Botany Bay City Council v Minister for Planning & Anor

KEY ISSUES: Costs :- public interest litigation - special circumstances - factors taken into consideration in ordering costs - successful party should be compensated by unsuccessful party - traditional exemption to usual order for costs focuses on conduct of successful party - Minister's participation in hearing limited - respondents' cases did not overlap - both respondents entitled to costs - indemnity costs - abandonment of part of claim at commencement of hearing - ordinary rule is that a successful party only receives costs on a party and party basis - sensible abandonment of claims with no real prospect of success - should not discourage the proper abandonment of unwinnable appeals or points - no order for indemnity costs

Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208; Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No. 2) (2004) 136 LGERA 365; Huntsman Chemical Company of Australia Ltd v Interactive Pools Australia Ltd (1995) 36 NSWLR 242; CASES CITED: Oshlack v Richmond River Council (1998) 193 CLR 72; Oshlack v Richmond River Council (1998) 82 LGERA 236; R v Riscuta [2003] NSWCCA 6; The Queen v The Australian Broadcasting Tribunal & Ors; Ex Parte Hardiman (1980) 144 CLR 13

APPLICANT: T O'Connor (Solicitor) SOLICITORS: Houston Dear O'Connor

FIRST RESPONDENT: M D Seymour (barrister) LEGAL REPRESENTATIVES: SOLICITOR: Christine Hanson Department of Planning

SECOND RESPONDENT: B R McClintock SC SOLICITORS: Minter Ellison

JUDGMENT:

• 8 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

BOTANY BAY CITY COUNCIL v MINISTER FOR PLANNING & ANOR (No. 2) [2006] NSWLEC 718

JUDGMENT 1 HIS HONOUR: On 13 October 2005, the Minister for Planning, acting as consent authority, granted development consent to the second respondent, Sydney Ports Corporation, for the construction and operation of a new container terminal and associated infrastructure at Port Botany. The development is State significant development which will effectively double the present capacity of the port and will cost an estimated $576 million. The consent was granted following public hearings by a Commission of Inquiry and the subsequent production of a report by the commissioner to the Minister. 2 On 31 October 2005, Botany Bay City Council commenced proceedings challenging the validity of the development consent on judicial review grounds. On 3 May 2006, after a six-day hearing, I delivered a judgment in which I dismissed the council's claim. 3 The respondents, namely the Minister and Sydney Ports Corporation, now seek an order for their costs. In particular, Sydney Ports Corporation seeks an order for the costs it has incurred in meeting those parts of the council's points of claim which the council abandoned at the commencement of the hearing, on an indemnity basis. 4 The position on costs generally is governed by what has come to be known as the "usual order as to costs". The reason for the usual order as to costs is explained by McHugh J (Brennan CJ concurring) in Oshlack v Richmond River Council (1998) 193 CLR 72. Although McHugh J dissented in the result in that case, his Honour's explanation remains as a classic statement of the principle (at 97 [67]): The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. 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. 5 Although in the present case the council was entirely unsuccessful in its legal challenge to the validity of the development consent, having failed in all the arguments which it advanced, it nevertheless submits that there should be no order as to costs. The reasons advanced in support of the submission may be summarised as follows:

(a) The litigation was public interest litigation, brought on behalf of the council's local residents who could be impacted by the rail and truck traffic; and there were concerns in relation to the hazard analysis that had been undertaken. (Reliance was placed upon Oshlack both at first instance: (1994) 82 LGERA 236 per Stein J and in the High Court; and Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No. 2) (2004) 136 LGERA 365.)

(b) A significant and novel question arose concerning the interpretation of cl 71(f) of the Environmental Planning Regulation 2000 ("the Regulation ").

(c) The hearing involved the interpretation of a document produced by the Environment Protection Authority (Hazardous Industry Planning Advisory Paper No. 6) used in the preparation of the Preliminary Hazard Analysis Report.

(d) The council was concerned about irrevocable damage which might result if there was not a successful challenge to the consent.

(f) The council should not in any event have to bear the costs of both respondents. (Reliance was placed on the joint judgment of Gaudron and Gummow JJ in Oshlack at 90 [46].)

(g) Any order for indemnity costs could discourage the proper abandonment at or prior to the hearing of unwinnable points. (Reference was made to Huntsman Chemical Company of Australia Ltd v Interactive Pools Australia Ltd (1995) 36 NSWLR 242 and to Engadine at 370 [11].) 6 In my opinion the council must pay the costs of both respondents and on the usual party and party basis. I have come to this conclusion for the following reasons. 7 Although the proceedings may be characterised as public interest litigation, that fact alone is not determinative. In the Engadine case I summarised (at 371 [15]) those factors which would qualify a proceeding as public interest litigation as follows: the public interest served by the litigation; whether that interest is confined to a relatively small number of people in the immediate vicinity of a development, or whether the interest is wider; whether the applicant sought to enforce public law obligations; whether the prime motivation of the litigation was to uphold the public interest and the rule of law; whether the applicant has no pecuniary interest in the outcome of the proceeding. 8 I am prepared to assume that the council in the present case brought the proceedings on behalf of those of its local residents who may be adversely affected, that the council had no pecuniary or private interest to protect, and that it was seeking to enforce compliance with the procedural requirements regarding the exercise of the discretion to grant consent. That is, I am prepared to assume that this case may be characterised as public interest litigation. 9 As I noted above, that is not, however, determinative of the question of costs. It is only one of many factors to be taken into consideration. In Oshlack, the High Court held that the fact that litigation may be characterised as public interest litigation was a relevant consideration in the exercise of the court's discretion as to costs, but was not determinative. 10 The primary consideration remains the principle described by McHugh in Oshlack at 97 [67], which I have set out in par [4] above. That is, the successful party should be compensated by the unsuccessful party for the costs it has incurred and which it would not have otherwise incurred if it had not been brought into court. Moreover, "the traditional exemptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion" (McHugh J in Oshlack at 97 [69], see also Gaudron and Gummow JJ at 87 [37]). There is nothing in the conduct of the successful parties in the present case which would come near disentitling conduct. 11 The determination of the ambit of cl 71(f) of the Regulation and the hazardous industry document did not occupy a great deal of the hearing time and could have been ready resolved without the calling of any evidence, other than tendering the document itself. 12 In submitting that it should not have to bear the costs of both respondents, the council relies upon the following obiter dicta of Gaudron and Gummow JJ in Oshlack at 90 [46] In a significant number of such litigious disputes, it will, in accordance with the reasoning in R v Australian Broadcasting Tribunal; Ex parte Hardiman [(1980) 144 CLR 13 at 35-6], be entirely appropriate for, if not incumbent upon, the local government body not to assume the position of a protagonist and to avoid incurring substantial costs. The position of protagonist will be filled by the party against which injunctive relief is sought and which is the real contradictor in respect of the application for declaratory relief. 13 I am not, of course, bound by obiter dicta of the High Court. Nor am I bound by a decision of the High Court constituted by any single justice, although such a decision is entitled to appropriate weight and respect: Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208, R v Riscuta [2003] NSWCCA 6. In Riscuta, Heydon JA, speaking for the court, held that a statement of principle by two judges of the High Court was not binding. His Honour said at par [101]: The dictum of Gaudron and Hayne JJ, though it is entitled to the greatest respect and though it is of persuasive value, is not an "appellate decision" of the High Court. It is a statement of principle, no doubt a considered one, offered as a dictum. 14 Both of the respondents in the present case were properly joined - the Minister as the authority whose consent it was sought to invalidate and the Sydney Ports Corporation as the beneficiary of the consent and having a pecuniary interest in the outcome. The Minister's participation in the hearing was properly limited, in accordance with the Hardiman principle, to submissions going to the powers and procedures of the consent authority (The Queen v The Australian Broadcasting Tribunal & Ors; Ex Parte Hardiman (1980) 144 CLR 13 at 36). The involvement of Sydney Ports Corporation was not so limited. The respondents' cases, moreover, did not overlap and each presented a different part of the defence case to the council's claim. 15 Moreover, I observe that I received considerable assistance in the resolution of this case by the submissions of senior counsel for the Minister, Dr J E Griffiths SC. For all of these reasons, I am not inclined to limit costs to be ordered to only one set of costs. 16 The application for indemnity costs is based on the abandonment by the council of part of its claim at the commencement of the hearing. Paragraph 13(b) of the council's amended points of claim alleged that the Minister failed to properly consider the findings and recommendations of the Commission of Inquiry before determining the development application. Paragraphs 14 to 17 of the amended points of claim challenged the validity of certain conditions of the development consent. On the first day of the hearing, at about 9:30 am, the respondents were given a written outline of the council's submissions which stated that the council does not press pars 13(b) and 14 to 17 of the amended points of claim. When senior counsel for the council commenced his opening submissions he said that the applicant does not press pars 13(b) and 14 to 17 of the amended points of claim. 17 The claim for indemnity costs is said to arise as a consequence of having to prepare a case to meet the abandoned elements of the claim, which costs could have been avoided entirely if the council had given notice earlier of its intention to abandon these parts of its claim. Moreover, Mr B R McClintock SC, appearing for the second respondent, says that par 13(b) was always a genuinely hopeless claim and there was no basis for making the allegation. 18 I am aware of the reality that costs ordered to be paid by one party to another cover only a proportion of the actual costs which the successful party has incurred. Nevertheless, the ordinary rule is that a successful party usually receives no more than an order that its costs shall be paid on a party and party basis. In Huntsman Chemical Company, the Court of Appeal declined to award the indemnity costs where a number of related appeals were abandoned upon the appeal being called. Kirby P accepted the reality that it is only shortly before the hearing of proceedings that parties and their lawyers typically give them their full attention. In particular, Kirby P made the following observation (at 247-8): Considerable store was placed upon the late abandonment of the appeals and the acknowledgment that this was said to provide that the appeals were always hopeless. Whilst that argument has force, it would be undesirable for the Court, by its costs orders, to discourage the proper, but late, abandonment of unwinnable appeals or points. Yet this might occur if there were a suggestion that such an act of responsible advocacy would be penalised by the making of a special costs order. 19 In the Engadine case I said (at 370 [11] - [12]): At the final hearing, the applicant sensibly abandoned its claims based on unreasonableness, estoppel and contract, those claims having no real prospect of success. By way of contrast, in Broadwater Action Group the applicant acted unreasonably in instigating and pursuing claims at hearing, notwithstanding the fact that it had absolutely no evidence whatsoever to support its claims which thus had no chance of success. Similarly, in Maule v Liporoni (No 2) (2002) 122 LGERA 216, the applicant persisted with claims that were baseless without regard to whether there was any evidence in support thereof and which had no chance of success.

The conduct of the applicant in these proceedings differs considerably from those cases. In this case the applicant chose not to pursue the claims at hearing, which, upon reflection, were not going to succeed, instead sensibly abandoning them at the outset of the hearing.

20 In my opinion the same considerations to which Kirby P referred to in Huntsman Chemical Company, and to which I referred in Engadine, apply here. Senior counsel for the council sensibly abandoned those claims which had no real prospect of success. The making of an order for indemnity costs would discourage such responsible acts of advocacy. 21 The formal order of the Court is that the applicant pay the costs of each respondent.

I hereby certify that the preceding 21 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd.

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