Danseur Pty Ltd v Cairns Regional Council & Ors [2022] QPEC 54

PLANNING & ENVIRONMENT COURT OF QUEENSLAND CITATION: Danseur Pty Ltd v Cairns Regional Council & Ors [2022] QPEC 54 PARTIES: DANSEUR PTY LTD (ACN 010 294 710) (applicant) v CAIRNS REGIONAL COUNCIL (first respondent) and PAUL SAVIOUR MARIO GEORGE BUGEJA & CATHERINE ANN BUGEJA (second respondents) FILE NO: 32 of 2020 DIVISION: Planning and Environment PROCEEDING: Application ORIGINATING COURT: Cairns DELIVERED ON: 4 February 2022 DELIVERED AT: Cairns HEARING DATE: 29 November 2021 JUDGE: Morzone KC DCJ ORDER: 1. Allow the second respondents’ application for costs. 2. Order that the applicant pay the second respondents’ costs of and incidental to the proceeding, including any reserved costs, to be assessed on the standard basis. CATCHWORDS: PLANNING AND ENVIRONMENT – APPLICATION – DECLARATION – COSTS – presumptive position that each party must bear the party’s own costs of the proceeding – whether rebutted - whether opposition to the proceeding was frivolous - whether second respondents are said to have introduced late material. -- 1 of 11 -- 2 LEGISLATION: Planning Act 2016 (Qld) ss 83, 79 Planning and Environment Court Act 1996 (Qld), ss 10(2), 11(1)(a), 37, 59, 60 CASES: Altitude Corporation Pty Ltd v Isaac Regional Council (No 2) [2015] QPELR 139 Danseur Pty Ltd v Cairns Regional Council & Ors [2021] QPELR 1189 Sincere International Group Pty Ltd v Council of the City of Gold Coast (No. 2) [2019] QPELR 662 SOLICITORS: P&E Law solicitors for the applicant Corrs Chambers Westgarth for the first respondent Holding Redlich for the second respondents -- 2 of 11 -- 3 Summary [1] In the wake of a favourable judgment delivered on 15 December 2020, the second respondents apply for their costs against the applicant to be assessed on the indemnity basis, or alternatively, on the standard basis, on the grounds that the applicant’s proceeding was a frivolous or vexatious application, and it introduced late material beyond the scope of the initiating proceeding. [2] The applicant opposes the application and contend that each party should bear their own costs of and incidental to the proceeding. It argues that its application was reasonable and meritorious, and the new material merely consolidated the scope of the disputed facts and contentions previously delivered. [3] In my view the legislative presumption is rebutted in the circumstances of this case. I have concluded that the applicant’s proceeding was frivolous or vexatious in that the issues advanced (including the added, abandoned and litigated issues) were unmeritorious and bound to fail. But I am unpersuaded that these matters warrant an order for indemnity costs. [4] Accordingly, I allow the application by ordering applicant to pay the second respondents’ costs of and incidental to the proceeding, including any reserved costs, to be assessed on the standard basis. Power to award costs [5] The second respondents contend that the court should make an indemnity (or alternatively standard) costs order for the whole or part of the proceeding because: (a) Pursuant to s. 60(1)(b) of the Act, the applicant’s proceeding was frivolous or vexatious in that the issues advanced were unmeritorious and bound to fail; and (b) Pursuant to s. 60(1)(e) of the Act the applicant introduced “new material”, particularly, an amended originating application and an amended statement of facts, matters and contentions. [6] As a general rule each party to a P&E Court proceeding must bear the party’s own costs for the proceeding.1 However, s 60 of the Planning and Environment Court Act 1996 (Qld) provides for exceptions to the general rule, relevantly here the second respondents rely upon s 60(1)(b), (e) and (i), as follows: “60 Orders for costs (1) The P&E Court may make an order for costs for a P&E Court proceeding as it considers appropriate if a party has incurred costs in 1 or more of the following circumstance: … (b) the P&E Court considers the proceeding to have been frivolous or vexatious; 1 Planning and Environment Court Act 1996 (Qld), s 59. -- 3 of 11 -- 4 Example— The P&E Court considers a proceeding was started or conducted without reasonable prospects of success. … (e) without limiting paragraph (d), a party has introduced, or sought to introduce, new material; ….” [7] Therefore, the court should act with a degree of hesitancy before depriving a successful party of costs, or ordering an unsuccessful party to pay costs unless in an unusual or exceptional case. In doing so, the court should not lose sight of the fundamental principle that costs orders serve a compensatory function, not a punitive one. Was the applicant’s proceeding frivolous or vexatious? [8] The second respondent contends that the applicant’s conduct in bringing and prosecuting the proceeding was frivolous or vexatious, since it was bound to fail. They point to the applicant’s abandonment of issues, belated concessions,2 and the disposition of the remaining issues in the judgement.3 [9] On the contrary, the applicant contends that each party ought bear their own costs because: it had a legitimate concern as to body corporate consent and disputed issues that required court adjudication, appropriately sought to reduce the real issues in dispute, and facilitated correction to the historical inconsistent approval in the public interest. [10] In Altitude Corporation Pty Ltd v Isaac Regional Council (No 2),4 Rackemann DCJ identified that a “case is without reasonable prospects of success if it is so lacking in merit or substance as to be not fairly arguable”. The nature of frivolous or vexatious conduct was also considered in Sincere International Group Pty Ltd v Council of the City of Gold Coast (No. 2)5 when Williamson QC DCJ said: [27] Sincere contends that the Council’s defence of the appeal was frivolous. The phrase ‘frivolous or vexatious’ as it appears in s 60(1)(b) of PECA is not defined. It is, as a consequence, to be given its ordinary meaning. Williams JA in Mudie v Gainriver Pty Ltd (No 2) 2 Qd R [2003] 271 at [59] held that the words ‘frivolous or vexatious’ in s 7.6(1A) of the repealed Local Government (Planning & Environment) Court Act 1990 were used in everyday language, and there was little doubt as to their ordinary meaning. His Honour held that frivolous meant ‘of little or no value or importance, paltry’; ‘having no reasonable 2 Reply submissions dated 28 October 2020 3 Danseur Pty Ltd v Cairns Regional Council & Ors [2021] QPELR 1189, at [12]-[17]. 4 Altitude Corporation Pty Ltd v Isaac Regional Council (No 2) [2015] QPELR 139 at [25], citing Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284, Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 and Keddie v Stacks (2012) 293 ALR 764 5 Sincere International Group Pty Ltd v Council of the City of Gold Coast (No. 2) [2019] QPELR 662 at [27]-[30]. -- 4 of 11 -- 5 grounds’, and ‘lacking seriousness or sense, silly’. McMurdo P and Atkinson J in the same decision held that the ordinary meaning of ‘frivolous’ was ‘of little or no weight, worth or importance’, and ‘not worthy of serious notice’. [28] The onus of proving frivolity lies with the applicant for costs. It is a high standard to be met, and will turn on matters of fact and degree, including public policy considerations and the interests of justice. Relevantly, something much more than lack of success needs to be shown to engage s 60(1)(b) of PECA. [29] Sincere allege that the conduct of the Council’s defence, or resistance to the appeal, was frivolous because it had no reasonable prospects of success. This allegation seeks to take up the example that follows s 60(1)(b) in PECA, which speaks of a proceeding that was started, or conducted without reasonable prospects of success. [30] The phrase ‘without reasonable prospects of success’ has been held to equate its meaning with ‘so lacking in merit or substance as to be not fairly arguable’. A case which is not fairly arguable is one that is regarded as ‘bound to fail’. This is a concept that falls appreciably short of ‘likely to succeed’. A lack of success does not mean that a proceeding had no reasonable prospects, or lacked merit.” [11] On 13 February 2020 the applicant applied for a declaration that the decision notice dated 7 November 2019 approving minor changes to the existing development permit for tourist and permanent accommodation offices in relation to land at 107 – 113 Esplanade, Cairns City in respect of the Cairns Aquarius building is void on the grounds that: “1. The change application in respect of which the Decision Notice was issued was not accompanied by the written consent of the owner in respect of the changes affecting or work within common property. 2. The changes approved under the Decision Notice are not ‘minor changes’ as defined in the Planning Act 2016 because they result in substantially different development”. [12] The applicant filed its Statement of Facts, Matters and Contentions on 27 April 2020 dealing with the following issues: (a) there was no lawful owner’s consent; (b) the approved minor change resulted in substantially different development; (c) administrative law challenges against the Council’s decision on the minor change application; and (d) challenges to the validity of Council’s decision notice. -- 5 of 11 -- 6 [13] The matters relating to paragraphs (c) and (d) went beyond the scope of the originating application. [14] The second respondents responded to the Statement of Facts, Matters and Contentions on 22 May 2020. On 26 June 2020 the applicant foreshadowed an application for summary judgment on the owner’s consent issue and filed affidavit material in the proceeding on 29 June 2020. On 8 July 2020 the second respondents communicated deficiencies in the affidavit evidence regarding “substantially different development”, affirmed the merit of their opposition regarding the owner’s consent issue, and warned of an indemnity costs application if the applicant applied for summary judgment. On 20 July 2020, the applicant abandoned the contentions in paras 124(a) and (c) but maintained contentions in paras 124(b) of the Statement of Facts, Matters and Contentions as to the substantially different development issue. The respondents apparently relied upon that representation in filing their affidavit evidence on the remaining issues. [15] On 18 August 2020 the applicant again foreshadowed its application for summary judgment in the absence of any lawful owner’s consent, and filed the application on 20 August 2020. The court made directions as to exchanging written submissions and set the hearing for the week commencing 26 October 2020. [16] In its outline of argument filed on 30 September 2020, the applicant acknowledged that the Statement of Facts, Matters and Contentions included extra issues, and later on 8 October 2020 it abandoned contentions relating to part of the owner’s consent in para 123(a) and the administrative law challenges in para 125. [17] After receiving the other parties outline of argument, on 19 October 2020, the applicant clarified that the owner’s consent contention was based on the post- Decision Notice discovery that the council relied upon a ‘consent’ that was not a lawful owner’s consent, that the applicant “did not intend to proceed with its contention” that the minor change would result in substantially different development and otherwise sought to invoke the court’s discretionary power. Two days before the hearing set for 26 October 2020, the applicant applied for leave to amend the Originating Application and its Statement of Facts, Matters and Contentions to formally limit the scope of the Owner’s Consent contention; abandoned the substantially different development contention, and added the challenges as to the validity of the decision notice. [18] By its amended originating application, the applicant maintained its proceeding for declarations and orders now under s 11(1)(a) of the Act as follows: 1. A declaration that the Decision Notice purporting to approve minor changes to an existing development permit for tourist and permanent accommodation and offices in relation to the land … in respect of the Cairns Aquarius building is void” and necessary orders. 2. Such orders as may be necessary to give effect to the declaration sought in (1) above; 3. Costs -- 6 of 11 -- 7 [19] The grounds relied upon were refined by reference to the former pleading and paragraph 126 of the Statement of Facts, Matters and Contentions filed on 27 April 2020, as follows: 1. The change application in respect of which the Decision Notice was issued was not accompanied by a lawful written consent of the owner in respect to changes affecting or work within common property; 2. Council’s 2019 Decision Notice: did not comply with requirements of the Act; was beyond power and should be set aside. [20] The proceeding involved a contested hearing over two days between 29 October 2020 and 9 December 2020. The remaining questions for determination were: (a) Was the “consent” of the Body Corporate to the change application a nullity because the Committee meeting at which consent was purported to be resolved was unlawful? (b) Does the decision notice dated 7 November 2019 comply with the formal requirements of the Planning Act 2016 (Qld)? (c) Can any noncompliance with the first respondent’s decision notice dated 7 November 2019 be excused pursuant to s 37 of the Planning and Environment Court Act 2016 (Qld)? (d) What are the appropriate and consequential orders? [21] The second respondents were wholly successful in the proceeding 32 of 2020 for reasons delivered on 15 December 2020 in Danseur Pty Ltd v Cairns Regional Council & Ors [2020] QPEC 64. I concluded that the council properly treated the application as being properly made having been satisfied with the form of owner’s consent and it is not for this court to look behind those matters. I also concluded that the decision notice is valid. While it did not include some of the formal requirements prescribed by the Planning Act 2016 (Qld) such noncompliance was not material and completely explicable given the age and scope of information available. This was an appropriate case warranting excusal of any noncompliance in any event. Accordingly, the judgement was formalised in the final orders made on 5 August 2022. [22] The applicant maintains that: (a) the proceeding was reasonable and meritorious; (b) that there were issues with the owner’s consent of the Body Corporate that were appropriately ventilated and whilst the applicant was unsuccessful in relation to the owner’s consent that issue could not be said to be doomed to fail; (c) the applicant prudently reduced the issues in dispute as the proceeding progressed; (d) that non-compliances with the formal requirements of the Act were established and then excused and that the final orders made on 25 August 2022 improved the clarity and certainty of the town planning consent issued in 1980, consistent with s 83(4)(b) of the PA, achieving a public interest outcome. [23] I disagree. -- 7 of 11 -- 8 [24] In my view the applicant’s contention regarding the owner’s consent was doomed to fail. I concluded, accepting the respondents’ steadfast position, that the matter was not justiciable because the court is not at liberty to go behind the ostensibly valid form of consent, and in any event, the decision was not on a restricted issue subject of s 100(2), and ought be treated as valid by virtue s 100. [25] It is true that the applicant progressively ‘reduced’ the issues as to whether the approved minor change resulted in substantially different development and administrative law challenges against the Council’s decision on the minor change application. But the applicant’s conduct is better characterised as abandonment after belatedly realising their poor prospects in the face of early and meritorious opposition by the second respondents. In those circumstance there is no kudos in reducing or limiting issues which were doomed to fail anyway. The second respondents’ costs were thrown away having tolerated the unmeritorious and superfluous contentions. [26] The applicant contends that the first respondent council’s decision notice: (a) does not state the day when the change application was made; (b) is not accompanied by a copy of the development approval, including the extra development conditions imposed; (c) does not state a description of any assessment benchmarks; and (d) is not accompanied by adequate reasons for Council’s decision. [27] This proceeding and the related proceeding brought to light the historical anomalies in the approvals for the Cairns Aquarius Community Title Scheme 1439. The second respondents found themselves in a unique position to take steps to grapple with historical events and defend the council’s decision notice. None of the contended non-compliances were attributable to the second respondents’ conduct. In the end, I found that the decision notice did not state the day when the change application was made as required by s 83(3)(a) of the Planning Act 2016 (Qld) and warranted excusal. But I otherwise found that the other matters contended by the applicants were not made out. In that context, the final orders excused “any” noncompliance as the court sought to quell the prospect of any continuing controversy between the parties. The applicant’s contentions of invalidity involved matters of technicality and form that would not render the decision notice invalid, and even if they were made out, they were excusable in any event. The applicant had no real prospects of establishing invalidity. [28] In all the circumstances, it seems to me that the applicant’s proceeding wholly failed and was bound to so fail since the Decision Notice was not “void”, and there was no real prospect of the applicant succeeding to set aside the Decision Notice as contended. [29] I have concluded that the proceeding was frivolous and vexatious, and the applicant ought pay the second respondent’s costs of the whole proceeding. Did the second respondents introduce late material? [30] The second respondents submit that the costs jurisdiction is also enlivened pursuant to s 60(1)(e) because, at the commencement of the hearing on 29 October 2020, with -- 8 of 11 -- 9 the court’s leave, the applicant introduced “new material” by way of the amended originating application and amended Statement of Facts Matters and Contentions. [31] The application was necessary and permitted with the courts leave. I am not satisfied that s 60(1)(e) is triggered at that point. [32] The amendments to the originating process and pleading largely consolidated the scope of the dispute which had evolved from 27 April 2020. At that time the applicant’s Statement of Facts Matters and Contentions introduced no new issues beyond the scope of the originating proceeding. These broader contentions required new material from both sides, and some contentions were subsequently abandoned at various stages. This is all part of the dynamic of the proceeding, relevant to whether the proceeding was frivolous or vexatious as discussed above. What is the appropriate costs assessment? [33] Having concluded that the proceeding was frivolous and vexatious, and the applicant ought pay the second respondent’s costs of the whole proceeding, I turn to assessment. [34] Costs are ordinarily assessed on the standard basis, unless the rules or a court order requires assessment on an indemnity basis. Circumstances warranting the exercise of the discretion to award indemnity costs include: (a) Knowingly making false allegations, or irrelevant allegations of fraud; (b) Particular misconduct that causes delay, costs and inconvenience of the court and other parties; (c) Proceedings commenced for some improper purpose or ulterior motive; (d) Proceedings commenced in wilful disregard of known facts or clearly established law; (e) Unnecessary allegations or groundless contentions that unduly prolong the case; (f) Imprudent refusal of an offer of compromise; (g) A contemnor. [35] The second respondents seek indemnity costs in reliance on the applicant’s conduct described as: (a) advancing issues that lacked merit and were bound to fail; (b) relying on pleadings that were irrelevant; (c) proceeding with the application for summary judgment notwithstanding the matters notified by the Second Respondents as to: (d) the points they would rely upon; and (e) the second respondents’ intention to seek indemnity costs; and -- 9 of 11 -- 10 (f) attempting, through all means possible, to prevent the second respondents from carrying out their home renovations in circumstances where there is no apparent interest (or no interest has been disclosed in this proceeding): at no time did the applicant disclose its interest in challenging the second respondents, or how or why it would be prejudiced by their renovations. [36] The second respondents incurred costs resisting the application and grounds that were bound to fail. The Statement of Facts Matters and Contentions exceeded the scope of the originating proceeding. The second respondents properly responded as directed, but also alerted the applicants of their meritorious position and costs consequences. The applicants persisted with an application for summary judgment aware that the second respondents contended that: (a) the body corporate’s signed and sealed owner’s consent form was also accompanied by the minutes of the committee meeting and the meeting agenda; (b) the body corporate’s decision to grant consent was not a decision on a “restricted issue”, and no resolution without dissent was required; (c) section 79(2)(a) of the Planning Act requires that Council must accept an application that the Council is satisfied complies with ss 79(1) and (1A); (d) the Council’s satisfaction with the owner’s consent was reasonable in the circumstances; and (e) in addition to these matters, there was no lawful requirement for the Council to go behind the owner’s consent form containing the body corporate’s seal that accompanied the second respondents’ minor change application. [37] With the benefit of the second respondent’s forewarning, the applicant’s ought reasonably to have been aware that the second respondents’ points would entitle them to have the application dismissed in the circumstances. [38] The second respondents have been forced to endure circumstances of uncertainty and complexity as they grappled with the parallel proceedings in an effort to realise their proposed development. They initially applied for a building approval for their proposed renovation with the benefit of town planning and architectural advice in October 2017. That approval was granted in January 2018. They then sought and obtained body corporate consent for the proposed renovations. The applicant commenced cognate proceedings No. 81 of 2018 against the council’s decision to grant the building approval. In May 2018, the applicant commenced proceedings to overturn the body corporate motions approving the second respondents’ proposed renovation works, which required new consents from the body corporate. In May 2019 the parties joined in consent orders in proceedings No. 81 of 2018 for a minor change application, which became the subject of this proceeding. The second respondents obtained approval of the minor change application with body corporate consent, but were met with the applicant’s further challenge by this proceeding. [39] The second respondents’ proper engagement and the merit of their position was ultimately realised in the outcome of this proceeding for reasons delivered on 15 December 2020 in Danseur Pty Ltd v Cairns Regional Council & Ors [2020] QPEC 64 and merged into final judgment on 5 August 2022. -- 10 of 11 -- 11 [40] The applicant did seem determined, if not relentless, in the rigorous pursuit of the proceeding. It contends that it has “by intervention through this proceeding and the related proceeding facilitated the correction of those historical anomalies which is in the public interest”. Whilst, I have concluded that applicant’s proceeding was frivolous or vexatious in that the issues advanced were unmeritorious and bound to fail, I am unable to discern an improper motive or purpose. [41] Accordingly, I allow the application by ordering that the applicant pay the second respondents costs of and incidental to the proceeding to be assessed on the standard basis. Orders [42] For these reasons, I will allow the second respondents’ application for costs. [43] I order that the applicant pay the second respondents’ costs of and incidental to the proceeding, including any reserved costs, to be assessed on the standard basis. Judge DP Morzone KC -- 11 of 11 --