JUDGMENT - On Costs
1 HIS HONOUR: This matter comes before me this morning in relation to the question of costs. On 12 August 2004 I gave judgment in favour of the applicant and made orders declaring that development consent no 2002/0252 granted by the first respondent to the second respondent, United Leisure Investments Pty Limited, was invalid. I also restrained the second respondent from acting upon the consent.
2 The parties are agreed that there were three fundamental issues raised for determination in the proceedings. They may be shortly described as the car noise issue, the geo-technical issue and the Water Board issue.
3 The parties are also agreed that the car noise issue and the evidence associated with the resolution of that issue occupied the greater portion of the hearing time and the effort of the parties in resolving the matter before the Court.
4 The allegation that there was a failure to properly consider the geo-technical issue, and a failure to address the water and sewerage facilities for the site were issues which, although answered by the applicant, did not occupy a significant proportion of the hearing time.
5 There was a further issue, being whether or not the Court should, in the exercise of its discretion, make an order. This matter was debated and particularly pressed by the second respondent. However, by reason of section 25B, the statute requires that issue to be considered by the Court in any proceedings and, accordingly, I do not consider the fact that that matter was discussed should have any significance in the resolution of the costs issue in these proceedings.
6 The Council resists an order for the entire costs of the applicant and says it would be appropriate if the Court was to make an order allowing the applicant seventy percent of its costs.
7 The second respondent advances a number of positions in relation to the matter. Its primary position is that, having regard to the way in which the proceedings have been resolved, each party should pay its own costs. Alternatively, it is submitted that the first respondent should be required to pay the applicant's costs. The third position of the second respondent is that the respondent should be required to pay one-third of the applicant's costs.
8 The second respondent has prepared detailed written submissions in relation to the question of costs which I have found to be of considerable benefit.
9 The submissions are predicated upon the fact that, in the ultimate resolution of the matter, the applicant succeeded in relation to the car noise issue and issues associated with it, but failed in relation to the geo-technical issue and the water and sewerage issue.
10 The second respondent accepts that ordinarily, costs will follow the event see Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 48,134 at 48,136.
11 However, it submits that notwithstanding the general principle, where an applicant has succeeded upon only a portion of its claim, the circumstances may make it reasonable that it bear the costs of litigating that portion upon which it has failed.
12 The principle identified by Toohey J was expressed in the following way at 48,136:
"A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them."
13 The approach adopted by Toohey J has been reflected in some other decisions of the Federal Court. In Commissioner of Australian Federal Police v Razzi & Anor (No 2) (1991) 101 ALR 425, Wilcox J examined the authorities, particularly an analysis by Mahoney's JA decision in Jamal v Secretary, Department of Health (1988) 14 NSWLR 252.
14 Having analysed the principles his Honour said (at ALR 430):
"I recognise the importance of the general principle to which Mahoney JA referred. But I do not think the courts should be reluctant to recognise the existence of exceptional cases. In these days of extensive court delays and high legal costs the courts should use all proper means to encourage parties to consider carefully what matters they will put in issue in their litigation. If parties come to realise that they will not necessarily recover the whole of their costs, even though they have unsuccessfully raised a discrete issue, they are likely better to consider whether the raising of that issue is a justifiable course to take."
15 In J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (No 2) (1993) 46 IR 301 French J considered the authorities with respect to orders for costs in circumstances where an applicant had failed on some issues.
16 His Honour said ( at IR 302):
"Those principles are subject to the qualification that the ends of justice may not be served if the party is dissuaded by the risk of costs from canvassing all issues however doubtful which might be material to the decision of the case - Cretazzo v Lombardi (1975) 13 SASR 4 at 12. In Trade Practises Commission v Nicholas Enterprises Pty Limited (No 3) (1979) 42 FLR at 213, Fisher J saw the discretion to apportion costs as one to be exercised only in the most exceptional circumstances. On the other hand, his Honour accepted that if a considerable portion of the trial is taken up in determining issues upon which the defendant fails, it is a proper exercise of discretion to reduce the costs allowed to that defendant. In Inn Leisure Industries Pty Limited v D F MaCoy Pty Limited (No 2) (1991) 28 FCR 172, I allowed a minor apportionment of costs recoverable by the successful applicant in respect of certain distinct and severable factual issues on which the respondent succeeded. Notwithstanding the principles averted to by Toohey J and reinforced by the other authorities to which I have referred, the demands of the community for greater economy and efficiency in the conduct of litigation may have to be reflected in a softening of the presumption that a successful party is entitled to all its costs. I agree with the observation of Wilcox J in Commissioner of Australian Federal Police v Razzi (No 2) (1991) 101 ALR 425 at 430."
17 There are of course other decisions which express caution before any order for apportionment is made. Counsel has referred me to the decision of Jacobs J in Cretazzo v Lombardi (1975) 13 SASR 4, where his Honour sounded what he described as "a cautious note of disapproval" with respect to applications for apportioning costs according to the success or failure of one party or the other on the various issues of fact or law which arise in the course of the trial.
18 His Honour commented (at SASR 16:
"But trials occur daily in which the party, who in the end is wholly or substantially successful nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely upon his success in these particular issues."
19 In Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261, Gummow, French and Hill JJ said (at IPR 272):
"Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of discretion will often depend upon matters of impression and evaluation."
20 In Mok v Minister For Immigration, Local Government and Ethnic Affairs (No 2) (1993) 47 FCR 81, Keely J said (at FCR 84):
"In my opinion the Court's power to order a successful applicant to pay the costs in respect of an issue raised by the applicant, on which the applicant has failed, ought to be exercised only where the Court, on a consideration of all the circumstances, has concluded that the raising of that issue by the applicant was so unreasonable that it is fair and just to make the order."
21 In the present case I am of the opinion that in relation to the matter of the availability of water and sewerage to the site, some special order for costs is appropriate. As I have indicated in my reasons for decision, the argument advanced by the applicant in relation to that matter seemed to me to be entirely without foundation. A more responsible approach to the litigation of the applicant's claim would not have brought the matter forward.
22 In relation to the geo-technical issue, although the applicant failed on that matter, I do not consider that in raising that issue, the applicant should have concluded that there would be absolutely no prospects of success.
23 I share the view expressed by Wilcox J in Razzi and Toohey J in Hughes that courts need to be mindful when considering whether to make an order for costs, particularly in cases relating to judicial review of administrative decisions, of the merit of the arguments advanced by each party. Having regard to the cost of such litigation, both to the public and private purse, in my opinion it is of fundamental importance that legal practitioners only advance arguments capable of being supported in some reasonable manner, thereby ensuring that resources are not wasted on issues which ultimately have no prospects of success.
24 However, the issue which I have identified as appropriate for an order which departs from the usual rule in this case occupied only a small portion of the proceedings. I believe it appropriate to reflect that portion by making an order that the applicant receive eighty-five percent of its costs.
25 With respect to the second respondent's argument that the burden of those costs should fall upon the first respondent, I do not believe this would be appropriate. The second respondent chose to join in the proceedings and play an active part in them and indeed provided the Court with a high level of assistance in relation to the ultimate resolution of the issues. However, by electing to take an active role in seeking to defend the Council's decision, in my opinion, it made itself amenable to a costs order should the outcome be adverse to its interests.
26 For those reasons, I believe it appropriate to make an order in relation to both respondents.
27 Accordingly, the order I make is that the respondents pay eight-five percent of the applicant's costs.