Booth v Bosworth

STATUTORY FRAMEWORK AND RELEVANT PRINCIPLES 6 Section 43 of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") relevantly provides: "(1) …the Court or a Judge has jurisdiction to award costs in all proceedings before the Court…. … (2) …the award of costs is in the discretion of the Court or Judge." 7 As I noted in the Yates Property Corporation Pty Ltd v Boland (No. 2) (1997) 147 ALR 685 at 687-688: "The discretion to award costs conferred on the Court by s 43 of the Federal Court Act is to be exercised in the context of O 62 of the Federal Court Rules. O 62 r 4 provides as follows: '(1) Subject to this Order, where by or under these Rules or any order of the Court costs are to be paid to any person, that person shall be entitled to his taxed costs. (2) Where the Court orders that costs be paid to any person, the Court may further order that as to the whole or any part of the costs specified in the order, instead of taxed costs, that person shall be entitled to: (a) a proportion specified in the order of the taxed costs; (b) the taxed costs from or up to a stage of the proceeding specified in the order; (c) a gross sum specified in the order instead of the taxed costs; or (d) a sum in respect of costs to be ascertained in such manner as the Court may direct.' The 'taxed costs' for which O 62 r 4 provides are costs taxed on a party and party basis (Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225; 118 ALR 248). In Re Wilcox; ex parte Venture Industries Pty Ltd [(1996) 141 ALR 727] the Full Court confirmed (per Black CJ at 729 and Cooper and Merkel JJ at 732-733) that the discretion to depart from the ordinary rule in favour of party and party costs is not to be exercised unless the justice of the particular case so requires or some special or unusual feature arises. That is, as the Chief Justice pointed out at 729: '…in the ordinary case costs will follow the event and the court will order the unsuccessful party to pay the costs of the successful party, on a party and party basis, a basis which will fall short of complete indemnity'. In Colgate-Palmolive Company v Cussons Pty Limited, Sheppard J, whilst acknowledging that the categories of case in which costs on some basis other than a party and party basis may appropriately be ordered are not closed, noted some of the circumstances in which a departure from the usual rule has been considered warranted. His Honour instanced the following: (a) the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud; (b) particular misconduct that causes loss of time to the Court and to other parties; (c) the commencement or continuation of proceedings for some ulterior motive, or in wilful disregard of known facts or clearly established law; (d) the making of allegations that ought never to have been made or the undue prolongation of a case by groundless contentions; (e) an imprudent refusal of an offer to compromise; and (f) proceedings involving a contemnor. His Honour was careful to note, however, that the existence of circumstances capable of warranting the making of an order for costs on a basis more generous than party and party costs to the person in whose favour the order is made does not compel the making of such an order. Costs are always in the discretion of the Court." 8 The more recent decision of the High Court in Oshlack v Richmond River Council (1998) 193 CLR 72 does not, in my view, throw doubt upon the existence of a "usual rule" that, in the absence of disentitling conduct, a successful party is entitled to an award of costs. What the decision makes clear is that where a court is given a wide discretion with respect to costs there is no absolute rule that a successful party is entitled to an award of costs (see partic. per Gaudron and Gummow JJ at [40]). I note that this appears to be the view of Oshlack v Richmond River Council adopted by the Full Court of this Court in Friends of Hinchinbrook Society Inc v Minister for the Environment (No 5) (1998) 84 FCR 186. Oshlack v Richmond River Council, which was concerned with the discretion vested in the Land and Environment Court by s 69 of the Land and Environment Court Act 1979 (NSW), also makes clear that in exercising a discretion of the kind created by s 43 of the Federal Court Act it is not permissible for the Court or a Judge to "take into account considerations which can be said to be definitely extraneous to any objects the legislature could have had in view" in enacting s 43 and in relation to the operation of s 43 upon proceedings of the kind in which the order for costs is to be made (see partic. per Gaudron and Gummow JJ at [49]).

Contentions 9 The applicant accepts that she is not entitled to her costs of the unsuccessful interlocutory application for an interim injunction. Further, the applicant accepts that she is not now entitled to her costs of or incidental to the re-opened hearing on 8 August 2001. The applicant sought and obtained leave to re-open the hearing to make certain supplementary submissions to the Court upon her undertaking to meet on an indemnity basis the respondents' costs of and incidental to the re-opening of the hearing. 10 Subject to the above matters, the applicant contends that, as the successful party in the proceeding, she is entitled to an order that the respondents pay her taxed costs of the proceeding. 11 The respondents do not seek any order for costs in their favour. Moreover, they accept that the applicant is prima facie entitled to an order awarding her some costs. However, they submit that, having regard to the particular circumstances surrounding this case, either there should be no order made as to costs or alternatively the applicant should be awarded only a small percentage of her costs. The respondents' submission was advanced on the following broad bases: (i) that the respondents' (perhaps more accurately, the first respondent's) costs of successfully resisting the interlocutory application should be taken into account as an offsetting factor against the applicant's costs of the trial; (ii) that the relief sought by the applicant was plainly over-reaching; (iii) that the applicant took an "attitude" throughout the proceeding such as to reject any proposal that the grid might be operated with a reduced electric current so as to deter Spectacled Flying Foxes without killing them; (iv) that it is apparent that the case of the applicant was prepared and presented with the support of public contributions while the respondents' costs, including any costs that they are ordered to pay to the applicant, will have to come out of their own pockets along with the loss resulting from the grant of the injunction; (v) that the applicant does not appear to be under an obligation to repay donations made to support the conduct of her case and that she may not have paid, or incurred a personal liability to pay, costs; (vi) that the proceeding was in the nature of a "test case" from which the applicant and her supporters gained benefit but the respondents did not; and (vii) that the applicant retained two junior counsel but the senior of them did not, and seemingly was never intended to, make a real contribution to the conduct of the applicant's case.

Consideration 12 The principal issue for present determination is whether the justice of this case requires that the ordinary rule in favour of party and party costs be departed from or whether a special or unusual feature of the case can be identified which calls for departure from the ordinary rule. 13 The first factor which the respondents identified as requiring or calling for a departure from the ordinary rule is, in effect, that the first respondent's costs of successfully resisting the application for interlocutory relief will not be recovered by the respondents unless the ordinary rule is departed from. As is mentioned above, Spender J ordered that the costs of and incidental to the interlocutory application be the first respondent's costs in the proceeding. His Honour could have, but did not, order that the costs of the interlocutory application be the first respondent's costs in any event. 14 As the respondents' submission recognises, it followed necessarily from the order made by Spender J that, unless the first respondent obtained an order for costs in his favour in the proceeding, he would not obtain his costs of and incidental to the interlocutory application. It seems to me that if I were to exercise the discretion given to me by subs 43(2) of the Federal Court Actin a way which reduced the costs to be paid to the applicant because of the impact, in the circumstances which have happened, of his Honour's costs order, this would amount to an effective interference with His Honour's costs order. 15 In making the order that he did, Spender J plainly turned his mind to the possibility that the first respondent, although successful on the interlocutory application, might not be successful on the principal application. His Honour may be assumed to have taken the view that the first respondent should only receive his costs of the interlocutory application if he also obtained an order for costs in his favour in the proceeding. To reduce the costs payable by the respondents to the applicant in the proceeding in a way which reflects the first respondent's costs of the interlocutory application would be to allow the first respondent to achieve, wholly or in part, indirectly that which Spender J declined to grant him directly (ie an order that he recover his costs of the interlocutory application in any event). 16 While I do not doubt that I have both jurisdiction and power to reduce the costs to be paid to the applicant so as to reflect, in whole or part, the fact that the first respondent successfully resisted the making of an interlocutory injunction, I am not persuaded that it would be an appropriate exercise of my discretion to do so. It has not been suggested that any factor, other than the hearing and determination of the principal application, has arisen since the date of the order of Spender J which calls for a reconsideration of the discretion exercised by his Honour. 17 I accept that the relief sought by the applicant in the proceeding was considerably wider than was capable of being justified by the evidence called by the applicant. It extended, for example, to species of flying foxes other than the Spectacled Flying Fox and it extended to conduct in addition to the operation of the electric grid. However, as senior counsel for the respondents frankly acknowledged in argument, the applicant's wide claim for relief did not result in any increase in the cost of preparing for or conducting the hearing. The real issues in dispute in the proceeding were well recognised by all. 18 The argument of the respondents with respect to the applicant's wide claim for relief was summarised in the following passage from their written submissions: "28. The Act uniquely confers on persons like the Applicant the right to apply for injunctive relief, in circumstances where such a person may not have locus standi under the general law. Uniquely, it confers on a person in Applicant's [sic] position the right to apply for interlocutory injunctive relief, without giving any undertaking as to damages. In the light of these unusual legislative provisions, persons in the position of the present Applicant should receive no judicial encouragement to adopt a position, in litigation under the Act, which is unreasonable or unjustified. The Applicant should not be rewarded, in costs, for seeking more extensive relief than she was able to produce any evidence to justify; nor for persisting in that position after the evidence had closed; nor for continuing to persist in that position even after the publication of Reasons for Judgment. There must be some disincentive against persons in the Applicant's position taking an attitude which is unreasonable, intransigent or capricious. 29. By contrast, the Act places enormous burdens on people like the Respondents, for no benefit to themselves beyond the benefit which the entire community enjoys from the protection of world heritage areas. The evidence accepted in this case (Reasons for Judgment, paras [108] and [109]) indicates a potential annual monetary loss to the Respondents of more than $200,000.00. Given the recalcitrant attitude taken by the Applicant, the Respondents had no alternative but to defend this case." 19 The above submissions, in my view, pay insufficient regard to the important principle that, subject to only limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. Although McHugh J was in dissent on the result of the appeal in Oshlack v Richmond River Council, his following observations at [67]‑[68] concerning the above principle do not seem to me to be controversial: "The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation. As a matter of policy, one beneficial by-product of this compensatory purpose may well be to instil in a party contemplating commencing, or defending, litigation a sober realisation of the potential financial expense involved. Large scale disregard of the principle of the usual order as to costs would inevitably lead to an increase in litigation with an increased, and often unnecessary, burden on the scarce resources of the publicly funded system of justice." 20 It seems to me that it would not be to "reward" the applicant in respect of any aspect of the conduct of the litigation to make in her favour the order typically made in favour of successful litigants. It would merely be to allow her that which fairness may be seen to dictate. 21 If the passage from the respondents' written submissions set out in [18] above is properly to be understood as suggesting that the applicant in fact adopted in relation to this proceeding an attitude that was "unreasonable, intransigent or capricious", the suggestion seems to me to be without proper foundation. Contrary to a suggestion which I understand the respondents to have advanced, the applicant was under no obligation to join with the respondents in obtaining a census of flying foxes ahead of the hearing of this proceeding. In any event, as the evidence in the proceeding revealed, a recent census was conducted by Ms Whybird and others. Nor do I consider that the applicant is open to criticism because her solicitor, who was apparently employed by Environmental Defenders Office (Qld) Inc, was not prepared to assist the respondent with "applications to government for the purpose of research, development and implementation of viable alternate crop protection techniques". 22 Further I do not accept that the attitude of the applicant to correspondence from the respondents' solicitor touching on the issue of lowering the voltage of the grid meant that the respondents had no alternative but to defend the case. It was at all times open to the respondents to undertake not to operate the grid, or to operate it only at voltages which would not result in injuries to Spectacled Flying Foxes. They did not offer any such undertaking before the hearing and they did not give evidence, or otherwise advise the Court, during the course of the hearing, or thereafter, of their willingness to give any such undertaking. 23 It may be that the reason for the limited attention which all parties paid to the possibility of the grid being operated at low voltages is revealed by the respondents' written submissions on the appropriate form of the substantial order in the proceeding. The applicant argued in favour of an order that would restrain the respondents from operating the grid so as to cause injury to Spectacled Flying Foxes. The respondents' written submissions indicated that they would need to obtain advice from appropriate experts as to whether it is feasible to operate the grid at a level which functions as a deterrent to Spectacled Flying Foxes without involving the risk of fatalities. The written submissions acknowledged the possibility that the respondent would be advised that there is no level of current at which the grid can safely be operated so as to deter Spectacled Flying Foxes without the risk of killing them. Having regard to these submissions it seems that the practical significance of any decision to lower the voltage of the grid is even now open to conjecture. 24 Having regard to the above, no further consideration need be given to the third basis upon which the respondents contended that the application should not receive the usual order for costs. 25 I do not consider that the fact that the respondents will have to meet from their own funds any order for costs made against them is capable of itself of justifying a departure from the usual rule that a successful litigant is entitled to an order for costs in its favour. It is ordinarily to be expected that a party will have to meet from its own funds orders for costs made against it. As the passage from the judgment of McHugh J in Oshlack v Richmond River Council set out above (see [19]) recognises, it is consistent with the public interest that a party contemplating defending proceedings have a "sober realisation of the potential financial expense involved". The fact, if it be a fact, that the applicant was able to litigate with the support of public contributions does not diminish this public interest, although it may have the result of lessening the amount of the cost required to be paid to indemnify the applicant in respect of her costs. The amount of costs necessary to indemnify the applicant will be a question to be determined by the taxing officer in due course. 26 The respondents further place reliance on the proposition that "the Court may reasonably take the view that this proceeding was in the nature of a 'test case'". It is not clear to me in precisely what regard the proceeding could be regarded as a test case. The standing of the applicant to bring the proceeding was not challenged. The principal dispute between the parties was whether the conduct of the respondents in causing the deaths of Spectacled Flying Foxes was likely to have a significant impact on the world heritage values of the Wet Tropics World Heritage Area. In large part this was a dispute on the facts: how many Spectacled Flying Foxes were being killed annually by the grid, how large was the total population of Spectacled Flying Foxes and what were the world heritage values of the Wet Tropics World Heritage Area? In any event, it seems to me to follow from the approach adopted by the High Court in Oshlack v Richmond River Council that, even were the proceedings to be characterised as a "test case", this would not of itself be sufficient to justify depriving the applicant of the usual order for costs. 27 Nor do I consider that the "unusual legislative provisions" referred to in the respondents' written submissions call for the usual rule as to costs to be departed from in the circumstances of this case. In Oshlack v Richmond River Council only Kirby J considered that the wide standing provisions of the Environmental Planning and Assessment Act 1979 (NSW) had a relevance to the question of costs. By contrast McHugh J at [89] said: "Under wide standing provisions … applicants are simply given enhanced access to restrain or remedy breaches of the law by respondents. Since the respondent is already expected to comply with the law, giving a member of the public a right to ensure that the respondent has so complied causes no relevant prejudice to the respondent." In my view, the wide standing provisions of the Act do not give rise to an implication that the Court should exercise its discretion as to costs in a manner calculated to encourage restraint in future litigation under the Act. 28 The question of whether it would be appropriate for the applicant to recover the costs of retaining two counsel at the hearing is one appropriate to be determined by the taxing officer. It is not a matter which touches on the terms of the costs order which it is appropriate to make. 29 It is, as the respondents have submitted, difficult, if not impossible, to make an apportionment of the costs incurred in the proceeding between issues, including issues as to relief, on which the applicant succeeded and on those on which she failed. Even if it were not, I would not consider this to be an appropriate case for such apportionment. It is commonplace for a successful party to fail on some issues or to be awarded relief formulated in a different manner than that claimed. Such commonplace outcomes do not ordinarily lead to the successful party being penalised in costs. The situation might be otherwise where a significant discrete issue has been litigated unsuccessfully by the otherwise successful party or where the successful party has engaged in conduct of a kind which renders it contrary to the interests of justice for that party to be fully indemnified for its costs (for example, the conduct of the kind identified by Sheppard J in Colgate-Palmolive Company v Cussons Pty Limited (see [7] above)). However, I do not regard this as such a case. 30 In my view the appropriate order in this case is that the respondents pay the applicant's taxed costs, including reserved costs (if any), of the proceeding other than: (a) the costs covered by the order made by Spender J on 13 December 2000; and

(b) the costs of and incidental to the making of further submissions to the Court on 8 August 2001.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

Counsel for the Applicant: Mr S Keim with Mr C McGrath

Solicitor for the Applicant: Environmental Defenders Office (Qld) Inc