Higgins v ACT

Parties: Judith Frances Higgins (Plaintiff) Australian Capital Territory (First Defendant) Gungahlin Golf Investments Pty Ltd (ACN 116 592 637) (Second Defendant) Territory Planning Authority (Third Defendant) Representation: Counsel C Erskine SC with R Arthur (Plaintiff) V Thomas SC with J Bird (First and Third Defendants) P Walker SC with J Larkings (Second Defendant) Solicitors Badgery & Rafferty (Plaintiff) ACT Government Solicitor (First and Third Defendants) Gadens (Second Defendant) File Number: SC 306 of 2019 McWILLIAM J:

1. This proceeding concerned a dispute about whether there was an equitable scheme of development in respect of land located at Harcourt Hill Estate in Nicholls. In Higgins v ACT (No 2) [2024] ACTSC 400 (Higgins (No 2)), the court found (at [162]) that there was such a scheme, binding on the first and third defendants in the proceedings, being the Territory and the Territory Planning Authority, as it is now known (hereafter, the government parties). However, the scheme was not binding on the second defendant, Gungahlin Golf Investments Pty Ltd (GGI), because when it purchased the lease over the land, it was in a position equivalent to that of a bona fide purchaser for value without notice of the equitable scheme: see Higgins No 2 at [172(e)].

2. Declaratory relief followed that outcome: see Higgins v ACT (No 3) [2025] ACTSC 336 (Higgins (No 3)). The question of costs of the proceeding remains outstanding and orders have been made for that matter to be determined on the papers: Higgins (No 3) at [81]. Knowledge of those earlier judgments and the issues involved has been assumed in these reasons on costs.

The appropriate orders for the costs of the proceeding

3. For reasons that are explained below, I have decided to exercise the discretion to award costs in the following way: (a) The plaintiff is entitled to her costs of the proceeding, payable by the government parties. (b) GGI is entitled to 40% of its costs of the proceeding, with half of those costs to be paid by the plaintiff and half of those costs to be paid by the government parties. (c) The government parties are to pay their own costs, the plaintiff’s costs and 20% of GGI’s costs.

The orders sought by the parties

4. The parties each filed comprehensive submissions, and submissions in reply, on the primary and alternative orders each sought. Their positions have been summarised as follows: (a) The plaintiff sought that the government parties and GGI pay her costs because they were the unsuccessful defendants. The plaintiff characterised GGI as substantially unsuccessful because of its opposition on the dominant issue in the proceeding, being the equitable scheme of development that was established. Alternatively, if the plaintiff were found liable to pay any portion of the second defendant’s costs (because it ultimately succeeded), she sought that such portion be paid by the first and third defendants. (b) The government parties accepted that they must pay 90% of the plaintiff’s costs but argued that the plaintiff should bear the remaining 10%, to reflect the fact that she achieved mixed success, with other causes of action being unsuccessful for reasons unrelated to the plaintiff’s success on her primary case. They resisted any application by the plaintiff for the government parties to pay any part of the second defendant’s costs. (c) The second defendant sought that the plaintiff pay its costs because it was ultimately the successful party. It further sought that the plaintiff pay its costs from 15 September 2022, that date being the expiry date of an offer of compromise issued in accordance with the principles derived from Calderbank v Calderbank (1975) 3 All ER 333, which was made on 1 September 2022 (Calderbank offer). In that regard, the second defendant contended that the plaintiff unreasonably failed to accept the offer.

Applicable principles

5. The submissions brought to the court’s attention numerous principles regarding costs generally, in multi-party litigation, and where offers of compromise have been made. Acknowledging that what is set out below may not do justice to the comprehensive nature of those submissions, it is what I consider to be sufficient to demonstrate how I have applied the principled exercise of the discretion in the circumstances of this case.

6. The starting point is that costs are discretionary, pursuant to r 1721(1) of the Court Procedures Rules 2006 (ACT), and the wide discretion must be exercised judicially, in accordance with established principle and the statutory context: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [35], [65]. Absent unreasonable conduct, costs are compensatory, not punitive: EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd [2011] FCAFC 92 at [9]; Latoudis v Casey (1990) 170 CLR 534 (Latoudis) at 567; and Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; 234 CLR 52 (Foots) at [34].

7. Consistent with that compensatory purpose, the exercise of the discretion frequently reflects the principle that costs follow the event, which is determined by reference to the outcome of the matter in substance: Latoudis at 568; and Foots at [34].

8. Where there are multiple issues in proceedings, the court generally does not differentiate between those issues on which the party succeeded or failed: Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 (Elite) at [6]; and Clarkson Williams Partners Pty Ltd v Vaughan (No 2) [2016] ACTCA 8 (Clarkson) at [10]. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Elite at [6].

9. Fairness is the touchstone. The result should be fair having regard to the particular facts and circumstances of the proceeding. “Ultimately, the Court is required to determine the appropriate order in the interests of justice”: Clarkson at [12]. In other words, the court makes a “broad evaluative judgment of what justice requires”: Gray v Richards (No 2) [2014] HCA 47; 252 CLR 601 at [2].

Orders for an unsuccessful defendant to pay the costs of a successful defendant

10. There is no general power at common law to order costs (whether against parties or non-parties): Re JJT; Ex parte Victoria Legal Aid [1998] HCA 44; 195 CLR 184 at 200; and Quach v Butt [2017] ACTCA 4 at [90]-[91]. As submitted by the government parties, this court does not possess inherent jurisdiction for orders of the type contemplated by the plaintiff in respect of any costs she may be found liable to pay to GGI.

11. In the Territory, the court’s power to make an order entitling the plaintiff to recover costs she has to pay from another party, or to make an order for costs as between parties or even in respect of a non-party to the proceeding, arises from the Court Procedures Act 2004 (ACT), where sch 1, item 26 permits rules to be made about costs as follows: Costs costs, including, for example, the following: (a) security for costs; (b) entitlement to recover costs; (c) costs of parties in proceedings; (d) costs against non-parties to proceedings; (e) assessment of costs

12. The plaintiff sought, and the government parties resisted, orders known as Bullock or Sanderson orders, derived from cases of the same name: Bullock v London General Omnibus Co [1907] 1 KB 264 and Sanderson v Blyth Theatre Co [1903] 2 KB 533.

13. As explained in cases such as Tomislav Lipovac bhnf Maria Lipovac v Hamilton Holdings Pty Ltd [1997] ACTSC 3 (Tomislav) at [62] and Skerbic v McCormack & Ors [2008] ACTSC 4 at [18]: (a) A Bullock order is an order that the plaintiff pay the costs of the successful defendant, with those costs added as a disbursement to the plaintiff's own costs against the unsuccessful defendant. (b) A Sanderson order is an order made directly against an unsuccessful defendant to pay the costs of a successful defendant, as well as the costs of the plaintiff, despite the fact that there may have been no issue on the pleadings between the defendants.

14. The discretion to make either of these types of orders requires: (a) That it was reasonable and proper for the plaintiff to have sued the successful defendant; and (b) That there is something in the conduct of the unsuccessful defendant which would justify making the order.

15. Those two principles were identified in Gould v Vaggelas [1984] HCA 68; (1985) 157 CLR 215 (Gould) by Gibbs CJ at 230 as follows (emphasis added): In my respectful opinion the true position was clearly stated by Blackburn CJ in Steppke v National Capital Development Commission (1978) 21 A.C.T.R 23, at pp. 30-31, when he said that “there is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant.”

16. Relevant considerations as to whether or not a Sanderson order should be made were set out in Lackersteen v Jones & Ors (No. 2) [1988] NTSC 72; 93 FLR 442 (Lackersteen) at 449, which was later approved in Council of the City of Liverpool v Turano (No 2) [2009] NSWCA 176 at [16] and referred to in Stevedoring Industry Finance Committee v Gibson [2000] NSWCA 179 at [128]. They include: (a) It must be seen to have been reasonable and proper for the plaintiff to have sued the successful defendant. (b) The causes of action against two or more defendants need not be the same but they must be substantially connected or dependant the one or the other. (c) While it is essential to find that the plaintiff has acted reasonably and properly, that alone is not sufficient. “The court must find something in the conduct of the unsuccessful defendant which makes it a proper exercise of discretion.” (Lackersteen at 449, emphasis added). I have emphasised those words to draw attention to the fact that they are the crux of the guiding principle. (d) Finally, in considering whether to make such an order, the court should, in the exercise of its discretion, balance overall two considerations of policy: the first, that an unnecessary multiplicity of actions should not be forced on litigants, so that a plaintiff who acts reasonably in joining two or more defendants should not be penalised or lose the fruits of his victory in costs on the basis that he should have either elected or taken separate actions; secondly, that an unsuccessful defendant should not have to pay more than one set of costs merely because he is unsuccessful.

17. While the conduct of the unsuccessful defendant is not viewed at large, contrary to a submission made by the government parties, it is also not limited to conduct relating solely to the joinder of the successful defendant. The principle as to conduct articulated in Gould and Lackersteen (emphasised at [15] and [16] above) is not so confined. The assessment of an unsuccessful defendant’s conduct in relation to the matter is not confined to conduct after action: Tomislav at [120].

18. In submitting that no conduct on their part showed that the joinder of the successful defendant was reasonable and proper to ensure the relief sought, the government parties relied on an earlier passage of Gould where Gibbs CJ addressed previous High Court authority to the effect that a Bullock order may be made where it was reasonable in all the circumstances for the plaintiff to bring the action against two or more defendants. His Honour then said (at 229): … In my respectful opinion, however, the mere fact that the joinder of two defendants was reasonable does not mean that the unsuccessful defendant should be ordered to pay, directly or indirectly, the costs of the successful defendant. Obviously a judge should make a Bullock order only if he considers it just that the costs of the successful defendant should be borne by the unsuccessful defendant, and, if nothing that the unsuccessful defendant has said or done has led the plaintiff to sue the other defendant, who ultimately was held not to be liable, it is difficult to see any reason why the unsuccessful defendant should be required to pay for the plaintiff's error or overcaution.

19. It is inappropriate to divorce that statement from its context and then rely upon it as confining the circumstances of conduct of the unsuccessful defendant to be considered and assessed. The Chief Justice was dealing with reasonableness of joinder and whether it was sufficient of itself to justify the making of a Bullock-type order. The principle that is of relevance to the circumstances of the present case is the broader principle the Chief Justice referred to as the “true position”, extracted at [15] above.

20. The same reasoning applies to the other authority relied upon by the government parties, namely Coffs Harbour City Council v Polglase [2020] NSWCA 265 at [178]. Again, the circumstances of that case were directed to the primary judge citing the passage in Gould at 229 and stating that the mere fact of reasonable joinder of a party and a denial of liability were not, without more, sufficient bases on which to make a Bullock type of order. The New South Wales Court of Appeal simply found at [178] that there was no error of principle in that reasoning.

21. A court may craft a Bullock or Sanderson order in respect of a proportion or percentage of the successful defendant’s costs if that is fair and just in all the circumstances: Leading Edge Events Australia Pty Ltd v Kiri Te Kanawa (No 2) [2007] NSWSC 568 at [85]. As in the circumstances of that case, mathematical precision is not required. The judgment in respect of the appropriate proportion is subjective, taking into account the whole circumstances of the trial and the ultimate outcomes.

The plaintiff is entitled to her costs

22. Applying those principles here, I have decided that the plaintiff is entitled to her costs of the proceeding being paid by the unsuccessful parties, being the government parties. She was not only successful in obtaining declaratory relief, the issue upon which she succeeded was the dominant issue in the proceeding.

23. I accept that she was not entirely successful, and that in respect of other causes of action, the reasons why she failed may not have been solely attributable to her succeeding on her primary case. However, these were not discrete issues and the length of submissions and/or reasons devoted to dealing with those matters does not make those matters discrete. They were all founded on the same factual matrix. That there was evidence specifically directed to those issues on which the plaintiff did not succeed, even acknowledging that they were separate causes of action, does not elevate the significance of those matters to the point where it would be appropriate to deprive the plaintiff of a portion of her costs.

24. The government parties must pay the plaintiff’s costs.

The second defendant is entitled to 40% of its costs on the ordinary basis

25. GGI successfully avoided the direct application of the equitable scheme of development to the land it had leased in a way that bound it. It is entitled to costs following the event and to be compensated for those costs.

26. However, as I have found, the existence or otherwise of the scheme of development was overwhelmingly the dominant issue in the proceeding. GGI opposed the existence of the scheme and on that issue, GGI failed. I accept that the plaintiff should not have to pay GGI’s costs of addressing the main issue in the case, as the plaintiff succeeded in that regard.

27. Although I agree with the government parties that the issue occupied approximately 90% of the trial, the position with regard to GGI’s costs is not straightforward, because much of GGI’s efforts (and therefore costs) were devoted to establishing a lack of notice to GGI, not the existence of the scheme itself. GGI purchased the lease of the golf course land (as set out in Schedule A to the orders made on 1 August 2025) well after the scheme of development was established. Taking that into account, and without attempting mathematical precision, I consider it appropriate that the plaintiff bear 40% of GGI’s costs.

28. Those findings influence the consideration of the Calderbank offer that GGI made on 1 September 2022. The terms of the offer were: (a) Judgment be entered in favour of GGI against the plaintiff. (b) The plaintiff pay GGI’s costs fixed in the sum of $240,000. (c) In the alternative, the plaintiff pay 90% of GGI’s party-party costs as assessed.

29. As GGI submitted, the applicable principles in evaluating whether a special costs order should be made have been set out in Hulanicki v Walton (No 2) [2015] ACTCA 45 at [11]-[16] and in Southwell v Staite (No 2) [2019] ACTSC 83 at [7]-[17]. I will not repeat them here.

30. Applying those principles, I accept that GGI’s Calderbank offer complied with the requirements for it to be effective in terms of form and substance. The offer contained a modest but genuine compromise. The terms of the offer were clear, and the offer was expressly stated to be without prejudice save as to costs, with a further statement that the offer may be relied upon in support of an application for solicitor-client costs. It was open for a period of 14 days, which was a reasonable period of time in the circumstances of the case with a rapidly approaching hearing date. It was made at a time when the plaintiff would have had a sufficient idea of the way GGI intended to defend the case and of her prospects. Finally, sufficient information was provided so as to make an informed decision about the value of the compromise.

31. However, it was not unreasonable for the plaintiff not to accept the offer because the sole aspect of the compromise was that the plaintiff pay 90% of GGI’s party-party costs. That compromise was not more favourable given how the matter subsequently unfolded and the costs order that has ultimately been found to be appropriate. Viewed as a percentage of the costs payable, the plaintiff’s success in the proceeding has resulted in an adverse costs order, but it is nevertheless one that remains more favourable than the compromise offered by GGI. The government parties

32. In respect of GGI’s costs that the plaintiff will be required to pay, I have decided that it is appropriate to make a Sanderson order against the government parties, in respect of part of the plaintiff’s costs liability to GGI, for the following reasons: (a) It was reasonable and proper for the plaintiff to have sued GGI. GGI was the lessee of the land that was the subject of dispute. It was also the party proposing to deviate from using the golf course land solely for the purposes of a golf course or ancillary purposes. Including GGI in the proceeding was necessary to ensure that it would be bound by the outcome, whatever that outcome was. That includes the findings made in respect of establishing a scheme of development insofar as it affects the government parties, who remain in the statutory position of Crown lessor. Without joinder of GGI, there would almost certainly have been multiple litigated disputes. (b) The primary cause of action against the government parties was substantially connected to the primary cause of action against GGI in that both were founded upon the equitable doctrine by which the scheme of development was found to have been established. (c) This case was unusual in that the reason for multiple defendants was not a situation of possible joint tortfeasors. It was because each defendant had an interest in the land the subject of dispute. The cases discussing joinder have little bearing here because the plaintiff’s choice to bring proceedings against all defendants was not based on uncertainty as to which party to sue, or to the government parties attributing any responsibility or seeking any contribution from GGI. This was an equitable action, and the relief sought required the joinder of both the lessor (and its agent, by virtue of the land management arrangements made by the Territory) and the lessee of the land in question. (d) The parties made various submissions about their conduct prior to proceedings being commenced, in terms of what was known, when it was known and what was disclosed. I was not satisfied that the government parties’ withholding of knowledge, or the lack of any evidence or information provided to the plaintiff, on its own, constituted a sufficient basis to make a Bullock or Sanderson order. (e) However, that does not mean that there was nothing to warrant such an order. The conduct that makes it fair to impose some liability on the government parties for GGI’s costs was more fundamental than that. The Territory or its agent failed to ensure that it met its obligations in equity to the plaintiff, which resulted in a lack of a covenant on an annexure to the lease when it was transferred to GGI in 2006. The reason that GGI did not have notice of the equitable scheme of development was because the full extent of the land captured within the scheme was not included on the lease. That meant GGI escaped being bound by the declaratory relief that was granted. That was a matter outside the plaintiff’s control and entirely within the control of the government parties. (f) The government parties submitted that the court should not make an order that was not related to the joinder of GGI or even the conduct of the litigation and that it would be unjust to do so. The detailed explanation of the principles that apply in guiding the court’s discretion where such orders are in contemplation (see [12]- [21] above) is the first answer to that submission. The second is that acknowledging that the facts established in the proceeding also have a costs consequence is not tantamount to an indirect resolution of the plaintiff’s claim for equitable compensation (recalling that such a claim was directed towards compensating an alleged diminution in value of the plaintiff’s land in any event). It is to recognise that in the unique factual matrix that is this case, it would be unjust for the plaintiff to pay the full extent of GGI’s costs when the enforcement of the scheme against GGI as lessee of the subject land was lost through no fault of her own. Fairness dictates that the government parties bear some of the responsibility for the costs incurred in addressing the notice issue, which only arose through their conduct as lessor. (g) As a separate consideration, part of GGI’s costs that the plaintiff has been ordered to pay are attributable to causes of action that fell away as a result of the plaintiff’s success against the government parties (see for example, Higgins (No 2) at [193]). I have found that those matters were minor aspects of the proceeding and they were brought against the government parties. However, even where a cause of action was not mounted against GGI, there was time spent in court while the arguments on those matters occurred and all the evidence and submissions were of course served on GGI and required attention. I have attempted to balance the policy consideration that an unsuccessful defendant should not have to pay more than one set of costs merely because it is unsuccessful with the particular circumstances here, where the government parties’ conduct had such an intimate connection to the litigated issues that are the subject of the costs in contemplation. It is thus just to lay GGI’s recoverable costs partly in the camp of the successful plaintiff as well as the government parties. (h) As the government parties are liable for the totality of the plaintiff’s costs, a Sanderson order is appropriate and would appear to be more efficient in the event that the costs ordered require assessment.

Orders

33. The orders of the Court are: (1) The first and third defendants are to pay the plaintiff’s costs of the proceeding. (2) Subject to order 3, the plaintiff is to pay 40% of the second defendant’s costs of the proceeding. (3) The first and third defendants are to pay to the second defendant half of the costs of the second defendant payable by the plaintiff.

I certify that the preceding thirty-three [33] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice McWilliam.

Associate: Date: