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- Quintenon Pty Ltd v Brisbane City Council[2018] QPEC 13
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Quintenon Pty Ltd v Brisbane City Council[2018] QPEC 13
Quintenon Pty Ltd v Brisbane City Council[2018] QPEC 13
PLANNING AND ENVIRONMENT COURT OF QUEENSLAND
CITATION: | Quintenon Pty Ltd v Brisbane City Council [2018] QPEC 13 |
PARTIES: | QUINTENON PTY LTD (Appellant) v BRISBANE CITY COUNCIL (Respondent) |
FILE NO/S: | 1996/15 |
DIVISION: | Planning and Environment |
PROCEEDING: | Application in pending proceeding |
ORIGINATING COURT: | Planning and Environment Court at Brisbane |
DELIVERED ON: | 23 March 2018 |
DELIVERED AT: | Brisbane |
HEARING DATE: | Hearing 2 May, 8 and 9 June 2017 with written submissions received to 26 October 2017. |
JUDGE: | Rackemann DCJ |
ORDER: | The application for costs of the appeal from 15 October 2015 to 16 December 2016 is dismissed. The respondent is to pay the appellant’s costs thrown away by reason of the adjournment of the hearing of the costs application on 2 May 2017 and is to pay the appellant’s costs of the directions hearings on 8 and 30 May 2017 to be assessed on the standard basis. The application for costs of the costs application is otherwise dismissed. |
CATCHWORDS: | PLANNING AND ENVIRONMENT – COSTS – Application for costs by successful appellant – application for costs of appeal from the date a Calderbank offer lapsed to the date reasons for judgment delivered – whether the Council unreasonably failed to accept the offer – where Council’s experts expressed concerns about aspects of the proposal the subject of the offer – whether the Council unreasonably failed to detail its requirements in relation to its residual concerns – whether other bases for costs of the appeal – whether appellant should have its costs of the costs application in any event. |
COUNSEL: | R Lister QC and J Houston for the Applicant B Job QC and N Loos for the Respondent |
SOLICITORS: | Dibbs Barker for the Applicant Brisbane City Legal Practice for the Respondent |
- [1]This is an application for costs by a successful appellant. The appeal was brought against Council’s deemed refusal of the appellant’s development application for a material change of use for a proposed mixed-use building. The appeal was commenced by a notice of appeal filed on 15 May 2015. Following a hearing in July 2016 reasons for judgment were published in December 2016 indicating that the appeal would be allowed and the development application would be approved subject to conditions. The further hearing was adjourned to enable the parties to consider conditions of approval. Final orders were subsequently made on 30 March 2017.
- [2]The applicable costs regime is that in the now-repealed s 457 of the Sustainable Planning Act (SPA), which provided, in part, as follows:
“(1) Costs of a proceeding or part of a proceeding, including an application in a proceeding, are in the discretion of the court.
(2) In making an order for costs, the court may have regard to any of the following matters—
- (a)the relative success of the parties in the proceeding;
- (b)the commercial interests of the parties in the proceeding;
- (c)whether a party commenced or participated in the proceeding for an improper purpose;
- (d)whether a party commenced or participated in the proceeding without reasonable prospects of success;
- (e)if the proceeding is an appeal against a decision on a development application and the court decides the decision conflicts with a relevant instrument as defined under section 326 (2) or 329 (2), whether the matters mentioned in section 326 (1) or 329 (1) have been satisfied;
- (f)if the proceeding is an appeal to which section 495 (2) applies and there is a change to the application on which the decision being appealed was made, the circumstances relating to making the change and its effect on the proceeding;
- (g)whether the proceeding involves an issue that affects, or may affect, a matter of public interest, in addition to any personal right or interest of a party to the proceeding;
- (h)whether a party has acted unreasonably leading up to the proceeding, including, for example, if the proceeding is an appeal against a decision on a development application, the party did not, in responding to an information request, give all the information reasonably requested before the decision was made;
- (i)whether a party has acted unreasonably in the conduct of the proceeding, including, for example—
- (i)by not giving another party reasonable notice of the party’s intention to apply for an adjournment of the proceeding; or
- (ii)by causing an adjournment of the proceeding because of the conduct of the party;
- (j)whether a party has incurred costs because another party has introduced, or sought to introduce, new material;
(k) whether a party has incurred costs because another party has not complied with, or has not fully complied with, a provision of this Act or another Act relating to a matter the subject of the proceeding;
(l) whether a party has incurred costs because another party has defaulted in the court’s procedural requirements; and
(m) whether a party should have taken a more active part in a proceeding and did not do so.
(3) Subsection (2) does not limit the matters to which the court may have regard in making an order as to costs.
(4) Despite subsection (1), if—
- (a)early in a proceeding the parties to the proceeding participate in a dispute resolution process under the ADR provisions or the Planning and Environment Court Rules 2010; and
- (b)the proceeding is resolved during the dispute resolution process or soon after it has been finalised; each party to the proceeding must bear the party’s own costs for the proceeding unless the court orders otherwise.”
- [3]As the court observed in Hydrox Nominees Pty Ltd v Noosa Shire Council,[1] the discretion afforded by the provision is open. It is to be exercised judicially, but without any presumption one way or the other. There is no presumption that costs ordinarily follow the event, nor is there a qualified protection against an award of costs. Sub-section (4), did however, encourage early resolution by providing a ‘no-costs’ regime where a proceeding resolved during the dispute resolution process or soon after it had been finalised.
- [4]In this case, the appellant seeks its costs in the proceeding from 15 October 2015 to 16 December 2016 (the date of delivery of reasons for judgment) on an indemnity basis or, in the alternative, according to the standard basis. It also seeks such costs for two counsel, including senior counsel and it seeks its costs of this costs application in any event. The respondent contends that each party ought to bear its own costs.
- [5]The proposal, the subject of the appeal, was a mixed-use building with the following four key use elements:
- (a)aged care accommodation;
- (b)assisted living units;
- (c)medical consulting rooms; and
- (d)a health training facility.
- [6]The building was expressed as being 20 storeys. At 82 m to the top of its roof, the proposal was relatively tall in absolute terms. That was a consequence of its use of relatively large floor-to-ceiling heights. The Council raised a plethora of issues in the appeal but, ultimately, in the course of the hearing, senior counsel for the respondent confirmed that if the height of the building were judged to be acceptable, the proposal was acceptable.
- [7]The proposal fell for assessment under Cityplan 2000, but the court was entitled to give weight to the provisions of Cityplan 2014. The height of the proposal was in excess of the acceptable solution of 15 storeys in applicable codes under each planning scheme. The court found that the height of the proposal brought the proposal into conflict with the planning scheme, but that there were sufficient grounds to warrant a decision to approve the application.
- [8]The appellants claim for costs is on the following bases:
- (i)failing to meaningfully engage with an offer to compromise on the central issue in the proceeding;
- (ii)failing to detail its requirements as to other concerns it claimed to have;
- (iii)failing to engage an expert in relation to internal design aspects of the proposal relevant to height and sustainability;
- (iv)advancing an argument that there was no community or economic need for the proposed development:
- without nominating an appropriate expert to assist the Court; and
- in circumstances where, prior to the hearing, the Council resolved to make major amendments to City Plan 2014 in recognition of the challenges facing the community in meeting the needs of the aged that had been identified by the Lord Mayor’s taskforce over eight years ago; and
- (v)abandoning many of its notified grounds during the hearing.
- [9]Leaving matters relating to the offer to compromise to one side, I would not be minded to order the respondent to pay the appellant’s costs of the appeal. As has already been noted, the central issue relied on by the Council in the appeal related to the height of the proposal. That was a legitimate planning issue raised and prosecuted by the Council in an appropriate way as the planning authority.[2] Whether the height of the proposal, which was in excess of the relevant acceptable solutions, was acceptable having regard to the applicable planning scheme provisions was ultimately a matter of evaluative judgement upon which minds may, and did, differ. The Council’s case was supported by relevant expert evidence[3] and the judgment of the Court was that the height of the proposal did, indeed, bring it into conflict with the planning scheme. The appellant ultimately had to make out grounds in order to justify a decision to approve the development despite the conflict. The Council’s case was clearly arguable. There were other issues initially raised by the Council which were resolved or abandoned, but no differential costs orders were sought and the contraction of the Council’s case at trial following concessions of its witnesses or as a consequence of forensic decisions to refine and confine its case would not have led to an adverse order for the costs of the appeal.
- [10]Some criticism was made of the Council for its failure to call a separate need expert or an expert in relation to internal design aspects relative to height and sustainability,[4] but they were aspects of the grounds case for the appellant, the party with the onus, in justifying approval notwithstanding conflict. The Council’s failure to match the appellant’s expert-for-expert in that regard does not call for a costs order. The Council was entitled to put the appellant to proof on its grounds and to submit, as it did,[5] that the broader need for aged care facilities[6] was not reflected in a demonstrated need for the building and did not justify a building of the height proposed.
- [11]The primary basis for the costs application, and the explanation for costs being sought from 15 October 2015, is the Council’s conduct in allowing an offer of compromise to lapse on that day. A consideration of that basis requires an examination of the factual context.
- [12]The Council’s grounds for refusal were notified by letter dated 18 June 2015. Those grounds had been informed by advice obtained from independent consultant experts. They included complaints about the height, scale and bulk of the proposed building.
- [13]On 24 June 2015 the parties attended an Alternative Dispute Resolution (‘ADR’) session chaired by the ADR Registrar. That was adjourned until 20 July 2015. On 30 June 2015 the Council’s consultants were informed that, as a result of the conference the appellant was preparing amended plans. By letter dated 15 July 2015 and marked “without prejudice save as to costs”, the appellant, via its solicitor, advised of their client’s willingness to compromise. In particular it observed, inter alia, as follows:
“In an endeavour to respond to Council’s concerns, and avoid the need for costly and protracted litigation, our client is prepared to accept the significant reduction in the height of the proposed development that would be achieved by implementing the Proposed Changes as follows:
- remove the floor wholly dedicated to health related education facilities – currently level 1
- combine and allocate more limited health related education facilities with the medical/allied health service suites and administration/offices – currently levels 2 and 3
- reduce the floor to floor height of the recreation/community/therapy facilities dedicated to the Aged Care floors – currently level 4
- remove one level of Aged Care – notionally level 9
- remove one level of Assisted Living Units – notionally level 18
- reduce the floor to floor height of remaining Assisted Living levels from 3.9m to 3.2m.
The Proposal Changes would result in a total reduction of 16.9m from the height of the Current Proposal.”
- [14]The proposal was further described in a spreadsheet, but was not the subject of new plans, because, as the letter explained, the appellant first wanted to explore whether the Council was prepared favourably to consider the “alternative development scenario” proposed. The letter went on to say that the proposed changes were provided to facilitate discussion and stated that “our client believes the proposed changes represent a very significant concession and trusts they will address council’s concerns”.
- [15]The appellant’s proposal was referred to the Council’s consultants. On the evening of 15 July 2015 Ms Rayment, the Council’s consultant town planner, sent an email to the Council’s solicitor in which she expressed views that, amongst other things:
- (i)the proposal appeared to be a genuine attempt to settle the matter and respond to the key planning issue of height;
- (ii)the proposal represented a significant reduction in both metres and storeys;
- (iii)the proposal would not be significantly above the acceptable outcome in height in the planning scheme;
- (iv)she would likely form the opinion that one additional storey (over the acceptable outcome in the planning scheme) would not be a conflict but would likely meet the performance outcome;
- (v)other planning matters relating to the built form and land use mix remained. She would differ from Mr McGowan in relation to built form issues although she suspected that they were somewhat exacerbated by the original height of the proposal.
- [16]The following day Mr McGowan, the Council’s visual amenity consultant, sent an email to the Council’s solicitor in the following terms:
“I agree with the points Natalie has made. The proposed reduction in height will go a long way to address key concerns. The extent to which other issues are addressed will obviously depend on design specifics (such as setbacks). It is possible that, with other design amendments, the proposal could be pretty close to meeting performance outcomes relating to visual impacts and design.”
- [17]The Council’s other consultant, Mr Beard, a traffic engineer, advised that the height did nothing to address traffic and parking issues, save that parking demand would reduce if the Gross Floor Area (‘GFA’) is reduced.
- [18]The positive reaction of the consultants as to the height of the proposal was not communicated to the appellant.
- [19]On 20 July 2015, prior to the resumption of the ADR session, the Council’s consultants met with Council’s representatives to discuss their views on the merits of the proposal. Ms Rayment’s recollection is that there was a common view that the proposal was a substantial improvement and that the reduction in height was supported in principle, but that plans or other material to properly document the proposed changes and respond to the remaining issues would be sought. Similarly, Mr McGowan’s recollection was that the proposal was generally thought to be a step in the right direction, but that the Council would seek further information from the appellant.
- [20]The ADR meeting resumed on 20 July 2015, but did not result in a resolution. The parties subsequently formally nominated their experts and the appellant gave its list of grounds for approval which, together with the Council’s grounds of refusal, became the issues in the appeal. On 2 September 2015 the court directed the experts to meet. Experts other than the town planners were to meet and complete reports by 25 September 2015 whilst the town planners were to do so by 16 October 2015. As it happened, the expert meetings did not occur until some time later.
- [21]On 8 September 2015 Ms Rayment attended another meeting arranged by the Council. She explained the purpose of that meeting as follows:
“… I understood the purpose of the meeting was again to discuss the acceptability of the ‘proposed changes’ and assist in identifying a list of further information required to be able to ensure the ‘proposed changes’ were satisfactory to settle the appeal.”
- [22]This appears to be the first action, since 20 July 2015, in respect of the proposal. Ms Rayment refers to a meeting of 8 September 2015 held in the chambers of the Council’s barrister and in the presence of Mr McGowan as well as Council’s solicitor and another Council officer. Mr McGowan speaks of a meeting in the chambers of the Council’s barrister on 15 September 2015. It is likely that they are referring to the same meeting. Ms Rayment says that in the meeting:
- (i)she again expressed her support for the proposed changes from a town planning perspective;
- (ii)it seemed likely that there may be consequential changes to the built form as a result of the changes in height; and
- (iii)Mr McGowan was interested in the revised visual appearance of the building to properly understand the proportions of its various components.
- [23]It appears that, on 8 September, Mr Woodhead, a solicitor in the employ of the Council, had a telephone conversation with Ms Kelson of the solicitors for the appellant. On 9 September Mr Woodhead sent an email seeking confirmation that the without prejudice proposal of 15 July 2015 had been withdrawn.
- [24]On 15 September 2015, the solicitors for the appellant responded, explaining that it was their understanding that the proposal had been rejected at the ADR conference, but inviting the solicitors for the Council to advise of their client’s attitude with respect to it. That was responded to the same day by an email in the following terms:
“My instructions are that following the ‘without prejudice’ conference, Council indicated to your client that the settlement proposal contained in your letter dated 15 July 2015 was reasonably well received. However, before Council can pursue the matter any further it needs appropriate plans to demonstrate the settlement proposal parameters.
If your client wishes to pursue settlement negotiations further, Council asks to be provided with appropriately detailed plans. Such plans should address issues such as Street activation, car parking design and parking numbers and a breakdown of activities on the site (by level) so that Council can properly appreciate the detailed nature of the contemplated use.
Council is hopeful that the matter can then move forward to a mutually acceptable resolution.
Your early response would be greatly appreciated in the circumstances.”
- [25]That was, in turn, responded to the following day in a letter which was, in part, as follows:
“… we anticipate that our client would be grateful if Council would give further consideration to the settlement proposal set out in our letter dated 15 July 2015.
In particular, we anticipate that our client would be grateful for an unequivocal intimation that a building of the height and composition described in our letter dated 15 July 2015 would be acceptable to the Council.
The changes detailed in our letter dated 15 July did not propose any change to the ground floor plan submitted to the Council in March 2015 (the March 2015 Plans).
The changes detailed in our letter dated 15 July 2015 proposed removal of the floor wholly dedicated to health-related education facilities (i.e. level 1 in the March 2015 plans) with an internal redesign of levels 2 and 3 in the March 2015 plans to accommodate an as yet to be determined (but reduced) extent of health-related education facilities in combination with the proposed Allied Health and Administration areas (e.g. Level 2 and 3 in the March 2015 Plans).
The changes detailed in our letter dated 15 July 2015 also included the removal of one floor of Age Care (i.e. notionally level 9 in the March 2015 Plans – 30 beds), one level of Assisted Living (i.e. notionally level 18 in the March 2015 Plans – 4 one bedroom units and 6 two bedroom units).
It is not anticipated that there would be any increase in parking demand occasioned by the removal of the components identified. Indeed, it seems likely that, if the proposed changes were acceptable to Council, parking demand would reduce.
In those circumstances, we do not understand the need for fresh plans to allow Council to “properly appreciate the detailed nature of the contemplated use”.
Alternatively, if Council is not prepared to indicate that the settlement proposal set out in our letter dated 15 July 2015 is acceptable, we anticipate that our client would be grateful for an unequivocal intimation of the respects in which the plans submitted to the Council in March 2015 would require further amendment (i.e. beyond those described in our letter dated 15 July 2015) to render our client’s proposal acceptable to the Council.
We look forward to your early reply.”
- [26]That letter was forwarded to the Council’s consultants with the following message:
“The Appellants are obviously reluctant to come up with new plans until we give them some hope that the new proposal will be, in principle, broadly acceptable. Can you each let me know specifically what further information you require regarding the “revised proposal parameters” so that we are able to communicate those matters to the appellant at the appropriate time?”.
- [27]In response, Mr McGowan advised that whilst reducing the height to 16 levels plus roof volume will result in a building scale that is more aligned with the intent for the area, it remains a large building and there are a number of issues/concerns that need to be understood. He specifically referred to shadow impacts, deep planting, street and cross block link activation and building form. He advised that “it would be useful to see updated elevations and perspectives so we can have a sense for the overall appearance of the amended building”.
- [28]Ms Rayment advised, inter alia, that:
- (i)in her view, the proposed 16 story high building is generally consistent with the intended height outcome for the precinct;
- (ii)other town planning issues related to street activation and casual surveillance over the planned cross block link; and
- (iii)suggested that the Council seek particular revised plans showing some matters.
- [29]By an undated letter received by the appellant’s solicitors on 18 September 2015 (the 18 September Letter), the Council responded to the appellant’s solicitor’s letter of 16 September 2015. That letter said, in part, as follows:
“At the outset I can inform you that Council wishes to pursue discussions about the 15 July 2015 proposal (July Proposal) and is of the view that there is considerable benefit to the parties doing so.
I can unequivocally inform you, in accordance with your request that Council is and will continue to give further consideration to the July Proposal.
Having said that, without having the benefit of details of the kind requested in my email to you of 15 September 2015, it is not possible at this stage to provide “an unequivocal intimation that a building of the height and composition described in (your) letter of 15 July 2015 would be acceptable to the Council”.
Council, in an effort to establish its willingness to further consider the July Proposal, has recently convened a conference with Counsel and its experts to ascertain more precisely what is required to move the July Proposal forward and hopefully closer to a resolution.
Consequently, your client is invited to provide, at its earliest opportunity, plans and other appropriate material which address the following matters:
| Street activation, casual surveillance over the planned cross block link | ||
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| Design of the ground level interface with street level frontage and cross block link | |
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| Direct access to the cross block link | |
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| Proposed deep planting. | |
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| Such plans would likely be sufficient if they included: | |
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| A revised ground floor/level 1 plan to increase activation and access to the cross block link |
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| A revised basement plan, reflecting a potential reduction in the need for car parking spaces, given the changes and a reduced basement footprint to provide for deep planting and details of the proposed deep planting |
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| A section showing the interface between ground floor and upper floor terraces with the cross block link including the means of physical access. |
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| Shadow diagrams of the July Proposal in comparison with a code complaint building under City Plan 2000 | |
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| Plans showing improved porte chochere design and the two crossovers, continuous awnings and preferably only one crossover. | |
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| Plans showing how the removal of the three floors will affect the proportions of the building over the podium. In particular elevations and perspectives would be helpful to inform an appreciation of the overall appearance of the building. | |
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| Detailed description of the proposed uses and allocated floor areas on a floor by floor basis to enable car parking and traffic issues to be appropriately assessed and the possibility of reducing the footprint of the basement car park. | |
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| Detailed plans showing the proposed access from O'Keefe Street. |
The last three paragraphs of page 1 of your letter record changes between the March 2015 plans and the July Proposal. While these changes are seen as constituting an improvement, the information requested above does not just relate to the July Proposal but also to aspects of the March 2015 plans, which plans are the subject of opposition by the Council in this appeal.
Council’s purpose in requesting the above information is to allow it hopefully, to be satisfied that the July Proposal together with details requested in the letter form the basis of a development which warrants an approval without the need for further Court proceedings.
The first paragraph of page 2 of your letter of makes an assumption about parking demand which Council wishes to have clarified in view of the basement car parking design and deep planting issue as well as other issues raised in this letter.
I hope that the content of this letter enables you to better understand the “need for fresh plans to allow Council to properly understand the detailed nature of the contemplated use”.”
- [30]Despite the Council’s solicitor being aware that “the appellants are obviously reluctant to come up with new plans which until we give them some hope that the new proposal will be, in principle, broadly acceptable”, the 18 September letter failed to advise that the amended proposal was considered to be acceptable at least in relation to height. As Mr McGowan acknowledged,[7] a response to the effect that the height was acceptable, but that the Council was looking for more in relation to other matters would have reflected his views. It would also have been consistent with the advice of Ms Rayment. Instead, the letter simply gave a commitment to the ongoing consideration of the proposal in the context of a request for plans and other material to address a range of issues. Counsel for the respondent frankly acknowledged that “we could have done better”.[8]
- [31]The solicitors for the appellant responded by a lengthy letter, dated 6 October 2015, in which, among other things:
- (i)a conclusion is drawn that the development proposal has been rejected and the Council’s solicitor is invited to advise if that is not so;
- (ii)the need for additional information in relation to some matters is refuted;
- (iii)5 issues raised in the Council’s correspondence, namely
- the proposed access from O'Keefe Street;
- the ‘planned’ cross block link;
- ‘deep planting’;
- reduction of the ground floor; and
- reduction in the basement footprint
are responded to;
- (iv)a willingness to consider requests for specific changes is expressed; and
- (v)the previous offer is said to be open for acceptance until 4 pm on 14 October 2015.
- [32]It appears that the content of that correspondence was not referred to the Council’s consultants at the time, as the evidence of both Mr McGowan and Ms Rayment was that they had no further involvement in relation to correspondence after 17 September 2015.[9]
- [33]The time nominated for acceptance of the offer expired without any response from Council. On 30 October 2015, the Council’s solicitor sent a letter in the following terms:
“We refer to your letters dated 1 and 6 October 2015.
We appreciate your client’s without prejudice offer contained in your letter dated 15 July 2015 has lapsed.
Nevertheless, we are instructed that the Council, without the benefit of the plans requested in our ‘18 September letter’, has not been in a position to assess the proposal the subject of the without prejudice offer.
We are also instructed that the Council does not accept your client’s assertion that all information has been provided or can readily be construed from previously submitted plans and information.”
- [34]The appeal subsequently proceeded on the basis of the original proposal, subject to changes which were accepted as being minor on the first day of the hearing. Those changes were the result of redesigning the driveways and porte-cochere and changed the geometry of the driveway ramps resulting in some changes to the internal layout. In particular, the design:
- reduced the width of each crossover;
- increased the length of the awning over the footpath;
- relocated the pedestrian access;
- reduced the floor height at ground level by 400mm; and
- increased the frontage landscaping, including a larger deep planting zone.
- [35]The changes were addressed in a second round of expert reports in which the experts retained by the council acknowledged that the changes represented improvements. For example:
- (a)in the Second Town Planner JER (dated 6 June 2016), Ms Rayment observed at [32] that, “…Ms Rayment also notes that previous concerns raised in the March Planning JER about the extent of deeper planting areas and the length of the Wolseley Street awning have been improved by the amended plans, together improving the pedestrian environment of Wolseley Street…”;
- (b)in the Second Traffic JER (dated 8/9 May 2016), Mr Beard agreed at 2 that, “…the revised ground floor traffic arrangements address most of the issues [which Mr Beard had considered unsatisfactory] listed above”; and
- (c)in the Notice Regarding Landscape Joint Experts Report (dated 11 May 2016), paragraph (d) stated, “the experts agree that the consolidation of the deeper planting areas (from two areas into one) and the relocation of the entry path and awning mean that the deeper planting area will be better able to accommodate larger trees which will be more likely to experience healthy growth (due to greater soil volume and improved access to sunlight and rainfall)”.
- [36]Prior to the last day of the trial the Council made a ‘without prejudice’ offer to compromise on the basis that the proposed development be reduced in height to 73.5 metres. That was not accepted. The appellant was wholly successful. The Council does not dispute that the appellant ultimately did better than the proposal put forward in its letter of 15 July 2015.
- [37]It has been accepted by this court that because the applicable costs regime is not one where there is a presumption in favour of costs following the event, the fact that a party might ultimately do as well or better than a Calderbank offer does not, of itself, lead to the conclusion that a costs order should be made nor that it should be on an indemnity basis.[10] The question is as to the reasonableness of the Council’s rejection of, or failure to accept, such an offer in the circumstances.
- [38]It was submitted, for the Council, that there may be doubt as to whether offers of compromise are appropriate to public law cases generally. Reference was made to a passage from “The Law of Costs” by Dal Pont[11] which refers to instances in which litigation is necessary to air some issue of broader public importance, especially in an ‘all or nothing’ case. That does not assist here. The jurisdiction of this Court does involve matters of public interest, but that does not mean that there is a public interest in matters inevitably proceeding to trial. The Court has been armed with an ADR registrar and ADR powers to facilitate the appropriate early resolution of matters. As has already been noted, the legislation at the time encouraged early resolution by providing a ‘no costs’ regime for settlement at or shortly after ADR. The present case concerned whether the proposal was an over development. It is difficult to see how the public interest is impinged upon where a resolution is achieved on the basis of a proposal which addresses that concern by a down scaling of the proposal. It might also be noted that there were no adverse submitters.
- [39]It was submitted, on behalf of the respondent, that whilst it may have been a preliminary step to an offer, the appellant’s proposal was not an offer of compromise capable of acceptance. It was pointed out that the letter of 15 July 2015 spoke of the proposed changes being “produced to facilitate discussion” in the context of a forthcoming ADR session. That may be so, but the letter made it sufficiently clear that a settlement proposal was being made. In particular, not only was the correspondence marked “without prejudice save as to costs” but, more importantly, it stated that “our client is prepared to accept the significant reduction in height of the proposed development that would be achieved by implementing the proposed changes” as set out in the letter and was doing so in an endeavour to “avoid the need for costly and protracted litigation”. The fact that the offer was put to resolve the litigation, rather than just to encourage discussion is consistent with the terms of the later letter from the solicitors for the appellant which advised that “the offer detailed in our letter dated 15 July 2015 remains open for acceptance until 4pm on Wednesday 14 October 2015”. The offer implicitly was subject to the formulation of conditions of approval, which, inter alia, would have referred to yet to be prepared plans corresponding with the description in the letter of offer, but does not mean that no offer, capable of acceptance, had been made. It may be noted that the subsequent offer made by the Council during the trial was also subject to the preparation of amended plans and a conditions package.
- [40]It was also submitted, for the respondent, that this is not a case of a “clear-cut rejection” of the appellant’s offer, but rather is a case where there was willingness on both sides to compromise followed by a failure of that to occur, because of a dispute about the level of detail requested. The letter of 15 July 2015 was a proposal by the appellant to compromise in the way described in the letter. It is true that, in subsequent correspondence, the Council variously claimed that the appellant’s proposal was “reasonably well received” and the Council would “continue to give further consideration” to it, but that was in the context of the Council:
- (i)seeking plans and material incorporating changes which were not part of the proposal;
- (ii)not responding to the letter from the solicitors for the appellant of 6 October 2015; and
- (iii)allowing the time for acceptance of the offer to lapse.
- [41]Whatever merit the Council might have seen in the appellant’s proposal, it is clear from the correspondence that it did not accept it, but rather allowed time for its acceptance to lapse. The reasonableness of that decision, at the time it was made, must now be considered.
- [42]The matters which are ordinarily considered assessing the reasonableness or otherwise of rejecting a Calderbank offer are:[12]
- (a)the stage of the proceeding at which the offer was rejected;
- (b)the time allowed to consider the offer;
- (c)the extent of the compromise offered;
- (d)the offeree’s prospects of success, assessed as at the date of the offer;
- (e)the clarity with which the terms of the offer were expressed; and
- (f)whether the offer foreshadowed an application for indemnity costs in the event of the offeree’s rejecting it.
- [43]In this case the offer did not expressly foreshadow an application for indemnity costs, but the expression “without prejudice – save as to costs” is a conventional signal heralding such an application.
- [44]The offer was made at an early stage of the litigation, in the context of an early dispute resolution process, at a time prior to the joint experts meetings and reports. The early resolution of matters is, of course, encouraged and, as has already been observed, the legislation provided a ‘no costs’ regime for resolutions achieved at or soon after an ADR process. Nevertheless, the respondent’s prospects of success in the litigation and the reasonableness of its actions in allowing the offer to lapse are to be assessed at the relevant time. It is relevant to bear in mind that the Council was being called upon to make a decision at an early stage, without the benefit of the joint experts meeting and report process.
- [45]The extent of the compromise offered was substantial, as was the time allowed for its consideration from 15 July 2015 until its ultimate expiry on 14 October 2015. The terms of the offer were comprehensible. The effect of the lack of more detailed plans is discussed later.
- [46]At all material times the Council had a reasonable, albeit ultimately unsuccessful, case to put in opposition to the appellant’s unamended proposal at least because of its height. It would nevertheless have been unreasonable for it to have refused, or to have failed to accept, a substantial compromise by way of an amended proposal which it knew or ought to have known was materially and essentially unobjectionable. The Council’s prospects in relation to issues other than height (and which were also of relevance to the changed proposal) and which depended on matters of expert judgment would have been more difficult to determine at this early stage, in advance of the experts meetings and reports stage.
- [47]It has already been observed that the Council’s consultants were favourably disposed to the appellant’s amended proposal in relation to height. Had the parties been negotiating simply on the issue of height or the Council’s advice been to the effect that a reduction of height cured all other issues, or at least relegated those to issues which did not warrant refusal, then the Council might well have been said to have acted unreasonably in allowing the offer to lapse. That was not the case however. Whilst the appellant puts the basis of its costs application on the Council having failed to meaningfully engage with “an offer to compromise on the central issue in the proceeding”, the offer of compromise was not an offer to settle that issue in the case, leaving other issues to be litigated. The offer was for the appellant to accept the significant reduction in height by implementing the amended proposal as otherwise described, so as to avoid the need for litigation. The proposal was to settle the case[13] on the basis of an amended proposal of a reduced height, as described in the letter of offer, rather than to settle the matter of height as a discrete, albeit important, issue.
- [48]The appellant’s solicitor’s letter of 16 September sought an ‘unequivocal intimation’ that a building of the height and composition of that described in the letter of 15 July would be acceptable to the Council, but that request for an intimation, to provide comfort, did not convert the offer of compromise into an offer to settle the issue of height as a discrete issue, leaving other issues to be litigated. Not only did the request relate to composition as well as height but, more importantly, it was a request in the context of correspondence which expressly referred back to the settlement proposal as set out in the letter of 15 July 2015.
- [49]This is not a case where the Council allowed an offer to lapse in the face of unqualified support for the offer from its independent expert consultants. As has been noted, each of the consultants retained reservations, issues or concerns about the proposal the subject of the offer. As Ms Rayment acknowledged,[14] whilst she would have expected the appellant to have produced detailed plans of its amended proposal, such plans would not have addressed her residual concerns at the time had they simply been a depiction of the offer as described. It is evident that the same could be said of Mr McGowan. It has already been noted that Mr Beard’s advice was to the effect that the traffic issues remained. A decision to accept the appellant’s offer would therefore have required the Council to put the residual reservations, concerns and issues of its expert consultants to one side. The question is whether it acted unreasonably in not doing so.
- [50]This court has previously observed that a responsible local government should be conscious of the distinction between issues which call for a refusal of an application and those which are matters of conditions only.[15] It should also be concerned not just with what its expert consultants say but with whether their opinions are supportable. In the current context it was incumbent on the Council, in considering the offer, properly to consider whether the concerns of its consultants were supportable and relevant to approval of the proposal. It was submitted, for the appellant, that the issues raised were variously characterised by a lack of analysis and understanding.
- [51]There is at least one respect in which the Council’s letter of the 18 September 2015 appears to be misconceived. That relates to a request in paragraph 3(b) for plans showing the proposed access to O'Keefe Street. Whilst the grounds of refusal referred to the Wolseley Street / O'Keefe Street intersection as one which would be subject to significant additional traffic volumes by reason of the proposal, the subject site had no frontage to O'Keefe Street and there was no proposed access from that street. This was pointed out in the appellant’s solicitor’s letter of 6 October 2015. The genesis of the request was unexplained.
- [52]The traffic matters then included issues as to the impacts of traffic generated by the proposal and as to car parking. Paragraph 3(a) in the 18 September letter sought a detailed description of the proposal uses and allocated floor areas, on a floor-by-floor basis to enable car parking and traffic issues to be assessed and to explore the potential to reduce the basement carpark. The appellant denied the necessity for that information. It had earlier, in its letter of 16 September, pointed out that the changes would likely reduce car parking demand. That may be so, but it would appear relevant for the council to be able to determine by how much traffic generation and parking were affected, given that traffic issues then remained outstanding issues on Mr Beard’s advice of 15 July.[16]
- [53]The advice the council received from Ms Rayment and Mr McGowan about their residual concerns at the time are best summarised in their emails of 17 September 2015 which, in turn, appear to have formed the basis for the requests in paragraph numbered 1 and 2 of the 18 September letter. Mr McGowan’s email was first in time. Ms Rayment’s spoke of her own issues and concerns and made some comment on Mr McGowan’s email.
- [54]Whilst the Council’s consultant experts were accepting of the height of the proposal, considered in isolation, Mr McGowan still had not embraced the building form. In his email of 17 September 2015 in detailing issues/concerns which needed to be addressed he said:
“Building form - The removal of 3 levels is going to affect the proportions of the building and the form of the podium. The provisions seek a slender tower (with 30 metres horizontal dimension) over a clear podium. It would be useful to see updated elevations and perspectives so we can have a sense of the overall appearance of the amended building”.
In her email on the same day, Ms Rayment said in this regard:
“I defer to Nick’s comments regarding building proportions but would need to tie them back to PO5 of the Eastern Corridor Neighbourhood Plan Code 2014 which is about cohesive streetscape, building separation, not prejudicing adjoining development, not dominating the street or pedestrian spaces and resulting in sensitive massing and articulation. I think reducing the building height helps a great deal in reducing the dominance in the street, and I am happy with a building setback/building separation. The building also seems to me to be well articulated”.
Ms Rayment went on to recommend the revised perspectives sought by Mr McGowan and they were duly sought in paragraph 2 (c) of the 18 September letter. The appellant did not accept that the provision of such plans was necessary. The tenor of the advice to the Council in this respect was not negative but rather that, in the absence of elevations and perspectives, the expert consultants were short of expressing unqualified satisfaction with the appropriateness of the building form.
- [55]The submissions for the appellant accepted that a request for elevations and perspectives to assist Mr McGowan’s (and council’s) consideration of Quintenon’s changed proposal might have been appropriate, but only if the Council had accepted the reduced height (even in principle). That however, mischaracterises the offer and the question which fell to the council to consider, which was whether the offer of the changed proposal was to be accepted.
- [56]Other matters of residual concern for the expert consultants at the time was what they saw as the proposal’s inadequate attempt to address the Wolseley Street frontage and the planned future cross block link to the south. Mr McGowan’s email of 17 September said as follows:
“Street and cross block link activation – the proposal does not positively address or activate Wolseley Street or the proposed cross block link. The port cochere and two wide cross overs are a poor outcome, as is the lack of continuous awnings. The ground level layout needs to be improved and there should be only one cross over.”
- [57]Ms Rayment’s advice was as follows:
“The other town planning issues related to street activation and casual surveillance over the planned cross block link. The main issue is the design of the ground level at this interface with the street frontage and the cross block link. I expect this goes hand in hand with any comments Colin has regarding the site access and operation of the port cochere. I’d like them to reconsider the immediate interface, particularly with the cross block link as currently this interface is primarily driveway for the front two-thirds – although perhaps this is the best access location i.e. as far as possible from the intersection Colin? It is good that the coffee/terrace is visible for the back third of the cross block link, but it would be good to see a section of this to demonstrate that physical access is available given the level differences. Direct access to the cross block link is an important part of acceptable outcome A15 and the corresponding performance outcome in the Eastern Corridor Neighbourhood Plan Code 2014. Upper levels appear ok given location of active space along this edge, plus terraces, provide for casual surveillance. I expect it will be difficult to get direct interface with the street frontage to Wolseley Street, given the requirement for a porte cochere I expect it is something the “facilities expert” will say is needed for this type of use, and we do have an interface, just one that is set back from the street frontage.”
- [58]There is no evidence of Mr Beard’s advice to council at this time although subsequently, in the joint meeting process, his position was that the ground floor traffic arrangement was unsatisfactory. The advice from Mr McGowan and Ms Rayment was reflected in Council’s letter on 18 September calling for plans to address these issues.
- [59]The planning documents showed a future cross block link to the immediate south of the subject site. The planning intent included that building design promote both activation and surveillance of the cross block link. That is a topic which had been addressed in the application documents. The grounds of refusal included that the proposal conflicted with relevant provisions of the planning documents in not providing an active frontage to the cross block link and not being built to the boundary of the link for a minimum of 75% of the boundary and not promoting adequate activation of the link. The concerns of Mr McGowan and Ms Rayment were related to matters of obvious relevance.
- [60]The appellant responded that it was unable to accommodate any change insofar as the cross block link is concerned. The appellant’s solicitor’s letter of 6 October pointed out that the cross block link was conceptual only and located on land adjacent to the subject site. The appellant had no knowledge or control over the specific location or particular design of that link. Further, the provision of that link would have to deal with challenges of topography and overland flow (flooding) in its design. As Mr McGowan acknowledged[17] “it was a pricklier problem than I anticipated”. At trial, Ms Rayment acknowledged the challenges and was still looking for improvements but ultimately, in cross examination, conceded that the interface with the cross block link was not a reason for refusal.[18] It should be remembered however, that her concession at trial came well after the offer to settle had lapsed. The reasonableness of Council’s conduct in allowing the offer to lapse must be judged at the relevant time when it was open for acceptance. At that time the council had apparently competent advice from well qualified experts that the proposal was deficient in its response to the planned cross block link.
- [61]Insofar as the relationship with Wolseley Street is concerned, Ms Rayment acknowledged that it would be difficult to get a direct interface with the street frontage to Wolseley Street given the likely requirement for a port cochere for the type of facility proposed. Mr McGowan’s preference for a single crossover was not promoted by Mr Beard. The advice to the Council from its experts however, was that the overall outcome, as then designed, was poor particularly in Mr McGowan’s opinion. That was relevant and apparently competent expert advice. It may be noted that subsequently, in the first traffic joint report, Mr Beard expressed his view that the driveways were, indeed, too wide and it was agreed that design changes would be necessary to satisfactorily resolve those issues. This led to a revised and improved plan of development with narrower crossovers and consequential extension of the awning.
- [62]Another issue related to deep planting, which was a requirement of the planning scheme[19] in respect of which there was an issue in the appeal. In his email of 17 September Mr McGowan said as follows:
“Deep planting – the proposal is deficient in deep planting (in terms of area and dimensions). Deep planting aids in mediating between the scale of the building and the human scale of the street. And is also required to protect amenity of adjoining uses. Perhaps with the removal of some GFA and greater clarity on uses, there is opportunity to remove some parking to make space for more deep planting”.
- [63]In her email of 17 September Ms Rayment said as follows:
“In relation to deep planting, I agree they should have some space for this – and perhaps the reduction in the floor area may allow some reduction in car parking and therefore reduction of basement footprint – subject to Colin’s comments. The space within the rear 3m set back could have some capacity to be used for deep planting – or is it fully required for storm water purpose, I can’t recall? It appears to be clear of the basement, but doesn’t have landscaping shown on it on the ground floor plan, so I assume there is some constraint there? The current proposed location of “deep” planting (albeit only 2m deep) is a bit counter intuitive to the precinct intent for activation of the street frontage – so I would prefer it to be either along the west or northern boundary.”
- [64]This was reflected in the Councils letter of 18 September seeking plans which addressed “proposed deep planting”. In particular, reference was made to a revised basement plan showing a reduced basement footprint to provide for deep planting and details of proposed deep planting. The solicitors for the appellant responded by saying that their client was unable to accommodate this aspect of the request as the Council had not identified any specific change to the deep planting proposed that would be acceptable to it. Insofar as the suggestion of a reduction of the basement footprint is concerned, it was pointed out that there was no car parking in the first level of the basement and that its footprint could not be reduced without compromising the essential services. Mr McGowan said that he thought that if there was potential to reduce car parking on the lower level then perhaps some of those services may have been able to have been moved[20] As it happens, however, the appellant did, subsequently, after the offer lapsed, increase the deep planting zone in conjunction with the modification of its proposal for purposes of trial. That change did not alter Mr McGowan’s opinion with respect with deep planting,[21] but the Council ultimately abandoned the issue in exhibit 32. At the time the offer was open for acceptance, however, the Council had relevant apparently competent advice from qualified experts to the effect that the proposal was deficient in deep planting.
- [65]Mr McGowan also raised an issue with respect to shadow impacts. In that regard his email of 9 September 2015 follows:
“Shadow impacts – the proposal is at the upper limit of expected scale for the area, so shadow impacts still need to be scrutinised. The appellants could easily provide revised shadow diagrams (which would compare shadows to a code compliant scenario)”.
- [66]That is not a concern which Ms Rayment endorsed. In that regard, Ms Rayment said:
“In relation to amenity impacts, particularly overshadowing, I am cautious about asking them to prepare a comparison shadow analysis between the revised height proposal and a code compliant height scheme, because now there is no specified height in metres for a fifteen storey outcome. Also, there are no submissions. I think the difference between fifteen storeys and sixteen storeys in this context would be marginal from an amenity perspective.”
- [67]Ms Rayment did not include shadow diagrams as one of the things she suggested Council request of the appellant. Ms Rayment’s reference to there not being a specified height in metres for a fifteen storey outcome is a reference to the position under the new planning scheme. Notwithstanding Ms Rayment’s position, the Council’s letter of 18 September did seek shadow diagrams. The appellant’s response was to refute the necessity of such drawings. The amended proposal would, of course, have been no worse in terms of casting shadow then the original taller proposal. The original proposal had been supported by a shadow diagrams. Subsequently, in the joint expert report on visual amenity, Mr McGowan accepted that the shadow impacts as depicted in those drawings would not be substantially greater than other fifteen storey developments on the site or other nearby sites might generate and therefore would not be considered unacceptable.[22] Shadowing issues were abandoned in the trial. It is difficult to see how shadowing was ever likely to be a substantial difficulty in relation to the proposal the subject of the offer of settlement.
- [68]Moreover, at the time settlement of the offer fell to be considered, the council was being advised by well qualified independent expert consultants. Whilst those consultants were satisfied with the reduced height of the proposal, they maintained concerns or reservations about other aspects of it. Those reservations or concerns related to matters of relevance going to the acceptability or otherwise of the proposal. Some, even at that early stage, could have been seen to be lacking in sufficient justification to warrant a rejection of the proposal. That is so with respect to Mr McGowan’s shadowing concerns. The request in relation to the proposed O'Keefe Street access appears to be misconceived. In other respects however, their concerns were apparently legitimate and relevant concerns to have raised at the time. They were not all maintained by the Council at trial, but the question is whether it was incumbent upon the Council, acting reasonably, not to have put them all to one side at this relatively early stage and to have accepted the settlement offer notwithstanding the then reservations of its expert consultants. In my view the Council was not acting unreasonably in not doing so.
- [69]The costs application was also put on the basis that the Council failed to “meaningfully engage with” the appellants offer and, in particular, failed to “detail its requirements as to other concerns it claimed to have”. It was submitted for the appellant that it was incumbent upon the Council, acting reasonably, to take up the appellant’s invitation and to “identify specifically what other changes to Quintenon’s plans would satisfy council in relation to other concerns that it said it had (including those properly raised by its consultants)”. I do not accept that. I was not referred to any authority for the proposition that a party exposes itself to an adverse costs order (let alone on an indemnity basis) by failing to put a reasonable counter-offer or by failing to advise another party as to how it should compose or vary an offer so as to make it acceptable to the offeree. It was not the Council’s responsibility to take the compromise proposal and amend or modify it to overcome its residual concerns. That might have been helpful, but it did not put itself at risk of the adverse costs order for failing to so do.
- [70]The application for costs from 15 October 2015 to 16 December 2015 is dismissed.
- [71]The application for costs of the costs application regardless of the outcome was on the basis of the way the costs application progressed. The parties were directed to file and serve their material prior to the application initially coming on for hearing on 2 May 2017. At that stage, the Council had not filed any material as to the advice it had from its experts when the offer was open for acceptance. At the hearing I intimated that I would be prepared to give the Council the opportunity to put on such material if, on refection, it so wished. The hearing was ultimately adjourned to 8 May 2017 to allow the Council time to consider whether it wished to rely on further material. The Council decided that it did so and there were two directions hearings (on 8 May and 30 May) prior to the resumed hearing of the costs application at which the council relied on further material. There is no basis for ordering the Council to pay the whole of the appellant’s costs of its otherwise unsuccessful cost application. The Council should however, pay the appellants costs thrown away by reason of the adjournment of the application on 2 May 2017 and the costs of the subsequent directions hearing on 8 May and 30 May prior to the resumed hearing. Those costs should be assessed on the standard basis.
Footnotes
[1] [2015] QPLR 188 at [3].
[2] There was some complaint about Council’s attitude to disclosure and requests to share the cost of photomontages, but there is nothing about that which warrants an adverse costs order for the appeal.
[3] Some reference was made to an internal memorandum prepared by a senior architect / urban designer during assessment of the development application, prior to the decision stage and which was favourable. That is but one view. It did not bind the Council was not the Council’ position.
[4] The appellant relied upon the desirability of greater floor-to-ceiling heights affording the flexibility of permitting floors to be adapted to different purposes.
[5] See reasons for judgment paragraphs [76], [79].
[6] Some acknowledgment of which can be seen in council’s resolution concerning amendments to city plan albeit, for the reasons stated in the judgment, those amendments were at too early a stage to attract any real weight.
[7] T 1 – 12.
[8] T2 – 55, T2 – 57.
[9] T1 – 34, T1 – 57.
[10] Steendyk v Brisbane City Council [2016] QPELR 936 at [23], citing YFG Shopping Centres Pty Ltd v Fabcot Pty Ltd (No. 3) [2015] QPELR 149 at [25] and Altitude Corporation Pty Ltd v Isaac Regional Council (No. 2) at [29].
[11] At paragraph 13.28.
[12] J & D Rigging Pty Ltd v Agripower Australia Limited & Ors [2014] QCA 23 at [6].
[13] Subject to the formulation of conditions, including any plans to be refered to therein.
[14] T1 – 48.
[15] Altitude Corporation Pty Ltd v Isaac Regional Council (No 2) (2015) QPELR 139.
[16] Traffic issues ultimately fell away, but had not at this stage. On 18 September the appellant’s solicitor had called upon the Council to agree in advance of the joint meeting process that the traffic issues did not warrant refusal of the application. That was followed up in subsequent correspondence, but there was no such agreement prior to the joint meeting process.
[17] T1 – 18.
[18] T5 – 73, 75.
[19] See P 24 of the Eastern Corridor Neighbourhood Plan.
[20] T1 – 16.
[21] Exhibit 27B, page 2.
[22] Ex 28 page 27 paragraph 102.