Boomerang & Blueys Residents Group Inc v New South Wales Minister for the Environment, Heritage and Local Government and MidCoast Council

Whether the applicant should pay more than one set of costs

1. In circumstances where there is more than one opposing party, consideration sometimes needs to be given to whether an unsuccessful party should be ordered to pay more than one set of the opposing parties' costs: Statham v Shepard (No 2) (1974) 23 FLR 244 ('Statham (No 2)') at 246; Muswellbrook Shire Council v Hunter Valley Energy Coal Pty Ltd [2019] NSWCA 216; (2019) 238 LGERA 295 ('Muswellbrook Shire Council v Hunter Valley Energy Coal') at [173] per Macfarlan JA; Local Democracy Matters Incorporated v Infrastructure NSW (No 2) [2019] NSWCA 118 ('Local Democracy Matters Inc (No 2)') at [18], [20]-[22].
2. As the primary submissions of the parties did not address this point, at the Court's request each of the parties provided further written submissions on 14 October 2020.
3. The applicant submits that, to the extent it is held liable for costs, it should only be ordered to pay one set of costs in the proceedings as Council's and the Minister's interests in the proceedings were identical and their separate representation was unnecessary. As such, the principles in Statham (No 2) and Local Democracy Matters Inc (No 2) apply and the applicant should therefore only be required to pay half of each respondents' costs.
4. The applicant submits that the ultimate interest of both Council and the Minister was to uphold the validity of the CZMP and that, although Council's role was to prepare and make the CZMP and the Minister's involvement was to certify the CZMP, those roles were "inextricably linked". The applicant submits that this is evident through the fact that Council needed to defend the Minister's certification in order to uphold the CZMP.
5. The applicant submits that the mere fact that the respondents had different roles under the Coastal Protection Act (and made separate decisions) did not of itself require separate representation for each respondent. The applicant submits that the respondents had "interwoven roles under the same legislation" and there was consequently no reason for them to be at arm's length from each other as their interest in upholding the CZMP was the same. Further, the applicant submits that the identical positions of the respondents in the substantive proceedings did not become apparent until written submissions were provided, such that the applicant could not have objected to the separate representation of the respondents on that basis. In any event, the case concerned questions of law and there was no need for the respondents to each protect their individual positions.
6. The applicant submits that the Minister effectively acknowledged that separate representation of the respondents was unnecessary as counsel for the Minister stated on the first day of the substantive hearing that "He [counsel for Council, Mr Lazarus] and I, as we're going along, are trying to ensure that we don't cover the same ground…" (Tcpt, 15 April 2019, p 70(24-25)). Further, the applicant submits that the Minister did not confine its case in the manner now claimed - as it was instead the Council that conducted cross-examination and made detailed closing submissions which the Minister adopted in their entirety. The Minister only made short submissions thereafter in relation to the applicable principles already covered by Council.
7. The Minister submits that in relation to the second proviso in Statham (No 2), the relationship between the two respondents was such that it was appropriate that they remained at arm's length in the litigation because of their different roles within the statutory scheme. Further, in relation to the third proviso in Statham (No 2), the Minister submits that no unreasonable duplication occurred in the case advanced by each of the respondents because first, the proceedings involved challenges to the validity of separate decisions made by each of the two respondents respectively, reflecting their different roles under the statutory scheme; second, each respondent appropriately confined its case to responding to the challenge made against its own decisions; and, third, to the extent that there was overlap, this was due to the fact that the applicant framed its case such that the same grounds for review were raised in relation to each of the respondent's decisions.
8. The Minister further submits that, if the Court was minded to award costs, it would be unfair to decline to order that both respondents should have their costs when no objection was taken by the applicant to them being separately represented at or before the hearing.
9. Council submits that it would be fair and reasonable for the applicant to bear more than one set of costs in the circumstances. Council submits that the proceedings necessitated a response from both Council and the Minister and that there is no reason why Council should be deprived of its costs (irrespective of the Court's ruling in relation to the Minister's costs, over which Council submits it should receive priority as it was in effect the proponent of the CZMP). Further, it was not inappropriate for Council to take an active role in the proceedings as there was no other contradictor to defend the challenges made regarding the preparation and adoption of the CZMP by Council.
10. Council further submits that there was at least a possible conflict of interest between Council and the Minister such that the general principle derived from Statham (No 2) does not apply, and that this possible conflict also justifies the separate representation of both Council and the Minister. Council says this potential conflict arose as a result of the differing obligations of Council and the Minister pursuant to the Coastal Protection Act, and the fact that both respondents had divergent interests in the outcome of the separate challenges made by the applicant to the decisions of Council and the Minister.
11. If the second proviso of Statham (No 2) were to apply, Council submits that it was not unlikely that there would be a conflict given the separate nature of the challenged decisions; that Council acted reasonably in remaining at arm's length from the Minister; and that it did not act unreasonably and duplicate costs.

Consideration

1. The power of the Court to make orders as to costs is provided for in s 98(1) of the Civil Procedure Act 2005 (NSW) ('Civil Procedure Act'), which states: 98 Courts powers as to costs (1) Subject to rules of court and to this or any other Act - (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. …
2. The discretion conferred by s 98 of the Civil Procedure Act is subject to the qualification that it must be exercised judicially "in accordance with established principle and factors directly connected with the litigation": Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [65] per McHugh J (in dissent but not relevantly for present purposes).
3. As set out in r 42.1 of the UCPR, the general rule is that costs follow the event: 42.1 General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the court is to order that the 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.
4. The rationale for the principle that costs follow the event is that the successful party to the proceedings should be compensated: Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59. How "the event" is defined depends upon the nature of the litigation and the practical result of a particular claim: Sze Tu v Lowe (No 2) [2015] NSWCA 91 at [39].
5. Rule 4.2(1) of the LEC Rules, which applies to proceedings in Class 4 of the Court's jurisdiction, states: 4.2 Proceedings brought in the public interest (1) The Court may decide not to make an order for the payment of costs against an unsuccessful applicant in any proceedings if it is satisfied that the proceedings have been brought in the public interest. …
6. Pursuant to s 11 of the Civil Procedure Act and r 1.7 and Sch 2 of the UCPR, the LEC Rules prevail over the UCPR only to the extent of any inconsistency between them with the effect that the Court preserves its discretion to make an order other than "costs follow the event" if it considers it appropriate to do so.
7. Rule 4.2(1) of the LEC Rules does not purport to do more than confer power on the Court to decline to make the usual order against an unsuccessful applicant. In effect, it assumes the existence of the general rule, but provides a "countervailing consideration" to its operation: Muswellbrook Shire Council v Hunter Valley Energy Coal at [90] per Basten JA.
8. There is no dispute between the parties as to the breadth of the discretion to award costs nor as to the requirement that such discretion be exercised judicially.

Whether proceedings were brought in the public interest

1. There are a variety of considerations which may determine whether litigation can be properly characterised as having been brought in the public interest (Engadine Area Traffic Action Group Inc (No 2) at [15]; Caroona (No 3) at [21]) and I note that the mere fact that the members of the applicant are a small section of the community or may have a pecuniary interest in the outcome cannot be on its own determinative: People for the Plains Incorporated v Santos NSW (Eastern) Pty Ltd (No 2) [2017] NSWCA 157 ('Santos No 2') at [38]-[40]. As such, in summary and for reasons that follow, I find that although the litigation has some public interest characteristics, the applicant has not shown that the litigation features "something more" such that, subject to my consideration and finding as to whether it should be subject to two sets of costs, the ordinary rule that costs follow the event should apply.
2. There is no doubt that the enforcement of public law obligations and the correct application of environmental laws has a prima facie public character and I accept that, at least in this sense, leaving aside the practical consequence which may result, that the proceedings had some characteristics of public interest litigation. However, on the assumption that the proceedings are properly to be characterised as in the public interest, this does not of itself warrant a departure from the usual costs rule.
3. Simple characterisation of litigation as having been brought in the public interest is, as noted by Preston J in Caroona (No 3) at [16], too crude a criterion to enable the Court to differentiate between the potentially large pool of matters as could be characterised as being brought in the public interest. As stated in Santos (No 2) at [40]: "Even assuming the proceedings were properly to be characterised as amounting to 'public interest litigation' (and there is scope for debate about this), as already noted that does not of itself warrant a departure from the general rule. As Bennett J observed (at [45]) in Corcoran v Virgin Blue Airlines Pty Ltd [2008] FCA 864, 'public interest and an arguable case are not necessarily decisive and not, of themselves, sufficient to prevent the usual costs order being made'. The appellant has not demonstrated that this appeal involved 'something more' than the mere fact of the litigation having the character of 'public interest litigation'."
4. Conscious of my consideration and findings in the primary judgment (generally at [79]-[95]) in relation to the applicant's standing to bring the proceedings, and accepting that public interest is a somewhat nebulous and multifaceted concept, and the caution that has been frequently prescribed lest an unprincipled approach be adopted, I have come to the view that while the proceedings may be categorised as being in the public interest such that they engage r 4.2(1) of the LEC Rules, I am not satisfied that there is "something more" to the litigation to justify a departure from the usual rule for costs.
5. Subject to my comments to follow, I accept the submissions of the respondents summarised at [26]-[32] and [39]-[41] above and I consider that the interests of the applicant were confined to a relatively small number of members who were concerned with relatively private interests. Further, I do not consider the prime motivation of the litigation was to uphold the public interest in the rule of law, or that the litigation directly sought to uphold the public interest of environmental protection.
6. While it is not abundantly clear whether the applicant maintained that the public interest was such that, of itself, the public interest was of such moment or magnitude as to justify departure from the usual rule in the manner considered by Biscoe J in Anderson on behalf of Numbahjing Clan within the Bundjalung Nation v NSW Minister for Planning (No 2) [2008] NSWLEC 272; (2008) 163 LGERA 132 at [10]-[11], even if this was the applicant's position, I do not consider that it has made out this case.
7. Suffice it to say, I do not consider that mere characterisation of the litigation as being in the public interest is sufficient to justify a departure from the ordinary costs rule because, put simply, I do not consider that the subject matter and the issues raised, even if in the nature of the public interest, were of such moment or magnitude as to be sufficient to depart from the usual order for costs.
8. Although the applicant submits that "something more" may be found in the fact that Council made a concession in relation to an error in respect of Table 1-4 (see [257] of primary judgment) and that I found, inter alia, that there was a "transpositional" error in the headings to Table 1-4, I do not consider that aspect determinative as I otherwise found against the applicant's other claims.
9. Further, the mere fact that there may have been some concessions made by the respondents which meant that some of the applicant's earlier expressed concerns did not require determination, does not in my view sufficiently distinguish the litigation such that there was "something more" to justify a departure from the usual costs rule.
10. While I accept that the proceedings involved the enforcement of public law obligations, I find, as submitted by Council, that the proceedings were nonetheless concerned with the categorisation of risk which had an effect upon specific properties, and that these matters are not necessarily issues of public importance nor does the resolution of those discrete issues affect the understanding and development of the law. I also note that at [84] of the primary judgment I expressed a view that the applicant's apparent concerns in relation to coastal protection and coastal management were somewhat difficult to reconcile with its position in seeking for the environmental controls contemplated by the CZMP to be reduced.
11. I also accept the similar submissions of the Minister that the proceedings primarily tested the lawfulness of decisions made under the Coastal Protection Act and Guidelines by both the Minister and Council in relation to the CZMP and the categorisation of risks assessed therein and that there was little further or broader interest served by the proceedings. Therefore, in summary, I do not consider the current litigation raised one or more novel issues of general importance; that the litigation has contributed in a material way to the proper understanding, development or administration of the law; or that the litigation affects a significant section of the public.
12. Although not determinative, I consider that a primary motivation in bringing the proceedings related to the effect of the hazard classification on the property values of a number of the applicant's members and I accept the submission of the respondents that there were a number of members of the applicant who would benefit by the resolution of what I consider to involve commercial and private concerns. Further, my consideration of the evidence averted to by the respondents, referred to at [46] above, leads me to the view that there was an enduring concern residing with the applicant to vindicate rights of a commercial and/or private character. This evidence indicated that many of the members owned property in the vicinity of the Beaches. Further, the applicant's historical internal correspondence and background material raised, on a number of occasions, the possible restrictions to the members' rights to build or renovate houses on their land with the effect of a consequential diminution in the value of their land and contained comments to the effect that the proceedings were brought to protect the "value and security of all properties at Boomerang and Blueys…".
13. In relation to what are sometimes called "countervailing considerations" (Caroona (No 3) at [61]), being matters taken into account to decline to depart from the usual costs rule when it is assumed or found that litigation could be characterised as public interest litigation, I repeat my earlier comments that I consider that the applicant is seeking to vindicate rights of a commercial character and that the private interests of the members of the applicant would be affected, legally or financially by the outcome of the situation.
14. Further, I consider that the narrowness of the question, which was required to be determined did not, in my view, involve a discrete point of interpretation that had broad ramifications. Despite these findings, and as I consider later in this judgment, it is appropriate to record that I do not accept the submission that the applicant conducted itself in a manner that could be described as disentitling, or that the applicant unreasonably pursued or persisted in points which had no merit or were not properly arguable. Further, I do not accept the applicant's submission that the Minister or Council conducted proceedings in a manner inconsistent with the conduct of a model litigant.
15. For the above reasons, I find that although the proceedings are able to be characterised as being brought in the public interest, the nature and extent of the public interests involved were relatively limited such that, subject to matters considered below as to whether the applicant should pay two sets of costs, no special circumstances exist which would justify a departure from the usual costs rule that costs follow the event.

Separate issue in relation to standing

1. While the applicant submits that the issue of standing, in which it enjoyed success, was a severable issue and that it should be awarded its costs of that aspect of the proceedings, particularly against Council which strongly contested the applicant's standing, given that the discretion to apportion costs in relation to discrete issues is one to be exercised only in exceptional circumstances and as I do not consider that the issue of standing in this case to be such a circumstance, I do not accept the applicant's submission.
2. While in particular cases it may be appropriate to apportion or reduce costs in a manner that reflects the way in which the proceedings were conducted and a party's success or failure on individual issues, in the usual case a court will not attempt to differentiate between issues on which a party was successful and those on which it failed. This approach was considered by Brereton J (as his Honour then was), In the matter of Optimisation Australia Pty Ltd (Costs) [2018] NSWSC 280 at [13]: "…The court does not usually apportion costs between issues, but acts on the outcome of the proceedings as a whole, without attempting to differentiate issues on which the party may not have succeeded. However, a successful plaintiff who has failed on certain issues may be deprived of costs on those issues, or even ordered to pay the defendant's costs of them. But this course, while open, is one on which the court embarks with hesitation; the authorities reflect consistent themes that (1) justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case; but (2) it may be appropriate to apportion costs where a clearly definable and severable issue, on which the otherwise successful party failed, has occupied a significant part of the trial. The severability of one issue on which the successful party failed is not, without more, sufficient to warrant departure from the general rule. However, the court may depart from the general rule if the ultimately unsuccessful party succeeds on significant issues, particularly if those issues are clearly dominant or separable." [footnotes omitted]
3. I adopt his Honour's analysis which I note was also referred to by Ward CJ in Eq in The Pharmacy Guild of Australia v Ramsay Health Care Ltd (No 2) [2019] NSWSC 1398 ('Pharmacy Guild (No 2)') at [26].
4. I accept the submission of Council that standing is not a discrete question in the pure sense as it is related to the question of whether the litigation is in the public interest. I am also conscious of the caution to be exercised in embarking in an apportionment of costs between particular issues, as a respondent or defendant should not be discouraged from raising a defence lest parties be dissuaded by the risks of costs from canvassing material issues. Moreover, as similarly considered by Ward CJ in Eq in Pharmacy Guild (No 2), I accept that matters going to standing in the proceedings were interwoven to some degree with issues to be considered when considering whether there were any public or private interests in the relief sought.
5. In the circumstances, and accepting the submissions of Council summarised at [55] above, I do not consider that there should be a departure from the usual rule that costs follow the event in the sense that the costs associated with the discrete issue of standing should be dealt with separately.
6. Even if I was of the view that costs could or should be apportioned, I also accept Council's submission that the cross-examination of Mr Fox, which I consider the main "separate" element of the standing argument, would most likely have proceeded in a not dissimilar manner and occupied the same amount of time (and therefore costs expended) even if the challenge to the applicant's standing had not been made.

Motion to set aside notice to admit facts

1. As noted above, the applicant seeks its costs against the Minister in relation to the Minister's motion. In his judgment, Boomerang & Blueys Residents Group Inc v New South Wales Minister for Environment, Heritage and Local Government [2018] NSWLEC 139, Sheahan J detailed the background to the proceedings including details of the notice to admit facts and the submissions made by the parties and, in particular, the Minister's submissions that the "facts" were not capable of admission and were not relevant as they did not reasonably relate to any ground pleaded by the applicant. His Honour dismissed the Minister's arguments, finding that the notice was neither oppressive nor an abuse of process; that the "use" of the notice was appropriate; that the (remaining) facts sought to be admitted were capable of response; and that the Minister had failed to identify the matters she genuinely disputed. His Honour reserved costs.
2. In interlocutory proceedings, the default position is that costs are dealt with and become payable upon the conclusion of proceedings in accordance with r 42.7 of the UCPR which is the starting point in determining the appropriate cost order in interlocutory applications (or in relation to "other steps in the proceedings"). Rule 42.7 of the UCPR relevantly provides: 42.7 Interlocutory applications and reserved costs (1) Unless the court orders otherwise, the costs of any application or other step in any proceedings, including - (a) costs that are reserved, and (b) costs in respect of any such application or step in respect of which no order as to costs is made, are to be paid and otherwise dealt with in the same way as the general costs of the proceedings. (2) Unless the court orders otherwise, costs referred to in subrule (1) do not become payable until the conclusion of the proceedings.
3. The default position of costs in the cause may, however, be displaced by the express discretionary power contained in that rule: Verde Terra Pty Ltd v Central Coast Council; Central Coast Council v Verde Terra Pty Ltd (No 5) [2020] NSWLEC 48 at [18],[21] (Pepper J citing Rees J in Pages Property Investments Pty Ltd v Boros [2019] NSWSC 1778 at [37]).
4. Having carefully considered the judgment of Sheahan J and the submissions before me, I do not accept the applicant's submission that the Minister's motion was not a step reasonably taken in managing the proceedings towards hearing.
5. Although I note that a number of the facts were not maintained by the applicant at the hearing of the Minister's motion before Sheahan J, I also accept the Minister's submission that the responses to remaining facts did not feature in the substantive hearing in any event.
6. I also accept that the applicant was successful in dismissing the Minister's motion and that, as recorded by Sheahan J, the Minister had "failed to identify for the Court, as required by the [Civil Procedure] Act, the matters she genuinely disputes" (at [106]).
7. In the circumstances, and rather than costs of the Minister's motion following the default position in accordance with r 42.7 of the UCPR such that the applicant would bear both its and the Minister's costs of the motion, I consider it appropriate that the Court should "otherwise order" and, taking into account other orders I make in this judgment, I find that there should be no order for costs in relation to the Minister's motion with the effect that the applicant and the Minister bear their own costs of the Minister's motion.

Costs of disputed facts proved or admitted

1. The applicant, in written submissions, relying upon r 42.8 of the UCPR seeks orders that the respondents pay the applicant's costs, assessed on an indemnity basis, of "preparing to prove" certain discrete facts which were disputed in the respondents' responses to the applicant's notices to admit facts and which were ultimately proved or admitted. The applicant refers to the discrete facts sought to be admitted being the facts in pars (15)-(18) of the notice to admit facts dated 24 May 2019 that the applicant issued to Council, and the facts in pars (15) and (17) of the notice to admit facts dated 24 May 2019 issued to the Minister. The facts in those paragraphs in each of the notices are identical. The applicant submits that these facts were ultimately admitted by Council and the Minister by the end of the substantive hearing.
2. Leaving aside a concern that a claim for these costs was not the subject of the applicant's motion presently before the Court, I do not consider that the applicant should be awarded costs in relation to these discrete "facts". As submitted by Council, it is unclear on the evidence which was before the Court at the substantive hearing and on the evidence presently relied upon in this motion (including the affidavit of Ms Mortimer sworn 27 April 2020), which specific facts the applicant says were subsequently admitted (both on behalf of Council and the Minister).
3. While it is clear that Council made an admission in relation to Table 1-4 (to the extent that the headings reflected "extreme or high" risk of wave runup or over wash), I am not satisfied on the material before the Court that the conduct of Council or the Minister in regard to these discrete facts is such as to entitle the applicant to an order for costs either on an indemnity or ordinary basis. More specifically, in relation to pars (15)-(18) (in the notice to admit facts issued to Council), I am not satisfied that it is appropriate than an order be made primarily because (16) and (18) were withdrawn or "not pressed" by the applicant (as per pars (25) and (26) of the affidavit of Ms Mortimer sworn 27 April 2019).
4. In relation to pars (15) and (17) in the notice to admit facts issued to the Minister, while I accept that Council may have conceded certain matters (albeit late) when it served written submissions on 1 March 2019, and although there was an overlap between the facts the subject of the notice to admit facts and the relationship with the concession made in the said submissions, I do not consider this is determinative. Also, in relation to pars (15) and (17), which facts relate to an alleged absence of material (then) available to Council, it appears that at no stage did Council make admissions to the effect of the facts therein alleged.
5. In the circumstances and taking into account my finding in relation to the other matters the subject of this judgment, I find that it is appropriate that there be no discrete order in the terms now sought by the applicant in relation to the discrete facts otherwise disputed.

Notice of motion to amend

1. By notice of motion filed on 10 April 2019, shortly before the commencement of the substantive hearing, the applicant sought leave to amend its summons. The Court heard argument on the amendment motion on the first day of the hearing, 15 April 2019, and having received short evidence and oral submissions, I granted leave to the applicant to amend its summons and thereafter gave reasons: Boomerang & Blueys Residents Group Inc v New South Wales Minister for the Environment, Heritage and Local Government and MidCoast Council [2019] NSWLEC 201 ('amendment judgment'). I adopt, but do not repeat, the matters considered in that judgment.
2. The applicant submits that the Court should "order otherwise" pursuant to s 42.7 of the UCPR because the sole reason for the amendment motion was that Council had not "indicated its position about the need for the applicant to challenge antecedent decisions until the Council filed its written submissions on 1 March 2019". The applicant submits that if Council had pleaded its position earlier in the proceedings, the applicant's amendment motion would never have been required and as Council was unsuccessful in opposing the grant of leave, it should pay the applicant's costs of its motion.
3. Council submits, first, that the Court should not entertain the application for costs because it is not reflected in the applicant's present motion for costs; second, that the late amendment was an "indulgence" sought by the applicant and even if Council had notified the applicant of its position earlier, an application to amend would have been required to be dealt with prior to the commencement of the substantive hearing; third, that the applicant would still have been required to make an application for the extension of time pursuant to r 59.10(2) of the UCPR; and, in all the circumstances, the costs of the amendment motion should be dealt with as part of the costs of the proceedings.
4. Having considered my reasons in the amendment judgment and the submissions presently made, I am of the view that it is not appropriate to "order otherwise" and therefore the costs in relation to the amendment motion should be dealt with in the same way as costs of the proceedings.
5. I accept that the amendment was, as submitted by Council, an "indulgence" sought by the applicant very late in the proceedings and I consider that the objection taken to the amendment (and the ensuing argument) was not indicative of unreasonable conduct on behalf of Council. In those circumstances, although the applicant was successful in its amendment motion, I see no reason why costs of the amendment motion should not be dealt with as part of the usual course pursuant to r 42.7(1) of the UCPR. As noted above in relation to other claims, in reaching this view I have also taken into account the orders which I have otherwise made in this judgment.

More than one set of costs

1. Taking into account the findings recorded above and for the reasons that follow, I have come to the view that it would not be appropriate (or reasonable) for the applicant to bear two sets of costs.
2. Although there have been a number of authorities relevant to this question that understandably turn upon their own facts, in general, more than one set of costs will not be allowed to respondents between whom no conflict of interest could arise in the presentation of their cases. In Statham (No 2) at 246, Woodward J stated: "The principle which I deduce from these authorities, and which I believe I should follow in spite of the two cases earlier cited, is that the court will not normally allow two sets of costs to defendants where there is no possible conflict of interest between them in the presentation of their cases. I would add to this basic proposition three provisoes. In the first place, if a conflict of interest appears possible but unlikely, the defendants should make any necessary inquiries from the plaintiff as to the way in which his case is to be put if this would resolve the possibility of conflict between defendants. Secondly, there could be circumstances in which, although the defendants were united in their opposition to the plaintiff, their relationship to each other might be such that they would be acting reasonably in remaining at arm's length during the general course of litigation. Thirdly, even if defendants are acting reasonably in maintaining separate representation for some time or for some purposes, they may still be deprived of part of their costs if they act unreasonably by duplicating costs on any particular matter or at any particular time. Bearing in mind these principles, it becomes necessary to inquire first whether there was any possible conflict of interest in the present case."
3. The principle was considered more recently in Local Democracy Matters Inc (No 2) at [20], [23] in the following terms: "…In Statham v Shepard (No 2) (1974) 23 FLR 244 at 246, Woodward J stated the general principle that, subject to certain provisos, "the court will not normally allow two sets of costs to defendants where there is no possible conflict of interest between them in the presentation of their cases". That principle has regularly been applied in this Court, including for example in Taylor v Owners - Strata Plan No 11564 (No 2) [2013] NSWCA 153 at [6] and HP Mercantile Pty Ltd v Hartnett [2017] NSWCA 79 at [8]. It is applicable to the present case. As Hodgson JA explained in Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121]: "underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs." In HP Mercantile Pty Ltd v Hartnett at [14] this Court said that: "the ultimate question is not (as the respondents submit) whether they have acted reasonably, nor whether there has shown to be duplication. The question is whether it is reasonable for the unsuccessful litigant to bear more than one set of costs."
4. The essential question is whether it is reasonable for the unsuccessful applicant to bear the entirety of both respondents' costs. This question in my view turns on whether there is "no possible conflict of interest between them and the presentation of their cases": Statham (No 2) at 246; In the matter of Reed Constructions Australia Pty Ltd (in Liquidation) - Walley v Chubb Insurance Australia Ltd [2019] NSWSC 1007; (2019) 372 ALR 684 at [48]; Muswellbrook Shire Council v Hunter Valley Energy Coal at [207].
5. Accepting that the Minister and Council were both necessary parties to the litigation and that each sought to defend challenges made to their respective decisions made under the Coastal Protection Act, it is clear that the interests of both respondents nonetheless overlapped in the sense that they both sought to uphold the CZMP.
6. This overlap and commonality in the decisions of both respondents (and their respective positions taken in defending them) may be deduced from my summary of the legislative framework and the requirements for the preparation and certification of coastal zone management plans under the Coastal Protection Act at [42]-[49] of the primary judgment. I similarly summarised the legislative regime in relation to the Guidelines at [51]-[59]. I also summarised the process contained within the statutory scheme leading to the Minister's certification of the CZMP at [209]-[212], and at [213], I summarised the evidence then before the Court indicating the "steps" that were undertaken. I adopt and do not repeat those paragraphs.
7. Simply stated, although Council's role under the Coastal Protection Act was to prepare and make the CZMP whereas the Minister's role was to certify the CZMP, I consider that, as submitted by the applicant, those roles were closely interlinked. As I noted in the primary judgment at [210], in order for Council to successfully uphold the CZMP it necessitated a defence of the Minister's certification. It is difficult to foresee how a possible conflict could arise if the Minister were to similarly defend Council's decision. As such, it is clear that there was a common interest in a number of (if not all) aspects of the respondents' positions.
8. Even if there was a possible, albeit unlikely, conflict between the respondents such that the first proviso of Statham (No 2) were to be engaged, I have not been presented with any evidence to suggest that appropriate enquiries were made by the respondents to ensure that any separate representation was necessary and appropriate in the circumstances. Applying the first proviso, the onus was on the respondents to make inquiries to elucidate whether there were circumstances requiring the respondents' separate representation. As such, I consider that this also militates against the respondents' arguments that each should be entitled to all of their costs.
9. As summarised above at [64]-[68], the Minister and Council both submit (adopting the second proviso in Statham (No 2)) that it was appropriate they remained at arm's length and, further, that each confined its case to responding to the separate challenges made to each of the separate decisions. Although I accept that consideration of "possible conflict" is not without nuance and that both respondents were public bodies and each made discrete and separate decisions, I nonetheless consider that these decisions were unlikely to be, or to result, in an enduring conflict in relation to ongoing management and/or public decision-making in relation to the respective roles such that it was not necessary to remain at arm's length in defending against the applicant's attack against the CZMP.
10. Even though I accept that the respondents sought to minimise duplication in the presentation of their cases, this is not relevant to my consideration given my findings above that there was no possible conflict between the respondents or that, even if there had been, that the respondents have not satisfied the first proviso of Statham (No 2). Although I do not consider either respondent to have conducted itself in an otherwise disentitling manner and I accept that each sought to minimise duplication, the relevant question is not whether the respondent has conducted itself reasonably but whether it is reasonable for the applicant to bear more than one set of costs: HP Mercantile Pty Ltd v Hartnett [2017] NSWCA 79 at [14]; Local Democracy Matters Inc (No 2) at [22].
11. Given the above, in my view it is not reasonable for the applicant to bear both the Minister's and Council's costs of the proceedings. Conscious that the appropriate order will be one that reflects the "actuality of the litigation" (Local Democracy Matters Inc (No 2) at [23]), and again taking into account my consideration and findings in relation to the discrete questions earlier in the judgment, it is appropriate that, considering the conduct of the respondents at and in relation to the hearing, the proportion in which each carried the litigation, and the question of fairness to all parties, I consider that Council should receive 60% and the Minister should receive 40% of their costs of the proceedings.
12. For completeness, in reaching my conclusion I am comforted in my view by the fact that, even if there is an element of "possible conflict" caused by the differing roles of each of the respondents under the Coastal Protection Act, that relationship is quite different to that between the respective parties considered by the Court in Muswellbrook Shire Council v Hunter Valley Energy Coal in circumstances where the Secretary of the Department of Planning, Industry and Environment, as the decision-maker, was the second respondent to a judicial review challenge brought by Muswellbrook Shire Council. The Court of Appeal (per Basten JA at [67]), considered that this was an "inappropriate" role and, on the facts of that matter, the Secretary should have, but did not, follow a role more closely aligned to that of amicus curiae where the usual order is that the amicus neither receives nor pays costs. Further, the Court did not accept that the Secretary conducted herself in compliance with the principles stated by the High Court in R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13; [1980] HCA 13 ('Hardiman') at 35-36 and, in the circumstances, costs were not awarded (despite the Secretary enjoying success in the proceedings). Macfarlan JA, having also referred to Hardiman, considered that, consistent with that principle, the Secretary was entitled to be present to make submissions concerning her powers and procedures. However, as there was already a well-represented active contradictor in relation to other aspects, when the Secretary decided to take an active stance (equating with that of the contradictor), she took the risk that she would not obtain an order for costs.

Conclusion

1. For the reasons above, I consider that the appropriate order is that the applicant pay 60% of Council's costs and 40% of the Minister's costs of the proceedings, with the exception of the Minister's motion in which the applicant and the Minister are to bear their own costs.
2. As the parties have enjoyed mixed success in this motion for costs, in the circumstances I consider that it is appropriate that there be no order for costs of the present motion such that each party bears their own costs of this motion.

Orders

1. The Orders of the Court are: 1. The applicant and the Minister are to bear their own costs of the notice of motion filed 5 June 2018 heard by Sheahan J on 24 July 2018. 2. Subject to Order (1), the applicant is to otherwise pay: 1. 60% of Council's costs of the proceedings; 2. 40% of the Minister's costs of the proceedings; 1. Each party to bear their own costs in relation to the present notice of motion for costs filed 10 February 2020.

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: 30 October 2020