Costs – where no reasonable ground for Council starting proceeding – where no absence of good faith by Council alleged – whether frivolous or vexatious proceeding
Costs – where proceeding frivolous – where experienced litigant responsible for frivolous proceeding – where frivolous allegation of development offence
Facts: This was an application in a pending proceeding by the First and Second Respondents to strike out paragraphs 5 to 11 of the Originating Application filed in the proceeding and that Brisbane City Council pay those parties costs on an indemnity basis.
The Second Respondent was a licensed building certifier employed by the First Respondent.
In October 2008, the First Respondent was engaged by the Third Respondents to undertake certification work in relation to a dwelling to be built on a newly reconfigured suburban lot. The Third Respondents submitted a development application for building work to the First Respondent. On 11 June 2009, the Second Respondent issued a decision notice approving the application.
The proceedings instituted by Council sought a declaration that the First and Second Respondents had committed a development offence pursuant to s. 578 of the Sustainable Planning Act 2009 (SPA) and various enforcement orders.
When the proceeding first came on for review in May 2012, Council was notified that an application would be brought by the First and Second Respondents to strike out those parts of Council's Originating Application which applied to them, on the basis that those parties had not undertaken any "development" within the meaning of that term in the SPA and therefore could not have committed a development offence.
One week after the review, a strikeout application and supporting affidavit was filed. 26 days after that, Council sought advice about the merits of the Originating Application from Senior Council. The advice from Senior Counsel, received four weeks later, was that the First and Second Respondents could not have offended and could not be liable for an enforcement order. Some four weeks later, Council indicated to the First and Second Respondents that it would not oppose the strikeout application.
It was in these circumstances that the First and Second Respondents sought indemnity costs, which was resisted by Council.
Decision: The Court held that:
- There was no argument that the proceeding against the First and Second Respondents as contained in the paragraphs to be struck out was one that was not frivolous and vexatious.
- The paragraphs sought to be struck out lacked substance so that there was no reasonable basis for making the allegations in those paragraphs and the trouble that they caused for the First and Second Respondents was unjustifiable.
- It was clear that the allegations ought never to have been made and the case was unduly prolonged.
- The relevant section of the SPA did not expressly indicate a preference for costs on either a standard or indemnity basis once the discretion to order costs was enlivened.
- Alleging an offence against another party was a serious matter. An experienced litigant such as the Council had an obligation to consider properly whether to plead a development offence against the First and Second Respondents. It was not suggested for Council that the pleading was even arguable, which was a relevant matter.
- It was appropriate to award costs of this application on an indemnity basis.
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