Costs Apportionment in Environmental Dispute

The court decided on the apportionment of costs in an environmental dispute, considering the success of the claimant's claims and the involvement of the Hawkesbury City Council. The ruling was made by Moore J in the Land and Environment Court on 12 September 2016.

Land and [ADDRESS] South Wales

Medium Neutral Citation: [COMPANY] v Hawkesbury City Council [2016] NSWLEC 127 Hearing dates: 12 September 2016 Decision date: 12 September 2016 Jurisdiction: Class 4 Before: Moore J Decision: See [18] to [20] Catchwords: COSTS – apportionment – applicant not successful on all issues – differential lodgement of submitting appearance by Council – costs order against Council agreed – determination of costs between remaining parties – costs order Legislation Cited: Hawkesbury Local Environment Plan 2012 Uniform Civil Procedure Rules 2005, Pt 42 r 42.1 Cases Cited: [COMPANY] v [NAME] [2015] NSWLEC 86 [COMPANY] v [COMPANY] (No 2) [2011] NSWCA 344 Category: Costs Parties: [COMPANY] (Applicant) Hawkesbury City Council (First Respondent) [COMPANY] (Second Respondent) [COMPANY] (Third Respondent) Representation: Counsel: [redacted] [NAME], barrister (First Respondent) [NAME] (Second and Third Respondents)

Solicitors: [redacted] [NAME] (First Respondent) [NAME] (Second and Third Respondents) File Number(s): 154005 of 2016 and 160454 of 2016 Publication restriction: No

Judgment 1. HIS HONOUR: In each of these proceedings, the original applicant in these Class 4 proceedings, [COMPANY] ([NAME]), seeks an order for costs, as do the substantive respondents, which I will describe as the "[NAME]". There are two sets of proceedings and they are also proceedings that involve Hawkesbury Shire Council (the Council), with respect to whose participation, it is conceded (in what has been described as the second proceedings - being proceedings in which the Council played an active part until 16 October 2015 when the Council lodged a submitting appearance), that the Council should pay [NAME]'s costs on an ordinary basis up to 16 October 2015. There is no basis upon which I could or should cavil with that finding.

2. In the substantive dispute between [NAME] and the [NAME], I gave a lengthy decision on 16 December 2015 in which I upheld the complaint by [NAME] against the [NAME] on two grounds, one of which grounds related to the inadequacy of the owner's consent to the development applications that had been approved on 30 June 2015 by Hawkesbury Council. That was a basis that had arisen during the course of the proceedings and following questions asked by me of a witness about owner's consent. The matter arose subsequently by a permitted amendment to the pleadings on behalf of [NAME], a subsequent additional hearing and subsequent written submissions being made.

3. The single substantive matter in the proceedings that had been alive from the beginning was the question of whether the terms of cl 2.8(3)(b) of the Hawkesbury Local Environmental Plan 2012 had been complied with, it being a "no adverse impact" test contained in the instrument and the matter being determined by the Council on the evidence submitted by the [NAME] was on a "no unreasonable or unacceptable adverse impact" test, not being that which was contained in the instrument.

4. On that second test, the Council had had the advantage not only of submissions by the solicitors for [NAME] and the (then) solicitor for [NAME] drawing their attention to the nature of the test to be applied but also a written advice from [NAME] of senior counsel and Mr To of counsel, such advice behind Annexure H to the affidavit of [NAME] dated 22 August 2016. There, at [15] to [17], the question of caution with respect to that provision was dealt with, in my view, correctly in the 22 June advice from [NAME] and Mr To.

5. I also have the position where there is, as provided by Pt 42 r 42.1 of the Uniform Civil Procedure Rules 2005, the general presumption is, in litigation such as this, that costs will follow the event unless it appears to me that some other order should be made as to the whole or any part of those costs.

6. The basis upon which I can make alternative orders to the usual form, that is costs be made in favour of the successful party as agreed or assessed, are powers are set out in s 98(4) the Civil Procedure Act 2005. I have been taken to a wide variety of authorities in these proceedings. It seems to me that it is not a matter where I need to canvas extensively those authorities, simply to observe that, collectively, they reinforce the proposition that I need to be satisfied that some order should be made as to the whole or any part of the costs. There are two matters I need to determine in making a decision as to whether I should depart from the general presumption.

7. The first is that put positively in favour of its position by [NAME] on behalf of [NAME] that there should be an indemnity costs order, following from the date of an offer made by [NAME] for the termination of the proceedings.

8. That is discussed in the submissions by [NAME] on behalf of [NAME]. It is unnecessary for me to deal with that at great length. The matter in particular that, in my view, militates against an indemnity costs order is that which is set out in [NAME]'s [33] in the following terms: It is arguable that [NAME]'s offer was not genuine in that it was for a complete capitulation of [NAME]'s position ie that it abandon its lawful (at that time) development consents or be faced with a punishment of an indemnity costs order as opposed to the more appropriate compensatory burden of party‑party costs. 1. [NAME]'s submission then notes that, as has been dealt with in cases such as [COMPANY] v [COMPANY] (No 2) [2011] NSWCA 344 where the decision of [NAME] deals with the circumstances under which such an order might be appropriate, there must be a genuine compromise. 2. [NAME] submitted that, in the circumstances where what was sought was an immediate surrender within the term of the period for which the offer was open of the two development consents that were held by the [NAME], that was not a genuine offer in circumstances where it was reasonable to assume, as was the position that was disclosed in the substantive hearing, that there might have been bookings for the use of the two contested facilities after the expiry of that period.

3. As [NAME] pointed out, an offer, for example, to abandon the consents after pre‑existing bookings were honoured or at least up until 31 October 2015, the time allowed by [NAME]'s undertaking to the Council, would have been something given away. However, the period of 28 days for acceptance does not really qualify as such.

4. The circumstances that were revealed in the subsequent hearing were that there were bookings of a lengthy nature that were necessary to be dealt in a discretionary fashion, in my decision given on 18 December, not being something that is the subject of the costs application in these proceedings.

5. The second matter that needs to be considered is the question of what might be the already accrued actual or realistically expectable decisions on costs in favour of the [NAME]. First, there is the position that, in the matter that was dealt with by Pain J (see [COMPANY] v [NAME] [2015] NSWLEC 86) which was an application for expedition by [NAME] was entirely unsuccessful.

6. It is clear from a short reading of her Honour's judgment that [NAME] applied and failed entirely and that, although her Honour reserved costs, it would be appropriate now for me to take into account [NAME]'s undoubted liability arising from those proceedings for [NAME]'s costs of those proceedings.

7. The second aspect with which I need to deal is the fact that there has been a costs order made in [NAME]'s favour for costs thrown away.

8. Whilst I am satisfied that the single substantive issue upon which [NAME] succeeded from amongst the issues that were originally pleaded by it was one that was something that was clearly on notice to both [NAME] and to the Council, there is no doubt that there were several other matters (as set out in [NAME]'s submissions) where I made the finding in the substantive judgment on 16 December 2015 that the matters pleaded and which took up some time during the hearing were either untenable or without sufficient basis to have warranted being pleaded - particularly in the circumstances where it would have been obvious, given [NAME]'s and Mr To's advice to the Council that there was a more than strong probability that [NAME] would succeed on the ground upon which it did succeed.

9. I am satisfied overall that, in order to bring these proceedings to an end, that I should set aside the earlier costs order that I have made in favour of [NAME]. Second, that there should be a costs order between the [NAME] in the terms that have been agreed between them (in Matter 154005 of 2016).

10. Third, that balancing the wins and losses, and having regard to the fact that there is a significant interest both public and between the parties of bringing these proceedings to an end, the appropriate order, doing as best I can without any detail as to the costs incurred by either party, is that [NAME] should be entitled to 50% of its costs in both matters beyond the amount that has been agreed to accrue to [NAME] as a consequence of the order in its favour against the Council.

11. In doing so it should be made expressly clear in the orders that that is an extinguishment of all costs entitlements in both proceedings of any nature - that is the 50% order against [NAME] and the costs order against the Council, with the costs order in favour of [NAME] running against [NAME] after the order for the Council expires in the proceedings in which the order is to be made against the Council.

12. The parties are to bring in Short Minutes, that can be e-mailed to my Associate, and I will make the orders in chambers. The Short Minutes are to be brought in within a week from today.

********** 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: 05 October 2016