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Danseur Pty Ltd v Cairns Regional Council[2022] QPEC 4

Danseur Pty Ltd v Cairns Regional Council[2022] QPEC 4

PLANNING & ENVIRONMENT COURT OF QUEENSLAND

CITATION:

Danseur Pty Ltd v Cairns Regional Council & Ors [2022] QPEC 4

PARTIES:

DANSEUR PTY LTD (ACN 010 294 710)

(applicant)

v

CAIRNS REGIONAL COUNCIL

(first respondent)

and

PAUL SAVIOUR MARIO GEORGE BUGEJA

& CATHERINE ANN BUGEJA

(second respondents)

FILE NO:

81 of 2018

DIVISION:

Planning and Environment

PROCEEDING:

Application

ORIGINATING COURT:

Cairns

DELIVERED ON:

4 February 2022

DELIVERED AT:

Cairns

HEARING DATE:

29 November 2021

JUDGE:

Morzone QC DCJ

ORDER:

  1. The applicant’s costs application is dismissed.

CATCHWORDS:

PLANNING AND ENVIRONMENT – APPLICATION – DECLARATION – COSTS – presumptive position that each party must bear the party’s own costs of the proceeding – whether rebutted – whether opposition to the proceeding was frivolous – whether second respondents are said to have introduced late material – whether unreasonable failure on the part of the second respondents to accept a Calderbank offer.

LEGISLATION:

Planning Act 2016 (Qld)

Planning and Environment Court Act 1996 (Qld), s 10 (2), s 59, s 60

CASES:

Alpine Hardwoods (Aust) Pty Ltd v Hardy’s Pty Ltd (No.2) (2002) 190 ALR 121

Altitude Corporation Pty Ltd v Isaac Regional Council (No 2) [2015] QPELR 139

Black v Lipovac (1998) 217 ALR 386

Calderbank v Calderbank [1975] 3 All ER 333

Colgate-Palmolive Co & Anor v Cussons Pty Ltd (1993) 118 ALR 248.

Danseur Pty Ltd v Cairns Regional Council & Ors [2020] QPEC 64

Digga Australia Pty Ltd v Norm Engineering Pty Ltd (No.2) [2008] FCAFC 76

Ford Motor Company of Australia Limited v Lo Presti (2009) 41 WAR 1

Nolan v Nolan [2015] QCA 199

Racing & Wagering Western Australia v Software AG (Aust) Pty Ltd [2008] FCA 1526

Rickard Constructions v Rickard Hails Moretti [2005] NSWSC 481 

Sincere International Group Pty Ltd v Council of the City of Gold Coast (No. 2) [2019] QPELR 662

COUNSEL:

M Jonsson QC for the second respondents

SOLICITORS:

P&E Law solicitors for the applicant

Corrs Chambers Westgarth for the first respondent

Holding Redlich for the second respondents

Summary

  1. [1]
    The applicant seeks its costs against the second respondents to be assessed on the indemnity basis, or alternatively, on the standard basis, because the second respondents frivolously opposed its application, introduced late material, and/or unreasonably failed to accept a Calderbank offer.
  2. [2]
    The second respondents oppose the application and contend that each party should bear the party’s own costs of and incidental to the proceeding.  They argue that their response to the application was reasonable and meritorious, the further plans were timely and of no cost consequence, and their refusal of the offer was reasonable in the context of time and circumstances.
  3. [3]
    In my view the legislative presumption is not rebutted in the circumstances of this case.  The second respondents’ response and engagement in this proceeding was reasonable and was not frivolous.  They reasonably deferred final resolution of this proceeding, which outcome was contingent upon related proceedings, in circumstances of uncertainty and complexity.   Their proper engagement and the merit of their position was realised in the related proceeding 32 of 2020, which rendered this earlier proceeding largely redundant as reflected in the mode and terms of the resolution of each proceeding.  The provision of revised plans was in timely furtherance of the proposed development and both proceedings.  I opine that the second respondents reasonably refused the Calderbank offer that was premised on the need for a material change of use approval, which was neither necessary nor required, and acceptance of the offer was premature pending continued disputation. 
  4. [4]
    Accordingly, I dismissed the application.  Each party ought bear their own costs of the proceedings, so I will not make any order for costs.

Power to award costs

  1. [5]
    As a general rule each party to a P&E Court proceeding must bear the party’s own costs for the proceeding.[1]  However, s 60 of the Planning and Environment Court Act 1996 (Qld) provides for exceptions to the general rule, relevantly here the applicant relies upon s 60(1)(b), (e) and (i), as follows:

“60   Orders for costs

  1. (1)
    The P&E Court may make an order for costs for a P&E Court proceeding as it considers appropriate if a party has incurred costs in 1 or more of the following circumstance:

…

  1. (b)
    the P&E Court considers the proceeding to have been frivolous or vexatious;

Example—

The P&E Court considers a proceeding was started or conducted without reasonable prospects of success.

…

  1. (e)
    without limiting paragraph (d), a party has introduced, or sought to introduce, new material;

…

  1. (i)
    an applicant, submitter, assessment manager, referral agency or local government does not properly discharge its responsibilities in the proceeding.”
  1. [6]
    Therefore, the court should act with a degree of hesitancy before depriving a successful party of costs, or ordering an unsuccessful party to pay costs unless in an unusual or exceptional case.  In doing so, the court should not lose sight of the fundamental principle that costs orders serve a compensatory function, not a punitive one. 
  1. [7]
    If awarded, costs are ordinarily assessed on the standard basis, unless the rules or a court order requires assessment on an indemnity basis.  Circumstances warranting the exercise of the discretion to award indemnity costs include: knowingly making false allegations, or irrelevant allegations of fraud; particular misconduct that causes delay, costs and inconvenience of the court and other parties; proceedings commenced for some improper purpose or ulterior motive; proceedings commenced in wilful disregard of known facts or clearly established law; unnecessary allegations or groundless contentions that unduly prolong the case; imprudent refusal of an offer of compromise; and a contemnor.[2]
  1. [8]
    Here, the applicant contends that the court should make an order for costs in circumstances that it has incurred costs because:
    1. (a)
      the second respondents had no reasonable prospect of success in opposing the relief sought and their opposition was bound to fail;
    2. (b)
      the second respondents introduced new plans and made a minor change application; and
    3. (c)
      the second respondents did not properly discharge their responsibilities, including its implied undertaking to proceed in an expeditious way,[3] in the application by continuing to oppose the application.
  1. [9]
    The applicant further contends that the costs ought be assessed on the indemnity basis because the second respondents, in defending the proceeding, wilfully disregarded known facts and law and unduly prolonged the application, in that the second respondents:
    1. (a)
      were given an opportunity to take the action that was ultimately taken as a consequence of the application prior to the commencement of the application and did not do so;
    2. (b)
      did not expeditiously concede that the proposed building works would occur on and in common property other than the exclusive use area and would need a subdivision;
    3. (c)
      did not expeditiously concede that the proposed building work would create a 17th  storey;
    4. (d)
      failed to resolve the originating application in accordance with the offer contained in the applicants letter of 17 September 2018; and
    5. (e)
      imprudently refused to accept a Calderbank offer in a letter sent on 10 October 2018.
  1. [10]
    The second respondents oppose the application for costs.  They contend that the general rule is not displaced and that each party ought bear their own costs.  They argue that their response to the application was reasonable and meritorious, the further plans were timely and of no cost consequence, and their refusal of the offer was reasonable in the context of time and circumstances.

Was the second respondents’ opposition to the proceeding frivolous?

  1. [11]
    The applicant contends that the second respondents frivolously resisted the relief sought in the application, despite offers made by the applicant, because:
    1. (a)
      the town planning consent granted by the first respondent on 12 August 1980 for the Cairns Aquarius approved the erection and use of a 15 storey building;
    2. (b)
      on 15 July 1982 the Cairns Aquarius was certified as a 16 storey building;
    3. (c)
      the proposed building works would create an additional storey because the building works will create a roofed structure over the existing rooftop and create a space between the floor level and the proposed roof above.  The space created by the roof will be partly enclosed and contain more space than is required for a lift, stairwell and/or bathroom;
    4. (d)
      the building work extended beyond the boundary of Lot 83 the exclusive use area 83E, into non-exclusive use common property which, if unrectified, warranted new subdivision plans;
    5. (e)
      the applicant had made the second respondents aware of those matters prior to filling the originating application; and
    6. (f)
      any alternative view lacked merit and substance and was bound to fail.
  2. [12]
    The applicant asserts that it was put to unnecessary costs as a consequence of the conduct of the second respondents including commencing the proceeding, briefing the registrar for the mediation, attendance at the mediation, mentions, changing direction orders and reviewing various iterations of the changed plan and application for the seventeenth storey.
  3. [13]
    On the contrary, the second respondents assert that their response was reasonable and meritorious and rely upon the contrast between the orders sought and the final outcome in the context of evolving and complex circumstances.
  4. [14]
    In Altitude Corporation Pty Ltd v Isaac Regional Council (No 2),[4] Rackemann DCJ identified that a “case is without reasonable prospects of success if it is so lacking in merit or substance as to be not fairly arguable”.  The nature of frivolous or vexatious conduct was also considered in Sincere International Group Pty Ltd v Council of the City of Gold Coast (No. 2)[5] when Williamson QC DCJ said:

“[27] Sincere contends that the Council’s defence of the appeal was frivolous.  The phrase ‘frivolous or vexatious’ as it appears in s 60(1)(b) of PECA is not defined.  It is, as a consequence, to be given its ordinary meaning. Williams JA in Mudie v Gainriver Pty Ltd (No 2) 2 Qd R [2003] 271 at [59] held that the words ‘frivolous or vexatious’ in s 7.6(1A) of the repealed Local Government (Planning & Environment) Court Act 1990 were used in everyday language, and there was little doubt as to their ordinary meaning. His Honour held that frivolous meant ‘of little or no value or importance, paltry’; ‘having no reasonable grounds’, and ‘lacking seriousness or sense, silly’.  McMurdo P and Atkinson J in the same decision held that the ordinary meaning of ‘frivolous’ was ‘of little or no weight, worth or importance’, and ‘not worthy of serious notice’.

[28] The onus of proving frivolity lies with the applicant for costs.  It is a high standard to be met, and will turn on matters of fact and degree, including public policy considerations and the interests of justice.  Relevantly, something much more than lack of success needs to be shown to engage s 60(1)(b) of PECA.

[29] Sincere allege that the conduct of the Council’s defence, or resistance to the appeal, was frivolous because it had no reasonable prospects of success.  This allegation seeks to take up the example that follows s 60(1)(b) in PECA, which speaks of a proceeding that was started, or conducted without reasonable prospects of success.

[30] The phrase ‘without reasonable prospects of success’ has been held to equate its meaning with ‘so lacking in merit or substance as to be not fairly arguable’. A case which is not fairly arguable is one that is regarded as ‘bound to fail’.  This is a concept that falls appreciably short of ‘likely to succeed’.  A lack of success does not mean that a proceeding had no reasonable prospects, or lacked merit.”

  1. [15]
    The second respondents own the residential unit Lot 83 in the Aquarius Building located at 107-113 Esplanade in Cairns, and were desirous of converting their exclusive use roof top garden into a covered and partially enclosed patio area with a lift. 
  2. [16]
    In mid 2017 the second respondents and their consultants engaged with the body corporate about the prospect of the proposed works extending outside their lot and exclusive use area.  After the second respondents obtained a building approval from a private certifier, the council alerted them of the potential impact of the building height on the flight path associated with the nearby Cairns Airport.  They then applied for preliminary approval, albeit misaligned with the body corporate’s position, which was approved by the council on 19 January 2018.
  3. [17]
    The applicant, whose members also lived in the Aquarius Building complex, became concerned about the prospect of illegal development if the second respondents pursued their building approval.  They actively made verbal and written representations to the second respondents.  When they perceived that their representations were not being heeded by the second respondents, they applied to this court on 14 May 2018 for a restraining order to stop the second respondents acting on their building approval, pending obtaining approval for a material change of use to create a 17th storey and a volumetric reconfiguration for the works external to the Lot and exclusive use area.  The application sought declarations that the building works would create an additional 17th storey requiring a material change of use approval, and a reconfiguration of a lot approval.
  4. [18]
    The originating application filed by the applicant sought the following declaratory and related orders:
  1. Declarations pursuant to section 11(1) of the Planning and Environment Court Act 2016 (Qld) (PEC Act) that, if constructed in accordance with the BA, the building works will:
  1. create a 17 storey building, inconsistent with the planning consent for the Aquarius issued on 12 August 1980 which is for a 15 storey building; (the Consent)
  2. result in a material increase in the scale of the development requiring a material change of use approval under Cairns Plan 2016 (the Cairns Plan); and
  3. require a reconfiguration of a lot approval for a Building Format Plan (BFP) of subdivision to be registered on title.
  1. Orders pursuant to section 11(4) of the PEC Act that:
  1. the Second Respondent be restrained from acting upon the BA unless and until a material change of use approval and BFP subdivision approval both consistent with the BA are obtained and all appeal rights in relation to them have expired.
  1. [19]
    The second respondents were then forced to grapple with the applicant’s proceeding while they tried to progress their proposed development.  The applicant’s contention regarding the creation of the 17th storey arises from a historical anomaly whereby the Aquarius Building was originally approved as a 15 storey building but later certified and built as a 16 storey building.  This was certainly not a creation of either the applicant or the second respondents.  Instead, the historical incongruity was apparently overlooked by the original developer and council at the time of construction, and everyone else since.  But it was particularly problematic for the second respondents because they occupied the top storey penthouse apartment on the (apparently unapproved) 16th storey, and their proposal would create a further 17th storey if it proceeded. 
  2. [20]
    Under the auspices of the court’s case management directions, the applicant and second respondents were directed to attend an early without prejudice conference on or before 30 September 2018.
  3. [21]
    In reliance on the adjudication in Cairns Aquarius [2018] QBCCMCmr 447 regarding the lack of authority to give body corporate consent, on 17 September 2018 the applicant’s solicitor offered to resolve the proceeding (and avoid the need for the without prejudice conference) by the second respondents:
    1. (a)
      cancelling the minor building work approval;
    2. (b)
      confirming that a material change of use application for the construction of an additional storey was required;
    3. (c)
      confirming that what is proposed was the addition of a new storey;
    4. (d)
      confirming that a subdivision would be required for the creation of further exclusive use areas within the community management statement;
    5. (e)
      confirming that what was proposed required the creation of further exclusive use areas; and
    6. (f)
      agreeing to cancellation of a proposed without prejudice conference;
  1. [22]
    The second respondents did not accept that proposal.
  1. [23]
    The parties’ reasonably and properly engaged in an early without prejudice meeting facilitated by the P&E ADR registrar on 20 September 2018. 
  2. [24]
    The applicants maintained that the proposed building works would create a new storey and conflict with the 1980 town planning consent and sought provision of new development plans by 22 October 2018.  The applicants also made an offer to settle the proceeding, on the basis that:
    1. (a)
      the proposed building works approved on 19 January 2018 will create an additional storey inconsistent with the planning consent dated 12 August 1980 for a building of 15 storeys and certified to 16 storeys;
    2. (b)
      the second respondent will not carry out the building works until it obtains a material change of use approval for the additional storey;
    3. (c)
      the parties agree to adjourn this proceeding until after a material change of use approval is obtained or such other time as agreed in writing; and
    4. (d)
      if a material change of use approval for the additional storey is obtained or the building works approval is cancelled, the applicant will withdraw this originating application.
  3. [25]
    After an agreed extension to respond to the offer, the second respondents rejected the offer by their solicitor’s letter of 30 October 2018. 
  4. [26]
    Since it remained unresolved, the proceeding was subject of further case management by the court including directions for prospective hearing dates. 
  5. [27]
    On 19 November 2018 the second respondents provided revised plans which included amendment of the boundaries of the proposed building works to remove horizontal intrusions from common property areas.  They proposed lodging a change application to the town planning consent dated 12 August 1980, to include an additional storey by reference to the revised development plans provided on 19 November 2018.  Despite persistence with the relief sought in the originating application (premised on a material change of use and reconfiguration approval) the applicant consented to the alternative course proposed by the second respondents.  Accordingly, on 17 May 2019 consent orders were made whereby the second respondents were ordered to lodge an application to change the Town Planning Consent granted 12 August 1980 to include an additional storey by reference to the revised development plans provided to the applicant by the second respondents on 19 November 2018.  Pursuant to those orders, the second respondents applied for a minor change to the original 1980 development permit to convert an exclusive use area attached to Lot 83 from a roof top garden area to a covered and partially enclosed patio area and associated lift, and consequential matters.
  6. [28]
    The applicant argues that this vindicates its pursuit of declaratory relief.  I disagree. The declaratory relief sought in 1(b) and (c) in this proceeding 81 of 2018, did not seek to compel the making of a minor change application as proposed by the second respondents, but instead sought to propound the need for material change of use approval and a reconfiguration by way of building format plan.  Neither of the latter matters were subject of the second respondent’s change application.  The timing and nature of the final consent declaration are also relevant, and I will deal with this later.
  7. [29]
    The council approved the minor change application and gave a decision notice accompanied by a copy of the very old 1980 Consent development approval at Appendix 1, and separately described the changes by incorporating by reference the extra development conditions, in particular:
    1. (a)
      Condition 1 identifies a change to the first paragraph of the 1980 Consent, by changing the reference to a 15 storey Building containing 81 units for Tourist and Permanent Accommodation and 1 floor of Offices to a 17 storey building containing 81 units for Tourist and Permanent Accommodation and 1 floor of Offices;
    2. (b)
      Condition 2 provides a table of Approved Plans to be included within the Consent Permit”, being the following drawings by TPG Architects, all of which are dated 15 November 2018:
      1. Drawing o. WD. 10 Rev C;
      2. Drawing No. WD. 11 Rev C;
      3. Drawing No. WD. 13 Rev C;
      4. Drawing No. WD.14 Rev C; and
      5. Drawing No. WD.15 Rev C; and
    3. (c)
      Condition 3 provides that all other conditions of the 1980 Consent remain unchanged.
  8. [30]
    The council decision reconciled the approval of the 15 storey building with the certificate of classification and physical as-constructed building of 16 storeys, and recognised that the changed roof top garden created an additional 17th storey.
  9. [31]
    But that was not the end of the disputation. 
  10. [32]
    The applicant launched a challenge to the council’s decision by a separate proceeding 32 of 2020 commenced on 13 February 2020.  It did not seek to agitate the 15, 16 and 17 storey trichotomy, or challenge the minor change (as distinct from a material change of use or reconfiguration), but instead the applicant challenged the validity of the council’s decision.  The applicants applied for a declaration that the council’s decision notice was void because, amongst other things, the second respondents’ change application was not properly made absent lawful consent of the body corporate, and the decision notice did not comply with the Planning Act 2016 (Qld).  The latter ground was included with the court’s leave after a contest at the hearing. 
  11. [33]
    Given the nature and scope of the new proceeding 32 of 2020, the former proceeding 81 of 2018 (subject of this costs application) lay in obeyance pending determination of the new proceeding. 
  12. [34]
    After a contested hearing, the second respondents were wholly successful in the cognate proceeding 32 of 2020 for reasons delivered on 15 December 2020 in Danseur Pty Ltd v Cairns Regional Council & Ors [2020] QPEC 64. 
  13. [35]
    The applicant asserts that it has been successful in the current proceeding warranting a costs order in the following ways:
    1. (a)
      The second respondents provided revised building plans that rectified the horizontal intrusions into common property;
    2. (b)
      The second respondents made an application to change the 1980 Consent by reference to the revised building plans, which was approved by the council, rectifying the inconsistency; and
    3. (c)
      On 21 May 2021 the court made a declaration with consent of the parties that the building work would create a 17th storey.
  14. [36]
    Whilst the second respondents provided revised building plans that rectified the horizontal intrusions into common property, the applicants remained undeterred from pursuing the relief in their application premised on a material change of use and reconfiguration approvals.  It was the second respondents who proposed the course to lodge a change application to the town planning consent despite the applicant’s persistence with the relief sought in its application.  The applicant’s insistence that the proposed works involved a material change of use persisted beyond the second respondents’ revision of the building plans, and remained an issue until shortly before the hearing in related proceeding number 32 of 2020.
  15. [37]
    It is true that the second respondents made an application to change the 1980 Consent by reference to the revised building plans, which was approved by the council, rectifying the inconsistency.  The applicant actively but unsuccessfully challenged the validity of that minor change approval in the separate proceeding 32 of 2020.  The court concluded that the council properly treated the application as being properly made having been satisfied with the form of owner’s consent and it is not for this court to look behind those matters.  The decision notice approving the minor change was found valid.  While it did not include some of the formal requirements prescribed by the Planning Act 2016 (Qld) such noncompliance is not material and completely explicable given the age and scope of information available.  I do not accept that the applicant’s unsuccessful challenge and outcome was a measure of the applicant’s success in this proceeding.
  16. [38]
    It is also true that on 21 May 2021 the parties joined to invite this court to make declaratory orders in this proceeding 81 of 2018 in the following terms agreed by the parties:

“Building works constructed in accordance with the development permit for building work granted by the 1st Respondent to the 2nd Respondent by Decision Notice dated 19 January 2018 in relation to Lot 83 on BUP 70177 in the Cairns Aquarius at 107-113 Esplanade, Cairns city will create a 17-storey building.”

  1. [39]
    The applicant argues that this vindicates its pursuit of the first declaration in the originating application in 81 of 2018.  Again, I disagree.  The creation of the 17th storey was contingent on the second respondents realising their proposed development after making the minor change application approval and defending the appeal in the cognate proceeding 32 of 2020.  That is, there was no utility in any declaration about a 17th storey, until the historical anomaly was investigated, and the second respondents’ proposal was affirmed in the face of the applicant’s challenge. 
  2. [40]
    The applicant contends the second respondents caused unnecessary costs to be incurred by:
    1. (a)
      persevering with the building approval after receiving advice of the issues;
    2. (b)
      maintaining the requirement for attendance at a without prejudice meeting;
    3. (c)
      not responding to a fundamental issue as to whether the works created a 17th storey; and
    4. (d)
      delayed provision of iterations of drawings that corrected the works occurring external to the lot and exclusive use area.
  3. [41]
    It seems to me that the second respondents’ response and engagement in this proceeding 81 of 2018 was reasonable, and not frivolous, as reflected in the timing, mode and terms of the resolution of this and cognate proceedings.  Their perseverance was ultimately vindicated.  They properly engaged in the proceeding, including the court ordered without prejudice conference, in circumstances of uncertainty and complexity.  They were caught in a historically anomaly, the origin of which was not of their doing, but transcended the particular interests and concerns of the parties to this application.  The second respondents found themselves in a unique position to take steps to regularise past wrongs in order to realise their own proposed development.  This engaged public policy considerations while they faced collateral changes to their own interests.  It was the second respondents’ success with the minor change approval, which effectively regularised the historical anomaly to facilitate the proposed development, in the case of the applicant’s challenge.  The consensual declaratory relief of 21 May 2021 merely regularised the historical anomaly to assure certainty in the public interest. 
  4. [42]
    The second respondents were not frivolous in their response to the applicant’s litigation.

Did the second respondents introduce late material – new plans and make a minor change application?

  1. [43]
    This is not a typical case where the provision of late material causes some cost consequence, for example, by delaying procedural steps or a hearing.
  2. [44]
    Here, the second respondents produced the revised building plans, and made the minor change application to the council, within the context of the court’s active case management, sanctioned by the orders of the court made on 15 November, 2018 and 17 May, 2019 and amidst the continuing uncertainties created by the historical anomaly and applicant’s disputation.  These steps served to better define the real issues for determination, to progress the proposed development, to regularise the historical anomaly and to achieve certainty in the public interest.
  3. [45]
    In my assessment, they made a genuine effort to revise plans in a timely way, make the minor change application and successfully contest the cognate proceeding 32 of 2020, which effectively overtook the applicant’s earlier proceeding and rendered the relief largely redundant. 
  4. [46]
    I do not accept that the second respondents’ efforts warrant a different order for costs

Did the second respondents fail to discharge their responsibilities, including their implied undertaking to proceed in an expeditious way, in the proceeding by continuing to oppose the application?

  1. [47]
    I do not accept that the second respondents failed to discharge their responsibilities in the proceeding when considered in all the circumstances, including those traversed above.
  2. [48]
    Both parties recognised the sensibility of proceeding 81 of 2018 (subject of this costs application) laying in obeyance pending determination of the new proceeding 32 of 2020.  It seems to me that the second respondents continued to endure circumstances of uncertainty and complexity as they grappled with the parallel proceedings in an effort to realise their proposed development.  I think the second respondents reasonably deferred final resolution which was contingent upon the latter proceeding 32 of 2020.  The scope, nature and outcome of proceeding 32 of 2020 rendered the earlier proceeding largely redundant, as reflected in the mode and terms of the resolution of this proceeding.  In my view, the 17th storey issue was moot unless the second respondents successfully resisted the applicant’s further change to the minor change approval, which was necessary to facilitate their proposed development.  The second respondents’ proper engagement and the merit of their position was realised in the outcome of proceeding 32 of 2020.
  3. [49]
    In all the circumstances, I think the second respondents’ conduct was appropriately expeditious and timely.

Did the second respondents unreasonably fail to accept a Calderbank offer?

  1. [50]
    The applicant also relies upon a letter of offer made under rule 353 of the Uniform Civil Procedure Rules 1999 and in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333.  That case recognised that offers of compromise not directly authorised by the rules of court, if reasonably made but unreasonably ignored, may properly influence the exercise of the judicial discretion as to costs being assessed on the indemnity basis. 
  2. [51]
    On 10 October 2018 P&E Law also wrote a without prejudice save as to costs letter to Holding Redlich attaching a draft resolution agreement which:
    1. (a)
      advised of the applicant’s view that the works proposed under the building work approval would create a new storey in conflict with the 1980 Consent;
    2. (b)
      advised of the applicant’s view that on that issue alone, the second respondents would be required to make a new material change of use development application to carry out the building works;
    3. (c)
      made an offer to settle under r 353 of the Uniform Civil Procedure Rules 1999 by way of resolution agreement proposing that the parties agree that:
      1. the proposed building works approved by the first respondent on 19 January 2018 (the Building Works) will create an additional storey and is inconsistent with the planning consent for Cairns Aquarius dated 12 August 1980 to the extent that it limits the height of the building to 15 storeys and is certified to 16 storeys;
      2. the second respondents will not carry out the Building Works until it obtains a material change of use approval for the additional storey;
      3. the parties agree to adjourn this proceeding until after a material change of use approval pursuant to paragraph 2 is obtained or such other time as agreed by the parties in writing; and
      4. if a material change of use approval for the additional storey is obtained or the Building Works approval is cancelled, the applicant will withdraw this originating application, and
    4. (d)
      advised of the applicant’s intention to rely upon the letter as being an offer to remedy the proceeding in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333 and reserving the applicant’s right to seek costs on an indemnity basis. [6]
  3. [52]
    After an agreed extension to respond to the offer, the second respondents rejected the offer by their solicitor’s letter of 30 October 2018.  The applicants assert that the second respondents imprudently failed to accept the offer.
  4. [53]
    Many of the relevant principles have been summarised in a recent decision of the Court of Appeal of Western Australia in Ford Motor Company of Australia Limited v Lo Presti,[7]  which I distil as follows:
    1. (a)
      a Calderbank offer will not justify an award of indemnity costs unless its rejection was unreasonable;[8]
    2. (b)
      the party who makes a Calderbank offer that is rejected bears the onus of satisfying the court that it should make an award of indemnity costs in his or her favour;[9]
    3. (c)
      all the relevant facts and circumstances must be considered in determining whether a party’s rejection of a Calderbank offer was unreasonable;[10]
    4. (d)
      whilst it is neither possible nor desirable to enumerate exhaustively all the circumstances which must be taken into account in a particular case in deciding whether the rejection of a Calderbank offer was unreasonable or imprudent, ordinarily regard should be had at least to the following:
      1. the stage of the proceeding which the offer was received;
      2. the time allowed to the offeree to consider the offer;
      3. the extent of the compromise offered;
      4. the offeree’s prospects of success, assessed at the date of the offer;
      5. the clarity with which the terms of the offer were expressed; and
      6. whether the offer foreshadowed an application for … indemnity costs in the event of the offeree’s rejecting it;[11]
    5. (e)
      In determining whether or not the conduct of the respondent was “unreasonable” there is, based on the weight of recent authority at the level of Australian intermediate courts of appeal no qualification of the concept of “unreasonableness” by importing such as “manifestly”, “plainly” or “so” which suggest (if not require) a more stringent test.[12]
  5. [54]
    The 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.[13]  In Racing & Wagering Western Australia v Software AG (Aust) Pty Ltd,[14] McKerracher J, in considering the principles applicable to the exercise of the discretion to award indemnity costs in circumstances where a Calderbank offer had been made, referred to the approach taken in Alpine Hardwoods (Aust) Pty Ltd v Hardy’s Pty Ltd (No.2)[15] in following the Full Federal Court in Black v Lipovac[16] that insofar as an applicant relies upon a rejection of the offer of compromise, the applicant must demonstrate that the conduct of the respondent was imprudent or unreasonable.
  6. [55]
    In Digga Australia Pty Ltd v Norm Engineering Pty Ltd (No.2),[17] the Full Federal Court stated that the preparedness or otherwise of the unsuccessful party to contemplate a careful consideration of its legal position and to engage in sensible discussions is a relevant consideration.[18]
  7. [56]
    Mere rejection is not automatically unreasonable, even if the reasoning process to reject the offer was wrong.[19]  As McDougall J explained in Rickard Constructions v Rickard Hails Moretti:[20]

“[30] If, as decisions such as Jones v Bradley (No 2) [2003] NSWCA 258; establish, the failure to accept a Calderbank offer does not create a presumption as to indemnity costs when the offeror receives a more favourable outcome than that offered, then the corollary is that it is necessary to show that there exist sufficient circumstances to displace the general rule as to costs (where the offeror was a defendant and the offeree a plaintiff). In many cases — maybe most — that will be done by demonstrating that rejection of the offer was unreasonable in some way. In this context, I think, “unreasonable” may mean either that the rejection was not supported by any process of reasoning whatsoever or that the reasons for rejection that were advanced, or that may be inferred, were legally or factually (or both) inadequate.  Further, where an offer on its face is reasonable, then I think that it is open to infer (absent some demonstration to the contrary) that the rejection was unreasonable.  Thus, I think, where it is shown that a reasonable offer was made and rejected, and where the offeror does better than the offer, there is at least a persuasive burden on the offeree to show that its rejection of the offer was not unreasonable.

[31] Where the question to be considered is whether an offer was reasonable, or whether its rejection was unreasonable, the analysis and answer require attention to the objective rather than subjective circumstances.  It is for the party asserting reasonableness to show, by reference to the relevant circumstances objectively considered, that the offer was reasonable.  Equally, if there is a persuasive burden cast on an offeree to show that its rejection was not unreasonable, that must be shown by an objective analysis of the relevant circumstances.

[32] An offeree may not be compelled to disclose its advice, where to do so would infringe legal professional privilege. However, whilst its failure to show what its advice was in respect of an offer may not lead to an inference being drawn against it (and in some cases at least it may be possible to infer that the advice given was consistent with the course taken), nonetheless a failure to disclose advice means that one circumstance that is possibly relevant to the char I respectfully agree with that reasoning, which is apt here.  There is no exhaustive or strict rule about what the court will consider reasonable, as I turn to consider the circumstances in this case.”

  1. [57]
    Here the applicant asserts that the second respondents’ refusal of the offer was imprudent because:
    1. (a)
      the offer, in conjunction with the open letter dated 10 October 2018, demonstrated the hopelessness of the second respondents’ case with respect to the 17th storey issue and inconsistency with the 1980 Consent;
    2. (b)
      the offer was a genuine offer of a realistic compromise that benefited the second respondents as it:
      1. focused on rectifying the inconsistency with the 1980 Consent;
      2. did not include a requirement that the second respondents prepare new plans to rectify the horizontal intrusion into common property (which ultimately occurred) or alternatively (if new plans were not prepared), did not require the second respondents to amend the common property boundaries through the lodgement of a reconfiguring a lot application; and
      3. included an offer that the applicant would withdraw this proceeding, which would have caused the applicant to lose the opportunity to pursue costs, which in the applicant’s submission, had been enlivened at that time having regard to the hopelessness of the second respondents’ position;
    3. (c)
      the failure to accept the offer led to further unnecessary costs being incurred by the applicant after 30 October 2018 (being the extended date for acceptance of the offer). To this end:
      1. the second respondents were given a reasonable period, being 20 days, to consider the offer;
      2. the offer was made early in the proceeding following the without prejudice conference and prior to any other substantial steps being taken in the proceeding;
      3. the offer was a genuine attempt at settlement; and
    4. (d)
      the rejection of the offer demonstrates that the second respondents failed to confront the shortcomings of their case with respect to the creation of a 17th storey and the consequential inconsistency with the 1980 Consent.
  2. [58]
    I do not accept that the second respondents’ rejection of the offer was unreasonable in all the circumstances.  The offer was not merely about the 17th storey issue and inconsistency with the 1980 Consent.  The underlying premise of the offer was the imperative of a material change of use approval, which was neither necessary nor required. 
  3. [59]
    The offer was communicated at a stage of the proceeding when the second respondents were forced to grapple with the historical anomaly (not of their making) amidst significant uncertainty and challenge to their proposed development.  By the time the offer was made, and thereafter open for acceptance, it seems to me that the second respondents would not have reasonably understood the case strengths and weakness legally and factually, to assuredly assess prospects of success.  Indeed, as it turned out, their rejection of the offer premised on the making of a material change of use application and securing an approval, was entirely vindicated.  Contrary to the premise of the applicant’s offer, the second respondents made a successful application to change the 1980 Consent by reference to the revised building plans, which effectively rectified the historical anomaly and perpetual inconsistency between the 1980 Consent approval and the built form.  As the court observed, part of the rationale for that approval lay in the concern to reconcile the approved 15 storey building of 81 units with the certificate of classification and as-constructed building involving 16 storeys.[21]  Indeed, that course forged by the second respondents, contrary to the offer requiring a material change of use, and the decision on the minor change application, resolved the previous issues raised by the applicant’s earlier application subject of the offer. 
  4. [60]
    To the extent that the offer deals with the 17th storey issue, again, in my view, the creation of the 17th storey was contingent on the second respondents realising their proposed development after making the minor change application approval and defending the appeal in the cognate proceeding 32 of 2020.  That is, there was no utility in making any resolution (notwithstanding the material change of use premise) about a 17th storey, until the historical anomaly was investigated, and the second respondents’ proposal was affirmed in the face of the applicant’s challenge. 
  5. [61]
    In the end, the court was then invited to make the consent declaration in this proceeding 81 of 2018 declaring that the building work created a 17th storey.  By that time, so much had become plainly obvious as evidence by the timing and consensual nature of the declaratory relief.  The declaration cemented regularisation of the historical anomaly, consistent with the outcome of the cognate proceeding 32 of 2020, and in the public interest.

Orders

  1. [62]
    For these reasons, I will dismiss the applicant’s application for costs.
  2. [63]
    I will make no order for costs with the effect that each party ought bear their own costs of the proceeding, including this application for costs.

Danseur Pty Ltd v Cairns Regional Council [2022] QPEC 4

Judge DP Morzone QC

Footnotes

[1] Planning and Environment Court Act 1996 (Qld), s 59.

[2] Cf. Colgate-Palmolive Co & Anor v Cussons Pty Ltd (1993) 118 ALR 248 at 247.

[3] Planning and Environment Court Act 2016, s 10 (2)

[4] Altitude Corporation Pty Ltd v Isaac Regional Council (No 2) [2015] QPELR 139 at [25], citing Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284, Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 and Keddie v Stacks (2012) 293 ALR 764

[5] Sincere International Group Pty Ltd v Council of the City of Gold Coast (No. 2) [2019] QPELR 662 at [27]-[30].

[6] CD-30 Affidavit of Leslie Anthony Manning Exhibit “LAM-20”

[7] Ford Motor Company of Australia Limited v Lo Presti (2009) 41 WAR 1 per Buss J A (with whom Wheeler J A agreed) at [16] to [32].

[8] Lo Presti at [16]. 

[9] Lo Presti at [21]

[10] Lo Presti at [17]

[11] Lo Presti at paragraph [19] referring to the circumstances stated by the Court of Appeal of Victoria in Hazelden’s Chicken Farm Pty Ltd v Workcover Authority (Vic) (No.2) (2005) 13 VR 435 at [25].

[12] Lo Presti at [28]

[13] Nolan v Nolan [2015] QCA 199 per Boddice J.

[14] Racing & Wagering Western Australia v Software AG (Aust) Pty Ltd [2008] FCA 1526 at paragraph [16]

[15] Alpine Hardwoods (Aust) Pty Ltd v Hardy’s Pty Ltd (No.2) (2002) 190 ALR 121 at [27] – [28]

[16] Black v Lipovac (1998) 217 ALR 386

[17] Digga Australia Pty Ltd v Norm Engineering Pty Ltd (No.2) [2008] FCAFC 76 at [25] – [26]

[18] Cited in Racing & Wagering Western Australia v Software AG (Aust) Pty Ltd [2008] FCA 1526 at [17].

[19] Rickard Constructions v Rickard Hails Moretti [2005] NSWSC 481 at [28] per McDougall J

[20] Rickard Constructions v Rickard Hails Moretti [2005] NSWSC 481 at [28] per McDougall J

[21] [2020] QPEC 64, at [2].

Close

Editorial Notes

  • Published Case Name:

    Danseur Pty Ltd v Cairns Regional Council & Ors

  • Shortened Case Name:

    Danseur Pty Ltd v Cairns Regional Council

  • MNC:

    [2022] QPEC 4

  • Court:

    QPEC

  • Judge(s):

    Morzone QC DCJ

  • Date:

    04 Feb 2022

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Alpine Hardwoods (Aust) Pty Ltd v Hardy's Pty Ltd (No.2) (2002) 190 ALR 121
2 citations
Jump To
Cite 1 - (2002) 190 ALR 121
Cite 2 - (2002) 190 ALR 121
Altitude Corporation Pty Ltd v Isaac Regional Council (No.2) (2015) QPELR 139
2 citations
Jump To
Cite 1 - (2015) QPELR 139
Cite 2 - (2015) QPELR 139
Black v Lipovac (1998) 217 ALR 386
2 citations
Jump To
Cite 1 - (1998) 217 ALR 386
Cite 2 - (1998) 217 ALR 386
Cairns Aquarius [2018] QBCCMCmr 447
1 citation
Jump To
Cite 1 - [2018] QBCCMCmr 447
Calderbank v Calderbank (1975) 3 All E.R. 333
3 citations
Jump To
Cite 1 - (1975) 3 All E.R. 333
Cite 2 - (1975) 3 All E.R. 333
Cite 3 - (1975) 3 All E.R. 333
Colgate-Palmolive v Cussons (1993) 118 ALR 248
2 citations
Jump To
Cite 1 - (1993) 118 ALR 248
Cite 2 - (1993) 118 ALR 248
Danseur Pty Ltd v Cairns Regional Council [2020] QPEC 64
3 citations
Jump To
Cite 1 - [2020] QPEC 64
Cite 2 - [2020] QPEC 64
Cite 3 - [2020] QPEC 64
DeGiorgio v Dunn (No.2) (2005) 62 NSWLR 284
1 citation
Jump To
Cite 1 - (2005) 62 NSWLR 284
Digga Australia Pty Ltd v Norm Engineering Pty Ltd (No.2) [2008] FCAFC 76
2 citations
Jump To
Cite 1 - [2008] FCAFC 76
Cite 2 - [2008] FCAFC 76
Ford Motor Company of Australia Limited v Lo Presti (2009) 41 WAR 1
7 citations
Jump To
Cite 1 - (2009) 41 WAR 1
Cite 2 - (2009) 41 WAR 1
Cite 3 - (2009) 41 WAR 1
Cite 4 - (2009) 41 WAR 1
Cite 5 - (2009) 41 WAR 1
Cite 6 - (2009) 41 WAR 1
Cite 7 - (2009) 41 WAR 1
Hazeldene's Chicken Farm Pty Ltd v Victorian Work Cover Authority (2005) 13 VR 435
1 citation
Jump To
Cite 1 - (2005) 13 VR 435
Jones v Bradley (No 2) [2003] NSW CA 258
1 citation
Jump To
Cite 1 - [2003] NSW CA 258
Keddie v Stacks (2012) 293 ALR 764
1 citation
Jump To
Cite 1 - (2012) 293 ALR 764
Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300
1 citation
Jump To
Cite 1 - (2005) 63 NSWLR 300
Nolan v Nolan [2015] QCA 199
2 citations
Jump To
Cite 1 - [2015] QCA 199
Cite 2 - [2015] QCA 199
Racing & Wagering Western Australia v Software AG (Aust) Pty Ltd [2008] FCA 1526
3 citations
Jump To
Cite 1 - [2008] FCA 1526
Cite 2 - [2008] FCA 1526
Cite 3 - [2008] FCA 1526
Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2005] NSWSC 481
3 citations
Jump To
Cite 1 - [2005] NSWSC 481
Cite 2 - [2005] NSWSC 481
Cite 3 - [2005] NSWSC 481
Sincere International Group Pty Ltd v Council of the City of Gold Coast (No.2) [2019] QPELR 662
2 citations
Jump To
Cite 1 - [2019] QPELR 662
Cite 2 - [2019] QPELR 662

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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