Lee Environmental Planning Pty Ltd v Reulie Land Co Pty Ltd

1. [1]

   LEEMING JA: I agree with Payne JA.

2. [2]

   PAYNE JA: This application for leave to appeal is solely concerned with costs. The applicants for leave to appeal are Lee Environmental Planning Pty Ltd (Lee Environmental Planning) and Lasovase Pty Ltd (Lasovase), who were two of the three unsuccessful respondents in the Land and Environment Court in Reulie Land Co Pty Limited v Lee Environmental Planning Pty Limited and Ors (No 2) [2020] NSWLEC 49 (Reulie (No 2)). The third unsuccessful respondent below, Wingecarribee Shire Council (the Council) is the sole respondent who appears on this application for leave to appeal. Lee Environmental Planning, Lasovase and the Council were each ordered to pay the costs of the successful party below, Reulie Land Co Pty Ltd (Reulie). The substance of this application is that Lee Environmental Planning and Lasovase seek an order that the Council alone be ordered to pay Reulie’s costs. Reulie has entered a submitting appearance in this Court.

Relevant facts

1. [3]

   Lasovase was the owner of land at Myra Vale Road, Wildes Meadow in Wingecarribee Shire, which the primary judge called “the subject property”. Lee Environmental Planning are town planning consultants who were retained by Lasovase to obtain development consent from the Council for a dwelling to be built on the land. Reuile owned a block of land, which the primary judge called “Lot 4”, which was located adjacent to the subject property on the other side of Myra Vale Road. A residence was constructed on Lot 4 overlooking part of Lasovase’s land.

2. [4]

   Section 4.12(9) of the Environmental Planning and Assessment Act 1979 (NSW) provides that the regulations may specify other things that are required to be submitted with a development application. Clause 50(1)(c) of the Environmental Planning and Assessment Regulation 2000 (NSW) requires that:

3. [5]

   Part 1 of sch 1, subcl 2(1) provides a long list of the documents which must accompany a development application, including a statement of environmental effects at subcl 2(1)(c).

4. [6]

   On 19 June 2018, Lee Environmental Planning made a development application for a proposed building envelope for a future dwelling house on the Lasovase land and submitted a Statement of Environmental Effects about the proposed development which asserted:

5. [7]

   In the week commencing 23 July 2018, a representative of Reuile had a conversation with Mr Gounder of the Council wherein he was told, in accordance with the representation contained in the Statement of Environmental Effects, that the proposed dwelling on the Lasovase land would not be visible from the Reulie property.

6. [8]

   On 8 August 2018, the Council requested, pursuant to cl 54 of the Environmental Planning and Assessment Regulation, the following information:

7. [9]

   Pausing there, the “attachment” referred to at item 2 of the 8 August 2018 letter from the Council was a map of the Lasovase land containing a blue square image representing the proposed building envelope. It is clear that what was being suggested by the Council’s 8 August 2018 letter was that the proposed building envelope for the dwelling on Lasovase’s land be moved to the west, away from Myra Vale Road and a considerable distance down a slope, also away from Myra Vale Road. It is also clear that the Council, by requesting a “photo montage of a conceptual dwelling with a view from Myra Vale Road” was seeking to understand the “visual impacts on views” of the proposed development.

8. [10]

   Clause 55 of the Regulation provides a procedure for amending a development application:

9. [11]

   On 6 November 2018, Lee Environmental Planning replied to the Council’s 8 August request:

10. [12]

    Pausing there, a number of matters relevant to the ultimate determination of this case are apparent. First, despite submission by the applicants to the contrary, the location of the building envelope the subject of this amended application was not determined by the Council. The location of the building envelope was not where the Council had suggested in the “attachment” referred to at item 2 of the 8 August 2018 letter. The amended application was for a building envelope related to a different and higher area, more visible from the road and surrounding properties, it being argued by the applicants that the location suggested by the Council was “substantially lower than originally envisaged.” Secondly, the requested photo montage was not supplied to the Council by the applicants.

11. [13]

    As will become apparent, a critical finding made by the primary judge in Reulie Land Co Pty Limited v Lee Environmental Planning Pty Limited and Ors [2019] NSWLEC 194 (Reulie (No 1)) was that what was submitted by Lee Environmental Planning with this response was insufficient for the purposes of complying with cl 55(2) of the Regulations.

12. [14]

    On 13 November 2018, the application for a proposed building envelope for a future dwelling house on the Lasovase land was granted by the Council.

13. [15]

    On 13 February 2019, Reulie commenced proceedings in the Land and Environment Court against Lee Environmental Planning, Lasovase and the Council seeking a declaration that the development consent granted by the Council for a proposed building envelope for the future dwelling house on the Lasovase land was invalid and of no effect. Reulie also sought an order restraining Lee and Lasovase from carrying out development in accordance with the development consent.

14. [16]

    On 19 February 2019, the Council advised all parties that it would not defend its approval of the proposed building envelope on the Lasovase land but, rather, would file a submitting appearance in the proceedings:

15. [17]

    On 1 March 2019, Lee Environmental Planning and Lasovase entered an unqualified appearance in the Reulie proceedings.

16. [18]

    On 3 March 2019, the Council filed a submitting appearance in the proceedings. On 8 April 2019, the settlement conference proposed by the Council took place between the parties but was unsuccessful.

17. [19]

    On 12 April 2019, Lee Environmental Planning and Lasovase amended their appearances to submitting appearances, after the Council had responded to a notice to produce issued by Reulie.

18. [20]

    On 13 June 2019, Lee Environmental Planning and Lasovase wrote to Reulie proposing that the proceedings be discontinued on the basis of the surrender of the consent, the Council receiving and giving effect to the surrender. A condition of this proposal was that there be no order as to costs made against Lee Environmental Planning and Lasovase. On 14 June 2019, whilst Reulie was taking steps to accept that offer, Lee Environmental Planning and Lasovase withdrew the offer.

19. [21]

    Pausing there, the primary judge found that by this conduct Lee Environmental Planning and Lasovase effectively forced Reulie to proceed with the litigation. A concession was made before the primary judge on behalf of Lee Environmental Planning and Lasovase that this conduct was a relevant matter for the purposes of the exercise of the costs discretion.

20. [22]

    On 17 December 2019 in Reulie (No 1), the primary judge declared the development consent to be invalid and of no effect, restrained Lee Environmental Planning and Lasovase from carrying out development in accordance with the consent, and reserved the question of costs.

21. [23]

    A hearing on costs occurred on 2 April 2020. Over objection, the primary judge allowed Lee Environmental Planning and Lasovase to lead evidence contradicting some of the principal findings of fact that her Honour had made in Reulie (No 1). In particular, her Honour permitted evidence to be led about the Council’s letter dated 8 August 2018, which had not been before the Court in Reulie (No 1).

Decision of the primary judge

1. [24]

   In Reulie (No 1), the primary judge made a declaration that the development consent was invalid and of no effect. The relevant findings in relation to the particulars indicating the nature of the changed development provided by the applicants are to be found commencing at [30]:

2. [25]

   None of the material that accompanied the amended development application identified the location of lot 4 relative to the proposed building envelope. At [39] of Reulie (No 1) the primary judge found:

3. [26]

   At [53], her Honour made the following finding:

4. [27]

   At [54] the primary judge said:

5. [28]

   In Reulie (No 2), the primary judge allowed Lee Environmental Planning and Lasovase to lead evidence to contradict findings of fact her Honour had earlier made. In particular the primary judge allowed the tender of the letter of 8 August 2018 referred to at [8] above. Plainly, the original impetus for the movement of the building envelope on the west of the land was Mr Gounder’s suggestion. To that extent, her Honour accepted that the finding to the contrary she had made in Reulie (No 1) was incorrect. Her Honour concluded, however, that on the basis of the remaining facts she had found, the correct exercise of the costs discretion had the effect that each of the respondents should pay Reulie’s costs.

6. [29]

   In particular, in Reulie (No 2), her Honour found that the failure of the applicants to provide sufficient particulars to indicate the nature of the changed development in the amendment application provided a sufficient basis to exercise the costs discretion to make the orders she did:

Consideration

1. [30]

   Section 58(1) of the Land and Environment Court Act 1979 (NSW) confers a right of appeal to the Supreme Court in respect of orders made in Class 4 proceedings. Section 58(3) requires a grant of leave to appeal against an order about costs. While it is inappropriate to lay down rigid and exhaustive criteria about the circumstances in which leave to appeal will be granted, leave to appeal to this Court is ordinarily granted only where there is an issue of principle, a matter of general importance or where an injustice can be demonstrated with reasonable clarity: Schwartz Family Co Pty Ltd v Capitol Carpets Pty Ltd [2017] NSWCA 223 at [26]. Where an injustice is alleged, the applicant must do more than point to an error that is merely arguable: The Age Company Ltd v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13].

2. [31]

   The hurdle that an applicant for leave must clear is greater in a case limited to a challenge to the exercise of the costs discretion. To successfully challenge a discretionary costs decision it is necessary for an appellant to demonstrate that some error of principle has occurred, that the judge has failed to take material considerations into account, has taken irrelevant considerations into account, or that the order made below is “unreasonable or plainly unjust” such that “the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance”: House v The King (1936) 55 CLR 499 at 505; [1936] HCA 40; Ross v Lane Cove Council [2017] NSWCA 299 at [2]-[3].

3. [32]

   Before going any further, I pause to observe that the arguments about costs in this case have now have taken up a great deal more court time and resources than the underlying dispute. The gross costs said to be in issue are alleged to be just over $120,000. For an undefended one day hearing it is likely that on assessment a much lower sum will ultimately be recoverable and it may safely be assumed that the total amount in issue in this Court is the applicants’ share of a total amount much less than $100,000. I have little doubt that the costs on all sides of the costs dispute is now comparable to, if indeed it does not exceed, the costs in issue in the underlying dispute. That is a state of affairs that this Court should discourage.

4. [33]

   In the present case, the conclusions reached by the primary judge were reasonably open to her in the exercise of her Honour’s discretion. In large measure, the applicants’ submissions seek to have this Court take a different view to that taken by the primary judge in relation to the facts and the reasonableness of the parties’ conduct in the proceedings below.

5. [34]

   This is not a case in which any real issue of principle was raised. As I have explained, the applicants entered an unconditional appearance in this case at a time when they knew that the Council was not proposing to defend the development consent and proposed to submit. The subsequent change of mind by the applicants, when they entered their own submitting appearance, makes this case a quite inappropriate vehicle to determine any question of principle about the proper role of a Council in defending Class 4 proceedings. The offer to settle made by the applicants, withdrawn before Reulie could accept, also makes this an inappropriate vehicle in which to determine any question of principle about whether an applicant should be “forced” to give up the benefit of a development consent they had secured. Finally, the assertion made by the applicants, never corrected when submitting the amended application, that “the proposed dwelling location will not impact upon views enjoyed by any adjoining properties” also makes this case an inappropriate vehicle to determine any question of principle. This is not a case where the applicant for development consent has not caused an error to be made by a consent authority. The applicants’ complaint that Mr Gounder was somehow responsible for all aspects of the errors made by the Council is unsustainable and inconsistent with the clear findings of the primary judge. Leave to appeal should be refused.

6. [35]

   In deference to the lengthy and written oral submissions made in this matter I will explain in a little more detail why leave to appeal about costs should be refused.

7. [36]

   Whilst Uniform Civil Procedure Rule 2005 (NSW) 6.11 permits the filing of a submitting appearance “save as to costs”, there is no other rule of court or other provision dealing with the costs consequences of the filing of a submitting appearance, whether or not expressed to be “save as to costs”. There is no prima facie rule that a submitting party will never be ordered to pay costs.

8. [37]

   In Seller v Jones [2014] NSWCA 19 at [55] and [59] McColl JA (with whom Ward JA agreed) noted that r 6.11 of the UCPR does not provide for the costs consequences of a submitting appearance. Rule 6.11 of the UCPR does, however, provide that a step is not be taken in litigation by a submitting party. The process of re-litigating matters of primary fact which have already been determined, under the guise of determining costs, even if permissible, should not have been permitted in this case, by parties who had filed submitting appearances and were bound by the first judgment.

9. [38]

   The principles relating to the award of costs in a case where the respondent enters a submitting appearance have recently been considered by this Court: Lou v IAG Limited t/as NRMA Insurance (2019) 101 NSWLR 606; [2019] NSWCA 319. As I explained in Lou at [41]-[43], with the agreement of Gleeson JA, what is called for in cases where costs are sought against a party who has entered a submitting appearance is the principled exercise of the costs discretion in s 98 of the Civil Procedure Act 2005 (NSW). The discretion that s 98 confers is subject to the qualification that it must be exercised judicially “in accordance with established principle and factors directly connected with the litigation”: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [65] per McHugh J (in dissent but not relevantly for present purposes).

10. [39]

    Among the guides to the exercise of the discretion to award costs are the rules contained in Part 42 of the UCPR. The usual rule is that costs follow the event, unless it appears to the court that some other order should be made: UCPR r 42.1. The rationale for the principle that costs follow the event is that the successful party to proceedings should be compensated: Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59. The mere fact that the cause of the invalidity is an error of the consent authority for development consent is not, of itself, a sufficient reason to order costs against the consent authority: Rossi v Living Choice Australia Ltd [2015] NSWCA 244 at [73] per Basten JA (with whom Ward JA agreed).

11. [40]

    In reaching her costs decision, the primary judge followed a decision of the Chief Judge of the Land and Environment Court in Platford v van Veenendaal (No 2) [2018] NSWLEC 86, a case dealing with the costs discretion in proceedings in the Land and Environment Court where all respondents to the appeal had entered a submitting appearance. The exercise of the costs discretion has not hardened to a rigid series of “rules” which are mechanically to be applied. All cases are different. The application of principle, however, in Platford was correct. There, Preston CJ of the LEC held that both the Council which had made the error and the developer which had sought the development consent which had been set aside should be ordered to pay costs despite the fact that each had entered submitting appearances in the proceedings. Preston CJ of the LEC rejected an attempt in that case to elevate the “general guideline” set out in Cutcliffe v Lithgow City Council [2006] NSWLEC 463; (2006) 147 LGERA 330 into “rules” governing the exercise of the costs discretion. I agree with his Honour. It was important to Preston CJ of the LEC that the applicant for development consent in Platford at [24] “did play a role in causing or contributing to the Council’s failure to consider the relevant matters, being the error that led to the invalidity of the consent.” So too here. Preston CJ of the LEC concluded at [28] that although the “duty to take into consideration the relevant matters in determining a development application is imposed on the consent authority, the applicant who seeks consent bears some responsibility to provide adequate information on the relevant matters in or accompanying the development application to enable the consent authority to take the relevant matters into consideration”. I agree with this conclusion in Platford and the application of the conclusion to the facts of this case by the primary judge.

12. [41]

    In Lou, the decision in Platford was distinguished. The statutory scheme established by the Motor Accidents Compensation Act 1999 (NSW) is quite different and, importantly, Ms Lou had not played any role in causing the error made by the decision maker in that case.

13. [42]

    The key arguments advanced by the applicants, if leave were to be granted, do not raise any question of principle or question of public importance. They do not raise any possibility of injustice that rises higher than the barely arguable. Those arguments may be addressed briefly:

    1. (1)

       the claim that the grounds of review all pointed to errors made by Council and not by the applicants. I do not accept the applicants’ submission. As I have described at [29] above, the primary judge found that the applicants failed to provide adequate information about relevant matters in the original development application and the amended development application. Having independently considered those materials, it is clear that the applicants’ information was not sufficient to enable the consent authority to take relevant matters into consideration. It is not to the point in those circumstances that the error was one made by the Council. The primary judge found, correctly, that the applicants did not provide adequate material to the Council showing the impact that the building envelope, as amended by the applicants, would have on Reulie’s land. Accordingly, it was correct for the primary judge to conclude that the applicants had contributed to the errors committed by the Council;

    2. (2)

       the claim that the Council did not allege that Lee Environmental Planning or Lasovase had contributed to Council’s errors by way of cross claim or affidavit evidence, so the inference that either or both of the applicants had contributed to those errors was not available to the Court. The applicants’ submission is incorrect. There was no denial of procedural fairness. There were findings of fact in the substantive proceedings concerning the contributions by the applicants to the errors made by the Council. In Reulie (No 2), her Honour found that the “blue box” plan provided to the applicants by Mr Gounder placed the building envelope to a location in front of Reulie’s land and she considered the plan in the context of the dispute as to who was responsible for the error that gave rise to the proceedings. Her Honour saw no reason to depart from her findings that the principal responsibility for the errors lay with each of the Council, Lee Environmental Planning and Lasovase. On all of the evidence, and in the exercise the costs discretion, I agree with the primary judge’s conclusion that the applicants failed to provide adequate information on the relevant matters in or accompanying the development application to enable the consent authority to take the relevant matters into consideration;

    3. (3)

       the claim that the applicants had no obligation to assess the impacts of the relocated building envelope in circumstances where Mr Gounder had advised that Council would support the development approval if it was relocated in a westward direction. This submission, in truth, raises a straw man. The primary judge correctly concluded that the applicants failed to provide adequate information about relevant matters in the development application and the amended application to enable the consent authority to take relevant matters into consideration. That was a sufficient basis for the award of costs her Honour made;

    4. (4)

       the claim that Council did not allege that the information provided by the applicants was deficient. Again, the applicants raise a straw man. The primary judge found that the information provided by the applicants was insufficient in Reulie (No 1). Lee Environmental Planning and Lasovase are bound by those findings. In the exercise of the costs discretion, her Honour was entitled to take those findings into account;

    5. (5)

       the submission that the applicants filed submitting appearances. So much may be accepted. So did the Council. As I have said, a powerful reason to refuse leave here is that knowing that the Council did not propose to defend the development consent, Lee Environmental Planning and Lasovase filed unqualified appearances in the proceedings and only six weeks later filed submitting appearances;

    6. (6)

       the claim that the Council ought not to have argued that the applicants pay the costs of the proceedings because it (or at least Mr Gounder) knew that Mr Gounder had requested the move of the envelope westwards. I reject the applicants’ submission. The submission does not raise any matter of principle. Her Honour carefully considered the same submission and rejected it. No error has been shown in that decision. I reject the related submission that the primary judge erred in failing to draw a Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 inference about the Council’s failure to call Mr Gounder. There was no reference in the proceedings before the primary judge, either in writing or in the transcript to Jones v Dunkel. The primary judge was not required to draw any Jones v Dunkel inference of the kind sought by the applicants. In any event, one of the items that Mr Gounder requested from the applicants was a photo montage. Had a photo montage of the relocated envelope been provided, the impacts upon Reulie’s views would have been very clear one way or another. Whilst there was no enforceable obligation to provide a photo montage, it was one way in which the misunderstanding that her Honour found that the Council was labouring under could have been addressed. It provides an additional reason to refuse leave to appeal;

    7. (7)

       the claim that the Court’s errors with regard to fault of the applicants were pointed out to her in the costs proceedings and there was no justification for her Honour to find that there was no evidence or submission to warrant departing from those findings. This submission must be rejected. First, the applicants were bound by the findings of primary fact in Reulie (No 1). They should not have been permitted to challenge those findings of primary fact in Reulie (No 2). Although no cross-appeal was mounted challenging this decision to permit the collateral attack, a party who has submitted to the jurisdiction of the Court should not be permitted, under the guise of a costs application, to contest questions of primary fact that were decided unfavourably to it in the principal proceedings where a submitting appearance has been entered. That is a sufficient basis to refuse leave to consider this point. Secondly, in any event, her Honour did consider the issue and no error, going beyond the barely arguable, was shown by the applicants.

14. [43]

    Finally in relation to the draft notice of appeal, I reject the submission of the applicants that the primary judge erred in finding that the applicants acted in concert. Plainly they did. Lee Environmental Planning was the applicant for the development application and Lasovase the client. Lasovase provided instructions as to what information ought to be obtained to confirm Lee Environmental Planning’s proposed course of action. I was initially less unsympathetic to a submission that Lee Environmental Planning and Lasovase should not have each been liable for costs. I have concluded, however, that even if leave were granted, this was not an issue raised in the draft notice of appeal. I reject the applicants’ submission that such a claim could be discerned in the applicants’ prayer for “such further or other orders as this Court sees fit”. The applicants should not be permitted to raise a new case on costs at this stage of the proceedings.

Conclusion and proposed orders

1. [44]

   For the foregoing reasons I would refuse leave to appeal.

2. [45]

   The costs of the application for leave to appeal should be borne by Lee Environmental Planning and Lasovase.

3. [46]

   SIMPSON AJA: I agree with Payne JA.