The costs of not playing by a Council’s own rules
The Land and Environment Court has sent a timely reminder to local Councils about the possible costs consequences of refusing development consent to a development application that is fully compliant with the relevant planning controls.
In a decision handed down last Friday, the Court has ordered one Council to pay the costs of a successful applicant in a case in which the Council was refusing development consent and defended the ensuing appeal even though the development application complied with all of the relevant provisions of the Council’s local environmental plan and development control plan: Dunford v Gosford City Council (No.3)  NSWLEC 96 (12 June 2015). The successful applicant’s costs had been estimated to be more than $150,000.
In that case the applicant had sought development consent for the demolition of a dwelling house and the erection of a new replacement dwelling house at Wamberal Beach. The land the subject of the development application was at risk of coastal erosion and the Council refused development consent on two grounds. One was that the construction of the proposed new dwelling did not sufficiently avoid or minimise the potential risk of coastal erosion. The other was that the development was not in the public interest as it would be “impacted by coastal hazard processes, resulting in property damage and loss”.
In the hearing of the appeal, the Council’s witnesses accepted that the proposed development complied with the technical provisions of the Council’s planning instruments but the Council still argued that were right in refusing development consent. In doing so, the Council sought to depart from the policy contained in its development control plan.
In handing down the Court’s decision, Sheahan J summarised the applicable principles in the following way:
- The basic rule in Class 1 proceedings is that the Court will not make any order for costs unless it considers that doing so would be fair and reasonable in the circumstances;
- The effect of the rule is that ordinarily each party in class 1 proceedings will be liable to pay its own costs;
- Success alone therefore is insufficient to justify the making of an order for costs;
- A Council is not always bound to follow previous planning decisions and can act in a way that may appear to be inconsistent, eg when it becomes aware of additional information which means it would be responsible to take a different stance;
- The principle which underlies the basic rule is that persons should not be discouraged from exercising their rights of appeal (the “no discouragement principle”);
- A significant purpose of planning appeals is to improve the decision-making process and in this context the no discouragement principle means that an unsuccessful consent authority is more likely to suffer an adverse costs order than an unsuccessful applicant; and
- Failing to lead the evidence necessary to make out a Council’s case and defending appeals that have poor prospects of success can amount to unreasonable conduct on the part of a consent authority.
- Applying these principles to the case before him, Sheahan J held that it was neither fair nor reasonable for the Council to argue against its own planning instruments and to adopt instead an arbitrary alternative approach. His Honour observed, “As is seen far too often, the Council left the applicant with no alternative but to bring her complaints to the Court”.
In the circumstances, the Court ordered the Council to pay the applicant’s costs of the whole proceedings.