The case of Moramou2 Pty Ltd v Brisbane City Council (No 2)  QPEC 22 concerned an application for costs to the Queensland Planning and Environment Court against the Respondent, the Brisbane City Council (Council), consequential upon the judgement in Moramou2 Pty Ltd v Brisbane City Council  QPEC 18. The judgement was in respect of an appeal against the Council's decision to give an enforcement notice to Moramou2 Pty Ltd (Appellant) concerning the use of its premises as a backpacker hostel. In issue was whether the discretion of the Court to make an order for costs had been enlivened on the basis that the Council's conduct was frivolous or vexatious, and it did not properly discharge its responsibilities during the proceedings.
The judgement in Moramou2 Pty Ltd v Brisbane City Council  QPEC 18 concerned an appeal against the Council's decision to give an enforcement notice to the Appellant in respect of the use of its premises, located at 47 Brighton Road, Highgate Hill, as a backpacker hostel. The Council claimed that there had been an unlawful increase in the intensity or scale of the use of the premises, specifically, that the number of residents accommodated at the premises exceeded the maximum authorised occupancy. In dismissing the appeal and setting aside the enforcement notice, Everson DCJ found that the number of residents occupying the premises lawfully complied with both the conditions of the relevant development approval and the current statutory regime administered by the State government regulating this type of use.
The application for costs was brought under section 60 of the Planning and Environment Court Act 2016 (PECA) upon a number of bases. Firstly, the Appellant argued that the Council's conduct in the proceedings was frivolous and vexatious. Secondly, the Appellant argued that the Council was not properly discharging its responsibilities in the proceedings. Thirdly, costs were sought on the basis that the adjournment on 10 December 2018 was solely for the purpose of introducing new material, that is, to permit the Council to give a substituted enforcement notice. Finally, the Appellant sought an order for costs in relation to its Calderbank offer made on 28 November 2018.
The Planning and Environment Court stated that the Appellant's right of appeal in the circumstances of this case was a right to appeal against an enforcement notice. The enforcement notice in question was dated 30 November 2017 and asserted that the Appellant had unlawfully increased the scale or use of its premises, and that it had undertaken unlawful building work on a pre-1946 building. The Court noted that in each instance, the Appellant was required to lodge a properly prepared development application by 20 March 2018 and "do all things necessary to progress the application". Importantly, the enforcement notice stated that the unlawful increase in intensity and scale of use of the premises arose in relation to the development approval granted on 13 July 1987.
When the appeal came on for hearing in December 2018, the parties agreed to an adjournment to permit the Council to issue a substituted enforcement notice. The Court observed that the substituted enforcement notice essentially re-pleaded the same allegations concerning the unlawful use of the premises, and asserted non-compliance with a development approval dated 27 February 1987, with no reference to the approval dated 13 July 1987. The allegations of unlawful building work were maintained on the same basis that the building work in question was assessable development.
The Appellant submitted to the Court that the development application to regularise the unlawful building work to a pre-1946 building had been made in circumstances where the Appellant conceded it was necessary. The Council submitted that whilst this development application had indeed been lodged with the Council, it had gone into abeyance as a consequence of the proceedings. Given these circumstances, the Council conceded that the Court need not deal with this aspect of the appeal.
Furthermore, the Appellant submitted to the Court that because it had dealt properly and expeditiously with the issue of the building work by lodging the development application, there was no need to include such a contention in either of the enforcement notices, nor should it have formed part of the proceedings generally. However, the Court did not accept this submission. As noted above, the enforcement notice required the Appellant to make the application and do everything necessary to progress the application. The application was also placed into abeyance upon the Appellant's request, pending the outcome of this appeal.
Council's defence of the enforcement notice was "frivolous and bound to fail" and the Council failed to discharge its responsibilities in the proceedings
The Court considered whether the proceedings were "frivolous or vexatious" under section 60(1)(b) of the PECA. The Court noted that the definition of "P&E Court proceeding" under Schedule 1 of the PECA included "a part of a proceeding and an application in a proceeding". Applying the Court's earlier analysis of this provision in Sincere International Group Pty Ltd v Council of the City of Gold Coast (No 2)  QPEC 9 at -, the Court adopted the view that "P&E Court proceeding" included a defence to an appeal by a local government, and the term "frivolous" meant, inter alia, having no reasonable grounds.
Applying this interpretation of section 60(1)(b) of the PECA to the present case, the Court observed that the Council had issued an enforcement notice alleging the unlawful use of the premises in circumstances where it was uncontentious that the development approval would be construed in favour of the Appellant if any ambiguity arose. Moreover, the original enforcement notice failed to identify the correct development approval for the premises, and the substituted enforcement notice failed to disclose any basis for an unlawful increase in the intensity or scale of the use of the premises. Accordingly, the Court concluded that the defence to this part of the enforcement notice concerning the alleged unlawful use of the premises was frivolous and bound to fail.
Additionally, the Court found that the Council's maintenance of the allegations of unlawful use of the premises on such tenuous grounds, notwithstanding the onerous evidentiary burden it carried, amounted to a failure to discharge its responsibilities in the proceedings under section 60(1)(i) of the PECA.
Given these circumstances, the Court found that its discretion was enlivened under section 60(1) of the PECA to make an order for costs. However, its discretion was confined to the defence of the allegations in the enforcement notice concerning the unlawful use of the premises, not the unlawful building work. Accordingly, the Court found that it was appropriate to order that the Council pay only half of the Appellant's costs of the proceeding, subject to its findings in relation to the adjournment below.
Council to pay Appellant's costs as a consequence of the adjournment
The hearing of the appeal was adjourned on 10 December 2018 to allow the Council to issue the substituted enforcement notice. The Court was of the view that this fell within section 60(1)(e) and (i) of the PECA. Accordingly, the Court held that the Council was to pay the Appellant's costs thrown away as a consequence of this adjournment on the standard basis.
Court disregards the Calderbank offer
The Court also considered the Appellant's submission for a costs order in relation to a Calderbank offer made on 28 November 2018. The Court observed that in circumstances where a local government has an obligation to enforce compliance with the planning controls administered by it, public policy reasons dictate that a Calderbank offer would be an unattractive and irrelevant consideration in a costs application for an appeal of this kind. The offer also sought to dispose of the unlawful building work issue summarily, which the Court believed to be an unattractive outcome. Thus, the Court disregarded the Appellant's Calderbank offer.
The Court concluded that its discretion to award costs under section 60(1) of the PECA was enlivened. The Court found that it was appropriate to make an order for the Council to pay the Appellant's costs thrown away as a consequence of the adjournment on the standard basis, and to pay half of the Appellant's costs of, and incidental to the appeal, including the costs of the application for costs on the standard basis.
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