Tough read for Reading Street: The Queensland Planning and Environment Court awards costs after finding part of the proceeding was frivolous and vexatious

In brief

The case of Baxter v Preston & Ors (No. 2) [2023] QPEC 37 concerned an application to the Planning and Environment Court (Court) for costs brought by the first and second respondents seeking an order that the applicant pay the costs of the applicant's originating application which was dismissed by the Court (Costs Application). 

Background

The originating application the subject of the Costs Application concerned an application brought by Steven Baxter (Applicant) against both Anthony and Kylie Preston (First Respondents), and Graya Construction Pty Ltd (Second Respondent), seeking declarations and consequential relief in respect of redevelopment of the First Respondents' land (Redevelopment) which the Applicant alleged was being carried out unlawfully and in the absence of the necessary development approvals (Originating Application). 

The Redevelopment involved modifications to a dwelling and the construction of a pool and associated deck area on a steep block owned by the First Respondents in Reading Street, Paddington. The Applicant owned the adjoining land and objected to the Redevelopment, asserting that it would affect the amount of natural light and ventilation available to the Applicant's property. The Second Respondent was the construction company engaged by the First Respondents to assist in the carrying out of the Redevelopment.  

On 21 April 2021 the Applicant obtained leave to file the Originating Application alleging that assessable development, being filling and excavation as well as building works associated with the construction of the pool (Works), were being carried out in the absence of a development approval for operational works, and therefore the First Respondents were committing a development offence. An interim enforcement order was made during an ex parte hearing requiring the Works to cease. 

By 15 July 2021 the First Respondents had obtained both an exemption certificate under section 46 of the Planning Act 2016 (Qld) and a development approval for operational work from the council authorising the completion of the Works and the Applicant had been notified of this outcome. The First Respondents had therefore, by this date, responded directly to the Applicant's allegations and the Applicant had ostensibly achieved what was sought at the time of the filing of the Originating Application. 

Despite these actions, the Applicant went on to amend the Originating Application to raise new allegations several times to such an extent that "the original pleading [was] lost in a sea of red tracked changes" (at [20]). The new contentions raised by the Applicant were described as "…unmeritorious, misconceived and futile" and the Applicant was unsuccessful in relation to all contentions (at [24]). 

As a result, the Applicant's third further amended Originating Application was dismissed. 

The Applicant also made an Application for leave to appeal against that decision which was dismissed. 

Application for costs 

Under section 60(1) of the Planning and Environment Court Act 2016 (Qld) (PECA) the Court has a discretion to make a costs order in a number of circumstances, including most relevantly to this case the following (at [3]): 

1. the proceeding was instituted and conducted primarily for an improper purpose (PECA section 60(1)(a));

2. the proceeding was frivolous or vexatious (PECA section 60(1)(b)); and

3. the applicant introduced new material (PECA section 60(1)(e)).

The First Respondents and Second Respondent argued that costs incidental to the Originating Application were incurred by them in each of the three circumstances identified in section 60(1) of the PECA (at [3]). The Court dealt with each circumstance as a separate issue in the Costs Application. 

The Court ultimately found that from 15 July 2021 onwards the Applicant's maintenance of the proceedings represented egregious conduct intended to engage section 60(1)(b) of the PECA and made an order for costs reflective of this. 

Court finds the proceeding was not instituted and conducted for an improper purpose 

The Applicant commenced proceedings on 21 April 2021, at which time the Applicant, as an adjoining neighbour, had a reasonable concern about the lawfulness of the Redevelopment and how it would impact the enjoyment of the Applicant's residence (at [43]). 

The Court appreciated that to commence the proceeding in the way the Applicant did was reasonable as the Applicant could only make an objection to the Council and had no right of appeal in relation to any decision regarding the development (at [43]). 

It was found that the Applicant's proceeding during the period from 21 April 2021 until 14 July 2021 was reasonable and the proceeding was not commenced for an improper purpose (at [50]). 
Section 60(1)(a) of the PECA was therefore not engaged. 

Court finds the proceeding was frivolous and vexatious from 15 July 2021 onwards 

The Court acknowledged that prior to 14 July 2021 the Applicant's proceeding was not frivolous or vexatious for the same reasons it gave regarding the first issue (at [43]). 

However, from 15 July 2021 onwards, the Applicant pressed on despite the First Respondents and Second Respondent having successfully responded to the Originating Application as originally filed, and in doing so the Applicant failed to appropriately re-examine the prospects of success (see [45] to [48]). 

The Applicant pursued unmeritorious points of form rather than substance and had abandoned the original pleading entirely. The Court found that the "[Applicant's] insistence on compliance with the law was misplaced and pursued with unnecessary belligerence" (at [47]). 

It was therefore concluded that the maintenance of the Originating Application from 15 July 2021 onwards was "…productive of serious and unjustified trouble and harassment" (at [55]). 

The Court was satisfied that the circumstances engaged section 60(1)(b) of the PECA. 

Court finds the applicant had introduced new material from 15 July 2021 onwards

The Applicant made several late amendments to the pleading, including twice during the three-day hearing (at [48]). 

The amendments introduced new allegations, being technical in nature and "unnoticeable other than to a person-well versed in legal quagmire" (at [29] of the Originating Application). 

The introduction of new material caused the Applicant's case to "shift, repeatedly" and had the effect of prolonging the trial (see [21] and [48]). 

The Court was satisfied that section 60(1)(e) of the Act was engaged (at [48]). 

Conclusion 

The Court concluded that the power to make a costs order under section 60(1) was enlivened and ordered the Applicant to pay the First Respondents and Second Respondent costs, assessed on an indemnity basis, on and from 15 July 2021 up to and including 9 December 2021, being the date the Originating Application was decided.