Recent decisions about costs in the Planning and Environment Court

The general rule in relation to costs for proceedings in the Planning and Environment Court (Court) is that each party to a proceeding must bear the party’s own costs for the proceeding.  That general rule is set out in section 59 of the Planning and Environment Court Act 2016 (PEC Act).  It is subject to exceptions, which are set out in sections 60 and 61 of the Act.

Section 60(1) of the PEC Act provides that the Court may make an order for costs for a Court proceeding as it considers appropriate if a party has incurred costs in one or more of a number of specified events, including:

• the Court considers the proceeding to have been frivolous or vexatious: section 60(1)(b); and
• an applicant, submitter, assessment manager, referral agency or local government does not properly discharge its responsibilities in the proceeding: section 60(1)(i).

Recent decisions of the Court have provided illustrations of the circumstances where the Court will make costs orders against an assessment manager and an enforcement authority in proceedings in the Court.

Sincere International Group Pty Ltd v Gold Coast City Council [2019] QPEC 9 (22 March 2019)

In Sincere International, the Court considered an application for costs by the appellant against Gold Coast City Council. The appellant had successfully appealed against conditions imposed on a development approval issued by the Council. The application for costs asserted that, amongst other grounds, the Court should make an order for costs against the Council because the Council’s position in the appeal had been frivolous (section 60(1)(b) of the PEC Act) and that the Council had not properly discharged its responsibilities in the proceeding (section 60(1)(i) of the PEC Act).

In relation to the application for costs under section 60(1)(b) of the PEC Act, the Court found that:

• The term ‘frivolous or vexatious’ is not defined and must consequently be given its ordinary meaning.  The ordinary meaning of ‘frivolous’ is ‘of little value or importance’, ‘having no reasonable grounds’ and ‘lacking seriousness or sense’.
• The onus of proving frivolity lies with the applicant for costs and it is a high standard to meet.
• Whether proceedings are frivolous will turn on matters of fact and degree, including public policy considerations and the interests of justice.
• An example for s 60(1)(b) is set out in the PEC Act. That example is that the Court considers that a proceeding was started or conducted without reasonable prospects of success.
• The phrase ’without reasonable prospects of success’ has been held to mean that a proceeding is so lacking in merit or substance as to be not fairly arguable.  A case that is not fairly arguable is regarded as bound to fail. However, something much more than a lack of success needs to be shown to engage s 60(1)(b) of the PEC Act.

The Court went on to find that, for the period from the decision notice for a development application which was the subject of the appeal to the Court, and finishing on the date when the Council notified the appellant of a change in its position in the appeal, the Council’s position adopted in the appeal was based on a planning report prepared by an officer of the Council which was misguided and infected with error.  Those errors included a failure to address or take into account relevant provisions from the Council’s planning scheme and a failure to consider the zoning of the subject land under the Council’s planning scheme.  Any defence of the appeal by the Council during that period was doomed to fail, particularly if the defence proceeded on the same rationale as that articulated in the planning report.

While the Court considered that the Council’s amended position could be fairly characterised as weak, it was not bound to fail or lacking in merit or substance.  Rather, the Council’s amended position was narrow and focussed, was supported by relevant and considered expert evidence, and was advanced in reliance on relevant provisions of the planning scheme.

In relation to the application for costs under section 60(1)(i) of the PEC Act, the Court found that:

• A party’s responsibilities in a proceeding for the purposes of section 60(1)(i) of the PEC Act are those responsibilities imposed on it by the Act that governs the proceeding.  The Acts that govern an appeal to the Court about a development application include the PEC Act and the Planning Act 2016.
• Section 60(1)(i) of the PEC Act should be construed as referring to a responsibility that arises from an obligation imposed on the named parties to do what the PEC Act and the Planning Act require of them when involved in litigation before the Court.
• Section 10(2) of the PEC Act imposes a responsibility on all parties to a proceeding for the purposes of section 60(1)(i) of the PEC Act.  The requirement is an implied undertaking to proceed in an expeditious way.  Section 10(2) of the PEC Act expressly recognises that the parties to a proceeding before the Court impliedly undertake to the Court, and each other, to proceed in a way which involves the litigation of only the real issues in dispute without undue delay, expense and technicality.  In this way, litigation would proceed in an expeditious way.
• Compliance with section 10(2) of the PEC Act would require a local authority, such as the Council, to properly assess the merits of its case and properly acknowledge and address the shortcomings in its case, where appropriate.  The assessment is not fixed in time.  Rather, it ought to be carried out at a number of stages of the litigation and be responsive to new material that comes to light.
• However, the requirement under section 10(2) of the PEC Act does not require a party to capitulate at the first sign its case may not proceed.  It is how a party responds to, and runs its case responsive to this assessment, which will be of import for the purposes of section 10(2) of the PEC Act.
• The Council reviewed its case when new information (a joint experts’ report) became available and altered its position in the appeal in response to that new information.  This change in position occurred efficiently, and in a timely way.  A short period of time was taken to consider the new information and obtain advice from an expert about that information.  There is nothing in this conduct that was improper, unreasonable or would otherwise justify an order for costs.  To the contrary, the Council’s timely change in position is what is expected of an assessment manager named as a party to an appeal to the Court.

The Court found that section 60(1)(b) of the PEC Act was engaged by some of the Council’s behaviour, and then considered a range of factors in determining whether to exercise its unfettered discretion to make an order for costs against the Council.  The Court ordered that the Council pay the appellant’s costs of the appeal during the period up to the date the Council changed its position in the appeal because, during this period, the Council was defending a position in circumstances where the defence was bound to fail.  The Court declined to make an order for costs against the Council after the date when it changed its position in the appeal, because the change in position reflects an approach to litigation by the Council which was not improper, unreasonable or otherwise justified an order for costs.

Moramou2 Pty Ltd v Brisbane City Council [2019] QPEC 22 (21 May 2019)

In Moramou2, the Court considered an application for costs in proceedings involving an appeal against an enforcement order issued by Brisbane City Council concerning the use of premises for a backpacker hostel.  The proceedings had one outstanding issue which was heard in the appeal, being whether there had been an unlawful increase in the intensity or scale of the use of the premises in terms of the number of people accommodated.  The Court set aside the enforcement notice and found that the current use of the premises lawfully complied with both the development approval for the premises and the relevant legislative requirements which regulate this type of use.

The appellant applied to the Court for an order for costs against the Council under sections 60(1)(b) and 60(1)(i) of the PEC Act.

The Court found that the Council’s defence of the part of the enforcement notice which essentially alleged an unlawful use of premises as a consequence of an exceedance of some implied occupancy cap was frivolous and bound to fail.  The Court also found that the Council’s conduct in maintaining allegations of an unlawful use of premises on such tenuous grounds despite the onerous evidentiary burden it carried amounted to the Council not properly discharging its responsibilities in the proceeding pursuant to section 60(1)(i) of the PEC Act.  Accordingly, the Court made an order for costs against the Council.

Lessons

These decisions reinforce that State entities involved in proceedings before the Court, whether in the capacity as an assessment manager or referral agency for a development application, or the enforcement authority for a development approval, must:

• ensure that they seek to litigate only the real issues in dispute, without undue delay, expense and technicality;
• ensure that their position in proceedings is supported by the relevant provisions of planning instruments and legislation and by evidence, whether factual or the opinion of a relevant expert; and.
• throughout the course of the proceedings, properly assess the merits of their case and acknowledge and address any shortcomings, where appropriate.

^{The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice and Attorney-General accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.}