De Rose v State of South Australia

REASONS FOR JUDGMENT 1 In De Rose v State of South Australia (2003) 133 FCR 325 ('De Rose (No 1)'), this Court allowed an appeal from a judgment of O'Loughlin J in which his Honour dismissed the appellants' application for a determination of native title over De Rose Hill Station in north-west South Australia. In De Rose v State of South Australia (No 2) [2005] FCAFC 110 ('De Rose (No 2)'), we made a determination of native title in favour of the Aboriginal persons who are Nguraritja for the determination area according to the traditional laws and customs of the Western Desert Bloc. 2 In De Rose (No 2), we made the following orders as to costs: '14. The first and second respondents pay the appellants' costs of the appeal. 15. The parties have liberty to file submissions within 21 days seeking a different costs order to that made in Order 14. 16. If submissions are filed in accordance with Order 15, Order 14 be stayed until further order of the Court.' 3 The first respondent ('the State') and the second respondents ('The Fullers') filed written submissions contending that the appropriate order is that each party bear its or their costs of the appeal. The respondents relied on s 85A of the Native Title Act 1993 (Cth) ('NT Act'), which provides as follows: '(1) Unless the Federal Court orders otherwise, each party to a proceeding must bear his or her own costs. Unreasonable Conduct (2) Without limiting the Court's power to make orders under subsection (1), if the Federal Court is satisfied that a party to a proceeding has, by any unreasonable act or omission, caused another party to incur costs in connection with the institution or conduct of the proceeding, the Court may order the first-mentioned party to pay some or all of the those costs.' 4 The Fullers also relied on an affidavit sworn by their solicitor which establishes that the Fullers have received public funding for the trial and the appeal, but have not as yet received an indemnity in respect of any costs that might be awarded against them in the proceedings. 5 The appellants submitted that it was appropriate to make a costs order in their favour. Accordingly, they contended that Order 14 (reproduced at [2] above) should stand. 6 Section 85A was introduced into the NT Act by the Native Title Amendment Act 1998 (Cth). Prior to its enactment, the NT Act made no provision as to costs. However, at that time (as now) s 43 of the Federal Court of Australia Act 1976 (Cth) provided that the Court had jurisdiction to award costs in all proceedings before it and that, except as provided by any other Act, the award of costs was to be at the discretion of the Court. While s 43 confers a broad discretion as to the appropriate award of costs, in the absence of special circumstances costs awarded under that provision ordinarily follow the event: Hughes v Western Australian Cricket Association Inc [1986] ATPR 40-748, at 48, 136, per Toohey J. 7 There is no dispute that s 85A of the NT Act applies to the appeal in the present case. It follows that unless we order otherwise, each party to the appeal must bear its or their own costs. 8 In Ward v Western Australia (1999) 93 FCR 305, Lee J made the following points about s 85A: · Section 85A(1) is intended to remove any ground for anticipation or expectation that unless cause is shown for another order, costs will follow the event (at [33]). · Nonetheless, s 85A acknowledges that the Court has an overriding discretion as to costs and does not expressly impose a limit on the scope of the discretion (at [31]-[32]). · There is no requirement that a threshold condition be met before the Court is empowered to make a costs order. It follows that the exercise of the discretion is not conditional upon a finding of fact or the formation of an opinion as to the occurrence of unreasonable conduct or the existence of special circumstances (at [35]). · Section 85A(2) of the NT Act puts beyond doubt the extent of the Court's discretion in cases where a party acts unreasonably, but s 85A(2) does not control or limit the discretion available to the Court under s 85A(1) (at [36]-[37]). · The matters to be taken into account in making a costs order are left to the Court's discretion, which must be exercised judicially. However, the starting point is that each party will bear their own costs unless the Court determines that it is appropriate in the circumstances to make an order for costs (at [34]). 9 The observations of Lee J were referred to on the appeal in Western Australia v Ward, but the majority of the Full Court did not need to consider their correctness: Western Australia v Ward (2000) 99 FCR 316, at [677], per Beaumont and von Doussa JJ. However, North J (who dissented) expressed his agreement with Lee J's approach: at [875]. 10 In our view, Lee J correctly stated the approach to be taken to the application of s 85A of the NT Act. In particular, we agree that the starting point is that each party to a proceeding will be left to bear his or her own costs unless the Court considers it appropriate in the circumstances to make a costs order. The starting point is not that costs ordinarily follow the event. 11 The appellants pointed out that they had succeeded in all but one of their grounds of appeal. They submitted that the Fullers, in particular, had taken up a good deal of time unsuccessfully re-arguing before the Full Court the extinguishing effect of the transitional provision of the Pastoral Land Management and Conservation Act 1989 (SA). They also submitted that the Fullers had agitated similar arguments to these advanced by the State and thus had unnecessarily prolonged the appeal. The appellants did not concede that the Fullers had acted in a 'quasi-representative role' (as the Fullers maintained) but maintained, in any event, that such a role was irrelevant on the question of costs. 12 In our view, the circumstances do not warrant the making of a cost order in favour of the appellants. Apart from the matters to which we have already referred, we particularly take into account the following factors: · the respondents succeeded at the trial and it was the appellants who appealed against the judgment at first instance; · the appeal was the first to address the complex interaction between native title and pastoral leases in South Australia; · the case can fairly be regarded as a test case in the sense that it is likely to have ramifications for the resolution of other native title claims in South Australia; · once the parties had the benefit of the judgment in De Rose (No 1), the respondents participated in a mediation which narrowed the issues and resulted in the State proposing a form of native title determination that was largely adopted by the Court; · while the Fullers persisted with arguments that were ultimately unsuccessful on the appeal, their contentions were not unreasonable or clearly untenable; and · contrary to the appellants' submissions, we do not think that the appeal was unnecessarily prolonged by the conduct of the Fullers. 13 For these reasons, we propose to vacate Order 14 made on 8 June 2005 and to make no order as to the costs of the appeal. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Wilcox, Sackville and Merkel.