Insights

In brief

The case of Quintenon Pty Ltd v Brisbane City Council [2018] QPEC 13 concerned an application in the Planning and Environment Court by the Applicant for costs on a standard basis following its success in an earlier appeal in which it successfully overturned a deemed refusal of a mixed use development for aged care accommodation, assisted living units, medical consulting rooms and health training facilities.
 
The Applicant sought costs in the following three circumstances:  
 
(a) costs on an indemnity basis from the date a Calderbank letter of offer was made;
(b) costs for the Council's adjournment of the costs hearing; and
(c) costs for the costs application.
 
The Council argued that each party should bear its own costs as was the default position under section 457 of the now repealed Sustainable Planning Act 2009 (SPA).
 
The Court dismissed the application for costs relating to the Calderbank letter and the application for costs of the costs application but granted costs on a standard basis for the delay caused by the Council's adjournment of the costs application.

Background

The Applicant lodged with the Council a development application for a material change of use which was refused primarily due to conflicts with the now superseded City Plan 2000 (City Plan) particularly in relation to height limits due to the larger than normal floor-to-ceiling ratios.
 
The parties proceeded to undergo an alternative dispute resolution process, which failed to deliver an outcome. The Applicant commenced a successful appeal against the Council's decision.

Court's discretion to award costs

The Court noted its broad discretion under section 457 of the SPA. The Court also noted its previous decision in Hydrox Nominees Pty Ltd v Noosa Shire Council [2014] QPEC 60 where it held that the Court's discretion is open (at paragraph [3]).

Applicant claimed entitlement to costs following successful appeal

The Applicant claimed it was entitled to costs for the following reasons:  
 
  1. the Council failed to engage with the Calderbank offer;
  2. the Council failed to inform the Applicant of the concerns Council had with its development proposal;
  3. the Council failed to engage an expert;
  4. the Council advanced an argument that there was no community or economic need for the proposed development without engaging an expert and while recognising out of Court there was an economic need for the proposed development; and
  5. the Council abandoned grounds during the course of the hearing.
The Court determined that failing to engage an expert to counter the Applicant's expert did not warrant a costs order. Furthermore, the Court held that the Council's conduct in the initial appeal, including abandoning grounds and advancing an argument concerning the economic or community need for the proposed development, was acceptable.
 
The Court afforded considerable time to whether it was reasonable for the Council to allow the Calderbank offer to lapse.

Applicant presented a Calderbank offer to the Council offering a significant reduction in height before the appeal

The Applicant sent a "without prejudice" letter to the Council before the appeal was commenced offering to modify their proposal to satisfy the height limit in the City Plan. The Council was amenable to the reduction in height, however, it was concerned about how the Applicant would address the additional issues raised by its experts. The Council did not inform the Applicant that it was amenable to the height reduction.
 
In response to the Calderbank offer, the Council sought additional plans from the Applicant which addressed the following:  
 
1. the changes to the proposed development; and
2. the new issues arising from the modified proposal, which included:
  (a) traffic generation;
  (b) building form;
  (c) future cross block link;
  (d) deep planning; and
  (e) overshadowing.

The Applicant refused to provide the detailed plans until the Council had accepted their offer. The Council allowed the offer to lapse.

Court determined that it was reasonable for the Council to let the Calderbank offer lapse

The Court determined that it was reasonable for the Council to let the Calderbank offer lapse. The Court relied upon the case of J & D Rigging Pty Ltd v Agripower Australia Limited & Ors [2014] QCA 23 in which it was held that the Court can consider the following matters when determining the reasonableness of rejecting a Calderbank offer (at paragraph [6]):
 
  1. the stage of the proceeding at which the offer was rejected;
  2. the time allowed to consider the offer;
  3. the extent of the compromise offered;
  4. the offeree's prospects of success, assessed as at the date of the offer;
  5. the clarity with which the terms of the offer were expressed; and
  6. whether the offer foreshadowed an application for indemnity costs in the event of the offeree's rejecting it.
     
The Court relevantly determined that the offer was given at an early stage at which time the Council's concerns were still legitimate even if they would have failed at a later date. Furthermore, although the offer was kept open for an adequate time and the terms were clear, the terms would have necessitated an absolute acceptance or refusal of the modifications to the development proposal.
 
The Court found that the terms of the Calderbank offer did not allow for the height issue to be separated from the additional issues, thereby requiring the Council to accept or refuse the proposal as a whole. Therefore, if the Council had accepted the Calderbank offer they would also have given away their ability to litigate or negotiate on the additional issues.
 
The Court found that the Council was acting reasonably in letting the Calderbank offer lapse in order to resolve the additional issues with the development application. The Court therefore determined that the lapse of the Calderbank offer did not enliven an entitlement to costs.

Court satisfied that the Applicant entitled to its costs thrown away by adjourned direction hearing

The Court held however, that the Council should pay the Applicant's costs on a standard basis for the adjournment of the costs hearing requested by the Council to procure additional information and the subsequent directions hearings required due to the adjournment.

Conclusion

The Applicant was unsuccessful in their application for costs in relation to the lapsed Calderbank offer. However, the Applicant was awarded costs arising from the adjourned costs hearing and the consequential need for a directions hearing in relation to the costs application, brought about by the Council.  

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal advice. Please seek your own legal advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​

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