In brief

The case of Danseur Pty Ltd v Cairns Regional Council & Ors [2022] QPEC 4 concerned an application to the Planning and Environment Court of Queensland (Court) in which the Applicant sought its costs against the Second Respondents in respect of the Applicant's originating application for declarations and orders in relation to building work on the Aquarius Building, on the grounds that the Second Respondents frivolously opposed the Applicant's originating application (former proceeding), introduced late material, and unreasonably failed to accept a Calderbank offer. The Cairns Regional Council (Council) did not have an active part in the application for costs.

Background

A town planning consent for the Aquarius Building was given on 12 August 1980 (Town Planning Consent) as a 15-storey building, but was later certified and built as a 16-storey building. Against that historical anomaly, the Second Respondents obtained a development approval for building work on 19 January 2018 (Building Work Approval) to convert the roof top garden, being above their 16th storey penthouse, into a covered and partially enclosed patio area with a lift, and thereby creating a 17th storey.

The Applicant, whose members reside in the Aquarius Building, became concerned about potentially illegal development and commenced the former proceeding, which sought declarations and an order restraining the Second Respondents from acting upon the Building Work Approval. The Applicant offered to resolve the former proceeding on 17 September 2018 on the basis that, in summary, the Second Respondents seek to cancel the Building Work Approval and agree that a development application for a material change of use and for reconfiguring a lot is required. The Second Respondents did not accept the offer.

At a without prejudice meeting facilitated by the P&E ADR registrar on 20 September 2018, the Applicant sought new development plans in respect of the building work the subject of the Building Work Approval and made a further offer to settle the former proceeding, which was also rejected. The Applicant on 10 October 2018 made a further offer, being a Calderbank offer (being a reference to the principles in Calderbank v Calderbank [1975] 3 All ER 333) meaning that if rejected there may be an entitlement to costs on an indemnity basis if the rejection was unreasonable. The Calderbank offer was to resolve the former proceeding, in summary, on the basis that the parties agree that the building work the subject of the Building Work Approval would conflict with the Town Planning Consent and that a development application for a material change of use is required. The Calderbank offer was rejected.

The Second Respondents provided revised plans on 19 November 2018 which amended the boundaries for the proposed building works to remove horizontal intrusions from the common property areas, and proposed to lodge an application to change the Town Planning Consent. The Applicant agreed to the Second Respondents' course of action and the Court ordered on 17 May 2019, by consent, that the Second Respondents lodge an application to change the Town Planning Consent by reference to the Second Respondents' revised plans, which the Second Respondents did.

The Council approved the application. The Applicant challenged the Council's decision in a separate proceeding on the basis that the Second Respondents' application lacked the lawful consent of the body corporate (cognate proceeding). The former proceeding lay in abeyance pending the resolution of the cognate proceeding, in which the Second Respondents were ultimately wholly successful, and that is the subject of our February 2021 article.

The Applicant then sought its costs in respect of the former proceeding on the following basis:

  1. The Second Respondents provided the revised plans, which were a response to the Applicant's issue about horizontal intrusions into common property.

  2. The Second Respondents made the application to change the Town Planning Consent which was approved by the Council, and that was a response to the Applicant's issue that there was an inconsistency in the approvals.

  3. The Court on 21 May 2021 made a declaration, by consent, that the building work would create a 17th storey.

The Court considered the following questions with respect to the exceptions provided under section 60(1) of the Planning and Environment Court Act 2016 (Qld) (PECA) to the general rule provided by section 59 of the PECA that each party must bear their own costs:

  1. Whether the Second Respondents' opposition to the former proceeding was frivolous? 

  2. Whether the Second Respondents introduced late material? 

  3. Whether the Second Respondents unreasonably failed to accept a Calderbank offer?

After deciding each of these questions in favour of the Second Respondents, the Court dismissed the application for costs.

Court finds that the Second Respondents did not frivolously oppose the former proceeding

The Applicant argued that the Second Respondents frivolously resisted the relief sought in the former proceeding and relied upon section 60(1)(b) of the PECA to provide an exception to the general rule as to costs. In response, the Second Respondents argued that their response was reasonable and meritorious.

The Court relied on Williamson QC DCJ's consideration of the nature of frivolous or vexatious conduct and section 60(1)(b) of the PECA in Sincere International Group Pty Ltd v Council of the City of Gold Coast (No.2) [2019] QPEC 9; (2019) QPELR 662. In [30] of that decision, Williamson QC DCJ held that the phrase "frivolous or vexatious" is to be given its ordinary meaning and that "[a] lack of success does not mean that a proceeding had no reasonable prospects, or lacked merit" (see [14]). 

The Applicant argued that its pursuit of declaratory relief was vindicated by the Second Respondents making the application to change the Town Planning Consent. The Court disagreed with this proposition because the declaratory relief sought to propound the need for a development approval for a material change of use as well as a reconfiguration by way of a building format plan, not to compel the making of the application to change the Town Planning Consent.

The Court found that the Second Respondents' response and engagement in the former proceeding was reasonable and not frivolous as they:

  • properly engaged in the former proceeding in circumstances of uncertainty and complexity; 

  • were caught in a historical anomaly, the origin of which was not their doing; 

  • were in the unique position to take steps to regularise past wrongs in order to realise their own proposed development; 

  • engaged public policy considerations while they faced collateral changes to their own interests; and

  • succeeded with an approved change to the Town Planning Consent which effectively regulated the historical anomaly to facilitate the proposed development in the face of the Applicant's challenge.

Court finds that the Second Respondents' introduction of late material does not warrant a different costs order

The Applicant relied on the exception to the general rule as to costs provided under section 60(1)(e) of the PECA with respect to the introduction of revised plans and the making of the application to change the Town Planning Consent.

The Court found that this was not a typical case where the provision of late material caused some cost consequence and that the introduction of this material better defined the real issues for determination, progressed the proposed development, regularised the historical anomaly, and achieved certainty in the public interest. Accordingly, the Court did not accept that the Second Respondents' efforts in respect of the late material warranted a different order as to costs.

Court finds that the Second Respondents did not unreasonably fail to accept the Calderbank offer

The Court noted at [54] that "[t]he rejection of a Calderbank offer does not create an automatic entitlement to costs on an indemnity basis. Such an order could only be made if the rejection of that offer was unreasonable". 

The Court did not accept that the Second Respondents' rejection of the Calderbank offer was unreasonable in circumstances where the offer was premised on a requirement to make a development application for a material change of use which was entirely vindicated.

Conclusion

The Court dismissed the application for costs and made no order for costs with the effect that each party is required to bear their own costs of the former proceeding, including the application for costs.

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2022.

Related Articles