Australian Capital Holdings Pty Ltd v Mackay City Council & Ors [2008] QCA 170

SUPREME COURT OF QUEENSLAND CITATION: Australian Capital Holdings P/L v Mackay City Council & Ors [2008] QCA 170 PARTIES: AUSTRALIAN CAPITAL HOLDINGS PTY LTD ACN 087 497 863 (appellant/first respondent) MACKAY CITY COUNCIL (respondent/second respondent) THE CHIEF EXECUTIVE UNDER THE TRANSPORT INFRASTRUCTURE ACT 1994 (first co-respondent/third respondent) v EULCOM PTY LTD ACN 102 773 106 (second co-respondent/first applicant) W A STOCKWELL PTY LTD ACN 010 095 360 (third co-respondent/second applicant) PORTERCO PTY LTD ACN 009 801 736 (fourth co-respondent/third applicant) PETER SOLOGINKIN AND COLLEEN SOLOGINKIN (fifth co-respondents/fourth applicants) PAUL SOLOGINKIN AND JUDY SOLOGINKIN (fifth co-respondents/fifth applicants) FILE NO/S: Appeal No 1822 of 2008 P & E Appeal No 3575 of 2006 DIVISION: Court of Appeal PROCEEDING: Application for Leave Integrated Planning Act – Further Order ORIGINATING COURT: Planning and Environment Court at Brisbane DELIVERED ON: 27 June 2008 DELIVERED AT: Brisbane HEARING DATE: 2 May 2008 JUDGES: Holmes and Fraser JJA and Chesterman J Separate reasons for judgment of each member of the Court, Fraser JA and Chesterman J concurring as to the order made, Holmes JA dissenting ORDER: Respondents to pay appellants’ costs of and incidental to complying with the orders made by the Planning and -- 1 of 5 -- 2 Environment Court on 4 February 2008 CATCHWORDS: ENVIRONMENT AND PLANNING – COURTS AND TRIBUNALS WITH ENVIRONMENT JURISDICTION – QUEENSLAND – PLANNING AND ENVIRONMENT COURT AND ITS PREDECESSORS – COSTS – OTHER MATTERS – where directions order of Planning and Environment Court set aside by Court of Appeal – where appellants sought costs of steps taken to comply with directions order of Planning and Environment Court, notwithstanding the rule under s 4.1.23(1) of the Integrated Planning Act 1997 (Qld) that parties bear own costs – whether those costs were “costs of a proceeding” in the Court of Appeal under r 681 of the Uniform Civil Procedure Rules 1999 (Qld) – whether, alternatively, those costs fall within exceptions to the general rule in s 4.1.23(1) Integrated Planning Act 1997 (Qld), s 4.1.23(1), s 4.1.23(2)(f) Uniform Civil Procedure Rules 1999 (Qld), r 681, r 679, r 766(1)(a) Australian Capital Holdings P/L & Ors v Mackay City Council; Australian Capital Holdings P/L v Mackay City Council & Ors [2008] QCA 157, cited COUNSEL: D J S Jackson QC, with R S Litster, for the first to fifth applicants P J Lyons QC, with M A Williamson, for the first respondent A N S Skoien for the second respondent E M Hussey for the third respondent SOLICITORS: Hopgood Ganim for the first to fifth applicants MacDonnells Law for the first respondent SB Wright & Wright and Condie for the second respondent Crown Law for the third respondent [1] HOLMES JA: On 2 May 2008 this Court allowed the appellants’ appeal and set aside a directions order made in the Planning and Environment Court. That directions order required steps to be taken by the parties towards an intended hearing for the purpose of determining certain issues left unresolved by a judgment. The first respondent was ordered to pay the successful appellants’ and the second respondent’s costs of the appeal. When the judgment was delivered, leave was given for further submissions to be made in writing as to the costs of the proceedings in the Planning and Environment Court; those submissions have duly been made. [2] Section 4.1.23(1) of the Integrated Planning Act 1997 (Qld) provides, with certain exceptions, that each party to a proceeding in the Planning and Environment Court must bear its own costs. Nonetheless, the appellants in their submissions seek the costs of the steps they took, in compliance with the directions order, towards the proposed further hearing in the Planning and Environment Court. They argue, firstly, that this Court should order the first respondent to pay those costs in the -- 2 of 5 -- 3 exercise of its general costs discretion under the Uniform Civil Procedure Rules 1999 (Qld). Rule 681, which confers the power to award costs, speaks, consistently with other costs rules, in terms of the “costs of a proceeding”; which one would ordinarily regard, so far as this Court’s discretion is concerned, as meaning only the costs of the appeal. But, the appellants point out, the expression “costs of the proceeding” is defined in Rule 679 as including “costs ordered to be costs of the proceeding”. They have had to meet the costs of complying with the directions, notwithstanding that they opposed their making, and the directions order has now been set aside on grounds including the lack of jurisdiction in the Court below to make it. This Court ought, the appellants say, to enable them to recoup those costs by ordering that they be costs of the proceeding before this Court. [3] But the costs in question did not by any stretch of the imagination arise from the appeal in this Court; at the highest, they were incurred contemporaneously with proceedings here. It seems to me, as a general principle, that it would be improper to deem costs, patently not incurred in a proceeding in this court, costs of an appeal solely for the purpose of enabling a meritorious appellant to recover them. There is all the more reason to reject the submission here, when the course proposed would subvert the effect of s 4.1.23(1) of the Integrated Planning Act. [4] Alternatively, the appellants argued, the costs order should be made in the exercise of the Court’s power, under Rule 766(1)(a) of the Uniform Civil Procedure Rules, to make any order that the Planning and Environment Court could make. One of the exceptions to the general rule in s 4.1.23(1) is where a party’s conduct in a proceeding is frivolous or vexatious; another is where a party has incurred costs because another party seeks to introduce new material. The appellants say that this Court should regard the case as falling within one or other of those exceptions, and order that the relevant costs be met by the first respondent. [5] It is necessary, in this context, to mention how the directions order came to be made. At first instance, counsel for the first respondent urged the learned judge to proceed to hear the outstanding issues rather than await the outcome of an appeal against his judgment, and proposed the draft order which ultimately formed the basis of the directions. The appellants contend that the first respondent’s conduct in proposing the further hearing in the Planning and Environment Court was “frivolous or vexatious”. In addition, the appellants had incurred costs because the first respondent sought to introduce new material, that result being facilitated by the directions, which included directions for the obtaining of expert evidence. [6] However, the first respondent’s submissions were made in a context in which the learned judge had indicated his intention to hear and resolve the issues; its error was to encourage him to do so before the appeal was heard. The learned judge at first instance ought, as this Court has held, to have rejected the first respondent’s contention to that effect, and declined to make the directions order; but I do not think, had he done so, that he would then have been justified in regarding the first respondent’s conduct in advancing the contention as “frivolous or vexatious”, so as to warrant a costs order. If one could not fairly have regarded the submission as frivolous or vexatious when it was made, it does not seem to me that this Court in hindsight should regard it as so, simply because, having succeeded, it caused the incurring of costs. -- 3 of 5 -- 4 [7] Nor do I think it can fairly be said that the first respondent was seeking to introduce new material. The impetus to introduce further expert evidence came not from it, but from the learned judge at first instance; he had indicated in his reasons for judgment that further such evidence would be needed to resolve the outstanding questions. [8] I would decline to make any further order for costs in this appeal. [9] FRASER JA: For the reasons given by Holmes JA, I agree with her Honour’s conclusion that the costs sought by the appellants as a result of the order made by the Planning and Environment Court judge on 4 February 2008 are recoverable, if at all, only pursuant to r 766(1)(a) of the Uniform Civil Procedure Rules 1999 (Qld). [10] In my opinion, the costs now sought by the appellants could have been awarded by the Planning and Environment Court pursuant to s 4.1.23(2)(f) of the Integrated Planning Act 1997 (Qld), as costs incurred "because another party seeks to introduce new material". I agree with the reasons given by Chesterman J for that view. As Holmes JA points out, the impetus to introduce further expert evidence came, not from the respondents, but from the judge. Nevertheless, the respondents enthusiastically pursued the opportunity to adduce evidence which they might have adduced at the trial, they were aware that the appellants necessarily would incur legal costs in response, and they maintained the correctness of that approach until the decision of this Court allowing the appeal. [11] Since this appeal was argued, this Court has allowed the principal appeal, set aside the orders made below and ordered that the appeal to the Planning and Environment Court be dismissed.1 It follows that the costs incurred by the appellants in preparation for the further hearing envisaged by the primary judge were wasted. For that reason and for the further reasons given by Chesterman J, I agree with the costs order proposed by his Honour. [12] CHESTERMAN J: I have read the draft reasons of Holmes JA dealing with the appellants’ submission in support of the order they seek that the respondents should pay their costs incurred in complying with the directions and orders made by the Planning and Environment Court on 4 February 2008. [13] I agree with Holmes JA that the costs sought are not costs of the appeal and that any order that the costs in question be paid must have its origin in UCPR 766(1)(a). I also agree with Holmes JA that the conduct of the respondents cannot properly be categorised as frivolous or vexatious. [14] However in my opinion the costs now sought could have been awarded by the Planning and Environment Court pursuant to s 4.1.23(2)(f) of the Integrated Planning Act 1997. That provision empowers the Planning and Environment Court to make an order for costs if a party to a proceeding incurs costs ‘because another party seeks to introduce new material’. The power is an exception to the general provision that the parties to a proceeding in the Planning and Environment Court bear their own costs. 1 Australian Capital Holdings P/L & Ors v Mackay City Council; Australian Capital Holdings P/L v Mackay City Council & Ors [2008] QCA 157. -- 4 of 5 -- 5 [15] It is in my opinion entirely apt to describe the further hearing, for the conduct of which the learned primary judge made the directions this Court set aside on 2 May last, as the introduction of new material. The purpose of the hearing was to allow the respondents to adduce further evidence to overcome a lacuna in the case they had presented to the primary judge. They had not sufficiently addressed the question of the effect their proposed development would have on the amenity of the Sologinkins, as the learned judge recognised. [16] Having failed to address that part of their case with sufficient evidence in a lengthy hearing, the Planning and Environment Court granted them the indulgence of what was, in effect, a second trial of that issue. [17] The orders were made without jurisdiction and in an erroneous exercise of judicial discretion. Until those consequences were pointed out by the judgment of this Court the parties were put to expense to prepare for the second trial. [18] The occasion for it was the respondents’ failure to prove their case in the appeal and their attempt to remedy the deficiency by fresh evidence. [19] The appellants who were put to the expense of preparing for the aborted hearing opposed the orders for it on grounds which have been vindicated. Notwithstanding that opposition the appellants pressed on for the further hearing. [20] In my opinion fairness requires that they should pay the appellants’ costs of and incidental to complying with the orders made by the Planning and Environment Court on 4 February 2008, pursuant to the exception to s 4.1.23(1) of the Integrated Planning Act found in s 4.1.23(f). -- 5 of 5 --