Solicitors:
Gillis Delaney Lawyers - Petitioner
Laxon Lex Lawyers - First Respondent
L Armstrong, NSW Crown Solicitor - Second Respondent
File Number(s): 2015/160390
[2]
Judgment
HIS HONOUR: On 28 March 2015 an election for the Parliament of NSW took place which included an election for the NSW Legislative Council. The election for the Legislative Council related to the whole of NSW and not to any specific electoral district. There were 5,040,662 electors enrolled to vote in respect of the election and 21 candidates were elected.
The Petitioner was a candidate and contested the election for the Legislative Council as the number one candidate for the No Land Tax Campaign (NLTC), a registered political party. The Petitioner was the last candidate excluded at the election. He had received 88,243 first and later preference votes.
The First Respondent (a candidate for the Animal Justice Party) was the 21st and last candidate elected with 91,420 votes.
The Petitioner filed his petition on 29 May 2015. It named the Electoral Commissioner of NSW as the Second Respondent. The petition was filed pursuant to s 151 of the Parliamentary Electorates and Elections Act 1912 (the Act). The Petitioner sought an order that pursuant to ss 161(1)(v) and (vi) of the Act that the First Respondent was not duly elected to the Legislative Council but that he was so duly elected. In the alternative, he sought an order that pursuant to s 161(1)(vii) of the Act, the Legislative Council election was absolutely void and a new election should be held.
The petition asserted the following:
(i) Interference with NLTC employees by the Liberal Party by discouraging them from attending polling booths.
(ii) Interference with NLTC employees by the Macquarie Radio Network by misleading broadcasts.
(iii) Interference with NLTC employees by the Labor Party and others by discouraging them from attending polling booths.
The petition alleged that this conduct had the effect of reducing the number of votes in favour of the NLTC.
Factual background
The matter was listed for directions before Davies J on 5 June 2015. On that day Davies J made timetable directions for the filing of evidence and set the hearing down for 7 September 2015.
On 23 June 2015 the Commissioner filed a Notice of Motion to strike out the petition (the strike out motion) and sought expedition for the hearing of that motion.
The motion asserted that the petition was liable to be struck out on various grounds including:
(a) That the petition was not properly constituted because the necessary parties were not joined, i.e. every other member of the Legislative Council who had been elected on that occasion and that the petition could not be amended because the 40 day limitation period had expired.
(b) That the practices identified in the petition did not constitute "illegal practices" within the meaning of s 164 of the Act.
(c) That the facts necessary to establish that the result of the election was likely to be affected by the practices referred to in the petition were not set out in it and were unprovable.
(d) That the facts necessary to establish that the relief sought in the petition were not set out.
(e) That the court did not have power to grant some of the relief sought in the petition.
On 25 June 2015 the Petitioner filed a notice of motion seeking to discontinue pursuant to SCR Pt 79 r 19 (the discontinuance motion). On 26 June 2015 the court gave directions which included that the discontinuance motion be heard on 27 July 2015. The hearing of that motion could not proceed on 27 July 2015 because the Petitioner failed to comply with SCR Pt 79 r 19 in multiple respects.
On 1 July 2015 the Petitioner served an amended discontinuance motion dated 29 June 2015 pursuant to SCR Pt 79 r 19. On 27 July 2015 the Court fixed the motion for discontinuance for hearing on 3 September 2015.
It was not in issue that the Supreme Court of NSW was the Court of Disputed Returns and had jurisdiction (exercisable by a single judge) to hear the petition and to otherwise deal with matters arising from the petition, including the hearing of the Petitioner's motion to discontinue. It was also common ground that the various provisions of the Act were to be strictly construed and that non-compliance would result in dismissal of the petition.
Hearing and submissions
At the hearing on 3 September the granting of leave by the Court for the Petitioner to discontinue was not opposed. The issue before the Court was costs.
SCR Pt 79 sets out rules relating to the Court of Disputed Returns. There was evidence before the Court of the following matters:
(a) Publication of the petition (SCR Pt 79 r 9). On 3 July 2015 the Petitioner caused the petition to be published in the Gazette and notice of the petition was published in the Daily Telegraph, a newspaper circulating in the electoral district of NSW.
(b) Publication of motion to discontinue (SCR Pt 79 r 19(6)). Not less than 14 days before the day appointed for the hearing of the motion to discontinue (3 September 2015), the Petitioner published the notice of motion in the Daily Telegraph ( 31 July 2015).
(c) The grounds for the application to discontinue (SCR Pt 79 r 19(5)). The discontinuance motion set out that although the Petitioner adhered to the matters raised in the petition, he did not wish to burden the people of NSW with the financial impost of a further election.
(d) The discontinuance motion stated that on the hearing of the motion any person who might have been a Petitioner in respect of the election could apply to the court to be substituted as a Petitioner (SCR Pt 79 r 19(5)). No such person applied on 3 September 2015 to be so substituted.
(e) The Petitioner denied by affidavit that he had entered into any agreement of any kind, or had entered into any undertaking of any kind, in relation to the discontinuance of the petition (SCR Pt 79 r 19(7)).
It follows that there was no impediment to the Court granting leave to the Petitioner to discontinue the petition.
The power to award costs is conferred by ss 161(1)(ix) and 172 of the Act. Those sections provide:
"161 Powers of Court
(1) The Court of Disputed Returns shall sit as an open court and its powers shall include the following:
…
(ix) To award costs,
…
(2) The Court may exercise all or any of its powers under this section on such grounds as the Court in its discretion thinks just and sufficient.
…"
"172 Costs
The court may award costs against an unsuccessful party to the petition and may in its discretion recommend that costs be paid by the Crown."
The competing submissions as to the meaning and application of those sections were as follows:
Second Respondent (Electoral Commissioner)
The Electoral Commissioner submitted that if leave were granted to the Petitioner to discontinue:
(a) The Court should make an order under s 161(ix) of the Act that the Petitioner was to pay the Commissioner's costs and
(b) The Court did not have power to make a recommendation under s 172 of the Act that the Crown pay the costs of either the Petitioner or the First Respondent (Pearson).
The Commissioner submitted that under the Act there was a general power to award costs pursuant to s 161(1)(ix) and a specific power under s 172. The Commissioner submitted that the power in s 172 only applied in the particular circumstances there described, i.e. where there was an "unsuccessful party". The Commissioner submitted that where proceedings were discontinued, there was no "unsuccessful party" and accordingly s 172 did not apply. The Commissioner submitted that even though s 172 did not apply, the Court had a broad general power to award costs under s 161(1)(ix).
The Commissioner relied upon the following matters as justifying an order for costs in his favour.
(i) The Commissioner had been put to considerable expense in dealing with the petition and there was no good reason, the proceedings having been abandoned by the Petitioner, that the Commissioner should be out of pocket in respect of the petition.
(ii) The reason put forward by the Petitioner for abandoning the petition, i.e. that he did not wish to burden the people of NSW with the cost of a further election, existed when the proceedings were commenced. It provided no justification for commencing the proceedings and then later abandoning them.
(iii) The Petitioner did not seek an early discontinuance and the proceedings had been protracted because of failures by the Petitioner to comply with the time limits set out in the Act and the SCR.
(iv) The petition was liable to be struck out on the grounds set out in the strike out motion and the application to discontinue was only made after the filing of the strike out motion. This was particularly so because of the failure to join the other 20 successful candidates.
(v) There was no suggestion that the Commissioner acted unreasonably in the defence of the proceedings and in accordance with the usual practice relating to the discontinuance of proceedings, the party discontinuing should pay the costs of the other parties.
The First Respondent (Pearson)
The First Respondent submitted that the power to award costs, pursuant to s 161(1)(ix) of the Act was a wide power, the only restriction being that the Court take into account just and sufficient grounds when exercising its discretion. He submitted that he had been joined to the proceedings only by reason of his status as an elected candidate and that no wrongful conduct was alleged against him. He had incurred considerable costs in defending the Petitioner's claim. He submitted that had the Petitioner considered the matter given as the reason for discontinuing the proceedings, he would not have commenced them. In those circumstances, the First Respondent sought a costs order against the Petitioner.
The First Respondent also sought an order against the Electoral Commissioner. The First Respondent submitted that the Electoral Commissioner had an overall supervisory role insofar as elections were concerned. He submitted that part of that supervisory role was to ensure that persons such as himself were not left out of pocket merely by reason of their successful election to office. Where he had been joined to the proceedings only by reason of his success as an elected candidate, and where there was no adverse conduct alleged against him, it was appropriate that the Electoral Commissioner pay his costs or any shortfall between those costs and the costs recovered from the Petitioner.
The First Respondent submitted that the general power to award costs in s 160(1)(ix) was sufficiently wide to allow such an order to be made. This was so because although he was a "successful party" he was not able to obtain a recommendation under s 172 of the Act.
Petitioner (Jones)
The Petitioner accepted that as a person seeking leave to discontinue, he might be seen as an "unsuccessful party" as envisaged by s 172 of the Act. In such circumstances he submitted that each party should pay their own costs and that a recommendation that the Crown pay his costs should be made pursuant to s 172.
The Petitioner justified that submission on the basis of what was said in Hanson v Johnston & Ors [2011] NSWSC 621 (McClellan CJ at CL) where his Honour made a recommendation in favour of an unsuccessful Petitioner. While recognising that he had a difficult case to prove, the Petitioner submitted that the matters about which he complained arguably involved illegal practices which had occurred with respect to the election and which had impacted upon him so as to prevent him being elected as a member of the Legislative Council. He submitted that because this was a matter of important public interest, a favourable recommendation under s 172 should be made in his favour.
The Petitioner submitted that he had recognised the difficulties confronting him in his case and the significant cost to the community and for that reason, had decided to "bow out gracefully". He submitted that in circumstances where he sought an early discontinuance, a recommendation should be made by the Court that the Crown pay his costs.
In the alternative, the Petitioner submitted that if he were not an "unsuccessful party" so that s 172 did not apply, an order should be made that each party pay his own costs. This order should be made under the general power to award costs in s 161(1)(ix) for the reasons already given.
Consideration
I am not persuaded that the effect of ss 161(1)(ix) and 172 is to provide two independent sources of power to award costs without there being any relationship between them. I favour the approach of McClellan CJ at CL in Hanson where his Honour said:
"11 When sitting as a Court of Disputed Returns a judge of the Supreme Court exercises the powers provided by the Parliamentary Electorates and Elections Act 1912 ("the Act"). Part 6 of that Act provides for the Court of Disputed Returns. Section 161 states the powers vested in that court. Those powers include a power to award costs (section 161(1)(ix)). Ordinarily one would construe that power as unconfined and like the power to award costs under s 98 of the Civil Procedure Act 2005, conclude that the court could make an order for costs against third parties. However, s 172 of the Act makes express provision for an award of costs which the Court of Disputed Returns may make which is confined to an order awarding costs against an unsuccessful party."
It seems to me that the two sections should not be read independently but read together as envisaged by McClellan CJ at CL. If that is so, there is no scope to award costs against third parties, nor is there scope to award costs against a party unless that party can be properly characterised as "an unsuccessful party to the petition". Support for that approach can be found in the apparent overlap between the sections.
If s 161(1)(ix) should be interpreted as a general and unconfined power to award costs, there would be no need for the first provision in s 172 that "the Court may award costs against an unsuccessful party to the petition". Such a provision would be otiose.
If that approach is correct, the operative section for the purposes of awarding costs is s 172 of the Act. On the interpretation submitted by the Electoral Commissioner and supported by the First Respondent and to a limited extent by the Petitioner, i.e. that the words "an unsuccessful party to the petition" do not include a Petitioner who seeks to discontinue a petition, s 172 would have limited application and would only become operative when proceedings had been heard or finalised by a consent dismissal. As a matter of practicality, given the rigid time limits which apply to petitions and their amendment, there is no difference in effect between a consent dismissal and an application to discontinue the petition.
I am not persuaded that the words "an unsuccessful party to the petition", as used in s 172 do not include a Petitioner who seeks leave to discontinue the petition. The practical effect of a successful application to discontinue is that none of the orders sought have been made and no legal detriment has been suffered by the respondents to the petition. In those circumstances an appropriate characterisation of the Petitioner is "an unsuccessful party to the petition".
There is no authority on that issue insofar as it relates to s 172 of the Act. No violence would be done to the structure of the Act to interpret s 172 in that way. Since the second part of s 172 comprises a remedial or beneficial provision which can ameliorate the potentially harsh effect of the first part of the section, it follows that the persons who can benefit from that ameliorative provision should not be narrowly defined by excluding a Petitioner seeking leave to discontinue the petition from the class of persons described as "an unsuccessful party to the petition".
On that interpretation of the costs provisions of the Act, I would resolve the costs issue as follows. As between the Electoral Commissioner and the Petitioner, I can see no reason why the Petitioner should not pay the costs of the Electoral Commissioner. Although there has been no hearing on the merits, the matters raised by the Commissioner in its motion to strike out the petition had considerable force and there was a strong likelihood that the motion would have been successful. It is of significance that the Petitioner sought leave to discontinue the petition within days of being served with the strike out motion. It is also not without significance that the Petitioner's legal advisors accepted the "difficulty" of the case which they had to make out.
As between the Petitioner and the First Respondent, the Petitioner should pay his costs. The First Respondent through no fault on his part has been put to the expense of defending the proceedings and his election. There is no good reason, the proceedings having been discontinued, why he should be out of pocket in respect of the petition.
Those findings give effect to the first part of s 172, i.e. that the Court may award costs against an unsuccessful party to the petition.
The next question is whether a recommendation should be made in accordance with the second part of s 172.
In Bradbery v Hay (No 2) [2011] NSWSC 691 Simpson J reviewed a number of decisions where a recommendation in accordance with the second part of s 172 was made or in the case of the Commonwealth legislation, an order to that effect. It is clear from her Honour's analysis that a number of those cases involved unusual features which justified the recommendation or order. A common theme in those cases was that the importance of the electoral process correctly operating was such that persons who genuinely believed that there had been some error or unfairness or worse, should not be discouraged from bringing proceedings to identify such a circumstance.
The facts alleged by the Petitioner in this case, even if they had been proved, could not have given rise to the sort of illegal practices referred to in s 164 of the Act. This should have been obvious to the Petitioner before the proceedings were commenced. I am not satisfied that it was reasonable for the Petitioner to bring these proceedings.
It follows that as between the Electoral Commissioner and the Petitioner there is no proper basis for making a recommendation that the Petitioner's costs be paid by the Crown.
The position as between the Petitioner and the First Respondent is somewhat different. No impropriety has been alleged against him. His exposure to these proceedings is based upon the fact that he stood for election to the Legislative Council of NSW and was successful. While there is no evidence as to the capacity of the Petitioner to meet the costs order made against him in favour of the First Respondent, there remains a risk that he will be unable to pay those costs. In those circumstances, the First Respondent could be substantially out of pocket.
Such considerations may well operate in the future to discourage persons such as the First Respondent from putting themselves forward as a candidate in State elections. It follows that there is an important public interest in preventing such a situation arising. The best way to ensure that this does not occur is to make a recommendation in accordance with s 172 that the Crown pay the costs of the First Respondent which have been ordered to be paid by the Petitioner.
Orders
The Court orders:
1. Pursuant to Pt 79 r 19 of the Supreme Court Rules 1970 the Petitioner is granted leave to discontinue these proceedings.
2. The proceedings commenced on 29 May 2015 are discontinued.
3. The Notice of Motion filed on 23 June 2015 by the Second Respondent is dismissed.
4. The Petitioner is to pay the costs of the First Respondent incurred in respect of the petition.
5. The Petitioner is to pay the costs of the Second Respondent incurred in respect of the petition.
6. The Court recommends that the costs of the First Respondent ordered to be paid by the Petitioner be paid by the Crown.
[3]
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Decision last updated: 14 September 2015