For the last 22 years, the general rule in relation to costs in the Planning and Environment Court has been that each party bear its own costs. The Court has had a discretion to award costs in certain circumstance (usually if it determined that the proceedings were frivolous or vexatious), however this discretion was sparingly exercised.

The existing costs regime has facilitated a jurisdiction in which those who could not ordinarily afford to take the risk of being lumbered with a costs order in the event they were unsuccessful at trial, can actively participate. It is common place for affected residents or land owners who had made properly made submissions against a development application to exercise their rights to appeal an approval issued by Council to the Planning and Environment Court, often without representation by solicitors. For Councils, who are automatically party to most proceedings before the Planning and Environment Court, the existing costs regime has generally been accepted on the basis that successful results are balanced by losses in Court.  Developers have also benefitted from a co-operative environment where problems with their proposed developments can be addressed by minor changes often proposed by independent experts engaged by opposing parties in the proceedings.

The decision for submitters to file an appeal and the decision by Councils to defend an appeal or originating application (to a hearing stage) will be complicated by amendments proposed to the current costs regime by the Sustainable Planning and Other Legislation Amendment Bill 2012, which was introduced to Parliament on 13 September 2012. The Bill introduces a significant reform to the Planning and Environment Court’s power to award costs, bringing it into line with the Supreme and District Court by providing that costs follow the event.

This broadening of the Court’s discretion in relation to costs will be enlightened by anticipated amendments to the Planning and Environment Court Rules 2010. Until then, there is growing speculation questioning whether access to justice in the Planning and Environment Court will be eroded if the Bill is enacted in its current form and more significantly for Council’s, whether this will result in situations where important decisions concerning the protection of Planning Schemes will be heavily influenced by the risk of an adverse costs order which in some significant appeals could reach into the millions of dollars. Concern also exists that the parties’ co-operative nature with respect to making changes to development applications will be diminished if the consequence of an appeal being allowed is an adverse costs order against the respondent Council. Removing the incentive for parties to negotiate and achieve good planning outcomes through changed applications would destroy a fundamental pillar of the Planning and Environment Court.

This information is intended to provide a general summary only and should not be relied on as a substitute for legal advice.

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