Each party should bear their own costs of the proceedings
24 Having concluded that it was reasonable for Mr Hill to have commenced these proceedings, the next question that arises is whether I should exercise a discretion to award costs when there has been no hearing on the merits. The exercise of that discretion is unfettered, and no rule or principle should be applied mechanically in the determination of where costs should lie in any particular case: Howards Storage World Pty Ltd [2010] FCAFC 5; (2010) 182 FCR 84 at [17] per Gray J with whom Lindgren J agreed. Ordinarily, the Court will not make an order for costs in circumstances where there has been no hearing on the merits: Lai Qin at 624-5. There are exceptions to this general principle: see Mahindra at [32]; Capic v Ford Motor Company of Australia Ltd (Costs Forthwith) [2019] FCA 1065 at [10] per Perram J. The Court may make an order of costs in favour of a party notwithstanding that there has been no hearing on the merits in circumstances where:
(a) one party has had a substantial victory and the other a substantial loss: Mahindra at [33];
(b) one party was almost certain to have succeeded: Capic at [10];
(c) one party has acted so unreasonably that the other party should be awarded costs: Capic at [10];
(d) the Court is satisfied that one party has effectively surrendered or capitulated: Mahindra at [35].
25 In relation to the issue of whether one party has effectively surrendered or capitulated, Halley J helpfully summarised the principles that have emerged from the authorities in Mahindra at [35] as follows:
(a) either an applicant or respondent might be found to have effectively surrendered or capitulated;
(b) it is necessary to have regard to the conduct of the parties not to determine whether a party has acted in a manner that can objectively be characterised as unreasonable, but rather to determine whether by their respective conduct one party has, in substance, capitulated or surrendered to the other party: see generally Chapman v Luminis Pty Ltd [2003] FCAFC 162 (Chapman) at [5]-[8] (Beaumont, Sundberg and Hely JJ); Zhao v Suzhou Haishun Investment Management Co Ltd [2020] VSCA 34 at [19]-[20] (Tate, McLeish and Hargrave JJA); cf Diamond Ace Super Fund Pty Ltd v Rodapa Development Pty Ltd [2020] FCA 1582 (Diamond Ace) at [65]-[68] (Griffiths J);
(c) it is necessary to distinguish between cases in which a party seeking to discontinue proceedings can be said to have effectively surrendered or capitulated and cases in which a supervening event renders the proceedings futile or moot: Diamond Ace at [59] (Griffiths J) citing Travaglini v Raccuia [2012] FCA 620 at [13] (McKerracher J); and Chapman at [7], citing ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270 (ONE.TEL) at [6] (Burchett J);
(d) an assessment of the degree to which the outcome achieves the relief sought is a threshold issue of significant weight in determining whether a party has effectively surrendered or capitulated. A party does not have to achieve complete success in order to establish that the other party effectively surrendered or capitulated. It is enough to demonstrate that the outcome secured sufficiently achieves the party's purpose in bringing the proceedings: Diamond Ace at [67]; Balanggarra Aboriginal Corporation v State of Western Australia [2018] FCA 1538 (Balanggarra) at [50] (Barker J); Stephens v Sena, in the matter of Vtara Solar Pty Ltd [2020] FCA 1179 at [30] (Stewart J);
(e) generally it is not the function of the Court to make a prediction as to the outcome of a hypothetical case in assessing the degree of success or failure achieved by a party in proceedings in which there has been no determination of the merits: Elevate Brandpartners Ltd v Hammond (No 4) [2020] FCA 421 (Elevate Brandpartners (No 4)) at [20] (Stewart J); Clark v ING Life Limited [2007] FCA 1960 at [16] (Rares J); Rickus v Motor Trades Association of Australia Superannuation Fund Pty Limited (2010) 265 ALR 112; [2010] FCAFC 16 at [118]-[119] (Jacobson, Siopis and Foster JJ); Mineralogy Pty Ltd v National Native Title Tribunal [1998] FCA 1700 at 6 (Lee, Tamberlin and R D Nicholson JJ); and
(f) in some cases it is relevant to have regard to the likelihood of success, but only insofar as it is possible to identify a likely "clear winner": ONE.TEL at [7]; and Balanggarra at [71]-[73].
26 Mr Hill's contention that, in the absence of being provided reasons for the revocation decisions, the Court should infer that the reason for the revocation decisions was the commencement of these proceedings, requires an examination of the claims that Mr Hill sought to advance in these proceedings to ascertain whether the Minister has in effect surrendered to them. Mr Hill's application for judicial review to this Court sought, amongst other things, orders quashing or setting aside the dispensation decisions on the basis of seven grounds of review. By way of summary, those seven grounds alleged that:
(a) the delegate who made the dispensation decisions, did not hold a lawful delegation to exercise the power in s 20(1) of the SAC Act;
(b) the delegate's exercise of power under s 20(1) was invalid in that, amongst other things, he sought to authorise each of the commercial operators to use aircraft to make additional movements per week during the curfew periods, but did not authorise a particular aircraft to do so for that purpose;
(c) the delegate misconstrued the power to grant a dispensation under s 20(1) in various ways including as to the meaning of the phrase "exceptional circumstances justifying the take-off or landing";
(d) the delegate failed to exercise jurisdiction or, alternatively, misconstrued the Sydney Airport Curfew (Dispensation) Guideline 2016, in relation to various alleged requirements of that Guideline;
(e) the delegate exercised the power in s 20(1) for an improper purpose including to "ensure connectivity in the overnight freight market";
(f) the delegate's decisions were legally unreasonable in that, amongst other things, he could not have reasonably or lawfully reached the state of satisfaction that there were exceptional circumstances justifying the proposed take-offs and landings for various reasons;
(g) the dispensation decisions amounted to the adoption or implementation of a plan for aviation airspace management that would have or was likely to have a significant impact on the environment within the meaning of s 160(1) of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) without the delegate having obtained and considered advice from the Minister administering that Act, which amounted to an improper exercise of power.
27 There is no evidence before me that the Minister accepted any of these claims and I am not satisfied that the Minister effectively surrendered or capitulated on that basis. Mr Hill seeks that I draw the contrary inference because the dispensation decisions were to operate until 1 July 2024 and, in the absence of being provided with the statement of reasons, it should be inferred that the revocation decisions were made by reason of these proceedings. Whilst the Minister did not provide Mr Hill with reasons for the revocation decisions, the evidence before me establishes that the Minister's representatives did provide Mr Hill with some, albeit limited, information as to those reasons, as follows:
In the interests of providing some explanation for the decision, our client advises that a delegate undertook a review of the circumstances surrounding the dispensations and, following extensive consultation with various stakeholders (including your client), the delegate formed the view that exceptional circumstances did not presently exist to justify the continuance of the dispensations. Accordingly, the delegate decided to revoke the dispensations.
28 This evidence (as limited as it is) does not support Mr Hill's contention that the Minister surrendered or capitulated to the claims he made. Rather, on the evidence available to me, it appears that the revocation decisions were made after further consultations were held and it was determined that exceptional circumstances no longer existed. This did not amount to a surrender or capitulation to the claims that Mr Hill was advancing. It may be that the internal review was initiated by reason of the apparent complaints from members of the community, including Mr Hill, but it does not follow that the revocation decisions were an effective surrender to these proceedings.
29 Mr Hill's further contention that in substance he was the successful party rests upon his submission that the effect of the revocation decisions is that he has secured the relief he sought in these proceedings. This is too simplistic an analysis of what happened here. True it is that the effect of the revocation decisions is that the dispensation decisions no longer apply. However, that has been brought about because, on the evidence before me, the Minister's delegate initiated a review prior to the commencement of these proceedings which resulted in the revocation decisions. Although the outcome was not known at the time of the commencement of the proceedings, it was an outcome brought about by reason of a process independent to these proceedings and the claims being advanced in them.
30 It follows that I am not satisfied that Mr Hill should be awarded his costs. Had I been so satisfied, I would have acceded to the application to make a lump sum costs order in favour of Mr Hill, but I would not have accepted the claimed amount of $27,731.77. In arriving at that amount, Mr Hill's representatives put evidence before the Court that Mr Hill had incurred, or was to incur, solicitor/client costs in the amount of $19,096.77 (representing a discount of 30% on costs actually incurred of $27,281.10), both in bringing the application for judicial review and in preparing submissions and evidence on the issue of costs, as well as $8,635.00 in disbursements (including Counsel fees). I do not consider the quantum of these costs to be proportionate to the materials that have been filed in support of the application for review or the costs application, or to be otherwise fair and reasonable. The only steps that had been taken on Mr Hill's behalf in the proceedings were the preparation and filing of an Originating Application, a supporting Affidavit, attendance at a case management hearing, and correspondence between the parties. Had I been persuaded to award Mr Hill his costs, I would have allowed recovery of no more than $10,000 plus disbursements in respect of this work. In regard to the costs application, Mr Hill's representatives prepared submissions that were slightly longer than 3 pages, an Affidavit of 7 pages which set out the costs that had been incurred in the proceedings and attached relevant correspondence and prepared submissions in reply of 2 pages. I would have allowed Mr Hill to recover no more than $4,000 in respect of the costs application.
31 I am also not satisfied that Mr Hill should pay the Minister's costs in respect of the proceedings or the costs application. Although the ordinary rule in r 26.12(7) of the Rules is that the respondent is entitled to costs on a discontinuance, there is good reason for departure from that ordinary rule in the present case. That is because, for the reasons I have set out above, I am satisfied that it was reasonable for Mr Hill to have commenced the proceedings notwithstanding that the dispensation decisions were being reviewed. And, there is good reason now to dismiss the proceedings having regard to the revocation decisions.
32 I am also not satisfied that Mr Hill should pay the Minister's costs of the costs application. I accept that the Minister had earlier offered to resolve the question of costs on the basis that each party bear their own costs before Mr Hill made an application for costs, but the Minister's position was conveyed in circumstances where the Minister had given limited information to Mr Hill as to the reasons for the revocation decisions. The only information that Mr Hill had been given was that which I have set out above at [27]. Given the paucity of information provided to Mr Hill as to the reasons for the revocation decisions, I do not consider that he acted unreasonably in refusing a "walk away" costs offer at that time. Although Mr Hill has not persuaded me that the Minister effectively surrendered to his claims or that he has been substantially successful, I also do not consider that it was unreasonable for him to have advanced those arguments within the limits of the information available to him.