Australians for Sustainable Development Inc v Minister for Planning

A MOST UNUSUAL CASE 7The starting point is the rule that costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs: r 42.1 Uniform Civil Procedure Rules 2005. 8In the usual case, some other order may be made where the successful party has engaged in disentitling conduct as a litigant: F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 3) [2007] NSWLEC 569 at [11] ; McCosker v Rutter [2010] NSWCA 318 at [32]. 9This case is unusual in that there was a supervening event, a change in the law, which altered the subject matter of the dispute after the hearing. Moreover, the law was changed by a Minister who was a party to the proceedings and had vigorously defended the applicant's claim. But for the Minister's conduct, the applicant would have won the case. 10The case is so unusual that none of the parties could cite a case directly in point. 11The case is distinguishable from one in which the law was changed by Parliament before a hearing: see, for example, True Conservation Association Inc v Minister Administering the Threatened Species Conservation Act 1995 [2008] NSWLEC 221. Such cases are a species of the genus of cases where some supervening event or settlement so removed or modified the subject matter of the dispute that no issue remained except that of costs: Kiama Council v Grant [2006] NSWLEC 96, 143 LGERA 441 at [80]. By analogy, those cases provide principled guidance as to the exercise of discretion in this case. The principle for which they stand is that where there has been a supervening event that has so altered the subject matter of the dispute, the proper exercise of the discretion would ordinarily be to make no costs order unless: (a)one of the parties has acted so unreasonably that the other party should obtain the costs of the proceedings; or (b)even if the parties had acted reasonably, one party was almost certain to have succeeded if the subject matter of the dispute had not changed or been rendered inutile so that that party should obtain the costs of the proceedings. 12In my opinion, the second of those points justifies an award of costs in the applicant's favour against all respondents, subject to the issue of apportionment. The first point, which is relevant to the issue of unreasonableness of the Minister's conduct, is dealt with below when discussing indemnity costs.

APPORTIONMENT 13Unless a particular issue or group of issues is clearly dominant or separable, it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it has failed: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [32] - [35]. Where a court exercises its discretion to apportion costs, the apportionment itself involves the exercise of discretion. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation: James at [36]. 14Justice may not be served if parties are dissuaded by the risk of costs from canvassing all material issues for fear of an adverse costs order. Equally, litigants should not be rewarded for the injudicious pursuit of issues without substance: GPT Re Ltd v Wollongong City Council [2006] NSWLEC 658, 151 LGERA 174 at [9] quoting Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd [1993] FCA 259, 26 IPR 261 at 28; Stena Rederi Aktieboc v Austal Ship Sales Pty Ltd [2007] FCA 1141 at [12]. 15A decision which is frequently cited in relation to apportionment of costs is that of Toohey J in Hughes v Western Australian Cricket Association Inc [1986] FCA 382, ATPR 40 - 748. There the costs argument of the respondents were on a similar footing to the respondents' arguments in this case: that there should be no order as to costs or, alternatively, any costs order in the applicant's favour should be a small percentage. The basis of the submission was much as is put here by the respondents, namely that the applicant had failed on more issues than the applicant had succeeded; that much of the time of the hearing had been taken up with issues on which the applicant had failed (though the applicant says this is not in fact the case here); and in such circumstances it was appropriate not merely to deprive the applicant of some proportion of the applicant's costs but to award to the respondents the costs of those issues on which they had succeeded. 16In response, Toohey J cited with approval Jacobs J's cautionary approach to the question of apportioning costs in Cretazzo v Lombardi (1975) 13 SASR 4 at 12: ...But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues. 17Toohey J observed that "it is true that if one took a head count of the causes of action pleaded in the statement of claim, the applicant failed on more than he succeeded, and by some margin", but added that nevertheless "the applicant succeeded in his primary aim": at [11]. His Honour noted the difficulty of dividing up time spent on evidence and submissions on particular grounds. He held that it was not appropriate to undertake a detailed costs process: at [15]: In my view it would be unsatisfactory to attempt to apportion issues and leave the fixing of costs of those issues to the taxing officer. That would impose a very great burden on him and upon the parties' legal representatives. I approach the matter on the basis that the applicant succeeded substantially in what he set out to achieve through his application. He failed on some issues in circumstances where, not only should he not have the costs of those issues, but there should be some compensation to the respondents for the time taken in meeting those issues both prior to and at the hearing. 18On that basis, Toohey J awarded the applicant 75 per cent of his costs. 19In Tasmanian Conservation Trust Inc v Minister for Natural Resources (1995) 55 FCR 516 the applicant had challenged two decisions of the respondent Minister which were made at the same time and involved the same subject matter, but succeeded in respect of only one of them. Sackville J decided that in these circumstances the successful applicant was entitled to half its costs. 20It is one thing to deprive a successful applicant of the costs of severable issues on which it failed, it is another thing to order it to pay the other party's costs of those issues. The latter order may be made where the raising of a severable issue by a successful applicant was so unreasonable that it is fair and just to do so: GPT at [16] and the cases there cited. Again, the same principle should apply in this case where the applicant would have succeeded but for the Minister's order changing the law after the hearing. 21The respondents, or one or more of them, make a number of points with which I agree and I do not think the applicant disagrees: (a)the Minister's order impacted only upon Ground 2; (b)the remaining grounds of challenge would have been dismissed irrespective of the Minister's order; (c)the measure of the sufficiency of the remedial action plans was central not only to Ground 2 but also to Grounds 3, 5 and 6; (d)Ground 1 was discrete and did not rely on the sufficiency of the remedial action plans; (e)success on Ground 2 would have resulted in injunctive relief to restrain the carrying out of Category 1 remediation work. 22In my view, the applicant should be awarded costs against all respondents because it would have won the case, on the basis of Ground 2, but for the fact that the Minister's order changed the law two weeks after the hearing. This is subject to the following two matters of apportionment. 23First, it is fair and just that the applicant should pay the costs of Lend Lease and BDA in meeting the applicant's expert evidence which the applicant filed and served but ultimately did not rely upon at the hearing. It put Lend Lease and BDA to the wasted expense of responding to that evidence which they had maintained from the outset was inadmissible. I understand that the Minister did not incur any such costs. In addition, the applicant's own costs relating to expert evidence should be excluded from the costs awarded to it. In order to reduce the burden of assessment of costs, I would have preferred to allow for those expert evidence costs by reducing by a percentage the costs awarded to the applicant. However, I have insufficient information to make any assessment of the quantum of those costs. The applicant and the affected respondents may be able to reach agreement on a percentage. 24Secondly, there should be an apportionment by way of a percentage reduction to reflect the costs payable to the applicant: (a)the applicant's failure on Ground 1 (which was discrete) and Grounds 3, 5 and 6 to the extent that they did not overlap with Ground 2; (b)the applicant's abandonment of Ground 4; and (c)the applicant's amendments to its points of claim. 25To the extent that there was overlap between Ground 2 and Grounds 3, 5 and 6, there should be no reduction because these costs had to be incurred in any event in relation to Ground 2. Grounds 2, 3, 5 and 6 related to one core factual issue, namely, the way in which contamination and remediation have been dealt with in the approval process. The applicant would have traversed much of the same factual ground had it not also brought Grounds 3, 5 and 6. So much is positively asserted by the Minister and Lend Lease. Those respondents use this to somehow suggest that they should not be liable for the costs of traversing this material. Yet because it was necessary to the Ground 2 claim, the applicant is entitled to its costs in relation to that exercise. I disagree with BDA's submissions that the said characterisation of the core factual issue is too broad to have any significance for costs. 26However, I accept that there were discrete and substantial factual and legal issues relating to Grounds 3, 5 and 6 which are suitable for apportionment. The factual overlap between Grounds 2 and 3 was greater than between Grounds 2 and Grounds 5 and 6. Grounds 2 and 3 were concerned with the adequacy of remedial action plans. Grounds 5 and 6 were also concerned with the way contamination and remediation had been dealt with in the approval process as a whole. 27Ground 1 raised a completely different factual issue from the other grounds. The applicant submits that to the extent that Lend Lease addressed Ground 1, it was not an appropriate contradictor because the ground related to an aspect of the Headland Park project and therefore the applicant should not be affected by Lend Lease's costs where they added little to BDA's submissions: Wilderness Society Inc v Turnbull, Minister for Environment and Water Resources [2008] FCAFC 19 at [12] - [13]. There is substance in the submission. However, I am not satisfied that this can be quantified in any significant way in a percentage reduction in the costs to be awarded to the applicant. 28The applicant abandoned Ground 4. However, the abandonment occurred before submissions were due and does not appeared to have caused any evidence to be filed relevant only to that ground. 29The first amendment to the applicant's points of claim was filed and served before the respondents filed and served their points of defence and they had an opportunity to address it without amending their points of defence. The second amendment to the points of claim was filed on the first day of the hearing but it was provided to the respondents before their submissions were due. It formalised the removal of Ground 4 and brought Lend Lease within Ground 2. These amendments appear to have had little cost consequences for the respondents. 30The quantum of the apportionment for the matters to which I have referred is a matter of impression and evaluation. 31In my opinion, the respondents should pay 75 per cent of the applicant's costs (except, as I have earlier said for costs relating to expert evidence). This is subject to the question whether the Minister should pay those costs on an indemnity basis, which is considered below.

INDEMNITY COSTS 32In order to award costs on an indemnity basis there must be sufficient special or unusual circumstances connected with the litigation justifying such an award: see my principal judgment at [300]. 33The applicant presses for indemnity costs against the Minister. The Minister submits that, in the exercise of its discretion, the Court should not make an indemnity costs order. 34Some of the reasons advanced by the Minister are really only referable to the apportionment issue. The Minister's reasons relevant to indemnity costs are as follows: (a)a successful party may be entitled to indemnity costs where there is some special or unusual circumstance in the case. The impugned conduct must be connected with the litigation itself; (b)the effect of the Minister's order amending SEPP 55 was limited to Ground 2; (c)assuming the amending order had not been made, in accordance with the usual costs rule the applicant would have been entitled to seek costs on the ordinary basis only. Accordingly, an order requiring the Minister to pay costs on an indemnity basis would go beyond compensating the applicant and would be punitive; (d)it is not necessarily the case that the making of the amending order resulted in undue waste of the Court's resources because the Court was still required to consider the matters raised in Ground 2 for the purpose of dealing with the question of costs; (e)the "primary" purpose of the amending order was for the avoidance of doubt, and was consistent with the Minister's submissions at the hearing. 35I reject the Minister's submission, substantially for the reasons submitted by the applicant. 36As I have said, the Minister's conduct was so unusual that the parties have been unable to cite a case directly in point. 37The Minister has provided no explanation about his delay in making the order amending SEPP 55. He was aware of contamination and remediation issues at the site, the possibility of SEPP 55 having relevance (this having been referred to, for example, in the Director-General's reports), and the allegations of inadequacies of the remediation action plans for the two projects. The Minister could have made the amending order at any time before or after the proceedings commenced and before the applicant had expended significant legal costs on prosecuting the proceedings. 38Counsel for the applicant says, and I am prepared to accept, that Ground 2 was always its strongest point and there is real doubt that the applicant would have brought the case or continued to press the case if the Minister's amending order had been made before the hearing. 39If the Minister is submitting that his conduct in making the order after the hearing was not connected to the litigation and therefore is not a basis to award indemnity costs, I reject the submission. This is not a case where it was Parliament that passed a law before a hearing. Here, it was the Minister himself who changed the law, doing so after a six day hearing in which he himself was a party and in which he had actively resisted the applicant's case. 40The making of the order was conduct of the Minister which affected the subject matter of the dispute to which he was a party. 41The Minister's amendment to SEPP 55 was not to render it inapplicable to Part 3A projects generally, which the Minister in the proceedings had submitted was the case anyway. Rather, it specifically targets, and only targets, the very two projects challenged in the proceedings. 42Given the targeted nature of the order and its timing, it should be inferred that the Minister had come to fear defeat and sought to move the goal posts of the case. In my opinion, the Minister's conduct in effectively making a central plank in the applicant's case inutile after the hearing meets the description of unreasonable conduct connected to the litigation. 43Further, the Minister's submissions fail to grasp the changed legal landscape since the commencement of the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules. It is the will of Parliament that the "duty" of the parties is to assist the Court in the "just, quick and cheap" resolution of the real issues in the proceedings: s 56(1), (3) and (4) Civil Procedure Act . A public body is under an obligation of "conscientious compliance with the procedures designed to minimise cost and delay": Morley v Australian Securities and Investments Commission [2010] NSWCA 331, 274 ALR 205 at [704]; Scott v Handley [1999] FCA 404, 58 ALD 373 at [44], [45] (Full Court). The public interest in the proper and efficient use of public resources has become a central consideration alongside the more traditional preoccupation with justice between the parties (which remains the priority): AON Risk Management Services Australia Pty Ltd v Australian National University [2009] HCA 27, 239 CLR 175 at [23]. The Minister's conduct has wasted public resources, as well as those of the applicant. 44In my opinion, the Minister's conduct was unreasonable such as to warrant the making of an order that the Minister pay the applicant's costs, in the proportion determined above, on an indemnity basis.

ORDERS 45In summary, I have concluded that the respondents should pay the applicant's costs and that the Minister should pay those costs on an indemnity basis. This is subject to an apportionment for expert evidence and discrete issues which the applicant abandoned or on which it was unsuccessful and its pleading amendments. 46The orders of the Court are as follows:

1. The first respondent is to pay 75 per cent of the applicant's costs of the proceedings, except for costs relating to expert evidence, on an indemnity basis.
2. The second and third respondents are to pay 75 per cent of the applicant's costs of the proceedings, except for costs relating to expert evidence.
3. The applicant is to pay the second and third respondents' costs of responding to the applicant's expert evidence. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 May 2011