Brisbane City Council v Brywell Pty Ltd & Ors [2012] QPEC 49

PLANNING & ENVIRONMENT COURT OF QUEENSLAND CITATION: Brisbane City Council v Brywell Pty Ltd and others [2012] QPEC 49 PARTIES: BRISBANE CITY COUNCIL (Applicant) v BRYWELL PTY LTD (First Respondent) and FREDERICUS BARTHOLOMEUS RUHLAND (Second Respondent) and DAVID ASHLEY JORDAN AND KIM SHEREE JORDAN (Third Respondent) FILE NO/S: 1806/12 DIVISION: Planning & Environment PROCEEDING: Application in Pending Proceeding ORIGINATING COURT: Planning and Environment Court of Queensland DELIVERED ON: 28 August ex tempore DELIVERED AT: Brisbane HEARING DATE: 28 August 2012 JUDGE: Andrews SC DCJ ORDER: 1. Order that paragraphs 5 to 11 of the originating application be struck out. 2. Order that the Brisbane City Council have liberty to replead. 3. Order that the Brisbane City Council pay the costs of the first and second respondent of this application on an indemnity basis. -- 1 of 6 -- CATCHWORDS: 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 Ebis Enterprises P/L v Sunshine Coast Regional Council [2011] QCA 15 followed Stevenson Group Investments P/L v Nunn [2012]QPEC 7 Copley v Logan City Council & Anor [2012] QPEC 43 distinguished Sustainable Planning Act 2009 s 457(2) COUNSEL: O’Brien for First and Second Respondents Kefford for the Applicant Brisbane City Council SOLICITORS: Brisbane City Legal Practice for the Applicant Carter Newell Lawyers for First and Second Respondents McCarthy Durie Lawyers for the Third Respondents [1] The application before me is 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 this proceeding. [2] The application to strike out is not opposed. The first and second respondents also seek an order that the respondent, Brisbane City Council, pay their costs. That application is not opposed. The first and second respondents also apply for an order that they have their costs assessed on an indemnity basis. That application is opposed. [3] Brisbane City Council, in the orders that it sought at paragraphs 5 to 11, did not act in bad faith in seeking those orders. That is not a finding that I make. It is more correct to say that the good faith or bad faith of the Brisbane City Council has not been put in issue in this case. There is no evidence with respect to it. I am not asked to make a finding of bad faith and there is no basis for me to suspect bad faith. [4] The second respondent is a licensed building certifier employed by the first respondent. In October 2008 the first respondent was engaged by the Jordans to undertake certification work in relation to a dwelling proposed to be built on a newly reconfigured suburban lot. The Jordans submitted to the first respondent a development application for building work in relation to the newly reconfigured lot, which I will call the property. On the 11th of June 2009 the second respondent, who was employed by the first respondent, issued a decision notice approving the development application for -- 2 of 6 -- building works on the property. Other than assessing the building application and issuing the approval, the first and second respondents have had no involvement in the development or construction of the dwelling on the property. [5] The second respondent was alleged by the Brisbane City Council to have committed an offence against section 83 of the Building Act and, as a result of that, a complaint and summons was served upon him and in March of 2011 the complaint was dismissed on the basis of a technicality. The technicality was the failure of the Brisbane City Council to aver that the second respondent was a licensed certifier. [6] It was too late for the council to reinstitute proceedings containing that averment. The allegations in that proceeding against the second respondent were to the effect that he should not have granted the building development approval applied for without first referring it to the Brisbane City Council as a concurrence agency. It seems likely that the second respondent should indeed have done so before he issued a decision notice approving the development application for building works on the property. [7] More than a year later the council instituted the proceeding in this court. It relevantly sought against the first and second respondents a declaration that they had committed a development offence pursuant to section 578 of the Sustainable Planning Act and it sought various enforcement orders. [8] On the 23rd of May 2012 the matter came on for review. On that occasion the Brisbane City Council was notified that a strike out application would be brought by the first and second respondents to strike out the parts of the Brisbane City Council's originating application that related to the first and second respondents on the basis that those parts disclosed no cause of action and were embarrassing. [9] The basis indicated was that the first and second respondents had not undertaken any “development” within the meaning of that term in The Sustainable Planning Act and therefore could not have committed a development offence under the Sustainable Planning Act. [10] These bases which were indicated seem to be correct. One week later, that is after the review, a strikeout application and supporting affidavit was filed. 26 days after that the Brisbane City Council asked Senior Counsel to consider the merits of the originating application and to appear on the hearing of the application. [11] Four weeks later, on the 24th of July, Senior Counsel responded to the Brisbane City Council that the first and second respondents could not have offended and could not be liable for an enforcement order. It was only last week that the Brisbane City Council indicated to the first and second respondents that there would be no opposition to their application to strike out the relevant paragraphs of the originating application. It is in these circumstances that it is submitted for the first and second respondents that it is proper that the costs ordered for them should be indemnity costs. [12] There is no question before me that is there is 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 concession is made because of the case of Ebis Enterprises Pty Ltd v. Sunshine Coast Regional Council [2011] QCA 15. At paragraph 7 of that case Chesterman JA, when referring to the predecessor to section -- 3 of 6 -- 457(2) of the Sustainable Planning Act observed, "A proceeding will be frivolous if it lacks substance, so there was no reasonable basis for starting it so that its prosecution produced unjustifiable trouble for the other party." [13] It is, in the proceeding before me, the case that those paragraphs did lack substance so that there was no reasonable basis for making the allegations in those paragraphs and the trouble that they have caused for the first and second respondents was produced unjustifiably. [14] The first and second respondents argue on the basis of Stevenson Group investments Pty Ltd v. Nunn [2012] QPEC 7 where his Honour Judge Searles referred to the judgment in Colgate-Palmolive Company and Colgate-Palmolive Pty Ltd v. Cussons Pty Ltd (1993) 46 FCR 225 to two particular instances which are said to warrant the exercise of the discretion to order indemnity costs. The two particular instances upon which the first and second respondents rely before me are, one, that the allegations ought never to have been made and, two, that there was an undue prolongation of the case by groundless contentions. [15] In this case it is clear that the allegations ought never to have been made. The case was unduly prolonged, but whether it was because of the groundless contentions or due to the failure of the Brisbane City Council to promptly investigate the strength of its pleading is not necessary for me to determine. [16] Indemnity costs are resisted by the Brisbane City Council and counsel submits in effect that its delay was understandable; in part I infer because of the need to investigate the arguments raised by the first and second respondents; in part because there was a change of counsel, that is of the barrister retained to appear; but the Brisbane City Council also refers me to the decision of Copley v. The Logan City Council and Anor (No 2) [2012] QPEC 43. In that case his Honour Judge Jones considered the propriety of an application for indemnity costs where there were poor grounds for including matters in a notice of appeal and where some of the matters in the notice of appeal were struck out. [17] After referring to the relevant provisions of the Sustainable Planning Act and the equivalent provision at section 4.1.23 of the Integrated Planning Act 1997 and after concluding that the outcome of the application would be the same whichever legislation was applied, his Honour found that a number of issues raised were manifestly unarguable and did not raise a reasonable cause of action and noted that notwithstanding those findings there was still an issue of whether the appeal could be characterised as frivolous and vexatious. His Honour does not appear to have had the benefit of a reference to the case of Ebis Enterprises which would have assisted his Honour to determine that that was a sufficient basis to characterise the proceedings as frivolous, but his Honour did appreciate that to the appellant it should have been clear that with respect to certain grounds there was no prospect of succeeding. His Honour did not, in the circumstances of that case, order that the costs he ordered the appellant to pay should be assessed on an indemnity basis. [18] As I understand the decision, one of the premises upon which his Honour acted was that under the Sustainable Planning Act or its equivalent section under the Integrated Planning Act each party must bear the party's own costs of the proceeding, save in certain circumstances, and that once it is shown that a part of the proceeding is -- 4 of 6 -- frivolous and vexatious, the Court is then given a discretion to order costs of the proceeding or that part. I understand his Honour to have regarded the existence of a frivolous or vexatious part of the proceeding to be a precondition for the ordering of costs and that the existence of a frivolous part of the proceeding did not necessarily meant that a Court should prima facie consider the ordering of indemnity costs. [19] His Honour at paragraph 32 noted, "Without expressing a final view about the matter it seems that this Court has only been prepared to order costs on an indemnity basis where more serious misconduct is involved. By way of examples, where there was a strong inference that a party was acting for an ulterior motive and/or for private gain and/or was guilty of noncompliance of orders and desultory, evasive and troubling and discreditable behaviour or where the party had advanced a case based on the repetition of arguments previously ruled on and rejected in other jurisdictions." [20] It is not suggested against the council that its conduct falls into any of those categories. However, when I look at the relevant section of the Sustainable Planning Act I note that it does not expressly indicate a preference for costs on either a standard or an indemnity basis once the discretion to order costs is enlivened. The Legislature seems to have left that discretion to be exercised on some basis not prescribed by that Statute. [21] In the case before me there are some particular features which are distinguishable from the features which existed before his Honour Judge Jones in Copley. His Honour was there dealing with an inexperienced litigant who had put up some groundless grounds of appeal. Before me, the pleader is an experienced litigant, the Brisbane City Council. The circumstances under which the Brisbane City Council made its allegations were such that I conclude it had ample time to consider the statutory basis for making its allegations. It had commenced in the Magistrates Court on a sound statutory footing. When electing a year later to pursue the first and second respondents on another basis it undoubtedly had some onus to consider the reasonableness of that basis and it had the expertise to do so. [22] The allegation that it made was an allegation of a development offence. If proved, the remedy that it sought was not a fine, but a remedy that the first and second respondents pay for or be financially responsible for completion of building work in accordance with a siting variation and approved plans. [23] When alleging an offence against another party it is a serious matter. I draw some assistance from the analogy which relates to the allegation of fraud against a party. While that allegation, that is of fraud, may be even more serious, there are duties imposed upon a pleader when making such an allegation. It seems to me that an experienced litigant such as the council did have an obligation to consider properly whether to plead a development offence against the first and second respondents of the type pleaded in this particular case. It is not suggested for council that the pleading is even arguable. I regard that as a relevant matter. [24] So I distinguish the circumstances of this case from the circumstances before his Honour Judge Jones particularly because I have before me an experienced litigant; secondly, because the allegation here is of a development offence. In this case it seems to me appropriate to order costs on an indemnity basis. [25] I order that paragraphs 5 to 11 of the originating application be struck out. -- 5 of 6 -- [26] I order that the Brisbane City Council have liberty to replead. [27] I order that the Brisbane City Council pay the costs of the first and second respondent of this application on an indemnity basis. . -- 6 of 6 --