Council wins costs against company and director

The company operated a scrap metal recovery business on industrial zoned land at Molendinar on the Gold Coast.  The company did not have any development approval for use of the land for scrap metal recovery and the use was not authorised by the zoning of the land.

The Council sought declarations under the Planning and Environment Court Act 2016(PEC Act) and enforcement orders under the Planning Act 2016 (Planning Act) in relation to the alleged unlawful use of the land.  Orders were also sought under the Environmental Protection Act 1994 (EP Act) to restrain unlawful environmental nuisance due to noise from the land.

The Council was ultimately successful in obtaining orders from the Court under the Planning Act and EP Act to cease the use of the land.

Costs application

Following the making of the orders against the company and its director, the Council sought its legal costs on the following basis:

• Costs up and including 10 November 2017 to be assessed on the standard basis;
• Costs subsequent to 10 November 2017 to be assessed on the indemnity basis.

Costs were sought by the Council on the higher indemnity basis as after 10 November 2017, the company and its director were in possession of advice from their own town planner and noise expert that the use was unlawful and causing environmental nuisance.

Court consideration

The PEC Act governs the determination of costs by the Planning and Environment Court. The Council claimed its costs on the basis that:

• The proceedings were frivolous or vexatious – s.60(1)(b);
• The Council was successful in obtaining enforcement orders – s.61(1).

The Court in its decision noted that the current regime under the PEC Act is substantially different to the regime that applied under the former Sustainable Planning Act 2009.  In particular, the Court now has a much more limited discretion to award costs.

In the Court’s view, for costs to be awarded on an indemnity basis under ss.59 and 60 of the PEC Act, a higher order of misconduct is required that would trigger indemnity costs in other civil litigation.  For example, without being exhaustive, the Court noted such conduct might include blatant dishonesty such as fraud, a flagrant breach of court orders, and continuing a blatant course of conduct involving the potential for serious environmental harm.

The Court, however, recognised that in relation to enforcement proceedings, costs are awarded pursuant to s.61 of the PEC Act which is not subject to the same limitations as ss.59 and 60.

In considering the issue of costs, the Court held:

• The company and its director had no prospects of successfully defending the Council’s enforcement proceedings;
• The defence of the proceedings was frivolous and vexatious;
• There were no discretionary grounds against costs being awarded.

The Court accordingly determined that the Council was entitled to be awarded costs under s.61 of the PEC Act.

Indemnity costs v standard costs

While the Court was sympathetic to the Council’s case for indemnity costs, the Court ultimately declined to make the orders on this basis. The Court took this approach having regard to the following:

• The company and its director (unfortunately) relied on advice of a third party in the conduct of the defence of the proceedings;
• There was some attempt by the company and its director to address the matters in dispute;
• The Council was not entirely successful in respect of the relief it sought.

Although the Court considered that there was a strong case for indemnity costs, it nonetheless decided to order costs on the standard basis.

Key takeaway

Persons defending enforcement proceedings taken under the Planning Act need to be mindful that they face the prospect of having to pay the Council’s costs if they are unsuccessful.  Persons also need to carefully consider how they conduct their defence to minimise the risk of adverse cost orders.

For Councils, the recovery of costs in enforcement proceedings can be an important vindication for taking enforcement action to uphold the law and protect the public interest as well as minimising the cost to the community in enforcing planning laws.