Central Australian Frack Free Alliance Inc v Minister for Environment & Anor

Allplastics Engineering Pty Ltd v Dornoch Ltd [2006] NSWCA 33, Australian Conservation Foundation v Forestry Commission (Tas) [1988] FCA 144; (1988) 81 ALR 166, Bob Brown Foundation v Commonwealth of Australia (No 2) [2021] FCAFC 20; (2021) 286 FCR 160, Booth v Bosworth [2001] FCA 1718, CSR Ltd v Eddy [2005] HCA 64; (2005) 226 CLR 1, Cumming v Minister for Planning (No 2) [2020] VSC 40, Engadine Area Traffic Action Group Inc v Southerland Shire Council (No 2) [2004] NSWLEC 434; (2004) 136 LGERA 365, Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2024] FCAFC 97, Friends of Hinchinbrook Society Inc v Minister for the Environment (No 5) [1998] FCA 432; (1998) 84 FCR 186, Geeveekay Pty Ltd v Director of Consumer Affairs Victoria (No 2) [2008] VSC 152, Hudson v Entsch [2005] FCA 557, Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164, Ohn v Walton (1995) 36 NSWLR 77, Millers Point Fund Inc v Lendlease (Millers Point) Pty Ltd (No 2) [2017] NSWLEC 29, Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, Parklands Darwin Pty Ltd v Minister for Infrastructure, Planning and Logistics (Costs) [2023] NTSCFC 1, Qantas Airways Ltd v Cameron (No 3) [1996] FCA 765; (1996) 68 FCR 387, Re Kerry (No 2) - Costs [2012] NSWCA 194, Re Southbourne Sheet Metal Co Ltd [1993] 1 WLR 244, Roe v Director General, Department of Environment and Conservation (WA) [2011] WASCA 57, Ruddock v Vadarlis (No 2) (2001) 115 FCR 229, South Melbourne City Council v Hallam (No 2) (1994) 83 LGERA 307, Wide Bay Conservation Council Inc v Burnett Water Pty Ltd (No 9) [2011] FCA 661, Williams v Minister for Environment and Heritage [2004] FCAFC 58; (2004) 132 LGERA 368, referred to.

Second Defendant: G Rich SC with H Baddeley and C Ernst

First Defendant: Solicitor for the Northern Territory

Minister for Environment & Anor (Costs) [2025] NTSC 54

• [1] The second defendant seeks an order for its costs of these proceedings brought by the plaintiff seeking to quash the decision of the first defendant to approve an Environment Management Plan ('EMP') allowing the second defendant to conduct regulated activity under an exploration permit, and to restrain the second defendant from conducting any activity in reliance on the decision or the EMP. The first defendant does not seek any order for costs against the plaintiff.

• [2] The grounds upon which the plaintiff sought those orders involved: (a) the proper construction of certain provisions of the Petroleum (Environment) Regulations 2016 (NT) concerning the extent of the environmental impacts and risks required to be addressed in the EMP; (b) the lawfulness of the first defendant's satisfaction that the EMP included details of the environmental impacts and environmental risks required by the relevant provisions; (c) the correctness of the first defendant's finding that the EMP contained an assessment of the environmental impacts which might arise directly or indirectly from an emergency situation; and (d) the first defendant's power to approve the EMP without reference to the Northern Territory Environment Protection Agency.
• [3] The parties agreed that those grounds could be tried and determined as preliminary questions pursuant to r 47.05 of the Supreme Court Rules 1987 (NT), and that the answers to those questions would also be determinative of the plaintiff's application for particular discovery of documents, the relevance of which was contingent on the correctness of the plaintiff's interpretation of the governing legislation. Following the trial of those preliminary questions:

(a) the first ground failed on the basis that the legislative scheme did not require the EMP for exploration stage activities to address the environmental impacts and risks associated with potential future production activity;[1]

(b) the second ground failed on the basis that in approving the EMP the first defendant was not required to consider broader questions of whether the exploration, production and utilisation of hydrocarbons causes unsustainable greenhouse gas emissions, and the causes and consequences of unsustainable emissions;[2]

(c) the third ground failed on the basis that the approval of that part of the EMP dealing with the environmental impacts and risks of potential emergency conditions could not be characterised as irrational or illogical;[3] and

(d) the fourth ground failed on the dual basis that, on proper construction of the scheme, the first defendant was permitted to approve the EMP in the absence of a referral to the Environment Protection Agency and a determination that an environmental impact assessment was required, and that the question whether the proposed action was required to be referred to the Environment Protection Agency is not an objective jurisdictional fact capable of determination in judicial review proceedings.[4]

• [4] The purpose of a costs order is to compensate the person in whose favour it is made, rather than to punish the person against whom the order is made.[5] The general rule is that if the court makes any order as to costs, it is to order that the costs follow the event unless it appears that some other order should be made having regard to the circumstances.[6] That general rule is based on the principle that justice is not achieved if the party who is responsible for others incurring the costs of litigation does not bear those costs. The second defendant had a substantive legal right to vindicate in its defence of the proceedings. Where, as in this case, the second defendant has been successful, it is the plaintiff who has been responsible for the costs incurred. That is because it has sought to impugn decisions made validly by the first defendant and to deny the second defendant something to which it was entitled.

• [5] Against that background, the second defendant's submissions in support of an order that the plaintiff pay the costs of and incidental to the proceedings may be summarised briefly as follows. The plaintiff brought the proceedings for the purpose of preventing or delaying the second defendant's petroleum exploration activities in furtherance of its general and overriding opposition to fracking activity, rather than because it had any primary concern about the details contained in the EMP.
• [6] In responding to the plaintiff's challenge, the second defendant was required to commission its own expert report in response to the expert evidence filed by the plaintiff. After the plaintiff had filed its expert evidence, it then brought an application for particular discovery which was both misconceived and oppressive given the scope and indeterminate nature of the documents sought. By way of example, the categories of documents sought included the 'best estimates' of the future petroleum that might be recovered by the second defendant in its unknown 'future production activities' and estimates of the greenhouse gas emissions that would result from that production.
• [7] All of the grounds of review advanced by the plaintiff (with the exception of the third ground), and its application for particular discovery, were founded on the general contention that the EMP was required to address the impacts resulting from any future production phase despite the fact that the EMP was necessary only for the approval of regulated activities under the exploration permit. The plaintiff's challenge on the first ground was plainly wrong, contrary to express textual indications in the legislation and inimical to the practical and rational operation of the legislative scheme. The plaintiff's challenge on the second and third grounds contended that the decisions made by the first defendant were irrational or illogical in circumstances where it was clearly open to a reasonable decision-maker to be satisfied that the EMP addressed the matters required under the terms of the legislation. The plaintiff's challenge on the fourth ground proceeded on fundamental misconceptions about the operation of the statutory scheme similar to those underlying the first and second grounds.
• [8] The plaintiff's claim that it brought the proceedings in the 'public interest' should not be allowed to obscure the fact that 'the absence of a prospect of monetary gain is not to be equated with the presence of a motive confined to altruism'[7], 'especially if an association is incorporated precisely for the purpose of pursuing the litigation'[8]. Further, it should not be assumed that those claiming environmental concerns have some monopoly over the public interest. There is also a public interest in social and economic development.[9] In this case, the principal object of the legislative scheme was to encourage petroleum exploration and production activities on the assumption that they are in the public interest.[10]
• [9] Even if the proceedings are capable of characterisation as public interest litigation, the usual order remains that costs follow the event.[11] There needs to be some additional special circumstance before the court should depart from the general rule, and such circumstances will be rare and exceptional.[12] That special circumstance cannot be found 'in some general, nebulous public interest litigation exception but rather in some special feature of [the] case'.[13]
• [10] The principle that there should be the expectation of a reasonable costs indemnity in public interest litigation 'recognises this is necessary both to discourage indiscriminate challenges and as a justification for an award of costs to challengers who succeed'.[14]
• [11] In the second defendant's ultimate submission, the first and fourth grounds of review and the application for particular discovery were based upon a particularly weak premise, and there were no special circumstances operating to displace the general rule.

• [12] The plaintiff opposes the second defendant's application for costs on the bases that the litigation: (a) was in the public interest and of broad public importance; (b) was commenced to ensure compliance with the law; (c) tested arguable and novel questions of law of general importance; and (d) was not conducted by the plaintiff in a way that would tend against a no-costs outcome.
• [13] In making that submission the plaintiff relies on the decision of the High Court in Oshlack v Richmond River Council, in which the court reversed a decision of the New South Wales Court of Appeal which had overturned a no costs order made by the court at first instance. The special circumstances warranting that result at first instance were that: (a) the applicant's motivation was to ensure obedience to environmental law and the preservation of the environment; (b) a significant proportion of public shared the applicant's opposition to the proposed development; and (c) the challenge resolved significant and arguable issues concerning the interpretation and administration of the statutory scheme.[15] The plaintiff says that result is reflective of the modern approach taken by courts in relation to the costs of environmental litigation.[16]
• [14] The plaintiff says that, conversely, those parts of the second defendant's submissions concerning the characterisation of, and motivations which might be attributed to, environmental litigation, and the writings and authorities relied upon in support of those submissions, are concerned with a different category of matter. A distinction is properly drawn between cases of genuine public importance and those in which the plaintiff is pursuing its own commercial or other interests.[17] To the extent that Millers Point Fund Incorporated v Lendlease (Millers Point) Pty Ltd (No 2) is cited by the second defendant as authority for the proposition that there is a countervailing public interest in social and economic development, the court in that matter determined that the litigation was prosecuted in the public interest and made no order as to costs for that reason.[18] In doing so, the court also observed that it was important that costs not present a barrier to the resolution of important questions of law in the pursuit of environmental justice.[19]
• [15] Against that background, the plaintiff submits that these proceedings raised difficult questions of construction of broad application and involved the issue of fracking approvals in which a substantial proportion of the Northern Territory community had a legitimate intellectual or ideological concern.[20] The plaintiff says that it has been undertaking activities in relation to fracking activity since at least 2015, and was not incorporated for the purpose of pursuing this litigation. The plaintiff is a not-for-profit association which has no commercial or financial interest in the outcome. The commencement of this litigation was consistent with the plaintiff's general activities over that extended period and with its concern about the environmental impacts of fracking. The commencement of proceedings to test executive compliance with the statutory scheme was in the public interest and has clarified the operation of the scheme, particularly in relation to the questions raised in the first and fourth grounds. The plaintiff says that all grounds advanced by it were 'well arguable, novel and important'. Finally, the plaintiff submits that it litigated the proceedings reasonably, efficiently and without undue delay, particularly in its consent to the grounds being tried and determined as preliminary questions in a manner determinative of the challenge.

• [16] I am unable to accept the second defendant's submission that because the legislative scheme operates on the assumption that petroleum exploration and production activities are in the public interest, the plaintiff's motivation in bringing these proceedings to prevent those activities was thereby at odds with the principal premise of the legislative regime and the public interest in facilitating petroleum activities. The objects of the legislation also include that petroleum exploration and production activities are conducted in a manner that 'provides protection to the environment of the Territory; and promotes principles of ecologically sustainable development'.[21]
• [17] They are objects which are coordinate and commensurate with the object of fostering economic development through the exploitation of petroleum resources, and which operate as a competing public interest. The commencement of proceedings to enforce compliance with those environmental objects cannot properly be characterised as either the pursuit of a private interest or contrary to the principal purpose of the legislation.
• [18] However, the fact that the proceedings involved a public interest aspect, or an asserted vindication of public rights, does not, of itself, warrant departure from the general rule that costs follow the event.[22] The decision in Oshlack is not to any different effect. The High Court in that matter was considering the subject matter, scope and purpose of a statutory provision which vested the Land and Environment Court with the discretion to determine by whom and to what extent costs of proceedings before it were to be paid. The relevant question was whether the Court of Appeal at intermediate level was correct to determine that the considerations taken into account by the court at first instance were 'definitely extraneous to any objects the legislature could have had in view' in enacting the provision. The answer to that question was that those considerations were not extraneous to the objects of the legislature and erroneous for that reason.[23] The High Court did not itself make 'no costs order against the moving party despite his claim being unsuccessful'.[24]
• [19] The decision in Oshlack does not itself indicate how a costs discretion should be exercised by a court in any given case. In fact, the plurality in that case rejected the notion that there is a fixed category of 'public interest litigation' which is determinative of the issue.[25] The exercise of the discretion requires the application of criteria of a legally normative nature to determine whether there are special circumstances warranting departure from the usual rule.
• [20] In litigation which is concerned with public rather than private rights, it may be enough that the proceedings raise a difficult and plainly arguable question of statutory construction directed to the vindication of a public right of broad importance, as it was determined to be in Bob Brown Foundation.[26]
• [21] In Ruddock, the Full Court of the Federal Court departed from the usual rule on the bases that applications claiming relief from unlawful detention should not be deterred by the threat of an adverse costs order and the proceedings raised undoubtedly difficult and important questions of law, as illustrated by the decision in favour of the applicants at first instance and in the dissenting opinion of the Chief Justice on appeal.[27]
• [22] Some care needs to be taken in the analysis of the decision and reasons of the Full Court of the Federal Court in Environment Council of Central Queensland Inc. The court at first instance dismissed the Environment Council's application and ordered it to pay the proponent's costs of and incidental to the application and half of the responsible Minister's costs. In making that order, the court accepted that the Environment Council brought the proceedings in the public interest and that they raised a matter of public importance. However, the interpretation it pressed was inconsistent with the statutory scheme. The Full Court dismissed the Environment Council's appeals against both the dismissal of its substantive challenge and the awards of costs made against it. It was in that context that the Full Court made no order as to the costs of the appeals on the bases that both the proponent and the Minister would be compensated 'to the extent they sought to be, for the conduct of the trial', and that the public interest role of community organisations is 'an important consideration for the exercise of the costs discretion at the appellate level in particular'.[28]
• [23] It may be accepted that a significant segment of the public shared the plaintiff's opposition to fracking activity in the Beetaloo Basin. It may also be accepted that the plaintiff is a community organisation which did not have any patent or undisclosed commercial interest in the outcome of the proceedings. However, those two matters do not, by themselves, warrant a departure from the general rule as to costs. The substance of the challenge must be such as to warrant that disposition.
• [24] Against that background, it is no doubt correct to say that the matters of construction raised by the plaintiff had not previously been determined by any court and have now been resolved. It follows that the first, second and fourth grounds for review were novel, but that characterisation has nothing to say about the strength of the arguments prosecuted by the plaintiff. All three of those grounds were predicated either directly or indirectly on the proposition that when considering the EMP for approval, the first defendant was obliged to have regard to the environmental impacts and risks of not just exploration activities, but also production-phase activities.
• [25] Although the arguments mustered in support of that premise were no doubt ingenious, that speaks more to the skill of counsel than to the inherent strength of the premise. Both the text of the legislation and the practical and rational operation of the legislative scheme plainly militated against the construction propounded by the plaintiff. The third ground was directed to the content of the EMP rather than the construction of the legislation and raised questions of impression and degree rather than any important legal issue. That the plaintiff conducted the litigation efficiently, responsibly and in a manner which facilitated its early resolution does not alter those characterisations. The fact that the plaintiff may not have acted in a way that disentitled it to a favourable costs order does not necessarily mean that it is entitled to that result. That only follows if it has established special circumstances which would otherwise warrant that result. In my assessment, it has not.
• [26] The second defendant has also sought an order that its costs be certified fit for senior and junior counsel pursuant to rule 63.72(9) of the Supreme Court Rules 1987 (NT). The subject matter of the case and its importance for the second defendant made the services of more than one counsel reasonably necessary.[29]

• [27] For these reasons, I make the following orders:
  1. The plaintiff is to pay the second defendant's costs of and incidental to the proceedings on the standard basis.
  2. The second defendant's costs are certified fit for the retainer of more than one counsel pursuant to rule 63.72(9) of the Supreme Court Rules 1987.

____________________________

[1] Central Australian Frack Free Alliance Inc v Minister for Environment [2024] NTSC 75 at [17]- [42].

[2] Central Australian Frack Free Alliance Inc v Minister for Environment [2024] NTSC 75 at [43]- [59].

[3] Central Australian Frack Free Alliance Inc v Minister for Environment [2024] NTSC 75 at [60]- [71].

[4] Central Australian Frack Free Alliance Inc v Minister for Environment [2024] NTSC 75 at [72]- [89].

[5] Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164 at [25]; Ohn v Walton (1995) 36 NSWLR 77 at 79; Allplastics Engineering Pty Ltd v Dornoch Ltd [2006] NSWCA 33 at [34].

[6] This general rule has been said to found a 'reasonable expectation' on the part of a successful party of being awarded costs against the unsuccessful party: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [67], [134]; Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164 at [25].

[7] Williams v Minister for Environment and Heritage [2004] FCAFC 58; (2004) 132 LGERA 368 at [23].

[8] Dal Pont , 'Law of Costs', (5th edition) at [9.16].

[9] See, for example, Millers Point Fund Inc v Lendlease (Millers Point) Pty Ltd (No 2) [2017] NSWLEC 29 at [23].

[10] Petroleum Act 1984 (NT), s 3(1)(a).

[11] Qantas Airways Ltd v Cameron (No 3) [1996] FCA 765; (1996) 68 FCR 387 at 389; Friends of Hinchinbrook Society Inc v Minister for the Environment (No 5) [1998] FCA 432; (1998) 84 FCR 186 at 188-189; Booth v Bosworth [2001] FCA 1718 at [19], [25]-[29]. See also Re Southbourne Sheet Metal Co Ltd [1993] 1 WLR 244 at 254; South Melbourne City Council v Hallam (No 2) (1994) 83 LGERA 307 at 308- 311; Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 123; Hudson v Entsch [2005] FCA 557 at [6].

[12] Engadine Area Traffic Action Group Inc v Southerland Shire Council (No 2) [2004] NSWLEC 434; (2004) 136 LGERA 365 at [19]; Roe v Director General, Department of Environment and Conservation (WA) [2011] WASCA 57 at [13]; Australian Conservation Foundation v Forestry Commission (Tas) [1988] FCA 144; (1988) 81 ALR 166 at 171.

[13] Wide Bay Conservation Council Inc v Burnett Water Pty Ltd (No 9) [2011] FCA 661 at [7]- [8].

[14] South Melbourne City Council v Hallam (No 2) (1994) 83 LGERA 307 at 311.

[15] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [20], [49], [145].

[16] For that proposition the plaintiff relies on the decisions in Bob Brown Foundation v Commonwealth of Australia (No 2) [2021] FCAFC 20; (2021) 286 FCR 160 at [16] (no order as to costs on basis that applicant's construction plainly arguable and matter had broad public importance); Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [13] (no order as to costs on basis that claim had substantial merit and no obvious element of fault on the part of the losing party); Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2024] FCAFC 97 at [53]- [57], [64], [70] (no order as to costs because issues concerned exercise of statutory power and raised matters of high public importance, and litigation conducted efficiently and responsibly).

[17] See the distinctions drawn in Geeveekay Pty Ltd v Director of Consumer Affairs Victoria (No 2) [2008] VSC 152 at [6], [33]-[34]. See also Cumming v Minister for Planning (No 2) [2020] VSC 40 at [19], in which the applicant's interest was found to be 'predominantly a private interest'.

[18] Millers Point Fund Incorporated v Lendlease (Millers Point) Pty Ltd (No 2) [2017] NSWLEC 29 at [22]- [37].

[19] Millers Point Fund Incorporated v Lendlease (Millers Point) Pty Ltd (No 2) [2017] NSWLEC 29 at [26].

[20] The plaintiff submits that interest may be inferred from the fact that 2273 public submissions were made in relation to this EMP; that 1250 submissions were made to an independent scientific inquiry into fracking in the Northern Territory conducted between 2016 and 2018; that 316 submissions were made to a Commonwealth Senate Enquiry conducted in relation to oil and gas exploration and production in the Beetaloo Basin; and that an open letter with more than 4500 signatories has called on the Northern Territory government to stop fracking in the Beetaloo Basin due to concerns over its contributions to greenhouse gas emissions and climate change.

[21] Petroleum Act 1984 (NT), s 3(1)(b) and (c).

[22] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [90]; Re Kerry (No 2) - Costs [2012] NSWCA 194 at [13], [15]; cf CSR Ltd v Eddy [2005] HCA 64; (2005) 226 CLR 1 at [78]- [81].

[23] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [31], [49].

[24] Cf Plaintiff's Submissions on Costs at [4].

[25] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [30].

[26] Bob Brown Foundation v Commonwealth of Australia (No 2) [2021] FCAFC 20; (2021) 286 FCR 160 at [16].

[27] Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [21]-[28].

[28] Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2024] FCAFC 97 at [35], [57].

[29] See, for example, Parklands Darwin Pty Ltd v Minister for Infrastructure, Planning and Logistics (Costs) [2023] NTSCFC 1.