Characterisation of the litigation
31The proper characterisation of the litigation, i.e. as " public interest litigation " or not, is, like questions of financial capacity, an issue germane to both motions. It was upon this issue that Mr Shearer focussed in his submissions on the Minister's behalf.
32I have already referred to the three-point test laid down by Preston J in Caroona No 3 (see [18] above). His Honour, in formulating that test, noted (at [21]-[27]) that the " public interest " is a multi-faceted concept, and cited with approval (at [38]) Lloyd J's five considerations in Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No.2) ("Engadine") [2004] NSWLEC 434; (2004) 136 LGERA 365 at [15] (citations omitted):
(a) The public interest served by the litigation.
(b) Whether that interest is confined to a relatively small number of members from the group or association in the immediate vicinity of the development, concerned with their own private amenity; or whether the interest is wider, involving a significant number of members of the public and concern for a wider and significant geographic area.
(c) Whether the applicant sought to enforce public law obligations.
(d) Whether the prime motivation of the litigation is to uphold the public interest and the rule of law.
(e) Whether the applicant has no pecuniary interest in the outcome of the proceedings.
33Preston J pointed out ( Caroona No.3 at [40]-[46]) that these considerations relevantly (1) focus on enforcing public law; (2) should not be considered a " code " for characterising public interest litigation; and (3) need not be answered in a particular way in the characterisation task. In applying the three-part test, His Honour found (at [81]) that the Caroona litigation was " public interest litigation ", and that it had no additional special features, but there were " countervailing factors " present, which would support the usual costs order being made.
34Both respondents concede in the present case that the group's challenge has elements of a " public interest litigation " character, but both submit that in all the circumstances of the case those elements are insufficient to make good the group's submission that the case as a whole be so characterised.
35The authorities recognise that there may in any one case be " many public interests ". Ruddock v Vadarlis (No.2) (2001) 115 FCR 229, at [19].
36In the Court of Appeal decision in Hastings Point Progress Association Inc v Tweed Shire Council (No 3) ("Hastings") [2010] NSWCA 39; (2010) 172 LGERA 157, Basten JA (with whom McColl JA agreed) stated (at [11]):
...the proceedings were brought predominantly in the public interest...There are three particular factors which militate in this case...First, the defendant is a commercial enterprise, and not the State or a governmental authority. Secondly, the question of public interest was not one having broad ramifications for the community at large, or even for the protection of the natural environment... Thirdly, the matter was not entirely without consequence for the private interests of members of the Association. Most, if not all, were local residents and overdevelopment would affect the amenity of the area within which they lived and owned property. Although they were not personally applicants in the proceedings, nor liable for the debts of the incorporated Association, for this purpose one is entitled to look behind the legal structure of the applicant to identify whose interests, both legal and financial, may be affected in a practical sense.
37Young JA (with whom McColl JA also agreed) identified (at [33]) five categories of " so-called public interest groups ":
... First, there are genuine groups of people whose sole interest is the protection of the environment. Secondly, there are groups whose real aim is to preserve their existing amenities and are happy for the proposed development to proceed in another area. Thirdly, there are groups which are a faade for a competitor who wishes to protect its own commercial interests. Fourthly, there are groups which have been formed for purposes of maintaining religious or ethical standards. Fifthly, there are groups which might contain representatives of all four categories or groups who have formed for some other purpose.
38His Honour found (at [34]) that the third group " cannot expect mercy on costs ", and that the second group " would have great difficulty ". The court was, therefore, required to " look further than the name of the applicant group and its professed aims " .
39Mr Ibbotson identified the following factors that would lead the court to come to a determination that the group's proceedings were truly " public interest litigation ": the group is not seeking to preserve the (pecuniary or commercial) interests of any individual; it would have preferred to resolve this issue by negotiation, consultation, and mediation, rather than litigation; the proceedings relate to public law; and it is not seeking to gain anything for itself from opposition to the development.
40He submitted that the proceedings should be identified as " public interest litigation " because of the effect that the development would have on the critically endangered ecological community. Although the development application foreshadowed eventual regeneration of the elements of BGHF which would be cleared for the development, that would not be possible if the project proved not to be economically viable.
41Some key members of the group live near the development, and have personal amenity concerns, but Mr Ibbotson submitted that that fact simply meant that those people were best placed to know the issues that were of concern to not only the local area, but also to the wider community. Insofar as the group might properly be thought to be within Young JA's second category - a local group seeking to protect the amenity of the area - Mr Shearer referred the court to Stein J's decision in Darlinghurst Residents Association v Elarosa Investments Pty Limited & Anor ("Darlinghurst") (1992) 75 LGRA 214, where the membership of the Association consisted, as here, mostly of residents living close to the site. Stein J found (at 216):
... the challenge by the Association to the consent for the building was representing and expressing far wider objections than the narrow private amenity of residents living in close proximity to the proposal. A wider public purpose was served by the litigation than solely that of some of the members of the applicant.
42In Engadine, Lloyd J applied the Darlinghurst principle to arrive at his five considerations, as outlined above at [32]. The question of a local group protecting its members' public amenity was considered, but not found to be determinative, in Minister for Planning v Walker (No.2) [ 2008] NSWCA 334. Mr Shearer, therefore, argued that wider public interest considerations do not apply to the present matter, and that the group was primarily concerned with local issues.
43Mr Shearer also argued that the group failed to demonstrate that its litigation was public interest litigation because no " complex or novel legal matters or any legal principle of general significance " was involved, unlike, for example, Sharples v Minister for Local Government (No.2) [2009] NSWLEC 62, where Biscoe J stated (at [15]):
The outcome of the case directly affected all ratepayers in the Tweed Shire and the legal principles were of general significance to the legality of revenue raising activities of all local governments in New South Wales. In my opinion, the public interest served by the litigation was wide.
or Engadine, where Lloyd J stated (at [17]):
The proceedings also served the interests of the council, developers and the wider community in providing clarification of the council's powers and obligations in applying and refunding contributions. As such, it can be said that the proceedings constituted public interest litigation.
44Mr Shearer also sought to negate the contention that the matter is in the public interest, on the basis that there was no failure by a relevant regulatory authority to take necessary action, as was the case in Delta Electricity (at first instance before Pain J, Blue Mountains Conservation Society Inc v Delta Electricity [2009] NSWLEC 150; (2009) 170 LGERA 1, and, on appeal to the Court of Appeal, Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263; (2010) 176 LGERA 424 - see [121]). The relevant regulatory authority in this case is the Minister for Planning, who has actively engaged in the matter and with the group.
45In Delta Electricity, Pain J had to characterise the matter, as " public interest litigation " or not, well in advance of a trial, and before all issues were known. Her Honour concluded that, on balance, the matter before her was such a case, and made a maximum costs order. The community group there involved would not proceed in the absence of such an order. Her Honour's decision was appealed, with the leave of the court of Appeal, on 19 grounds.
46On appeal, Beazley JA (in a lengthy dissenting judgment) surveyed the cases where such a protective or maximum costs order had been made. Inter alia, Her Honour dealt with Walker, Engadine and Caroona before turning (at [115]) to the question of whether the case met the test of " public interest litigation ". Beazley JA would have allowed the appeal, but agreed with Pain J's decision on the characterisation point, noting that (1) a central issue in the case was of widespread concern, namely possible pollution by Delta of Cox's River which feeds into Warragamba Dam, the source of Sydney's water supply, and that (2) the community group involved could not persuade the relevant regulator to take action (see especially [121]). Her Honour found a disproportionality between the quantum of the maximum costs in the order Pain J made and a reasonable estimate of the relevant costs. Basten and Macfarlan JJA joined Beazley JA in granting leave but, in far less comprehensive judgments, dismissed the appeal. However, neither demurred from the characterisation of the case as " public interest litigation ".
47Mr Nash relied on the Court of Appeal's application in Walker of Lloyd J's five considerations in Engadine, and submitted that the " primary motivation " of the present litigation was the shared interest of a group of understandably concerned nearby citizens for their own amenity, rather than any general concern of citizens from a wider area to enforce the relevant public law obligations in play here, or uphold the public interest and the rule of law, i.e. the predominant concern of the group lies with matters of local, albeit some public, interest. All submissions on the project from its members and other locals and all its publications raise only issues of local amenity and lead to the inference that the "primary motivation" of the proceedings is "local interests" , and not the broader "public interest" contemplated in the authorities.
48Mr Nash submitted that, even if the court did not accept that submission, there was in this present case no evidence of any relevant " other factor ", or what Preston J had called, in Caroona No 3 (at [53]), " something more ". See also Biscoe J in Anderson on behalf of Numbahjing Clan within Bundjalung Nation v NSW Minister for Planning (No 2) [2008] NSWLEC 272; (2008) 163 LGERA 132.
49I have concluded that, while there are some elements of a broader public interest nature involved in this matter, especially the threat to Blue Gum High Forest in the Sydney Basin, the real aim of the group bringing the challenge is to preserve the amenity of the residential neighbourhood where its members reside, in the face of the " threat " posed to it by a six-storey private hospital.
50I, accordingly, decline to classify this challenge as " public interest litigation ".
51The consequences of that conclusion are that the usual costs regime in class 4 matters should " inform" the consideration of the two notices of motion presently before the court, but not dictate the outcome (see [4] above).
52I now turn to consider, first, the group's application for a maximum costs order.