New South Wales Medium Neutral Citation: Penrith City Council v Dincel Construction System Pty Limited (No 2) [2020] NSWLEC 58 Hearing dates: 24 April 2020 Date of orders: 22 May 2020 Decision date: 22 May 2020 Jurisdiction: Class 4 Before: Robson J Decision: See orders at [24] Catchwords: COSTS — Party/Party — Costs orders in interlocutory proceedings Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) r 42 Cases Cited: His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Incorporated (No 2) [2007] NSWCA 142 Pages Property Investments Pty Ltd v Boros [2019] NSWSC 1778 Verde Terra Pty Ltd v Central Coast Council; Central Coast Council v Verde Terra Pty Ltd (No 5) [2020] NSWLEC 48 Category: Costs Parties: Penrith City Council (Applicant) Dincel Construction System Pty Limited (First Respondent) Gaonor Pty Limited (Second Respondent) Representation: Counsel: R White (Applicant) J Lazarus SC with H Grace (First and Second Respondents) Solicitors: Dentons Australia Pty Ltd (Applicant) Addisons (First and Second Respondents) File Number(s): 2019/00157051 Publication restriction: Nil Judgment 1. These reasons relate to costs associated with a notice of motion filed 6 April 2020 by the respondents in Class 4 proceedings for leave to re-open the case. 2. By amended summons filed 27 June 2019, Penrith City Council ('Council') seeks declaratory and consequential injunctive relief against Dincel Construction Systems Pty Ltd ('Dincel') and Gaonor Pty Ltd ('Gaonor') (collectively 'respondents') in relation to unauthorised development carried out at premises located at 901-915, 919-929 and 931 Mamre Road, Kemps Creek. 3. The substantive proceedings have been heard over eight days on 4-5 December, 9-11 December 2019 and 17-19 February 2020. On 19 February 2020, I reserved my decision subject to allowing Council to provide further written submissions to a number of exhibits comprising proposed orders proffered by the respondents and for the respondents to provide any submissions in response thereto. 4. By notice of motion filed 6 April 2020, the respondents sought the following orders: "1. The Respondents be granted leave to re-open its case to rely on the affidavit of Andrew Cowan dated 6 April 2020 and Penelope Louise Murray dated 6 April 2020. 2. Upon the Second Respondent providing a revised form of undertaking in the document annexed to this notice of motion, the Second Respondent is released from the undertaking given to the Court on 9 March 2020 requiring it to cause a development application to be lodged with the Applicant in relation to 919-929 Mamre Road, Kemps Creek, by 30 April 2020. …" 1. The notice of motion was returnable before me on 24 April 2020. In support of their motion, the respondents read the affidavits of Andrew Colin Cowan affirmed 6 April 2020 and Penelope Louise Murray affirmed 6 April 2020. 2. Mr J Lazarus of senior counsel with Mr H Grace of counsel appeared for the respondents, and Mr R White of counsel appeared for Council. Each of the parties provided written submissions in relation to the substantive orders sought in the motion. 3. At the commencement of the hearing of the motion on 24 April 2020, the Court was informed that the parties had reached substantial agreement in relation to the relief sought in the notice of motion and, at the commencement of the hearing on the motion, I heard submissions from counsel to the effect that the parties had, on an interlocutory basis, reached an agreement recorded in proffered "Short Minutes of Order", which I made with the consent of the parties on 24 April 2020 as follows: "1. The Respondents be granted leave to re-open its case to rely on the affidavit of Andrew Cowan dated 6 April 2020 and Penelope Louise Murray dated 6 April 2020. 2. Upon the Second Respondent providing a revised form of undertaking in the document annexed to the Respondents' Notice of Motion dated 6 April 2020, the Second Respondent is released from the undertaking given to the Court on 9 March 2020 requiring it to cause a development application to be lodged with the Applicant in relation to 919-929 Mamre Road, Kemps Creek, by 30 April 2020. 3. Leave is granted to the Applicant to file and serve updating evidence in relation to 931 Mamre Road and 1107 Mamre Road in respect of which it intends to seek leave to reopen including submissions as to why the Applicant should be permitted to re-open its case to lead such evidence to the extent it is not responsive to the Respondents' evidence referred to in Order 1 by 4pm, 1 May 2020. 4. The Respondents are to file and serve submissions limited to the updating evidence, by 4pm, 8 May 2020. 5. Applicant to file and serve submissions in reply, in relation to the updating evidence by 4pm, 15 May 2020." 1. I note that, because the orders agreed to by the parties anticipate in Order 3 that Council itself may file responsive evidence and may seek leave to re-open its case, in a practical sense, the hearing has not been completed. 2. The Court having made the orders, Mr White sought an order that the respondents pay Council's costs of the notice of motion. Mr Lazarus submitted that, in those circumstances, each party should bear its own costs or alternatively, that Council pay the respondents' costs of the motion. 3. The evidence in relation to the respective costs applications primarily comprised correspondence passing between the parties which was annexed to the affidavit of Mr Cowan affirmed 6 April 2020 and various documents in relation to discussions or meetings earlier undertaken between the parties. 4. Council submits that it is appropriate for the Court to order the respondents, as the parties bringing the motion to re-open, to pay Council's costs of the notice of motion. Council says that the further evidence relied upon seeks only to correct a "mistake" made by the respondents in relation to the identity of the relevant planning authority to whom a draft site-specific development control plan should be directed. Council submits that this correction was neither requested nor agreed to by Council. 5. Council further submits that it would have been inappropriate for an application to re-open to be made by way of letter and that such an application would always need to have been made by way of a notice of motion which, in turn, would likely require evidence and submissions to be filed in support. 6. In response, the respondents submit that the appropriate order in the circumstances is for each party to bear its own costs of the motion. Although the respondents acknowledge that the application has been made in order to correct a mistake, the respondents submit that it was a common mistake between the parties and was caused by incorrect advice provided by Council. The respondents point to correspondence detailing the background facts to support this contention. 7. The respondents further submit that the orders sought in the notice of motion were opposed by Council until the day prior to the hearing of the motion. The respondents submit that the evidence before the Court shows that the respondents sought to make the application to re-open by consent, however Council's refusal to consent to the application forced a notice of motion to be filed. Applicable law 1. The principles in relation to the awarding in costs in matters such as the present are well-known. In interlocutory proceedings, the "default" position is that costs are dealt with and become payable upon the conclusion of proceedings in accordance with r 42.7 of the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR'): Verde Terra Pty Ltd v Central Coast Council; Central Coast Council v Verde Terra Pty Ltd (No 5) [2020] NSWLEC 48 ('Verde Terra') at [18] (Pepper J citing Rees J in Pages Property Investments Pty Ltd v Boros [2019] NSWSC 1778 at [37]). 2. Rule 42.7 of the UCPR provides as follows: 42.7 Interlocutory applications and reserved costs (1) Unless the court orders otherwise, the costs of any application or other step in any proceedings, including— (a) costs that are reserved, and (b) costs in respect of any such application or step in respect of which no order as to costs is made, are to be paid and otherwise dealt with in the same way as the general costs of the proceedings. (2) Unless the court orders otherwise, costs referred to in subrule (1) do not become payable until the conclusion of the proceedings. 1. The discretionary power of the Court to award costs in relation to interlocutory proceedings was recently explained by Pepper J in Verde Terra at [21]: "Rule 42.7 of the UCPR is therefore the starting point in determining the appropriate cost order in interlocutory applications (or in relation to "other steps in the proceedings"). The default position of costs in the cause may, however, be displaced by the express discretionary power contained in that rule. That power, although unfettered (Metropolitan Petar at [28]), must be exercised judicially having regard to established principle (Oshlack [Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11] at [134])." 1. Further, in circumstances where the discretionary power of the Court to award costs is exercised, the general position is that costs follow the event: UCPR r 42.1. Nonetheless, the Court must exercise its discretion in light of the circumstances of the case: His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Incorporated (No 2) [2007] NSWCA 142 at [21]. 2. For reasons that follow, I am of the view that the appropriate order is that costs should be in the cause. 3. I accept that it is usually appropriate for an application for leave to re-open a case that has otherwise been completed, especially one that has proceeded over a period of eight days, to be made by notice of motion. In the circumstances, I do not consider Council's reluctance in relation to the respondents applying by letter to the Court to vary the second respondent's undertaking of 9 March 2020, to be unreasonable. 4. Council's failure to agree to the orders until after service of evidence and submissions is understandable and, to that extent, it is not unreasonable given the nature of the matter. Despite this, there is some substance in the submission that the position in which the respondents found themselves was, in some minor way, contributed to by Council's earlier conduct. The correspondence to which I have been directed indicates that there was clearly some delay, and obviously some misunderstanding, in relation to the identity of the relevant planning authority to whom the draft site-specific development control plan should be directed. 5. Although the substance of the relief sought in the motion primarily concerned a revision to an undertaking earlier given, it is unclear whether Council was partly responsible for the respondents' misunderstanding. However, I note that, even if there was some miscommunication, this occurred some eight months before the lodgement of the draft site-specific development control plan. In these circumstances, it is difficult to determine with whom responsibility for this misunderstanding should lie. 6. In the circumstances, as I do not consider the material before the Court to be sufficient to assign blame on either party for the mistake which apparently led to the necessity of re-opening the case, and as I also consider that neither party's conduct could be described as unreasonable, I find that the appropriate order is that costs be in the cause. Orders 1. The orders of the Court are: 1. The orders made on 24 April 2020 are confirmed. 2. Costs of the notice of motion filed 6 April 2020 are costs in the cause. ********** 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: 22 May 2020