Costs awarded by the Planning and Environment Court of Queensland for a frivolous and vexatious proceeding that was bound to fail

In brief

The case of Danseur Pty Ltd v Cairns Regional Council & Ors [2022] QPEC 54 concerned an application by the Second Respondents to the Planning and Environment Court of Queensland (Court) for costs against the Applicant as a consequence of the Court dismissing in the case of Danseur Pty Ltd v Cairns Regional Council & Ors [2020] QPEC 64; (2021) QPELR 1189 the Applicant's Originating Application seeking a declaration that a decision notice given by the Cairns Regional Council (Council) approving minor changes to a development permit for tourist and permanent accommodation offices is void (Subject Proceeding).

The Council did not have an active part in the application for costs.

We have previously published articles in respect of the Subject Proceeding and another application for costs by the Applicant against the Second Respondents in the case of Danseur Pty Ltd v Cairns Regional Council & Ors [2022] QPEC 4, which can be found in our February 2021 article and July 2022 article respectively.

The Court considered whether the following exceptions in section 60(1) of the Planning and Environment Court Act 2016 (Qld) (Act) to the general rule in section 59 of the Act that each party must bear its own costs were engaged:

1. Whether the Subject Proceeding was frivolous or vexatious in that the issues advanced were unmeritorious and bound to fail (see section 60(1)(b) of the Act).

2. Whether the Applicant introduced new material, being the Applicant's amended Originating Application and amended Statement of Facts, Matters and Contentions (section 60(1)(e) of the Act). 

The Court found that the Subject Proceeding was frivolous and vexatious such that the general rule was replaced and ordered the Applicant to pay the Second Respondents' costs on the standard basis.

Court finds that the Applicant's proceeding was frivolous and vexatious

The Second Respondents argued that the Subject Proceeding was frivolous and vexatious as it was bound to fail given the Applicant's "…abandonment of issues, belated concessions, and the disposition of the remaining issues…" [footnotes omitted] (at [8]).

The Applicant argued that each party should bear its own costs because the Applicant had a legitimate concern regarding body corporate consent and other issues which required the Court's adjudication, the Applicant appropriately reduced the issues in dispute, and the proceeding facilitated the correction of a historical planning inconsistency which is in the public interest (at [9]).

The Court considered the following principles from the relevant case law in respect of the meaning of "frivolous or vexatious" (at [10]):

• A "…case is without reasonable prospects of success if it is so lacking in merit or substance as to be not fairly arguable" (Altitude Corporation Pty Ltd v Isaac Regional Council (No.2) [2014] QPEC 55; (2015) QPELR 139 at [25]).

• In Mudie v Gainriver Pty Ltd & Anor [2002] QCA 546; (2003) 2 Qd R 271 at [27], Justice Williams held "…that frivolous meant 'of little or no value or importance, paltry'; 'having no reasonable grounds', and 'lacking seriousness or sense, silly'". Justice McMurdo and Justice Atkinson in the same decision at [35] held that the ordinary meaning of "'frivolous' was 'of little or no weight, worth or importance', and 'not worthy of serious notice'" (see Sincere International Group Pty Ltd v Council of the City of the Gold Coast (No.2) [2019] QPEC 9; (2019) QPELR 662 (Sincere case) at [27]).

• Frivolity is a high standard to be met and requires something much more than a lack of success (see [28] to [30] in the Sincere case).

The Court found that the Applicant's contention regarding the lack of owner's consent of the body corporate in respect of the minor change application was doomed to fail because the Court is not at liberty to go behind an ostensibly valid form of consent (at [24]).

With respect to the Applicant's abandonment of issues throughout the Subject Proceeding, the Court found that where this abandonment occurred in the face of poor prospects and the Second Respondents' meritorious opposition, "…there is no kudos in reducing or limiting issues which were doomed to fail…" (at [25]). 

The Court found that the other issues advanced by the Applicant in the Subject Proceeding would not succeed in rendering the decision notice invalid even if they were made out (see [26] to [27]).

The Court held that the Subject Proceeding was frivolous and vexatious as the Applicant had no real prospect of succeeding to set aside the decision notice as contended (see [28] to [29]).

Court finds that the introduction of new material does not warrant costs

The Second Respondents argued that the Applicant's introduction of new material by way of an amended Originating Application and amended Statement of Facts, Matters and Contentions engaged the costs exception in section 60(1)(e) of the Act (at [30]).

The Court found that section 60(1)(e) of the Act was not engaged as the amended Originating Application was necessary and permitted with the Court's leave and the amended Statement of Facts, Matters and Contentions did not introduce issues that were beyond the scope of the originating proceeding (see [31] to [32]).

Whilst the Court found that these matters did not warrant the payment of costs under section 60(1)(e) of the Act, the Court noted that these matters are relevant to its finding that the Subject Proceeding was frivolous and vexatious (at [32]).

Court finds that costs should be awarded on the standard basis

Having found that the Subject Proceeding was frivolous and vexatious and the Applicant ought to pay the Second Respondents' costs, the Court turned to consider the Second Respondents' argument that such costs ought to be assessed on an indemnity basis for the reason that the Applicant's conduct could be described as including "advancing issues that lacked merit and were bound to fail", "relying on pleadings that were irrelevant", and "proceeding with the application for summary judgment notwithstanding the matters notified by the Second Respondents…" (at [35]).

The Court found that the Applicant should pay the Second Respondents' costs assessed on the standard basis as the Court could not discern an improper motive or purpose in the Applicant's pursuit of the Subject Proceeding, notwithstanding the finding that the Subject Proceeding was frivolous and vexatious and bound to fail (see [40] to [41]).

Conclusion

The Court allowed the application and ordered that the Applicant pay the Second Respondents' costs of and incidental to the Subject Proceeding, including any reserved costs, to be assessed on the standard basis.