VICTOR BERK v. THE COUNCIL OF THE MUNICIPALITY OF WOOLLAHRA [1992] NSWLEC 116 (26 November 1992)

IN  THE  LAND  AND			MATTER NO:     10288 of 1991

ENVIRONMENT  COURT			CORAM:	     Pearlman J

OF NEW SOUTH WALES			DECISION DATE: 26 November 1992

VICTOR BERK

Applicant

v

THE COUNCIL OF THE MUNICIPALITY OF WOOLLAHRA

First Respondent

S and O TAECHAUBOL

Second Respondents

L and P O'NEIL

Third Respondents

JUDGMENT ON COSTS

HER HONOUR:

By a notice of motion dated 5 December 1991, the applicant, Victor Berk, seeks an order that Woollahra Municipal Council (the first respondent) and L and P O'Neil (the third respondents) pay the applicant's costs of class 1 proceedings heard before Assessor Riding arising out of the refusal by the first respondent to grant development approval. (No order was sought against the second respondents, and they did not appear).

The land which was the subject of the class 1 appeal was No 6 Wolseley Road Point Piper, one of three separate lots upon which was formerly situated the residence known as Paradis-Sur-Mer. The owners of the land are Mr and Mrs Gerald Symonds and the applicant is their architect.

Mr and Mrs Symonds acquired the Paradis-Sur-Mer site in 1990. They demolished the existing house, and set about constructing a house on each of the three separate lots. Their efforts have involved them in considerable litigation in this and other courts.

They started with the middle lot, No 7, in respect of which their development application was refused by the first respondent, but granted on appeal in class 1 proceedings in this Court. They then turned to No 6. A development application lodged by them in respect of No 6 in 1990 was refused, and an appeal in class 1 proceedings in this Court was also refused ("the first No 6 appeal"). They applied to the first respondent again in respect of No 6 in 1991, and the application was again refused by the first respondent. It is in respect of the appeal from that refusal ("the second No 6 appeal") that this application for costs is made.

On the way, however, there have been other applications. These included a notice of motion brought by the third respondents to stop the work proceeding on No 6 (which was refused), a s 56A appeal, (which was dismissed by Cripps J in March 1992), an application for special leave to appeal to the Court of Appeal (which was refused in May 1992), and an application for special leave to appeal to the High Court, which is pending.

In respect of the remaining lot, No 8, the owners have made application to the first respondent for development approval which, so far as I am aware, has not yet been determined.

It is important to bear in mind, however, that this application concerns only the costs of the second No 6 appeal, heard by Assessor Riding over 11 days between 16 October 1991 and 5 November 1991, and in respect of which he allowed the appeal and granted development approval.

The application is made on alternative grounds. The applicant claims that the proper principle to be applied in civil litigation in this Court is, following Latoudis v Casey (1990) 170 CLR 535, that costs ought generally to be awarded in favour of the successful party. In the alternative, the applicant claims that the circumstances in the second No 6 appeal were exceptional, so as to found an order for costs against the first and third respondents in his favour.

S 69 of the Land and Environment Court Act 1979 provides that costs of and incidental to proceedings in this Court are in the Court's discretion. There are no other relevant legislative provisions, regulations or directions, except cl 12 of Practice Direction No 3 issued by the Chief Judge of this Court in 1987. That practice direction is as follows:

"12 Costs

The practice of the Court is that no order for costs is made in Planning and Building Appeals unless the circumstances are exceptional.

As from this date a direction made by the Chief Judge that proceedings be heard by one or more assessors shall be interpreted as being a direction to hear the whole of the matter other than any question of costs.

Any application for costs should be made by notice of motion within 14 days of publication of the judgment".

The practice of the Court prior to the making of cl 12 of the Practice Direction was generally not to award costs against unsuccessful parties in class 1 proceedings (see for example Rio Pioneer Gravel Co Pty Ltd v Warringah Shire Council (1969) 17 LGRA 153; McDonald Industries Ltd v Sydney City Council (1980) 43 LGRA 428); and Kremer & Associates v North Sydney Municipal Council (1982) 47 LGRA 209).

It is the contention of Mr Gruzman QC, on behalf of the applicant, that the Court's discretion conferred by s 69 is unaffected by previous decisions of this Court or by the Practice Direction, and there is accordingly no legal requirement for this Court to consider whether or not exceptional circumstances exist so as to found an order for costs. He contends that the applicant is prima facie entitled to an order, he being the successful party in the second No 6 appeal, and there is no suggestion of bad faith on his part or that of the owners of No 6.

For that proposition, Mr Gruzman relies principally on Latoudis v Casey.

That case concerned the question of whether a court of summary jurisdiction in exercising a statutory discretion to award costs in criminal proceedings which have terminated in favour of a defendant should be guided by a general criterion that, ordinarily, an order for costs will be made in favour of a successful defendant.

I do not think that Latoudis v Casey is authoritative of the guidelines to be taken into account by a court when exercising a discretion in relation to costs in civil as distinct from criminal proceedings. That case was concerned only with summary jurisdiction in criminal proceedings, and involved an appeal from a decision of a Victorian magistrate not to award costs in favour of the appellant against the informant. It was held by Mason CJ, Toohey and McHugh JJ (with Brennan and Dawson JJ dissenting) that:

1. Costs in civil and criminal proceedings are not awarded in order to punish the unsuccessful litigant, but to compensate or indemnify the successful litigant for the costs to which he or she has been put by the proceedings in which he or she has been successful.

2. Where there is a statutory discretion, unfettered by the legislature, it is nevertheless appropriate for an appellate court to lay down guidelines for the exercise of that discretion (following Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513). Such a principle or guideline leads to judicial consistency, and does not constitute a fetter upon discretion otherwise unfettered.

3. Accordingly, in ordinary circumstances, an order for costs should be made by a court exercising summary jurisdiction in criminal proceedings in favour of a successful defendant.

Each of Mason CJ and Dawson, Toohey and McHugh JJ referred to civil proceedings, but each of their Honours pointed out that there was no complete analogy between criminal and civil proceedings. I do not think that the references of their Honours to civil proceedings were meant to do any more than suggest that, if there was any guiding principle in civil proceedings that costs follow the event, it was not necessary to import such a principle, simply by analogy, into criminal proceedings. For example, at 543 Mason CJ said:

"I am not persuaded that there is a complete analogy between the discretion to award costs in summary proceedings and the power to award costs in civil proceedings. For that reason I would not be prepared to accept that in summary proceedings there should be a general rule that costs follow the event. .... The differences between criminal and civil proceedings are substantial, not least of them being the absence of pleadings, the different onus of proof, the defendant's inability in criminal proceedings to enter into a compromise and the possibility that the charge, if proved, may affect the defendant's livelihood and reputation. These differences may possibly provide grounds in the circumstances of particular cases for refusing to order costs in favour of a successful informant which would have no application in civil proceedings".

Mr Gruzman sought to derive some support for his contention from a decision by Hemmings J in this Court in Raiti v Leichhardt Municipal Council (1990) 72 LGRA 333. At 334 Hemmings J said:

"In ordinary circumstances in proceedings in this Court costs should follow the event, unless there are special circumstances or conduct on the part of the successful party which warrants denial of such costs. The conduct of the unsuccessful party is irrelevant. This Court has had a policy, however, that in relation to matters in classes 1, 2 and 3, as the proceedings are by way of re-hearing of the application rather than an appeal against the determination by a consent authority, that the parties should not be unduly deterred from exercising the rights of such review by the possibility of the burden of costs. The parties usually expect that the court will only order that costs be awarded in unusual or exceptional circumstances.

However, I am not of the opinion that before I can exercise my discretion to award costs in matters of this kind, I am compelled first to find such exceptional circumstances. I believe that it is now well established, consistent with the exercise of the discretion in other jurisdictions of this Court, that a successful party should be entitled to expect compensation for the costs incurred by an obligation to bring a matter before the court if that obligation should never have arisen: cf Latoudis v Casey ....".

However, it is significant to observe that Hemmings J did not expressly refer to the Practice Direction, and, even more significantly, found in that case that there had been a failure of Leichhardt Municipal Council properly to discharge or even attempt to discharge its duties under the relevant legislation and that the applicant was as a result of that failure compelled to come to the Court to obtain the consent that it would have obtained if the council had performed those duties. In other words, His Honour did find exceptional circumstances.

I do not think that the decisions in Latoudis v Casey or Raiti v Leichhardt Municipal Council oust the general guideline set out in the Practice Direction. In a recent decision, J W and E Askew Pty Ltd v Council of the Shire of Oberon (26 October 1992, unreported) Bignold J resisted a similar claim saying,

(at 8) that he preferred ".... to adhere to a formulation which reflects the Court's long established policy or practice ...." rather than ".... to propound a different or variant formulation ...." which Hemmings J in Raiti v Leichhardt Municipal Council may have been influenced to reformulate by Latoudis v Casey.

The Practice Direction does not lay down an inflexible guideline, but allows the Court to exercise its discretion to award costs in cases where it is appropriate to do so. It applies only in planning and building appeals in classes 1, 2 and 3 of the Court's jurisdiction (but not in classes 4 and 5, where costs ordinarily follow the event). It was brought into force to formulate a long-standing policy of the Court, based on a philosophy of encouraging parties to seek review rather than discouraging them by burdening them with the risk of an award of costs against them. I see no reason, in principle or authority, to depart from the practice.

For all these reasons, the first ground upon which the applicant's claim is made must fail. It follows that, unless "exceptional circumstances" have been demonstrated, no order of costs will be made. I turn, then, to consider the applicant's claim that exceptional circumstances do exist.

The applicant contends that exceptional circumstances may be found in the conduct of both first respondent and the third respondents.

Mr Gruzman points to the profusion of litigation. Whilst I have some sympathy for Mr and Mrs Symonds having become implicated, sometimes not of their choice, in a considerable number of Court proceedings, those proceedings are largely irrelevant to the decision which I have to make. What must be kept firmly in mind in this matter is that the applicant is seeking costs in relation to class 1 proceedings in respect of the second No 6 appeal. Thus the proceedings relating to lot 7 are irrelevant - they refer to another lot, and a different house. Thus the interlocutory or incidental proceedings in this Court relating to No 6, and the proceedings in both the Court of Appeal and the High Court, are also irrelevant - they do not have any effect on the proceedings which are in question here, except that they arise out of them and except that the same parties were involved. They do not impinge on the success of the applicant in the second No 6 appeal.

Nor should I be constrained to fit the facts of this case to the facts in previous decisions of this Court where costs have or have not been awarded. That would be to fetter the Court's discretion, which must remain unfettered, except that there may be a guideline or principle to assist the Court to exercise it, which the Practice Direction amounted to (cf Latoudis v Casey). Each case must be examined on its merits.

Turning, then, to the conduct of the first respondent, it is said that the second No 6 appeal was simply a re-litigation of issues which had already been dealt with in the first No 6 appeal. I agree that the issues were similar. The principal issues were the same - the question of compliance with the foreshore building line, the question of compliance with the height requirements under the relevant local environmental plan, and land dedication under s 94 of the Environmental Planning and Assessment Act 1979. However, an appeal from a refusal of a council to grant development application is in the nature of a re-hearing of the merits which are relevant to that particular application (s 39(3) Land and Environment Court Act 1979). There is nothing in the decisions of Assessor Riding in the first No 6 appeal and the second No 6 appeal which would lead me to the view that there was any misconduct or dereliction of duty on the part of the first respondent in ventilating the matters which concerned it the first time and again the second time.

The hearing of the second No 6 appeal dealt with the relevant merit issues more exhaustively, no doubt to some extent as a result of the third respondents' participation. It was not simply reconsideration of the same issues, as comparison of Assessor Riding's judgments show. For example, in relation to the foreshore building line, he was not satisfied in the first No 6 appeal that the building complied, and although he said in his judgment in the second No 6 appeal that "nothing has changed my mind regarding that line", he examined the position carefully in the light of further evidence and submissions and concluded that the building as now proposed did comply. The same comment applies to other issues, such as bulk, style and flat roof design - they were considered in more detail in the light of further evidence and submissions. It is not, therefore, a case where the reasons for refusal or the issues raised were substantially the same (cf Silverton Ltd v North Sydney Council Bignold J, unreported 27 August 1982).

In the first No 6 appeal, Assessor Riding made some comments as to how the development application could be modified so as to make it more likely to be approved. The owners were said to have taken heed of those comments in preparing the development application which led to the second No 6 appeal. When it was lodged, the officers of the first respondent recommended its approval.

It is said therefore that the first respondent was in dereliction of its duty when it refused the development application in the face of those modifications and the recommendation from its officers that the application be approved, relying on McCalden & Anor v Newcastle City Council (1983) 10 APA 143.

But I do not think a council is bound to follow the recommendations of its officers, so that if it does not do so it is acting in some way in bad faith or in dereliction of its duty. McCalden & Anor v Newcastle City Council is not authority for such a proposition (as was recognised by Bignold J in Minas v Botany Municipal Council (1987) 65 LGRA 129 at 131). Something more needs to be demonstrated to show the first respondent's dereliction of duty, and there was simply no evidence to support such a contention.

The conduct of the third respondents which is said to amount to exceptional circumstances is that they sought leave to be joined as parties in the second No 6 appeal and then fully contested that appeal, traversing the same issues as in the first No 6 appeal and calling witnesses and cross-examining other witnesses.

I do not think that the fact that the third respondents actively took a role in the proceedings are exceptional circumstances. They sought leave to do so and it was granted. The fact that they and the first respondent have taken other proceedings, is, as I have said, irrelevant. So also is the fact they are alleged to be litigants of considerable assets, able to continue an expensive litigation process.

There was evidence that the third respondents made remarks to Mr and Mrs Symonds and their builder to the effect that they would have Mr Symonds in court "for the rest of his life" and that "the first brick they lay will be the last". They have made good their threats, according to the applicant, and hence the profusion of litigation on the part of the third respondents. But what the third respondents may have said, in highly emotive circumstances and in connection with what they no doubt regarded as crucial to the enjoyment of their property, does not amount, in my view, to exceptional circumstances. They wanted to preserve what they saw as their rights, and the courts of this State provide a forum in which to do so. They may have felt provoked to speak heatedly or even irrationally, but that does not deprive them of their right to seek assistance from the courts, and the exercise of such right, even if it results in several applications and considerable days in court, is not exceptional.

For all the above reasons, I make orders as follows:

1. The notice of motion is dismissed.

2. The exhibits may be returned.

I make no order as to costs of hearing of the notice of motion.

I HEREBY CERTIFY THAT THIS AND THE PRECEDING 10 PAGES ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE JUSTICE M L PEARLMAN AM.

Associate