The case of Sincere International Group Pty Ltd v Council of the City of Gold Coast (No. 2)  QPEC 9 concerned an application for costs to the Planning and Environment Court. The Appellant had successfully appealed against conditions which had been imposed by the Gold Coast City Council (Council) with the Court holding that the development application ought be approved subject to an amended suite of conditions (see Sincere International Group Pty Ltd v Council of the City of Gold Coast  QPEC 53).
The Appellant sought an order that the Council pay the Appellant's costs under section 60(1) of the Planning and Environment Court Act 2016 (PECA) for the following reasons:
- the Council had no reasonable prospects of success in the appeal;
- the Council introduced new material in the form of revised conditions of approval;
- it was unreasonable for the Council to reject two settlement offers; and
- the Council failed to discharge its responsibilities in the proceeding.
The Court held that section 60(1) of the PECA was engaged and therefore ordered that the Council pay the Appellant's costs for the proceeding up to and including 11 September 2018 and the costs of the application for costs on a standard basis.
Background to the appeal
The original appeal concerned an appeal to the Planning and Environment Court against conditions imposed by the Council on an approval for reconfiguring a lot to create 67 community title lots, common property and two balance lots. The issue before the Court concerned the balance lots, being lots 900 and 901.
The Council had imposed a condition, being condition 7, requiring both lots to be combined and dedicated at no cost to the Council for “Public open space for environmental conservation purposes”. The Council later withdrew condition 7 in respect of Lot 900, but maintained condition 8 in respect of Lot 900 which constrained future development on the land.
The Court ultimately held in favour of the Appellant as the Council had failed to provide sufficient evidence to establish that condition 8 was necessary.
The Council had no reasonable prospects of success in the appeal
A proceeding in the Planning and Environment Court requires each party to bear its own costs under section 59 of the PECA. An exception to that provision is contained in section 60(1) of the PECA, which confers a power on the Court to award costs in the following circumstances:
"(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 circumstances—
(b) the P&E Court considers the proceeding to have been frivolous or vexatious;
The Appellant submitted that the Council's defence was frivolous as it had no reasonable prospects of success. In order to consider this submission, the Court had to split the proceeding into two periods being the period leading up to 11 September 2018 and the period following 11 September 2018.
In relation to the period leading up to 11 September 2018, the Court noted the fundamental errors in the planning report which was relied upon the Council officer who recommended the approval of the development application and thus the conditions were bound to fail.
The Court noted that the Council changed its position after 11 September 2018 in response to the expert ecologist’s joint report. The Council provided the Appellant with a revised suite of conditions which sought to impose restrictions on future development on Lot 900. The Court determined that although the Council’s amended case was weak, it was well short of being bound to fail, frivolous or vexatious.
The Court therefore determined that section 60(1)(b) of the PECA was engaged in respect of the Council’s defence of the appeal prior to 11 September 2018.
Did the Council introduce new material?
The Appellant argued the Council introduced new material in the appeal as it had sought leave to amend the issues in dispute. Section 60(1)(e) of the PECA allows the Court to make an order for costs when a party has introduced new material. The Court noted that "new material" for the purposes of section 60(1)(e) of the PECA includes documents that may be read as material before the Court and is not limited to evidence.
The Court determined that the Council did introduce new material as the material in issue was introduced as a consequence of an order of the Court dated 17 October 2018. The Council relied on this material and its use was critical for the Council. The Court was therefore satisfied the Council did introduce new material under section 60(1)(e) of the PECA.
Was it unreasonable for the Council to reject offers to settle the appeal?
The Appellant further submitted that the Council unreasonably rejected two offers to settle the appeal. In relation to the first offer made on 13 September 2018, the Court was not persuaded that the Appellant made an offer to settle as it was more of an intimation of what may have been accepted by the Appellant if the Council was to make an offer to resolve the appeal.
The second offer made on 25 September 2018 however, was regarded as an offer to settle the appeal. The Court determined that in this letter, the Appellant was prepared to resolve the appeal due to the amended suite of conditions. Although the Council did not accept the second offer, the Court did not consider that the Council acted unreasonably as there was no evidence to suggest that the Council ignored the offer or acted contrary to the advice of its legal team and expert witness.
Did the Council fail to discharge its responsibilities in the proceeding?
The Appellant also relied upon section 60(1)(i) of the PECA, which confers a power on the Court to award costs where it is satisfied that an assessment manager has not properly discharged its responsibilities. The Appellant argued that the Council did not properly discharge its responsibilities for the following reasons:
- the Council failed to assess the merits of the Council’s case and failed to acknowledge the clear deficiencies in its case; and
- the Council ought to have realised the limitations in its case and acted reasonably to withdraw its opposition to the appeal.
The Court noted that section 60(1)(i) of the PECA should be construed as referring to a responsibility that arises from an obligation imposed on the named parties to do what the PECA and the Planning Act 2016, require of them when involved in litigation. Section 10(2) of the PECA imposes a responsibility on all parties to a proceeding for the purposes of section 60(1)(i) of the PECA to impliedly undertake to the Court and each other to proceed in an expeditious way.
The Court noted that section 10(2) of the PECA means that the parties are to proceed in a way which involves the litigation of only the real issues in dispute without undue delay, expense and technicality. The Court determined that the Appellant failed to demonstrate that the Council did not comply with section 10(2) of the PECA, as the Council reviewed its case and altered its position in an efficient and timely manner.
The Court determined that the Appellant had successfully demonstrated that section 60(1)(b) and (e) of the PECA were engaged. In order to determine the award of costs, the Court noted that in relation to section 60(1)(b) of the PECA, costs would only be awarded for the part of the appeal up to and including 11 September 2018, as the Council's approach to the litigation after that date was proper and reasonable.
The Court further noted that although section 60(1)(e) of the PECA was engaged, an order for costs under this sub-section was not warranted as the introduction of the new material by the Council was made in order to formalise the issues in the appeal. Therefore, the Court held that the Council was to pay the Appellant's costs on a standard basis for the proceeding up to and including 11 September 2018, and the costs of the application.
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