Australia: Court awarded costs in favour of council to compensate for costs incurred in the proceedings


The case of Gray v Gympie Regional Council [2016] QPEC 49 concerned an application under section 457 of the Sustainable Planning Act 2009 made in the Planning and Environment Court by the Gympie Regional Council against Deirdre Gray seeking an order that Ms Gray pay the Council's costs of the proceeding.

The Court determined that it was appropriate to order costs in favour of the Council from 24 June 2016 to compensate the Council for wasted costs and expenses incurred by the Council to comply with the Court's directions, including engagement of experts.


In 2015, Ms Gray made a development application to the Council for approval for development which comprised of a material change of use to convert an existing dwelling house, within a residential living zone, into a "hardware and trade supplies store". The Council refused the development application on 16 September 2016 on the basis that the proposed development was in conflict with the residential living zone and the strategic framework of the planning scheme.

On 14 October 2015, Ms Gray appealed the Council's decision by way of a notice of appeal based on the view formed by Ms Gray's town planner, acting as her agent, that she had reasonable prospects of success.


Ms Gray was invited to withdraw her appeal by the Council in February 2016 on the basis that the appeal had little prospects of succeeding or the parties should engage in early mediation before substantive steps were taken. Ms Gray's agent refuted the Council's position as to prospects but agreed that the dispute was largely about the sufficiency of grounds to support the development application despite conflicts with the planning scheme. On 27 April 2016, the parties took part in a mediation conference, however, it did not resolve the matter.

In May 2016, directions for the conduct of the appeal proposed by Ms Gray were made by the Court. The Council took steps in the proceedings to comply with the directions on 24 June 2016 and engaged and nominated a town planning expert, traffic expert and need expert for the appeal. Ms Gray, on the other hand, only engaged and nominated a town planning expert for the appeal.

On 6 July 2016, Ms Gray received advice from her lawyer as to her prospects of success in the appeal which was less than 50%. Notwithstanding that, Ms Gray continued with the appeal and did not inform the Council of her intention to discontinue the appeal.

The Council continued to take steps to resolve the appeal which included the Council's town planning expert arranging to meet with Ms Gray's town planning expert on the 26 July 2016. However, this meeting was cancelled by Ms Gray's town planning expert at the last minute on the basis that the appeal may be withdrawn shortly.

The Council's experts continued to work up until 27 July 2016 when the Council advised them to stop upon receiving a letter advising of Ms Gray's intention to discontinue the appeal. The Council up until that date had incurred costs in the form of fees payable to the Council's need expert in the amount of $3,452 and the Council's town planning expert in the amount of $5,791.50.


The Council submitted that Ms Gray should pay its costs of the proceedings on the basis that:

  • the Council was successful in the appeal because the original decision was not overturned;
  • Ms Gray had a commercial interest in seeking to obtain an approval for a commercial use in a residential area;
  • Ms Gray did not have reasonable prospects of success given the conflicts with the planning scheme and did not nominate experts to address all of the issues in dispute;
  • the Council defended the appeal to protect the public's interest in orderly development;
  • Ms Gray acted unreasonably, by obtaining directions order and not complying with them, knowing that the Council was incurring costs, and failing to discontinue the appeal or advise the Council of the intention to withdraw the appeal within a reasonable time; and
  • Ms Gray failed to comply with the directions orders and the implied undertaking in rule 4(3) of the Planning and Environment Court Rules 2010.


The Court noted that its power to make an order for costs under section 457(1) of the Sustainable Planning Act 2009 was a broad one to be exercised judicially. However, there should be no presumption that costs ought to follow the event.

It was the Court's view that it was appropriate for the Council to recover part of its costs of the proceedings on the basis that the Council should be compensated for wasted costs and expenses it had incurred in complying with the directions and the engagement of experts.

The Court determined that Ms Gray "effectively surrendered" to the Council and it was not a case where there was "some supervening event or settlement [that] so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs". The Court noted that nothing in the Council's conduct in the appeal could be said to disentitle it to recover its costs given that Ms Gray took no steps to stop the Council from incurring costs when she became aware of her prospects of success on 6 July 2016.

The Court reinforced that costs were awarded not to punish Ms Gray, but were compensatory in the sense that it was to indemnify the Council against the expenses incurred in the proceedings.


Ms Gray submitted to the Court against the award of costs in favour of the Council on a number of basis which included the following:

  • The award of costs would be contrary to accepted notions of public policy to award costs against a party who discontinued an appeal in circumstances where it took those steps following advice to do so.
  • The advice provided to Ms Gray changed over time and she was entitled to change the approach to reflect the change in advice.

In relation to the first argument, the Court by reference to Manly Wharf Pty Ltd v Manly Council (1997) 98 LGERA 245 noted "it is difficult to conceive of a situation where an applicant would incur the costs of fully litigating a matter simply to avoid the costs of discontinuance" and therefore rejected the argument made by Ms Gray.

In relation to the second argument, the Court determined that while Ms Gray was entitled to change her position as advice given to her changed, it did not mean that the Council should be expected to bear the costs which it had reasonably incurred for no ultimate benefit. The Court therefore ordered Ms Gray to pay the Council's costs of the proceedings from 24 June 2016, including its costs of the costs application on a standard basis.

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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Ian Wright
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