Court of Appeal (Qld)|1994-06-28|Before: Before Fitzgerald P, McPherson JA, Shepherdson J, As McPherson JA, Fitzgerald P

Anghel v Minister for Transport (No 2) [1994] QCA 232 (28 June 1994)

IN THE COURT OF APPEAL [1994] QCA 232

MINISTER FOR TRANSPORT AND MINISTER ASSISTING THE PREMIER ON ECONOMIC AND TRADE DEVELOPMENT

I agree with his Honour that the primary judge's power to award costs was not his general power to do so but the specific power conferred by section 49 of the Judicial Review Act 1991. The respondents had made a "costs application" under subsection 49(1) prior to the appellant's application to have their application for judicial review stayed or dismissed under section 48 of the Act, and they were entitled to have the position with respect to costs determined in accordance with subsections 49(1) and (2), which are set out in McPherson J.A.'s reasons for judgment.

As his Honour states, those provisions enable costs orders more favourable to the respondents than would ordinarily be appropriate under the general law. I should add that I consider that subsection 49(1)(d) is wide enough to permit an order for costs on a solicitor and client basis, and is not confined to an order for costs "on a party and party basis". There is no sufficient reason why the larger power should not include power to make the more limited order. Further, I agree with McPherson J.A. that an order for costs made under subsection 49(1)(d) is not limited to costs incurred after the order with respect to costs is made but may extend to costs incurred "from the time the costs application was made." As his Honour points out, the order under appeal in this matter extended back beyond that point and, to that extent, was not supported by that subsection. Subsection 49(1)(e) is not similarly limited.

As McPherson JA. indicates, it falls to this Court to exercise afresh discretionary power to make an order with respect to costs. The Court may refuse to make an order in favour of the respondents on their costs application, may take the usual course of making an order against them in favour of the appellant who was successful in the proceeding, or may make an order under subsections 49(1)(d) or (e). Matters to which regard is to be had are set out in subsection 49(2). It is unnecessary on this occasion to determine whether those matters are exhaustive or whether other matters may also be considered.

The financial resources of the appellant far outweigh those of the respondents (subsection 49(2)(a)) who, speaking generally, are not well off. Further, the decision in respect of which they sought judicial review has adversely affected them financially as well as in other respects. In such circumstances, it may often be appropriate to make at least an order under subsection 49(1)(e). Such a course will be less likely to deter private citizens from challenging government decisions which affect them, and thus advance the general intent of the Act that persons aggrieved should have a practical means of calling such decisions in question.

On the other hand, such an order might not be justified for other reasons; for example, if there was no "reasonable basis for the review application" (subsection 49(2)(c)). Conversely, the strength of a case for judicial review may be such that, taken with other circumstances, an applicant for review should have a costs order under subsection 49(1)(d)although the review application is unsuccessful. In this matter, the respondents' application for review was considered by the primary judge to have a reasonable basis but was, nonetheless, able to be summarily disposed of.

The third factor made relevant by subsection 49(2) is that referred to in paragraph (b). Many proceedings for judicial review will involve issues "that ... may affect the public interest". Thus, in this case, the location of a rail link to the Port of Brisbane may be considered a matter of public interest. However, the respondents' review application was not related to public interest considerations but, quite legitimately, to the effect of what was proposed upon their personal interests. While this does not disentitle them to an order under subsection 49(1), it provides little support for a costs order under subsection 49(1)(d) rather than 49(1)(e).

On a consideration of the material factors, McPherson JA. has concluded that an order under subsection 49(1)(e) is appropriate. I agree. The project of which the respondents complain has subjected them to disadvantages in the interests of the general community. They should not be further disadvantaged by being required to pay the government's legal costs of a challenge which the primary judge considered reasonable.

Judgment delivered the Twenty Eighth day of June 1994

By a letter dated 17 June 1993 addressed to the Chief Executive Officer of Queensland Rail, the Minister for Transport gave his approval for the construction of standard gauge rail link to the Port of Brisbane. The proposed rail link is planned to follow the route of the existing railway line to the Port. Residents who live along the route are apprehensive that it will increase the density of rail traffic, with consequent detriment to their environment.

Claiming to be aggrieved by the Minister's decision of 17 June 1993, eleven of the residents applied under the Judicial Review Act 1991 to the Supreme Court for a statutory order of review in relation to it. They also applied for an order under s.49 of the Act that the Minister, who was the respondent to the original application for review, indemnify them in relation to costs properly incurred. The Minister responded by applying for an order that the application for review be stayed or dismissed. He claimed that for various reasons there was no prospect that the application would succeed.

The Minister's application came before a Judge in Chambers who, after hearing submissions, decided to sustain it. He ordered that the residents' application for review be dismissed, and delivered written reasons for that order.

Although his Honour dismissed the application for judicial review, he ordered the Minister to pay the costs incurred by the residents both in the original review application and in the Minister's application to dismiss. That was on 5 November 1993. Later on 2 December 1993 his Honour gave the Minister leave to appeal against the order for costs, delivering written reasons in which he explained the basis of his earlier order that the Minister pay the residents' costs.

This is the Minister's appeal against that order for costs. Leave to appeal against it was sought under s.9 of the Judicial Review Act and obtained from the Judge who made the order. However, s.49(5) of the Judicial Review Act provides that an appeal may be brought from an order under s.49 only with leave of the Court of Appeal. To the extent that it is material here, s.49 of the Act provides:

"49.(1) If an application (the "costs application") is made to the Court by a person (the "relevant applicant") who -

(b) has been made a party to a review application under section 28; or

(c) is otherwise a party to a review application and is not the person whose decision, conduct, or failure to make a decision or perform a duty according to law, is the subject of the application;

(d) that another party to the review application indemnify the relevant applicant in relation to the costs properly incurred in the review application by the relevant applicant, on a party and party basis, from the time the costs application was made; or

(c) that a party to the review application is to bear only that party's own costs of the proceeding, regardless of the outcome of the proceeding.

(2) In considering the costs application, the Court is to have regard to -

(ii) any person associated with the relevant applicant who has an interest in the outcome of the proceeding; and

(b) whether the proceeding involves an issue that affects, or may affect, the public interest, in addition to any personal right or interest of the relevant applicant; and

(c) if the relevant applicant is a person mentioned in subsection (1)(a) - whether the proceeding discloses a reasonable basis for the review application; and

(d) if the relevant applicant is a person mentioned in subsection (1)(b) or (c) -whether the case in the review application of the relevant applicant can be supported on a reasonable basis.

(3) The Court may, at any time, of its own motion or on the application of a party, having regard to -

(a) any conduct of the relevant applicant (including, if the relevant applicant is the applicant in the review application, any failure to prosecute the proceeding with due diligence); or

(b) any significant change affecting the matters mentioned in subsection (2);

revoke or vary, or suspend the operation of, an order made by it under this section.

(4) Subject to this section, the rules of court made in relation to the awarding of costs apply to a proceeding arising out of a review application.

(5) An appeal may be brought from an order under this section only with the leave of the Court of Appeal."

In his reasons for judgment delivered on 5 November 1993 the learned Judge said that the application "thus far was reasonable because of the difficult issues of law involved", and that "for the reasons explained" the residents should have their costs. Those reasons were explained earlier in the written judgment, where, in referring to the residents' application for a costs order under s.49, his Honour said that the basis of their claims was that they were ordinary citizens, whose peaceful occupation of their homes was threatened by a public project of some magnitude, and that they should be funded in pursuit of their remedies.

In the further set of written reasons delivered when granting leave to appeal, the Judge said he was moved to exercise his discretion as to costs by a combination of factors, which he went on to summarise. There were three. Briefly stated, the first was that the residents were likely to suffer an additional burden of inconvenience beyond that borne by others for the sake of a project that was being undertaken in the general community interest. The second reason was that the application was "obviously sincere and far from frivolous" : some difficult refinements of law had been considered on the application before his Honour, and the residents could not be said to have been irresponsible in pursuing their application. The third point made by his Honour was that the matter had been concluded at an early stage before substantial costs had been run up. The costs incurred so far were, he said, "relatively miniscule" compared with the overall expenditure on the rail link project; but those costs would bear relatively heavily on the residents, who were already disadvantaged by the rail link proposal.

In the course of those additional reasons the Judge also remarked:

"Learned counsel for the minister, who seeks leave to appeal against the order, thought that the order for costs may have been made pursuant to s.49(2)(b) of the Act, but that is not so. It was not suggested in the judgment that any reliance was placed upon it and that silence is accurate because the order was made under my general discretion and the influence of the above factors upon it."

He went on to refer to s.49(1)(d) of the Act and to say that his prior reference to it was nothing more than an indication of what might be the legislature's view of "the philosophical basis which underpinned the features relied upon in exercising my discretion" as to costs.

The general power of the Supreme Court to award costs in proceedings before it is conferred primarily by O.91 of The Rules of the Supreme Court. It is a power which, were it not for the specific provisions of s.49, would no doubt be exercisable in proceedings under the Judicial Review Act. However, the plain effect of s.49 is to displace O.91 to the extent that its provisions are inconsistent with s.49. Section 49(4) provides that the rules of court in relation to awarding costs apply to proceedings arising out of review applications as defined; but the subsection is expressed to be "subject to this section".

That shows that s.49 is intended to be the dominant provision. It may be now the only source of power to award costs in proceedings arising out of review applications. Here, however, his Honour appears to have considered that he was exercising the general power and discretion of the Court under O.91 to award costs, rather than the power conferred by s.49 which is what the residents' application for costs evidently envisaged. On appeal it was submitted on behalf of the appellant Minister that if the order for costs in this case was made in the exercise of the Court's general power and discretion to award costs, then it was wrong and should be set aside.

The established rule of practice is that a successful defendant, or a party occupying the position of a defendant, may not be ordered to pay the general costs of proceedings in which that party was successful. See No. 1 North Phoenix Gold Mining Co. v. Phoenix Gold Mining Co. (1896) 6 Q.L.J. 1, 310. The position may now be different in England, where the power to award costs has since 1925 been the subject of a differently formulated provision. See Knight v. Clifton [1971] Ch.700, 700709. However, the force of the rule and the reason for it, as well as the earlier English decisions on which it is founded, were recognised by the High Court in Hally v. Dennis [1955] HCA 41; (1955) 95 C.L.R. 661, 663-664. If, therefore, in making the order with respect to costs now under appeal, his Honour was exercising the general power of the Court under O.91, the order for costs made against the Minister in this case infringed the rule against ordering a successful defendant to pay costs.

The correct view is that the power of awarding costs in a matter like this is the power specifically conferred by s.49 rather than the general power invested by O.91. The words "another party" in s.49(1)(d) are plainly capable of including the respondent to a review application; indeed, in many cases the respondent will probably be the only other party to the application. The result is that, because by s.49(4) the rules of court are made subject to s.49, the rule preventing an award of costs against a successful defendant or a party in the position of a defendant is displaced in the case of a proceeding arising out of a review application. The only express restriction is imposed by the concluding words of s.49(1)(d), which limits the extent of the indemnity that may be awarded to costs incurred "from the time the costs application was made".

Subject to that limitation, a successful respondent may under s.49(1)(d) be ordered to pay the costs properly incurred by the applicant in the review application. It is true that the primary purpose of s.49 may be to enable applicants for statutory review, by making application under the section at an early stage, to find out in advance whether they can expect to be indemnified in respect of costs of proceedings in the future. However, the power conferred by the section is not in terms so confined, but under s.49(1)(a) is exercisable whenever a person "has made a review application". Once that happens the Court may make an order under s.49(1)(d) that another party indemnify the applicant for costs properly incurred. If at first sight the provision has the appearance of being prospective, there is on closer examination nothing in it to prevent its being applied ex post facto to cover costs already incurred from the time the costs application was made.

The Judge was therefore wrong in deciding that in exercising the general power of the Court under O.91 the Minister could be ordered to pay the costs, either generally or without limit as to the time when they were incurred, of all the residents who were applicants. Under the general power conferred by O.91, the discretion to award costs ought not to have been exercised to make a successful defendant pay the costs of an unsuccessful plaintiff or applicant. Such an order could have been made in the exercise of the power conferred by s.49 of the Act, but it would then have had to be restricted to costs incurred from the time when the costs application was made. The order for costs made here was not limited in that way. Furthermore, in exercising the power conferred by s.49, the Court is required to have regard to the matters listed in s.49(2) of the Act. Here his Honour specifically disclaimed reliance on s.49(2)(b) as a possible basis for his decision, and the general tenor of his remarks implies he considered that, in making the order for costs against the Minister, he was not bound by the provisions of s.49.

It is my belief that, in these respects and for the reasons mentioned, the Judge's discretion miscarried and that the order made below must be set aside. It follows, as was accepted on appeal, that it now falls to this Court to exercise the discretion afresh. Section 49 of the Act envisages a costs regime that will lead to results differing on some occasions widely from those ordinarily made in exercising the Court's general jurisdiction under O.91. Making an order for costs against a successful respondent is an example in point. Mr Allan of counsel for the residents on appeal candidly acknowledged that he had not located any reported decision in which such an order had been made in similar circumstances. He referred to Kent v. Cavanagh (1973) 1 A.C.T.R. 43, 55, where Fox J. said he thought it undesirable that responsible citizens with a reasonable grievance who wish to challenge government action should only be able to do so at the risk of paying costs to the government if they fail. His Honour added the opinion that the inhibiting effect of the risk of paying costs in such cases is excessive and not in the public interest.

Kent v. Cavanagh was not a case in which a successful defendant was ordered to pay costs, but one where, for the reasons mentioned by Fox J., no order as to costs was made against the plaintiffs. What was said by his Honour in that case is to some extent now reflected in s.49(2)(b) of the Act in Queensland; but I doubt if the present case falls within its terms. Section 49(2)(b) appears to be directed to proceedings in which it is the public interest rather than any private right of the applicant that is sought to be vindicated by the application. Here, the residents are understandably aggrieved at bearing what they see as a disproportionate share of the burden imposed by a public project; but it remains true to say that it was their rights of property and personal convenience and not the public interest they were intent on protecting when they made the review application.

Furthermore, even accepting that, as the Judge said, the residents' application was not frivolous or unreasonable, his Honour was nevertheless able to dispose of it on the Minister's application to strike it out summarily, and to do so without a full hearing of all the issues said to be involved. Expressed broadly, the criticism levelled against the Minister's decision was, as his Honour found, of a factual nature for which judicial review under the Act was not available. It is thus not easy to conclude that, within the meaning of s.49(2)(c), the proceedings disclosed a reasonable basis for the review application. As regards the factors mentioned in s.49(2)(a), the financial positions of each of the 11 applicant residents are briefly set out in the affidavits read in support of the costs application. Although several of the applicants are in apparently secure employment, it is fair to say that on the evidence before us none of them is well off, and a few have little or no income at all. A complaint common to all of them, which is to some extent supported by evidence, is that the rail link project has already had a depressing effect on the values of their properties along the route.

When these matters are considered in conjunction with other circumstances identified by his Honour, I am not persuaded that a case is made out that would justify exercising the discretion under s.49 so as to make an order that the respondent Minister pay the costs of the applicant residents. I believe it appropriate that there be no order as to costs, which means that the costs, both of and incidental to the review application and the application to strike out, will lie where they fall.

As to the costs in this Court, we gave leave under s.49(5) to the Minister to appeal but we did so on terms that the appellant paid the residents' costs of an appeal which, it was conceded, has been undertaken in the long-term interests of the appellant and others similarly placed. In the proceedings below the Judge reserved to the Court of Appeal the costs of the Minister's application to him for leave to appeal, and I consider that, as part of the costs incurred in appealing here, the appellant should also be ordered to pay the residents' costs of and incidental to that application.

The outcome therefore is that the appeal is allowed. The order made on 5 November 1993 that the respondent Minister pay the costs of the applicants (except the first applicant) in respect of the original application for judicial review and of the further applications referred to in that order is set aside. In lieu there will be no order as to the costs of those proceedings. Further order that the appellant pay the costs of the appeal and of the application made on 30 November 1993 for leave to appeal of the respondents to this appeal.

Separate reasons for judgment by Fitzgerald P., McPherson J.A. and Shepherdson J.

APPEAL ALLOWED. THE ORDER MADE ON 5 NOVEMBER 1993 THAT THE RESPONDENT MINISTER PAY THE COSTS OF THE APPLICANTS (EXCEPT THE FIRST APPLICANT) IN RESPECT OF THE ORIGINAL APPLICATION FOR JUDICIAL REVIEW AND OF THE FURTHER APPLICATIONS REFERRED TO IN THAT ORDER IS SET ASIDE. IN LIEU THERE WILL BE NO ORDER AS TO THE COSTS OF THOSE PROCEEDINGS. FURTHER ORDER THAT THE APPELLANT PAY THE COSTS OF THE APPEAL AND OF THE APPLICATION MADE ON 30 NOVEMBER 1993 FOR LEAVE TO APPEAL OF THE RESPONDENTS TO THIS APPEAL.

CATCHWORDS JUDICIAL REVIEW - COSTS - Whether successful respondent may be ordered to pay proper costs of applicant under s.49 Judicial Review Act 1991 - Minister approved rail link - Residents sought judicial review and indemnity for costs under s.49 - Review application dismissed but costs ordered against Minister - Costs order appealed - Whether s.49 displaces O.91 R.S.C. - Nature of O.91 R.S.C. considered - Factors relevant to fresh exercise of discretion - Whether ordinary citizens threatened by public project should be funded in pursuing remedies.

I have had the benefit of reading in draft the reasons for judgment prepared by the President and McPherson J.A.

I agree with them that the appeal must be allowed and I agree with the orders proposed. I do so for reasons different from those appearing in their judgments and I now set out my reasons.

I have found section 49 a rather difficult section in the Judicial Review Act. Its provisions were apt to meet the application made by the respondents.

Section 49 does not and cannot apply to applications for costs by every party to a review application. That this is so appears from subsection 49(1) which limits the class of persons by whom costs applications can be made, e.g. the party whose decision is sought to be reviewed under say section 20 of the Judicial Review Act, cannot make a "costs application" under subsection 49(1).

The emphasis in subsection 49(2) is on the applicant for the "costs application" and, in part, on his financial resources. Subsection 49(2) appears to assume that any respondent to a review application will always be able to withstand an order for costs made against him or it by a successful applicant. Is this assumption correct? What of an impecunious local authority whose rate payers are hard hit by drought and/or recession and are unable to pay the rates on which the local authority relies for financial survival and which makes a "decision to which this Act applies" (see section 4) from which an application to review is successfully brought?

As I read section 49, such an authority cannot rely on subsection 49(1). Another rather unsatisfactory aspect of section 49 is that it appears to be concerned with a "costs application" made before the review application is finally heard and determined - see subsection 49(3) giving the Court power to revoke etc. any order made under section 49, if for example the applicant has failed to prosecute the review application with due diligence and also subsection 49(5) which requires leave of the Court of Appeal for an appeal from an order under section 49. Despite this apparent limit in the use of a "costs application" I must say that on its literal construction, section 49 is capable of applying to applicants who after final judgment has been delivered, apply for a costs order of the type specified in say subsection 49(1)(e).

I have mentioned the above aspects of section 49 to indicate why I consider the section rather difficult and to illustrate that it is not capable of being utilised by all parties to an application for Judicial Review.

The power of any court to deal with costs or proceedings before it is important.

In my view, the construction of subsection 49(4) is of vital importance in the present case. That subsection reads:-

"(4) Subject to this section, the rules of court made in relation to the awarding of costs apply to a proceeding arising out of a review application."

By section 3 of the Judicial Review Act "rules of court" mean "the rules of the Court and until Schedules 4 and 5 are repealed, include the provisions of those Schedules."

"Court" means the Supreme Court (section 3).

Thus far, the rules of court referred to in subsection 49(4) mean the Rules of the Supreme Court of Queensland.

Section 58 of the Judicial Review Act which is headed "Amendment of rules of court" confirms this view. That section reads:-

"58.(1) The rules of court are amended as set out in this section.

(3) Schedule 1 (Part 20, Forms 465 to 490)-

(4) The rules set out in Schedule 4, and the forms set out in Schedule 5, have effect in place of the rules and forms mentioned in subsections (2) and (3).

(5) One year after the commencement of this Act, or on such earlier day as may be fixed by the Governor in Council by Gazette notice, Schedules 4 and 5 are repealed by force of this subsection.

(6) The rules set out in Schedule 4, and the forms set out in Schedule 5, immediately before the repeal of those Schedules, have effect, after the repeal, as if they were rules and forms of the rules of court made under section 11 of the Supreme Court Act 1921, and may be amended or repealed accordingly."

I note particularly the above subsection 58(4) and point out that Schedule 4 in the Judicial Review Act is headed "Rules of Court Relating to Applications for Judicial Review" and Schedule 5 contains "Forms Relating to Applications for Judicial Review".

There is not within the Judicial Review Act including Schedule 4 any rule of Court made in relation to awarding of costs. Further, Rule 23 appearing in Schedule 4 contains a reference to "Order 41 Rule 27 of the rules of Court" and subsection 58(1) of the Judicial Review Act expressly refers to amendment of "rules of court" in section 58 and subsection 58(2) omits "Order 81". Order 81 of the Rules of the Supreme Court deals with the various writs which the provisions of the Judicial Review Act are intended to replace.

In the absence of a rule of court made under the Judicial Review Act including Schedule 4 to that Act in relation to the awarding of costs, it is my view that a judge or Court exercising jurisdiction under the Judicial Review Act on a question of costs must apply the rules of the Supreme Court relating to the awarding of costs but subject to the operation (if any) of section 49 on those rules.

Under Order 91 Rule 1 of the rules of the Supreme Court, costs of and incidental to all proceedings in the Supreme Court are in the discretion of the Court or Judge, subject to the provisions of the Judicature Act and the Rules of the Supreme Court.

The general interpretation of that rule is that costs follow the event e.g. where there are no materials before the Judge upon which he can exercise his discretion as to costs, he ought not to deprive a successful party of its costs (The Civil Service Co-Operative Society Ltd v. The General Steam Navigation Co (1903) 2 K.B. 756).

However, that general rule is expressly made subject to section 49 of the Judicial Review Act. (subsection 49(4))

In the instant case section 49 applied and the learned trial Judge, when considering the costs application, had before him some evidence of the financial resources of some of the applicant respondents.

In my respectful view the learned trial Judge erred in law when he said that his order for costs was made under his general discretion and the influence upon that of the three points mentioned in the reasons of McPherson J.A. and he failed to consider all of subsection 49(2). The learned trial Judge specifically said that subsection 49(2)(b) was not the basis of his exercise of discretion.

Because of that error in law the decision must be set aside and it falls to this Court to exercise the discretion afresh. I agree with the orders proposed by McPherson J.A.

Anghel v Minister for Transport

At a glance

Court

Decision date

Before

Source

Judgment (81 paragraphs)

Anghel v Minister for Transport (No 2) [1994] QCA 232 (28 June 1994)

Parties

Legislation Cited (2)