These are extraordinary proceedings in which the summons was filed and final orders were made on the same day, 1 March 2019.
The Court's reasons for judgment were published on 6 March 2019: Johnston v The Greens NSW [2019] NSWSC 215.
The Court ordered that the plaintiffs' summons be dismissed. At the request of the plaintiffs, the Court agreed to hear the parties on the issue of costs, and made orders for the delivery of written submissions.
The Court has received submissions from the plaintiffs, the first defendant (whose legal representatives also acted for the seventh and eighth defendants), the fourth defendant and the fifth defendant.
The plaintiffs are members of the first defendant, which is the political party with the formal title of The Greens NSW.
The Greens NSW is an association incorporated under the Associations Incorporation Act 2009 (NSW) (Associations Incorporation Act). It is also a political party registered in New South Wales under Part 6 of the Electoral Act 2017 (NSW).
The only other active defendant at the hearing was the fifth defendant, Ms Abigail Boyd. Ms Boyd is also a member of The Greens NSW, and was interested in the proceedings because she had been preselected to be nominated by The Greens NSW as a candidate in the elections for the New South Wales Legislative Council, which in fact occurred shortly after the hearing of these proceedings.
The fourth defendant, Mr David Shoebridge, is also a member of The Greens NSW, and a preselected candidate for nomination by The Greens NSW as a candidate in the same elections.
In essence, the primary relief sought by the plaintiffs in their summons were declarations that, on the proper construction of the constituent documents of The Greens NSW, and the relevant preselection rules, where a preselected candidate for nomination ceases to be eligible for preselection, there must be a recount of all ballots on the basis that votes cast in favour of the ineligible candidate be given to the next candidate in order of the voter's preference, and that subsequent candidates in the order of preference be treated correspondingly. If the consequences of a preselected candidate becoming ineligible were as asserted by the plaintiffs, it would have been necessary for The Greens NSW to undertake a complete recount of the voting for selection of candidates to be nominated for the election. The approach adopted by The Greens NSW was the simpler one of elevating the preselected candidates after the candidate who had become ineligible up one in the list of nominations (a process called "bumping up").
The precise terms of the relevant relief sought by the plaintiffs are set out at par 22 of the primary judgment.
For the reasons set out in the primary judgment I found, on the proper construction of the relevant constituent documents and rules, that the approach adopted by The Greens NSW was authorised, and it was not required to undertake a recount of the ballot on the basis contended for by the plaintiffs. I also gave reasons why, even if I had not found in favour of The Greens NSW as a matter of principle, I would have nonetheless dismissed the summons in the exercise of the Court's discretion.
The reasons for the extreme expedition in hearing and determining the plaintiffs' claim are explained in the primary judgment, and it is sufficient to say that the plaintiffs' claim had to be dealt with immediately because of a looming hard deadline for The Greens NSW to submit its list of nominated candidates to the Electoral Commissioner or risk being excluded from the election.
I should add that Ms Boyd had a particular interest in the proceedings, because she was the candidate who had been bumped up from fourth place on The Greens NSW ticket to replace the candidate who had been in third place, but had become ineligible. Accordingly, Ms Boyd was at risk of losing her place on the ticket if the plaintiffs' application had been successful.
Although Mr Shoebridge had a real interest in the proceedings, he had been preselected at first place on the ticket for the Legislative Council election and so was not in any real risk of losing his place.
As is obvious from the orders made dismissing their claim, the plaintiffs were entirely unsuccessful in the proceedings.
Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") provides:
42.1 General rule that costs follow the event
Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.
This rule has the effect that the Court should order the plaintiffs to pay the defendants' costs of the proceedings, unless the plaintiffs persuade the Court that some other costs order should be made.
The plaintiffs seek an order that The Greens NSW pay their costs of the proceedings, notwithstanding that its defence was wholly successful. The plaintiffs consistently with this position accept that The Greens NSW should also pay the costs incurred by the other defendants.
The order sought by the plaintiffs is resisted by all of the defendants who have delivered submissions on the issue of costs. All of those defendants submit that the plaintiffs should be ordered to pay their costs of the proceedings in conformity with the usual application of UCPR r 42.1.
The position of Mr Shoebridge is somewhat unusual, as although The Greens NSW and Ms Boyd appeared and defended the claim made by the plaintiffs, Mr Shoebridge did not. According to his submissions, he was given notice of the plaintiffs' intention to make their application in the Duty List, but was told that the application would not be made on Friday 1 March 2019, when it was in fact made and determined, but the following Monday, 4 March 2019. Mr Shoebridge's submission was that he was nonetheless named as a party, and incurred legal costs before he learned that the plaintiffs' claim had been dismissed.
I explained in par 15 of the primary judgment why it was necessary for the Court to determine these proceedings on 1 March 2019, notwithstanding that the plaintiffs advised the Court on that date that they did not propose to seek leave to file their statement of claim until Monday, 4 March 2019. These events support the likelihood that, as claimed by Mr Shoebridge, he was induced by the plaintiffs to incur legal costs on the basis of an understanding that he would have to deal with their claim on 4 March 2019.
A further feature of the orders for costs sought by the defendants is that they submit that the Court should order that the costs payable by the plaintiffs start to accrue from a date before the formal commencement of the proceedings when the plaintiffs' summons was filed in Court by leave given on 1 March 2019. Not only had the plaintiffs given notice of their intention to commence these proceedings if The Greens NSW did not act in accordance with their wishes, which led the defendants to begin incurring legal costs before the proceedings were formally commenced, but because of the exceptional urgency of the matter, the parties appeared before me in the Duty List on 28 February 2019, and I made informal case management arrangements to try to ensure that the Court could deal with the proceedings the next day if necessary.
The plaintiffs' justification for the costs order that they seek is contained in their written submissions dated 22 March 2019 and their written submissions in reply dated 5 April 2019. In outline, the plaintiffs submit that, in accordance with UCPR r 42.1, "some other order should be made" because there are special circumstances present, including that there was a public interest in the outcome of the litigation. The plaintiffs submit that they are two members of an association with an express purpose of fielding candidates in political elections, and that they brought proceedings to resolve an issue of construction and alleged breach of the rules of the association, on the basis of the proper interpretation of the rules as advanced by the plaintiffs. The plaintiffs were not candidates and did not have any financial interest in the outcome of the substantive proceedings. The plaintiffs also submit that they had broad support within The Greens NSW, as shown by the response of 709 people to an open letter and a petition that were in evidence.
The open letter and petition referred to in the plaintiffs' last submission was part of an exhibit filed with the affidavit of the second plaintiff affirmed on 22 March 2019. I note that the timetable set by the Court on 18 March 2019 only made directions for the service of written submissions and did not provide for the filing of any further affidavit evidence. Mr Shoebridge initially objected to the Court receiving this further affidavit without the ability to cross-examine the second plaintiff. Directions were made to give Mr Shoebridge (and presumably any other party who so desired) an opportunity to do so, but Mr Shoebridge's request was later withdrawn. None of the other defendants formally objected to the service of the further affidavit of the second plaintiff (although Ms Boyd observed in her written submissions that such affidavit was served without any order from the Court). In circumstances where most of the active defendants referred to the further affidavit in their written submissions, there can be no denial of procedural fairness in the Court taking this further affidavit into account. In any event, as will be seen, the content of that affidavit is not critical to the Court's resolution of the question before it.
The plaintiffs primarily rely upon the decision of the High Court in Oshlack v Richmond River Council (1990) 193 CLR 72; [1990] HCA 11. In that case, the High Court, by majority, allowed an appeal from the Court of Appeal of New South Wales, which in turn had allowed an appeal from a decision of Stein J in the Land and Environment Court. The plaintiff commenced proceedings against the Council and another party, which was the developer under a development application approved by the Council. The proceedings were brought under s 123 of the Environmental Planning and Assessment Act 1979 (NSW) ("EPA Act") which, in terms, authorised any person to bring proceedings in the Land and Environment Court for an order to remedy or restrain a breach of that Act. Stein J made no order as to costs following his decision to dismiss the plaintiff's claim. The effect was that the plaintiff was not ordered to pay the costs of the successful defendants.
The appeal to the High Court was concerned with whether Stein J's discretion to make no order as to costs under s 69(2) of the Land and Environment Court Act 1979 (NSW) ("LEC Act") miscarried. I note that s 69(2) is drafted in relevantly similar terms to s 98(1) of the Civil Procedure Act 2005 (NSW).
Some care must be taken in interpreting this judgment. The majority comprised Gaudron and Gummow JJ, in a joint judgment, and Kirby J. The relevant reasons in the two judgments for upholding the appeal differ. An understanding of the joint judgment should commence by noting the summary made by their Honours at [20] of the matters taken into account by the primary judge in determining that there should be no order as to costs (footnotes omitted when citing extracts of this authority):
In exercising the discretion conferred by s 69(2) of the [LEC Act] by a determination that there be no order as to costs, despite the dismissal of the appellant's application for injunctive and declaratory relief, the primary judge took various matters into account. They included the following:
(i) The "traditional rule" that, despite the general discretion as to costs being "absolute and unfettered", costs should follow the event of the litigation "grew up in an era of private litigation". There is a need to distinguish applications to enforce "public law obligations" which arise under environmental laws lest the relaxation of standing by s 123 [of the EPA Act] have little significance.
(ii) The characterisation of proceedings as "public interest litigation" with the "prime motivation" being the upholding of "the public interest and the rule of law" may be a factor which contributes to a finding of "special circumstances" but is not, of itself, enough to constitute special circumstances warranting departure from the "usual rule"; something more is required.
(iii) The appellant's pursuit of the litigation was motivated by his desire to ensure obedience to environmental law and to preserve the habitat of the endangered koala on and around the site; he had nothing to gain from the litigation "other than the worthy motive of seeking to uphold environmental law and the preservation of endangered fauna".
(iv) In the present case, "a significant number of members of the public" shared the stance of the appellant as to the development to take place on the site, the preservation of the natural features and flora of the site, and the impact on endangered fauna, especially the koala. In that sense there was a "public interest" in the outcome of the litigation.
(v) The basis of the challenge was arguable and had raised and resolved "significant issues" as to the interpretation and future administration of statutory provisions relating to the protection of endangered fauna and relating to the ambit and future administration of the subject development consent; these issues had "implications" for the Council, the developer and the public.
(vi) It followed that there were "sufficient special circumstances to justify a departure from the ordinary rule as to costs".
In an examination of the reasons of the primary judge with respect to costs, it should be borne in mind that his Honour was dealing with an application for costs by both the developer and the Council, not the Council alone. The appeal to this Court is limited to the denial of costs to the Council.
Gaudron and Gummow JJ expressed the issue for determination in the following terms, at [31]:
The true issue here is not whether this was "public interest litigation". Rather, to adapt the terms used by Dixon J in Water Conservation and Irrigation Commission (NSW) v Browning, to which reference was made earlier in these reasons, the question is whether the subject matter, the scope and purpose of s 69 are such as to enable the Court of Appeal to pronounce the reasons given by Stein J to be "definitely extraneous to any objects the legislature could have had in view" in enacting s 69.
This statement of the true issue was in response to the submission for the appellant, referred to by their Honours at [30], that, for the purpose of the rule governing the power of the court to order the payment of costs under s 69(2), there was "a category of 'public interest litigation' into which this case fell". Their Honours observed: "That is a 'nebulous concept' unless given, as the primary judge did in the present case, further content of a legally normative nature. It also tends, in this litigation, to distract attention from the legal issue which is at stake".
At [40], Gaudron and Gummow JJ stated the following principle:
There is no absolute rule with respect to the exercise of the power conferred by a provision such as s 69 of the [LEC Act] that, in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party. Nor is there any rule that there is no jurisdiction to order a successful party to bear the costs of the unsuccessful party.
Relevantly, their Honours stated at [48] "…that, in the present case, there was no miscarriage", and concluded at [49]:
The primary judge reasoned from a starting point which favoured costs orders against the appellant as the unsuccessful party. However, he correctly drew a distinction earlier expressed as follows by Menzies J, with the concurrence of Kitto, Taylor and Windeyer JJ:
"Prohibitions and restrictions such as those under consideration are directed towards public health and comfort and the orderly arrangement of municipal areas and are imposed, not for the benefit of particular individuals, but for the benefit of the public or at least a section of the public, viz those living in the municipal area."
Having characterised the nature of the litigation as concerned with public rather than private rights, Stein J stated that "something more" than the categorisation of proceedings as public interest litigation was needed before a successful defendant should be denied costs. Stein J then isolated the factors identified in pars (iii), (iv) and (v) of the summary given earlier in these reasons as sufficient special circumstances. In proceeding to exercise in this fashion the discretion conferred by s 69, Stein J did not take into account considerations which can be said to have been definitely extraneous to any objects the legislature could have had in view in enacting s 69 and in relation to the operation of s 69 upon proceedings instituted under s 123 of the EPA Act. The contrary is the case.
Kirby J identified the relevant issue for determination as follows (at [104]):
Each of the judges in the Court of Appeal concluded that the flaw in Stein J's reasoning was a failure to conform to the holding of this Court in Latoudis v Casey. The point of general importance is, therefore, whether that holding forbade Stein J from giving weight to the public interest character of the proceedings. In my view, it did not and the appeal must succeed. (Citations omitted)
His Honour referred to s 69 of the LEC Act and noted its broad and unconfined terms (at [109]). His Honour observed that "Parliament has not sought to control or limit in any way the exercise of the discretion" pursuant to that section (at [110]). However, his Honour said it was necessary to understand the context in which s 69 was enacted (at [112]). Central to that context was the effect of s 123 of the EPA Act. After referring to that section and other relevant provisions of the LEC Act, his Honour said (at [114]):
Inherent in the foregoing legislative innovation is a parliamentary conclusion that it is in the public interest that such individuals and groups should be able to engage the jurisdiction of the Land and Environment Court, although they have no personal, financial or like interest to do so.
His Honour further said (at [117]):
When this background of special, and in some ways peculiar, legislation is recognised, it will be appreciated that the provision in the Land and Environment Court Act as to costs appears in a statutory context which alters, to some extent, the assumptions upon which civil litigation in this country has hitherto, ordinarily, taken place. Instead of a purely adversarial contest between two parties having individual, and typically financial, interests to advance, Parliament has envisaged that, in some cases at least, the contestants will be ranged as they were in these proceedings: on the one side an individual or representative body seeking to uphold one perception of the public interest and the requirements of environmental law; on the other side, a local government authority seeking to uphold another.
To that extent, Kirby J concluded (at [132]) that the Court of Appeal erred in holding that the High Court decision in Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 stood in the way of Stein J taking into account the broader public interest element in exercising his discretion to make no order as to costs.
His Honour went further, however, rejecting the respondent's submission that it was impermissible for Stein J to have regard to "an indeterminate class of "public interest" litigation" (at [136]). His Honour acknowledged that "it is difficult to define with precision what is meant by "public interest" litigation" but observed (at [136]):
…in this country, as well as in England, New Zealand, Canada and elsewhere a discrete approach has been taken to costs in circumstances where courts have concluded that a litigant has properly brought proceedings to advance a legitimate public interest, has contributed to the proper understanding of the law in question and has involved no private gain. In such cases the costs incurred have occasionally been described as incidental to the proper exercise of public administration. Upon that basis it has been considered that they ought not to be wholly a burden on the particular litigant. (Citations omitted)
McHugh J (with whom Brennan CJ agreed) dissented. For present purposes, it is only necessary to identify his Honour's misgivings in respect of the "public interest" label. His Honour noted the "inherent imprecision" in the use of such label, noting (at [71]):
Much litigation concerns the public interest. Prosecutions and most constitutional and administrative law matters almost invariably affect or involve the public interest. So do many ordinary civil actions concerning private rights and duties. Many defamation actions, for example, involve the defence of fair comment on a matter of public interest or the truth of an imputation that "relates to a matter of public interest". If the present case is "public interest litigation", it is difficult to see how prosecutions, most administrative and constitutional matters and many ordinary civil matters are not also "public interest litigation" entitling a court to depart from the usual order as to costs. At all events, it seems difficult - probably impossible - to formulate a principle that would indicate a rational basis for determining that the present litigation is public interest litigation without being compelled to hold that most cases involving criminal prosecutions and constitutional and administrative law are also "public interest litigation" for the purpose of costs orders. (Citations omitted)
It may be observed from these various judgments that a majority eschewed reliance on broad and undefined notions of "public interest" factors in litigation. Only Kirby J attempted to give the label any meaningful content but even his Honour acknowledged (at [136]) that the label "public interest litigation" was "difficult to define with precision". Nevertheless, Gaudron and Gummow JJ and Kirby J concluded that Stein J did not err in the exercise of his discretion to make no order as to costs under the LEC Act s 69(2) having regard to the permissible objects and purposes of proceedings brought under s 123 of the EPA Act.
Despite the arguably narrow holding established by the High Court in Oshlack, it has been accepted in subsequent authorities that the ability to characterise the proceedings as "public interest litigation" may be a relevant factor to take into account in the exercise of the Court's discretion to award costs under s 98 of the Civil Procedure Act (see, for example, Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA 157 at [24]; Hunter Development Corporation v Save Our Rail NSW Incorporated (No 2) (2016) 93 NSWLR 704; [2016] NSWCA 375 at [67]).
In Hastings Point Progress Association Inc, Young JA (with whom McColl JA agreed) cited the decision of Lloyd J in Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No 2) [2004] NSWLEC 434; 136 LGERA 365 where his Honour (at [15]) cited a number of factors that are relevant to the exercise of characterisation of proceedings as "public interest litigation". Those factors included:
1. The public interest served by the litigation;
2. Whether that interest is confined to a relatively small number of people in the immediate vicinity of a development, or whether the interest is wide;
3. Whether the applicant sought to enforce public law obligations;
4. Whether the prime motivation of the litigation is to uphold the public interest and the rule of law;
5. Whether the applicant has no pecuniary interest in the outcome of the proceedings.
The nature of the present case illustrates the difficulties described by McHugh J in Oshlack in attempting to characterise proceedings as having been brought in the "public interest". It is, to some degree, a matter of perspective. On one hand, as submitted by the plaintiffs, it might be said that one of The Greens NSW's raison d'etres is to stand candidates for election to the New South Wales Parliament. The Greens NSW is a political party registered under Part 6 of the Electoral Act. The plaintiffs, as members of The Greens NSW, had a legitimate interest in ensuring the proper and orderly administration in the process of selecting candidates for election to the New South Wales Legislative Council. The fact that those candidates which are ultimately preselected will stand for election by the enfranchised voting population takes the relevant interests above and beyond those possessed by the plaintiffs to the public at large. On the other hand, as was submitted by The Greens NSW and Ms Boyd, it is equally true that the plaintiffs brought proceedings to enforce their private contractual rights arising under The Greens NSW's constitution.
The plaintiffs submitted that the "public interest" character of the proceedings is bolstered by reason of the evidence from the second plaintiff that he had "no financial or political interest" in bringing the proceedings. The first plaintiff, however, did not initially put on evidence to like effect. This was met by submissions from The Greens NSW and Ms Boyd that the Court should either proceed on the assumption that the first plaintiff did have a vested political interest or that a Jones v Dunkel inference should be drawn to that effect. In response to these submissions, the first plaintiff provided a further affidavit affirmed on 5 April 2019 in which he deposed that he does not and never had a vested interest in the substantive proceedings. No directions were made for the filing and service of any further affidavit evidence in reply nor did the plaintiffs seek leave to do so. In those circumstances, it would be inappropriate for the Court to take this further affidavit into consideration in the absence of the active defendants' ability to test its veracity (although, for the reasons that follow, this will be of little consequence to the outcome in any event).
It may readily be accepted that the existence of political motivations in the outcome of the proceedings may be "private interests" that will militate against the Court characterising the proceedings as being in the nature of "public interest" litigation. But in proceedings such as these, this can give rise to difficult questions of degree. For instance, The Greens NSW and Ms Boyd submitted that the plaintiffs did in fact have such interests. Quite apart from the invitation to draw a Jones v Dunkel inference, it was suggested that the first plaintiff demonstrated such political motivation in his affidavit affirmed on 27 February 2019 by expressing a desire that the Court "uphold [his] political rights to count [his] second preference vote". But this might be said to be equally consistent with a motivation that the proper administration of The Greens NSW required that, in the event of Mr Buckingham's resignation, the ballot papers of voters who marked Mr Buckingham first would be adjusted by moving the second person into first and all subsequent persons up one, as required by the constitution. It was not suggested by any of the defendants that the plaintiffs had any reason to oppose Ms Walker's candidature such that if they succeeded in their claim they would derive a personal benefit from not having her on the ticket.
It was also suggested that notwithstanding his denial the second plaintiff had a political stake in the proceedings. Reference was made to the fact that the second plaintiff was a signatory to the open letter. In that open letter, there is a space next to the name of the signatory in which that person may write additional comments. In that space, the second plaintiff wrote that:
"the left renewal insurgency is poisonous and destructive. SDC and [the Committee of Management] are corrupted by tribal allegiances. The unmoderated facebook site is foul. A failure to recount the [Legislative Council] preselection, if Jeremy Buckingham resigns, will render the [Legislative Council] ticket unrepresentative of Greens members."
These remarks are suggestive of some kind of political view but it is difficult to draw any firm conclusions from those remarks insofar as they relate to these proceedings. The same observations that I made above in respect of the alleged political interests of the first plaintiff might equally apply here. This is certainly the case in respect of the third sentence which is the most relevant part of the remarks to these proceedings. The most favourable inference that can be drawn from these remarks in support of the contention that it demonstrates a political interest is that the first plaintiff did not wish to see candidates from "the left renewal insurgency" be preselected as candidates for election. But if that be the case, there was no evidence that by prosecuting these proceedings the first plaintiff would be assured of some outcome that would align with those alleged political interests. There was no evidence that Ms Boyd, Ms Walker or any other person were members of any so-called "left renewal insurgency".
Notwithstanding these evidentiary difficulties, I am prepared to infer from this limited evidence, favourable to the active defendants, that at least one or both of the plaintiffs may have harboured some private or political motivations in pursuing the litigation. It is therefore not necessary to consider whether the Court should draw a Jones v Dunkel inference insofar as the first plaintiff's evidence is concerned. But even then, the existence of an identifiable private interest is only one factor in the characterisation exercise, and a factor which in the circumstances of this case does not disqualify the proceedings from being characterised as having a "public interest" element (see Darlinghurst Residents' Association v Elarose Investments Pty Ltd [No 3] (1992) 75 LGRA 214 at 216). This is so because it is difficult to conclude on the material before the Court that any such private interests were the controlling or dominant reasons for pursuing the proceedings (Hastings Point Progress Association Inc at [8]).
In the result, the competing factors that the Court must consider in forming a view on whether the proceedings had a sufficient "public interest" character are finely balanced. In all the circumstances, however, I think that there was some (albeit limited) "public interest" element to the proceedings. But it does not immediately follow that the plaintiffs should succeed in obtaining the costs order that they seek. It is clear that the mere characterisation of proceedings as "public interest litigation" is not by itself a reason to depart from the usual rule. Something more will usually be required (Botany Bay City Council v Minister for Local Government (No 2) [2016] NSWCA 127 at [7], citing Minister for Planning v Walker (No 2) [2008] NSWCA 334 at [9]; see also Hastings Point Progress Association Inc at [26]-[27]).
In my view, that "something more" is not present in the circumstances of this case. The plaintiffs did not identify anything above the mere characterisation of the proceedings as possessing a "public interest" character that would warrant the Court making an order that The Greens NSW pay the plaintiffs' costs of the proceedings. Less still was there justification for The Greens NSW bearing the active defendants costs of the proceedings. The plaintiffs sought to justify the orders which they now seek by submitting that the bringing of the proceedings was necessary to resolve an issue of the proper interpretation of The Greens NSW constitution. It was submitted that this followed from the sequence of events described in the principal judgment from paras 30 to 46, including the fact that the Committee of Management was at a deadlock and the failure of the State Delegates Council to consider the proposals which the plaintiffs favoured.
All of this may be accepted. There is no doubt that a dispute arose as to the proper interpretation of the constitution. But this as far as the submission goes. It is difficult to conclude that the circumstances in which the proceedings were brought by the plaintiffs and the internal difficulties faced by The Greens NSW following the resignation of Mr Buckingham takes the proceedings outside what might otherwise be described as a garden variety dispute as to the proper interpretation of a company or incorporated association's governing rules. The proceedings did not involve any question of public importance the resolution of which may have affected a significant portion of the public. To the contrary, the outcome of the litigation would have directly affected only those members of The Greens NSW who had nominated for preselection.
It should not also be overlooked that The Greens NSW is, for present purposes, a private entity. While it is a registered entity for the purposes of Part 6 of the Electoral Act, it was not suggested (and nothing in the terms of that Act indicate) that any of the entitlements or obligations imposed upon it by that Act were relevant in any material way to the present dispute. It could not be said that The Greens NSW were obliged to select candidates in a particular mode or method such that the bringing of proceedings might be said to vindicate a public right. Division 3 of Part 7 of the Electoral Act contemplates that the method for selection of candidates for nomination is a matter for the political party. This is, accordingly, governed by the constituent and other relevant documents of the political party.
The fact that The Greens NSW does not exercise any relevant public power also tends to undermine the plaintiffs oblique suggestion that The Greens NSW's opposition to the plaintiffs' claim could be equated to that of a contradictor who took a disinterested position on the issues in dispute. The Greens NSW took an active position in opposing the recount of the kind sought by the plaintiffs. The plaintiffs were of course entitled to challenge the position adopted by The Greens NSW. They did so and were wholly unsuccessful.
In all the circumstances of the case, I am not persuaded that the Court should depart from the usual rule set out in UCPR r 42.1 and "otherwise order" that The Greens NSW pay the plaintiffs' costs. I note for completeness that The Greens NSW also submitted that the plaintiffs conduct in the proceedings, including the delay in bringing the proceedings and how the plaintiffs conducted their case during the hearing on 1 March 2019, should have some bearing on the Court's discretion. Given that the plaintiffs have not shown that there was a sufficient reason above and beyond the characterisation of the proceedings as having a "public interest" element to depart from the usual rule, I do not find it necessary to form a concluded view on these matters.
Similarly, I am not persuaded that an order should be made requiring The Greens NSW to bear the active defendants' costs. Those parties (including the other defendants who took no active role in the proceedings) were joined as necessary parties to the proceedings. The active defendants vigorously opposed the plaintiffs' claims. The plaintiffs have not identified any feature which would make it appropriate that The Greens NSW bear the responsibility of their costs. The plaintiffs should also pay any legal costs incurred by Mr Shoebridge. As noted above, Mr Shoebridge did not appear on 1 March 2019 on the understanding that any hearing would take place on 4 March 2019 instead. Mr Shoebridge appears to have incurred some legal costs in his preparation of the proceedings and I see no reason why those costs should not be recoverable.
The remaining issue for determination is whether the defendants should be awarded their pre-commencement costs of the proceedings. The authorities bearing on this question were considered by Young AJA in Chow v Chow (No 2) (2015) 229 BPR 35,385; [2015] NSWSC 1348 at [19]-[24]. In that case, the substantive proceedings (which were commenced in May 2015) involved an application for the appointment of trustees for sale of certain land pursuant to s 66G of the Conveyancing Act 1919 (NSW). After a contested application, orders were made appointing trustees for sale. Attention then turned to the question of the costs of the proceedings. His Honour noted that the question of costs was complicated by reason of the fact that the parties had engaged in negotiations concerning the sale of the land since June 2011.
His Honour referred (at [19]) to the decision of Megarry VC in Re Gibson's Settlement Trusts [1981] Ch 179 at 187 where the Vice-Chancellor described the usual position as to the award of costs in the following terms:
Neither the fact that at the time the costs were incurred no writ or originating summons had been issued, nor the fact that the immediate object in incurring the costs was to ascertain the prospective litigant's chances of success, will per se suffice to exclude the costs from being regarded as part of the costs of the litigation that ensues. Of course, if there is no litigation there are no costs of litigation. But if the dispute ripens into litigation, the question then arises how far the ambit of the costs is effected by the shape that the litigation takes.
Young AJA then considered (at [23]) the effect of two decisions of the High Court (Kirk v Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA 1 and Edwards v Santos Ltd (2011) 242 CLR 421; [2011] HCA 8) before concluding (at [24]) that the Court had power under s 98 of the Civil Procedure Act 2005 (NSW), in combination with ss 23 and 63 of the Supreme Court Act 1970 (NSW), to award pre-commencement costs of the proceedings that would not otherwise be caught by the statement of principle expressed by Megarry VC in Re Gibson's Settlement Trusts. Accordingly, his Honour awarded that the costs of all parties from June 2011 be paid out of the proceeds of sale.
The plaintiffs, in substance, submitted that Chow was distinguishable. It was put that Chow was a "very special case" (a phrase used by Young AJA at [28]) and that in any event the costs of the proceedings in that case were to be paid out of the proceeds of sale of the land, and not by the parties personally.
I do not think that the fact that costs are paid out of the proceeds of sale is of any significance. As Young AJA recognised in Chow at [7]-[10], it simply reflects the usual order made in respect of applications under s 66G of the Conveyancing Act which have been prosecuted and defended by co-owners without any relevant delinquency. Those costs are still the parties' costs in the proceedings, notwithstanding that they are to be paid out of the proceeds of sale once agreed or assessed.
I also do not think that Young AJA was intending to express any qualification that orders requiring a party to pay pre-commencement costs of the proceedings from a particular date would only be made in unusual (or perhaps exceptional) circumstances. The observations made by his Honour at [28] of the judgment were directed toward the unusual circumstance in that case that significant legal costs had been incurred by the parties in 2011 directed toward the issue of whether to sell the land. As his Honour noted at [18], when proceedings were ultimately commenced in May 2015 there was no real dispute that the land should be sold; rather, the only issue between the parties was who should be appointed as the trustees for sale. In those circumstances, his Honour found that it was appropriate to make a specific order to ensure that the costs incurred in 2011, which had a logical connection with the 2015 proceedings, would not be excluded from the costs assessment process.
I think the approach to be taken by the Court in circumstances where a party seeks an order that pre-commencement costs are to be specifically included in any costs order is whether, taking into account all the relevant circumstances, there are good reasons for making such an order.
In the present case, due to the imminent deadline in which to file the formal paperwork to nominate candidates for The Greens NSW ticket, the dispute evolved and ripened into contested litigation in an extraordinarily fast fashion. The evidence indicates that the first plaintiff foreshadowed his intention to commence proceedings from 20 February 2019. Similar expressions of intention to commence proceedings were made by the plaintiffs between 22 February and 27 February 2019. Thereafter, but before the formal commencement of proceedings on 1 March 2019, formal documentation was drafted and served upon the parties. Written submissions were also exchanged between the parties. Thus, it appears that a significant portion (if not all) of the legal work by the parties was undertaken well before the proceedings were formally commenced on 1 March 2019. Given that the bulk of the legal work was undertaken close to the commencement of proceedings, it may be that a costs assessor forms the view that those costs would be captured as costs incidental to the proceedings, and therefore properly characterised as costs incurred for the purposes of the proceedings.
However, taking into account the urgency involved in the proceedings and the way in which the proceedings were conducted, I think that the defendants have demonstrated a good reason to make a specific order that the costs of the proceedings be assessed from 20 February 2020. As Young AJA noted in Chow at [28], this is not to say that the defendants would be entitled to all of their costs from that date; it will remain a matter for any costs assessor (should the matter proceed to assessment) to determine what costs have been reasonably incurred for the purposes of the proceedings.
It follows from the reasons above that the plaintiffs' application for a special costs order must be refused. As noted above, the legal representatives acting for The Greens NSW also acted for the seventh and eighth defendants in the substantive proceedings. The transcript of the hearing on 1 March 2019 shows, however, that those parties would have filed a submitting appearance had there been an opportunity to do so before final orders were made that day. On that basis, it is not appropriate that those parties receive the benefit of the costs order that will be made. The Court will therefore make an order that the first and second plaintiffs pay the first, fourth and fifth defendants' costs of the proceedings, to be assessed from 20 February 2019.
Mr Shoebridge sought an order that the plaintiffs pay his costs of this special costs application on the indemnity basis. It was submitted that the application was so unmeritorious that it constituted a "sufficient or unusual feature" that enlivened the Court's discretion to award indemnity costs (see Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 at 233-4).
While the plaintiffs' application might be described as lacking in strength, I do not think that it was unarguable. The weakness of the application is, of course, not a sufficient reason in itself to award indemnity costs (Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 542; Hurstville Municipal Council v Connor (1991) 24 NSWLR 724 at 735; Horswill v McClellan (No 2) [2019] NSWSC 964).
Accordingly, the Court:
1. Orders that the first and second plaintiffs pay the first, fourth and fifth defendants' costs of the proceedings on the ordinary basis, to be assessed from 20 February 2019.
[4]
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Decision last updated: 17 January 2020