Re Section 11a of the City Area Leases Ordinance 1936 and Re An Application By Tekmat Investments (Formerly Axiom) Pty Limited To Vary the Provisions of the Crown Lease Relating To Block [1987] ACTSC 77 (27 November 1987)

SUPREME COURT OF THE ACT

IN THE MATTER of Section 11A of the CITY AREA LEASES ORDINANCE 1936 AND IN THE
MATTER of an application by TEKMAT INVESTMENTS (formerly AXIOM) PTY LIMITED to
vary the provisions of the Crown Lease relating to Block 1 Section 24 Division
of TURNER in the AUSTRALIAN CAPITAL TERRITORY
S.C. No. 665 of 1985
Order for Costs

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Kelly J.(1)

CATCHWORDS

Order for Costs - Vacation of order before drawn up and entered - Reconsideration - Application for variation of purposes clause in Crown Lease under s.11A City Area Leases Ordinance 1936 - Objectors unsuccessful - Minister playing active role for most of application - Whether objectors entitled to costs - Whether Minister entitled to his costs - Principles applicable.

Millensted v. Grosvenor House (Parklane) Limited (1937) 1 KB 717

Pittalis v. Sherefettin (1986) 2 All ER 227.

In the matter of an application by Anthony Hordern & Sons Limited and Others (1963) 9 LGRA 190

Re Bailey's Application and re Australian Capital Press Holding Ltd's Application (1966) 10 FLR 175.

Re Warmac Dickson Pty Limited's Application, 10 October 1969 and 13 February 1970, A.C.T. Supreme Court, Kerr J (unreported).

Re Yackam Pty Limited's Application, 29 June 1979, A.C.T. Supreme Court, Connor J (unreported).

Morpath Pty Limited v. A.C.T. Youth Accommodation Group Incorporated (1987) 74 ALR 121.

HEARING

CANBERRA
27:11:1987

ORDER

The orders for costs made herein on 5 November 1987 should be vacated.

The applicant should pay the Minister's taxed costs of and incidental to the reference to the bench of three Judges together with the sum of $50, otherwise the Minister to bear his own costs.

The applicant pay the taxed costs of the objectors, other than those of ACT Youth Accommodation Group Incorporated.

DECISION

On 1 July 1985 Axiom Pty Ltd (it has since changed its name to Tekmat Investments Pty Limited) (Tekmat) made application under s. 11A of the City Area Leases Ordinance 1936 (the Ordinance) that the purposes clause of its lease from the Commonwealth of Australia of land known as Block 1, Section 24, Division of Turner should be varied. Within the 21 days prescribed by s. 11A(6) 17 notices of intention to oppose the application were filed with the Registrar. One of the 17 notices was given by A.C.T. Youth Accommodation Group Incorporated (ACT Youth). As s. 11A(6) requires, each notice of intention to oppose stated the grounds of opposition.

2. When the application came on to be dealt with initially all who had given notice of intention to oppose sought leave to be heard in opposition to it. What happened then is summarised in Re Axiom Pty Limited (1986) 66 ACTR 1 at p 9 as follows:-

"Mr Arthur (counsel for Tekmat) submitted

that the National Capital Development
Commission (the Commission) was the only
authority in which was vested the function of
the planning which necessarily included the
town planning of the City of Canberra. It
followed, he said, that no construction of
s. 11A which empowered the Court to have
regard to town planning considerations when
dealing with an application for variation
under the section was available. He conceded
that some of the grounds particularised in
the notices of intention to oppose filed by
all objectors but A.C.T. Youth were valid."

3. Thereafter, having heard argument in which counsel for the Minister elected to take no part, I reserved my decision but a week later ordered, pursuant to s. 8AB(3) of the Australian Capital Territory Supreme Court Act 1933, that the jurisdiction of the Court in relation to the applications for leave to object to the application for variation should be exercised by a bench of three Judges. In due course, on the hearing of that reference, submissions were put by counsel on behalf of the Minister, by counsel on behalf of ACT Youth, by counsel appearing on behalf of 15 of the 16 objectors earlier referred to and instructed by the same solicitor and by one objector in person.

4. Eventually ACT Youth's application for leave to be heard in opposition to the application for variation was dismissed, leave to be heard in opposition to the application was granted to all 16 of the remaining objectors, the further hearing of the application for variation was remitted to me and any question of costs of the reference under s. 8AB(3) of the A.C.T. Supreme Court Act 1933 was reserved to me.

5. When the matter came again before me, all 16 objectors appeared by the same counsel instructed by the same solicitor.

6. In the result the contest between the parties was confined to the following grounds:-

"1. The variation sought by the applicant is
repugnant to the principles for the time
being governing the construction and
development of the City of Canberra.
2. There are no conditions existing as make
it desirable to vary the provisions in order
that the reasonable user of the land should
not be impeded.
3. Use of the land for any purpose other
than residential will adversely affect the
residential amenity of residents in the
immediate vicinity.

Particulars

(a) There has been no or no adequate planning
for overspill carparking from Civic into
adjoining residential areas.
(b) The onsite carparking for the land in
question as set out in NCDC Policy Plan
Development Plan dated October 1984 and in
the proposed variation does not provide
sufficient carparking for people who work in
the proposed building let alone people who
will be visiting the proposed development.
(c) If the development is allowed to proceed
there will necessarily be a worsening of the
car parking and traffic flow problems in the
area.
(d) The public transport system is not
adequate and therefore cannot provide a
solution to the lack of planning for
carparking and traffic flow in the area.
(e) The proposed development and its
consequent addition to the carparking and
traffic flow problems will adversely affect
the beauty and tranquillity of the area."

7. On 17 July 1987, I granted the application for variation. I reserved the question of costs.

8. On 5 November 1987 I heard argument on the question of costs and immediately ordered that Tekmat should pay its own costs, that the 16 objectors should pay their own costs, Tekmat should pay the Minister's costs of the reference to the bench of three Judges but that otherwise the Minister should pay his own costs.

9. In making these orders I accepted the submission made by counsel for Tekmat that upon its true construction s. 11A(7) of the Ordinance which reads:-

"The applicant for variation shall pay his
own costs and, if the Court so orders, the
full costs of any other person appearing in
pursuance of this section."

meant that an applicant must in any event pay his own costs of an application but that the costs of others appearing to oppose his application should be dealt with as in the ordinary adversary situation. It followed, so the submission went, that the ordinary rule that costs follow the event should apply and, the objectors having failed, they should be required to bear their own costs. I took the view also that the Minister should have his costs of the reference to the bench of three Judges since that reference raised a question of considerable importance to the administration of the City of Canberra and the Minister was, in my opinion, entitled to put submissions in that behalf. Counsel for the Minister had sought that Tekmat should pay one quarter of the Minister's taxed costs of the whole of the action.

10. Having made those orders I reflected on the matter overnight and came to the conclusion that I may have erred in accepting the interpretation of s. 11A(7) propounded by counsel for Tekmat. Accordingly, on 6 November 1987, I had the matter restored to the list and indicated that I entertained doubts as to the correctness of my decision the day before. I asked that the matter be listed for further consideration and on 11 November 1987 heard further argument. I proceeded on the basis that, should it be appropriate, the orders made on 5 November 1987 could be vacated in the exercise of a power to alter a judgment at any time before the judgment had been drawn up and perfected. See Millensted v. Grosvenor House (Parklane) Limited (1937) 1 KB 717 and Pittalis v. Sherefettin (1986) 2 All ER 227.

11. Counsel for Tekmat did not contend that such a power did not exist and I proceeded to hear argument on the basis that should I finally reach the conclusion that I had erred I would vacate the orders which I had made and which had not been drawn up or perfected.

12. There have been a number of applications under s. 11A of the Ordinance in respect of which orders for costs have been made and, commonly, when such applications are not opposed, an order that the applicant pay the Minister's costs in a nominal or comparatively nominal sum is made.

13. In In the matter of an application by Anthony Hordern & Sons Limited and Others (1963) 9 L.G.R.A. 190, Dunphy J granted three applications for variation of the purposes clauses of the crown leases of three adjoining parcels of land. Leave had been given to one opponent to object on what I may describe as commercial grounds and to a couple living nearby on what I may describe as personal grounds. His Honour ordered that the three applicants should together pay costs, which he assessed, of the commercial objector and the full costs of the personal objectors. He gave no reasons for the orders he made for costs but it is instructive to consider some of his remarks in the case. He found that the motivating reason for the commercial objector's appearance in the proceedings was in reality the fact that the land upon which its nearby motel was erected had been leased to it for 30 years and that if a motel were built upon the land the subject of the several applications the real applicant would take over the unexpired residue of the term of the lease from the Commonwealth of each of the parcels of land, so gaining a substantial advantage. The exact length of those residues does not appear from the report but it is obvious that each would have been much in excess of 30 years. He acknowledged (at p. 216) that the commercial objectors had

"brought to the forefront, a particular point
of view and ha(d) raised some issues which,
although rejected, ha(d) given counsel
engaged and (him)self cause to think about
the implication of the legislation and the
limits and bounds of procedure and, to that
extent, his objection had been of value in
. . . the first contested application ... for
variation".

Of the personal objectors he said, at pp. 216-7:-

"The granting of the application will not
cause them to leave (their home) unless they
are unable to put up with the presence of a
motel as their next door neighbour. This
will not be due to any positive physical
nuisance from the motel, but almost entirely
due to an assault upon their sensibilities by
its presence. They really say 'Let us live
where we are until 1970 and deny our
neighbours the right to sell on present terms
till that date'. Should I uphold their
objection on this basis against the rights
and wishes of three neighbours who are
willing and anxious to sell and whose wishes
will be frustrated and rights abrogated by
such a decision?"

14. It seems to follow from His Honour's reasons as given that, despite what he considered to be the lack of merits of their objections, he so construed s. 11A(7) as to find that it meant that the objectors were entitled in the circumstances to have their costs, in the one case a large part of them, in the other their full costs. His Honour obviously did not accept the view that costs should follow the event (in the limited way allowed by the subsection for objectors cannot be required to pay an applicant's costs).

15. It follows, therefore, that His Honour appears to have construed s. 11A(7) in such a way as to indicate a benevolent attitude to objectors as against applicants for variation.

16. About three months later, Eggleston J considered applications under s. 11A of the Ordinance in Re Bailey's Application and re Australian Capital Press Holding Ltd's Application (1966) 10 FLR 175. The only objector to the application was the company which I have described as the commercial objector in the earlier application. His Honour allowed the Minister a nominal sum, that being all that had been sought by counsel on his behalf. Dealing with an application for costs by the objector he said:-

"I think all the matters which the objector
urged before me were matters which might have
been urged in previous applications and were
not. I do not feel that that particular
objector contributed anything more than some
hurdles to be surmounted before the race
could be completed and in the circumstances I
do not propose to allow that objector any
costs of these applications."

17. Counsel for the objector had submitted that the language of sub-section (7) was rather different from the language used usually in costs provisions because it provided that an applicant for variation should pay his own costs. He submitted that, there being no question of an unsuccessful objector having to pay an applicant's costs, the Court should, unless an objection raised was a frivolous one, grant an objector his costs; this in order to protect fully the rights of parties who thought that "they ha(d) a legitimate claim to come before the Court to try to protect their rights".

18. Counsel submitted that the case had been the first in which the interpretation of the words "reasonable user of the land" had been considered and that the argument submitted in respect of that expression had been of great benefit to the Court and would continue to be of benefit.

19. Counsel for the Minister submitted that counsel for the objector had put correctly the broad view as to the application for costs in the matter.

20. It seems plain that His Honour interpreted the sub-section to mean that the repetition of arguments that had failed when used previously or the taking of objections which might have been taken on an earlier occasion would result in an objector's being required to pay his own costs.

21. In Warmac Dickson Pty. Limited's Application in respect of which judgment (unreported) was given on 10 October 1969, Kerr J heard applications for costs on 16 and 18 December 1969. On 13 February 1970 he handed down his decision, making no order as to costs.

22. In respect of the Minister's application for costs, his Honour pointed out that the Minister had not filed a certificate under s.11A(2)(b) stating that in his opinion the variation sought would be repugnant to the principles for the time being governing the construction and development of the City of Canberra. Such a certificate would have brought the Supreme Court proceedings to an end. Instead the Minister elected to oppose the application for variation on a number of other grounds. Of six other objectors, five were what I may describe as commercial objectors, while the sixth objected on the ground that granting of the variation would be contrary to the principles of the leasehold system of land tenure in the Australian Capital Territory. The Minister was represented by counsel while the other six objectors were all represented by another counsel.

23. Kerr J considered the Minister's application for costs on the basis that the Minister had fought the case as a litigious adversary setting out to defeat the applicant if he could, putting tactical considerations, such as were appropriate in adversary litigation, in the forefront of the conduct of his case. His Honour referred to what had been called the practice of the Court always to grant the Minister his costs in applications of the type, whether he supported or opposed the application or was neutral, appearing only to help the Court. The practice was said to have been based on the desirability of always having the Minister present in s.11A cases to help the Court and of not discouraging him from appearing. His Honour considered that in the ordinary case the practice was a good one which should be followed but he considered that when he put himself fully in the position of a litigious adversary the Minister ran the risk of not getting his costs if unsuccessful. His Honour went on to say that he did not mean to say that this would be the case whenever the Minister opposed an application. On the contrary, he said, the practice of awarding the Minister his costs would apply in all cases of opposition when that opposition was made pursuant to an overriding objective of helping the Court. However, he considered the case a special one where the Minister had elected to play the role of a litigious adversary in its full sense and left him as an unsuccessful party to bear his own costs. His Honour dealt with the private objectors' applications for costs by saying that they had fought a hard and detailed case as litigious adversaries taking every point of law conceivably open to them and joining issue on all questions of fact. He could see no reason why they should not bear their own costs.

24. In In the matter of an application by Yackam Pty Limited in which judgment (unreported) was handed down on 29 June 1979, Connor J dealt with an application for variation of the purposes clause of land at Phillip. There were 12 objectors who gave notice of intention to oppose the application on five grounds, two in common form. The remaining grounds were as follows: -

"(a) the variation of the purpose clause
would introduce businesses and purposes
that are inconsistent with the general
character of the Phillip area;
(b) there are insufficient parking and
traffic facilities to cope with the
proposed purpose clause should that
clause be varied by (the) Court;
(c) A variation in the purpose clause as
proposed materially prejudices other
properties in the general area having
similar purpose clauses to the clause
sought to be varied."

25. His Honour dealt with one of the common form grounds and that identified as (a) above by rejecting summarily the assertions made in those grounds, having regard to the evidence led. He then rejected the second common form ground on the evidence and dealt with ground (b) by saying that he was satisfied on the unchallenged and uncontradicted evidence that there was ample parking space for vehicles in the area. He dealt with the last ground by saying that there was a very real question whether, if prejudice were shown, it would necessarily be a proper ground on which to uphold an objection. He did not decide that question, however, being satisfied that the only basis upon which the ground was put was not made out on the evidence. His Honour therefore granted the application, ordered the applicant to pay the Minister's costs in the conventional amount and made no order as to costs of the objectors. He gave no reason for the order made in respect of the costs of the objectors but it is plain that it must have been on the basis of his peremptory dismissal of the case they sought to make.

26. In Re an application by Idonz Pty Limited dealt with on 1 April 1987 the opponents of the application withdrew at an early stage. There followed some discussion on the question of costs during the course of which I remarked,

"The Court starts off with a bit of bias in
favour of objectors under the legislation"

27. During the course of my reasons for judgment on the application for variation I indicated that I accepted that to some degree the peace of the neighbourhood was disturbed by traffic and rubbish collection and that the inference might reasonably be drawn that another (commercial) building in the vicinity would increase traffic problems and raise the level of noise. I accepted further evidence that there was already in the street where one of the objectors lived an overflow of parking by people who worked in Civic or in the Australian National University. I concluded that the grant of the application for variation would adversely affect, although to a limited degree, the residential amenity of residents in the immediate vicinity.

I also said: -
" . . . the proposals for redevelopment now in
hand the redevelopment which has already
occurred now places and will place upon the
public transport system a continuing and
growing burden which will not immediately be
met from available resources. They will also
cause what I think will be quite serious
parking problems so that there will be a
substantial overspill of parked cars. . . . The
Commission and the Department appreciate that
a permanent solution (in respect of parking)
will take time to achieve and accept that in
the meantime there will be an overspill into
suburbs. . . . the public transport system will
in the not too distant future if development
continues at its present rate in the city
area become quite inadequate and . . . parking
will continue to be a problem in that area."

28. I then expressed myself as satisfied that further applications for variation of purposes clauses within the city area and adjacent suburbs must be carefully looked at to ensure that they meet the tests required by s.11A. I indicated that had the matters fallen to be decided without the benefit of the interpretation of the section given by the Federal Court in Morpath Pty Limited v. ACT. Youth Accommodation Group Incorporated (1987) 74 ALR 121, it was probable that I might have refused the application on the evidence before me at the point. Subsequent evidence indicated that vigorous efforts had been made to deal with the parking and traffic problems which were in existence. Finally I expressed myself as satisfied on balance but just on balance that it was proper to permit the variation sought.

29. In Morpath Pty Limited v. Youth Accommodation Group Incorporated (supra) Beaumont J, with whom Fisher and Davies JJ concurred, said, at p 139:-

"It is evident from the context, scope and
purpose of the Ordinance, and s 11A in
particular, that the discretion vested in the
court under s 11A is to be exercised in the
public interest having due regard to the
interest of adjoining occupants in the local
amenities."

At p.140, he said:-

". . . (the wide statutory discretion conferred
by s 11A(1)) should be exercised in the
public interest, balancing society's interest
in the fullest use of land against the
interests of local occupants in their
amenities."

30. Counsel for the applicant submitted in the course of his detailed and attractive argument that although s.11A(7) provided that in any event an applicant for variation should pay his or her or its own costs it was not to be construed as meaning that the costs of others, the Minister and objectors, were to be dealt with in some way different from that which would follow on the application of ordinary principles regarding payment of costs. He said that costs normally follow the event and there was no reason why that rule should not apply when objectors failed to defeat an application for variation, bearing in mind, of course, the provision regarding an applicant's costs. He submitted that had the legislature intended that a more liberal approach to the payment of objectors' costs should be made than was ordinarily the case, the section would have used the word "unless" instead of the word "if".

31. It seems to me that, in general, where local residents, reasonably and properly, advance with some degree of success arguments against an application for variation they ought not to be deprived of their costs or at least of a substantial part of them unless the arguments they advanced have already been the subject of authoritative decision or decisions applicable in all the circumstances to the circumstances of the objectors.

32. Detailed consideration of the approach taken by other Judges of the Court and further consideration of the language used in sub-s.(7) lead me to conclude:-

(a) The Minister is entitled to that proportion of his
costs necessarily involved in his assisting the
Court whether by indicating that he does not
object to the proposed application or by the
leading of evidence and the making of submissions
which assist the Court in establishing the correct
principles to be followed in relation to a
particular application for variation.
(b) If the Minister chooses to adopt the role of
adversary in respect of an application for
variation without filing a Certificate under
s.11A(2)(b) and fails he may expect to be ordered
to pay his own costs.
(c) Where an objector makes out a substantial, even
though in the event unsuccessful, case against an
application for variation the Court is not bound
to follow the ordinary rule as to costs but may in
the proper exercise of its discretion order that
the costs of the objector or part of them should
be paid by the applicant. An objector is unlikely
to have an order for costs made in his favour if
he merely advances arguments which have been dealt
with by the Court before or if he fails to adduce
any sufficient evidence which goes at least some
distance towards proving, even if in the event
inadequately, a ground or the grounds upon which
he seeks to rely.
(d) Regard may be had to the fact that an unsuccessful
objector may recover compensation from the
applicant pursuant to the provisions of s.11A(8).

33. Of course, in the instant application no case for compensation was sought to be made. In the result I am satisfied that the objectors did make out to some degree the case they sought to make. There has to be taken into account, too, the fact that a not insubstantial amount of the costs of the application was incurred because the applicant sought to limit the jurisdiction of the Court in applications under s.11A with the result that the matter was referred to a bench of three Judges.

34. It has to be borne in mind, also, that the Minister took an active part in supporting the application for variation when evidence came to be led. In doing this, he was seeking, as I saw it, to support departmental and Commission policy.

35. In the result, therefore, I think that in this case, having regard to the way the evidence fell and the not insubstantial case made by the objectors, the proper order is that the objectors should have their costs against the applicant. I see, however, no reason why the order which I made earlier that the Minister should have his costs of and incidential to the reference to the bench of three Judges under s.8AB(3) of the Supreme Court Act 1933 should be varied except that I think that I should add an order that the conventional sum of $50 normally ordered to be paid to the Minister by a successful applicant when an application is unopposed should be paid him.