Australia: Costs had to be incurred in any event - each party is to bear its own costs

IN BRIEF - EACH PARTY BEARS ITS OWN COSTS

The case of Allen & Anor v Cairns Regional Council & Anor No. 3 [2016] QPEC 25 concerned an application made in the Planning and Environment Court for costs by Barry Gordon Allen, Edgewill Pty Ltd and Cairns Regional Council against Rosanne and Darryl Barnes arising from a declaratory proceeding commenced by Mr Allen and Edgewill in respect of the lawfulness of the existing use of the nursery.

In the declaratory proceeding, Mr Allen and Edgewill successfully obtained the declaration. However, the Court determined not to make a costs order following its consideration of a Calderbank offer which was rejected by Mr and Ms Barnes and the matters identified in section 457 of the Sustainable Planning Act 2009.

WHILST MR ALLEN, EDGEWILL AND THE COUNCIL WERE SUCCESSFUL IN THE PROCEEDING THE COURT FOUND THAT THE SUCCESS WAS CONTRIBUTED TO BY THE ROLE OF MR AND MS BARNES AS RESPONDENTS

The Court noted that Mr Allen, Edgewill and the Council had complete success in the proceeding. However, in the Court's view, had Mr and Ms Barnes not been parties to the proceeding, the oral evidence of Mr Allen would not have been led which contributed to the success in the proceeding.

MR ALLEN, EDGEWILL AND THE COUNCIL WOULD HAVE INCURRED SUBSTANTIAL LEGAL COST, WITH OR WITHOUT MR AND MS BARNES AS RESPONDENTS

The Court found that Mr and Ms Barnes had no commercial interest in the proceeding whilst Mr Allen and Edgewill had a commercial incentive to obtain the declarations.

Even if Mr and Ms Barnes did not oppose the declarations sought, the declarations could not have been made by way of a consent order and Mr Allen and Edgewill would have had to satisfy the Court that the declarations were necessary and appropriate and that there were factual and legal bases to make such declarations.

Consequently, Mr Allen and Edgewill would have incurred substantial legal costs with or without having Mr and Ms Barnes as respondents in order to protect their commercial interests.

As to the Council it had a duty to ensure that Mr Allen and Edgewill adequately addressed all necessary factual and legal issues when applying for declarations. As a result, the Council would also have incurred substantial legal costs with or without Mr and Ms Barnes as respondents.

JUST BECAUSE THE SOLICITORS FOR MR AND MS BARNES WERE ASSURED IN RELATION TO THE PROSPECTS OF SUCCESS OF THE PROCEEDING, IT DID NOT MEAN THAT MR AND MS BARNES HAD ACTED UNREASONABLY OR PARTICIPATED IN THE PROCEEDING FOR AN IMPROPER PURPOSE OR WITHOUT REASONABLE PROSPECTS OF SUCCESS

Mr Allen, Edgewill and the Council argued that Mr and Ms Barnes had acted unreasonably leading up to the proceeding or had participated in the proceeding for an improper purpose or without reasonable prospects.

The Court did not accept the submission made by Mr Allen and Edgewill. In the Court's view, the commencement of the declaratory proceeding was not because of the refusal of Mr and Ms Barnes to concede that there was an existing lawful use of the nursery or to resolve the Planning and Environment Court appeal against the Council's approval of Edgewill's development application for the nursery.

Rather, it was in the interest of Mr Allen and Edgewill to circumvent Mr and Ms Barnes' appeal by applying for a declaratory relief with the support of the Council.

The Court found that Mr and Ms Barnes did not participate in the proceeding for an improper purpose. The Court also found that Mr and Ms Barnes' case was not without reasonable prospects of success. The assurances of the solicitors for Mr Allen and Edgewill and the Council about their genuine view of the prospects of success of the proceeding were no more than untested advice of Mr Allen about various historical factual matters.

COURT FOUND MR AND MS BARNES HAD NOT ACTED UNREASONABLY AND MR ALLEN AND EDGEWILL'S CASE WAS NOT SO COMPELLING WHICH WOULD WARRANT MR AND MS BARNES NOT PROCEEDING WITH THE MATTER

The Council submitted that Mr and Ms Barnes' arguments on the characterisation of the use depended on a strained interpretation of the planning scheme which was directly against the established authority with which the Court disagreed.

Mr and Ms Barnes advanced their arguments in reliance of an opinion of an experienced agricultural scientist who did not have the benefits of the oral evidence about the factual matters given during the hearing. In the Court's view these matters only became obvious when the oral evidence was given which were not so obvious from the affidavit material or expert reports.

In the circumstances, the Court found that Mr and Ms Barnes' agricultural expert's opinion was based on a different factual hypothesis and was plausible.

As to Mr and Ms Barnes' refusal to accept a settlement proposal, the Court observed that there was no suggestion that they ignored legal advice to resolve the matter and the facts of this case were distinguishable to those of Hydrox Nominees Pty Ltd v Noosa Shire Council (No 2) [2014] QPEC 60. Furthermore, the Court found that Mr Allen and Edgewill's case was not strong enough to warrant Mr and Ms Barnes not proceeding with the matter.

MR AND MS BARNES HAD A GENUINE CONCERN ON THE CHEMICAL SPRAY DRIFT AND ANY RESOLUTION OF THIS ISSUE WOULD BE A MATTER OF PUBLIC INTEREST

As to whether the proceeding involved a matter of public interest the Court found that the proceeding was not concerned with impacts on Mr and Ms Barnes or amenity.

However, Mr and Ms Barnes had a genuine concern about the chemical spray drift from the nursery and this issue was raised in the declaratory proceeding whilst it was more relevant in the Planning and Environment Court appeal.

In the Court's view, any resolution of this issue in the declaratory proceeding and the appeal would amount to a matter of public interest and it was not unreasonable for Mr and Ms Barnes to maintain their concerns.

EVEN IF MR AND MS BARNES ACCEPTED THE CALDERBANK OFFER AND WITHDREW, MR ALLEN, EDGEWILL AND THE COUNCIL WOULD HAVE BEEN REQUIRED TO PROCEED THE MATTER TO A HEARING IN ORDER TO OBTAIN THE DECLARATIONS

The Court also considered the Calderbank offer made by the Council to Mr and Ms Barnes which was made to the effect that indemnity costs would not be sought if the parties agreed to the declarations be made by consent.

It was observed by the Court that the declarations sought could not be made by consent and the Court would be required to be satisfied that there was sufficient evidence to make the declarations.

On this basis, even though Mr and Ms Barnes had withdrawn from the proceeding, Mr Allen, Edgewill, and the Council would still be required to provide evidence to satisfy the Court in making the declarations. Mr Allen, Edgewill and the Council would therefore be required to proceed the matter to a hearing in order to obtain the declarations and costs would have been incurred in any event.

In the circumstances, the Court did not consider it was unreasonable for Mr and Ms Barnes to not accept the Council's Calderbank offer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Ian Wright
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