SUPREME COURT OF File No 1621 of 1993

BETWEEN:

THOMAS TAN Applicant - First Defendant

AND:

BONNYSIDE PTY LTD ACN 010 729 Applicant - Second 085 Defendant

AND:

COUNCIL OF THE CITY OF GOLD Respondent - First Third COAST Party

AND:

COUNCIL OF THE SHIRE OF Respondent - Second Third BEAUDESERT Party

MOYNIHAN J - ORDER FOR COSTS

ORDER AS TO COSTS DELIVERED: 27 June 2000

JUDGMENT DELIVERED ON: 5 June 2000

HEARING DATE: No appearance required - written submissions as to costs submitted to the Court.

ORDER: 1. The Third Party action against the Second Third Party is dismissed.

2. The First Third Party should pay: a. the Applicant's and the Second Third Party's costs of the application to be assessed on the standard basis; and, b. the Second Third Party's costs of and incident to its joinder as a third party to be assessed on the standard basis.

SUBMISSIONS: Mr KN Wilson - for the First and Second Defendants Mr WG Everson - for the First Third Party Mr RN Traves - for the Second Third Party

[1] It is necessary to dispose of the costs of the separate determination of a question pursuant to Chapter 13 Part 5 of the Uniform Civil Procedure Rules.

[2] The applicants, the defendants in the action, sought a separate determination as to which of the respondents (the first third party - the Gold Coast City Council or the second third party - the Council) had succeeded to the liabilities of the former Albert Shire Council.

[3] The application was brought in an action where the plaintiff sued the applicants for breach of contract or negligence in the construction of a dwelling house. The applicants sought to attribute liability to the Albert Shire Council or its officers. That Council had, however, been abolished.

[4] The applicants being uncertain as to which of the Gold Coast City or Beaudesert Shire Councils had acquired the Albert Shire Council's liability, joined each as a third party. Each of the third parties then contended that the other had acquired the liability.

[5] For reasons which I published on 5 June, I decided that the Gold Coast City Council had succeeded to the Albert Shire Council's liability in respect of the plaintiffs claim with the consequence that the respondent Beaudesert Shire Council (the second third party) should be dismissed from the action.

[6] I made provision for written submissions as to costs. These have now been received. The submissions do not cite any specific provisions of the rules or any cases.

[7] The applicants submit that their costs of determination of the separate question should be paid by the Gold Coast City Council as should the Beaudesert Shire Council's costs of the action and the application.

[8] The Beaudesert Shire Council submits the applicants should pay its costs of the action, including the application for separate determination on the basis that they have been unsuccessful in their claims against it. It makes no submission as to any order for costs as between the applicants and the respondent Gold Coast City Council.

[9] The Gold Coast City Council submits that the appropriate costs orders are that the applicants pay the Beaudesert Shire Council's costs of the action and the application; and, that as between the applicants and the Gold Coast City Council, the costs of the application for separate determination should be costs in the cause. In support of this, it is submitted that it would be unjust to require the Gold Coast City Council to pay the applicant's costs since it might fail in their claim against it.

[10] The determination of the separate question should in my view be treated as a distinct event for the purpose of dealing with costs. The Gold Coast City Council should therefore pay the applicants and the Beaudesert Shire Council's costs of the application.

[11] As a result of the successful application the Beaudesert Shire Council is dismissed from the action and should have its costs. In my view its costs of the action should be paid should be paid by the Gold Coast City Council because the latter Council unsuccessfully contented that the Beaudesert Shire Council rather than it were liable if the applicants were successful in making out a case against the former Albert Shire Council. The issue of costs as between the third party Gold Coast City Council and the defendant respondents as a consequence of the outcome of the trial is in my view a separate consideration.

[12] I therefore order:— 1. The first third party has succeeded to the liabilities of the Albert Shire Council.

2. The third party action against the second third party is dismissed.

3. The first third party to pay:

(a) the applicant defendants' and the second third party's costs of application to be assessed on the standard basis; and,

(b) the second third party's costs of and incidental to its joinder as a third party to be assessed on the standard basis.

SUPREME COURT OF QUEENSLAND File No 1621 of 1993

BETWEEN:

THOMAS TAN Applicant - First Defendant

AND:

BONNYSIDE PTY LTD ACN 010 729 Applicant - Second 085 Defendant

AND:

COUNCIL OF THE CITY OF GOLD Respondent - First Third COAST Party

AND:

COUNCIL OF THE SHIRE OF Respondent - Second Third BEAUDESERT Party

MOYNIHAN J - REASONS FOR JUDGMENT

DELIVERED ON: 5 June 2000

HEARING DATE: 16 December 1999 ORDER: The Council of the City of the Gold Coast has succeeded to the liabilities of the Council of Albert in respect of the plaintiffs claim

CATCHWORDS:

LOCAL GOVERNMENT - Ordinances, regulations and by-laws - application of Local Government (Albert, Beaudesert and Gold Coast) Regulation 1994 - whether Council of the or Council of the Shire of Beaudesert succeed to the liabilities of former Albert Shire Council

COUNSEL Wilson for the applicants Mr G Gibson QC with Mr W Everson for the respondent (first third party) Mr RN Traves for the respondent (second third party) Gadens Lawyers for the applicants SOLICITORS Witheriff Nyst for the respondent (first third party) Messrs Barry & Nilsson Lawyers for the respondent (second third party)

[1] The question for determination on this application is which of the Council of the City of Gold Coast (the First Third Party) and the Council of the Shire of Beaudesert (the Second Third Party) has succeeded to the liabilities of the Council of the in the following circumstances.

[2] The plaintiff sued the first and second defendants for breach of contract or negligence as a consequence of the structural inadequacy of a house built for the plaintiff. At the time of its construction, the land on which the house was constructed was in the Albert Shire. That Council issued the relevant building approval and its officers inspected the construction work on a number of occasions. In the event that they are found liable to the plaintiff, the first and second defendants seek to recover contribution on the basis that the Albert Shire Council (by its officers) negligently approved the building work and carried out the inspections. [3] The Albert Shire has however been abolished in circumstances to be canvassed shortly. The Local Government (Albert, Beaudesert and Gold Coast) Regulation 1994 became law from 22 March 1995; the “changeover day”. The Regulation abolished the areas of the City of Gold Coast and of the Shire of Albert and created a new local government area known as The City of the Gold Coast consisting of the abolished City of Gold Coast and Shire of Albert. It also changed the external boundary of the new City of Gold Coast by excluding a designated “area A” and including it in the Shire of Beaudesert. The plaintiffs land is in area A. In those circumstances the defendants instituted third party proceedings against the third party Councils on about 8 December 1998.

[4] There is no provision of the Regulation which specifically provides as to which of the Gold Coast or Beaudesert Councils become responsible for the liability of the former Albert Shire Council which is in issue here. The Regulation however dealt with liabilities. I should mention that it was common ground that “liabilities” as referred to in the regulations should be interpreted to include the claims made by the defendants against the third parties. By regulation 27, the Gold Coast City Council and the Beaudesert Shire Council were to jointly consider the liabilities of each that were to become the liabilities of the other. If they reached agreement a schedule identifying the assets and liabilities was to be prepared for gazettal. If they did not reach agreement within six months after 22 March 1995 the Minister could identify the relevant liabilities and prepare a gazette notice. In either case, upon gazettal the liability of the affected local government stated in the gazette notice become a liability of the new local government. It was, however, common ground that these provisions have not been availed of.

[5] Moreover regulations 69 and 70 provide:

“69. A legal proceeding by or against a merging local government that is not finished before the changeover day may be continued and finished by or against the new local government.”

“70.(1) This section applies to a legal proceeding by or against a local government that -

(a) relates to area A or B; and

(b) is not finished before the changeover day; and

(c) is identified by the Minister by Gazette notice.

(2) The legal proceeding may be continued and finished by or against the local government controlling the area after the changeover day.”

It is common ground these provisions do not apply since the third party proceedings were not commenced until after the changeover day and there has been no gazettal in terms of regulation 70(1)(c).

[6] Absent a specifically applicable provision the question of which of the Gold Coast Council or the Beaudesert Shire Council has acquired the liability of the Albert Shire Council has to be determined in accord with general principles of statutory interpretation.

[7] The following definitions contained in regulation 4 are relevant:—

“merging local government” means -

“(a) before the changeover day -

(i) the existing Gold Coast City Council; or

(ii) the existing Albert Shire Council; or

(b) from the changeover day -

(i) the abolished Gold Coast City Council; or

(ii) the abolished Albert Shire Council.”

“new area” means - (a) before the changeover day -

(i) the existing area of the City of the Gold Coast; and

(ii) the existing area of the Shire of Albert (excluding area A); and

(ii) area B; or

(b) from the changeover day -

(i) the abolished area of the City of the Gold Coast; and

(ii) the abolished area of the Shire of Albert excluding area A);

(iii) area B.”

“new local government” means:

“the local government for the new area from the changeover day.”

[8] Part 2 of the Regulation is concerned with “Implementation of Reviewable Local Government Matters”. The reference to reviewable local government matters is to the implementation of recommendations made in a report which the Regulation is designed to implement: see regulation 3. Regulations 5 and 6 of the Part provide:—

“City of the Gold Coast

5.(1) The existing areas of the City of Gold Coast and the Shire of Albert are abolished.

(2) A new local government area is created from the abolished ares.

(3) The external boundaries of the new area changed by -

(a) excluding area A; and

(b) including area B.

(4) The new area is a City. (5) The name of the new area with the external boundaries as changed is Gold Coast.

(6) The area shown delineated on map no. LGB 58 edition 2, held by the department, is the City of Gold Coast.”

“Shire of Beaudesert

6.(1) The external boundaries of the Shire of Beaudesert are changed by -

(a) excluding area B; and

(b) including area A.

(2) Map no. LBG 12 edition 2, held by the department, shows the Shire of Beaudesert with area B excluded and area A included.”

It may be noted that the changes are in terms of “areas” and area A is excluded from the area of the City of Gold Coast and included in that of the Beaudesert Shire.

[9] Part 4 of the Regulation contained “General Provisions to Implement Reviewable Local Government Matters for New Area” It contains regulations 19 and 26 which provide:

“19(1) The new local government is the successor of the merging local governments.

(2) The other provisions of this Part do not limit subsection (1).

(3) However, subsection (1) applies subject to the provisions of this regulation about Area A and B.”

“26 All assets and liabilities of each merging local government become assets and liabilities of the new local government.”

[10] Part 5 of the Regulation makes “General Provisions to Implement Renewable Local Government Matters for Area A”. The part makes provision to the effect that the Beaudesert Shire Council may continue to perform the function and exercise the powers previously conferred on the Albert Shire Council with respect to land in area A, the local laws and planning scheme of the Albert Shire Council continue to apply to it and the Beaudesert Shire Council receives the rate revenue for it: see regulations 56-63. It should also be noted that the records for area A become the records of the Beaudesert Shire: regulation 66(2); and, reference to the Albert Shire Council in the relevant building permit is to be taken as a reference to the Beaudesert Shire Council: regulations 66 and 68(2). Absent the application of any other regulation the liability here seems to come within regulation 26. The Regulation characterises the liabilities it is dealing in terms of local government not in terms of areas. It has the consequence that the Gold Coast Council acquires the liabilities of the Albert Shire Council. This outcome is in my view supported by regulations 19, 69 and 70. It is true that regulation 19(3) subjects si 17 to the regulations provisions about area A. I have outlined the provisions of Part 5. I do not understand those provisions to have the consequence of passing the Albert Shire Council's liability here. Had the proceedings been commenced before changeover day they would have continued against the Gold Coast Council. The considerations being those I have outlined, the Council of the City of the Gold Coast has succeed to the liabilities of the Council of Albert in respect of the plaintiffs claim. Regulation 70 specifically provides for proceedings in respect of area A but on conditions not fulfilled here.

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