Kvelde v State of New South Wales

Supreme Court of NSW|2024-03-05|Before: Walton J

JUDGMENT

By a Summons filed 12 October 2022, Ms Helen Kvelde and Ms Dominque Jacobs ("the plaintiffs"), sought declarations that s 214A of the Crimes Act 1900 (NSW) ("Crimes Act") ("the impugned law or provision") and cl 48A(1) of the Roads Regulation 2018 (NSW) ("Roads Regulation") (together, the "impugned provisions") are invalid. The plaintiffs submitted that: 1. Section 214A of the Crimes Act is invalid because it infringes the implied freedom of political communication ("the implied freedom") and is thus beyond the power of the Parliament of New South Wales; and 2. Clause 48A(1) of the Roads Regulation is invalid because it is beyond the scope of the regulation-making power contained in the Roads Act 1993 (NSW) ("Roads Act").
The defendant, the State of New South Wales ("the State"), disputed that the plaintiffs had standing to challenge the validity of either provision.
Kvelde v State of New South Wales [2023] NSWSC 1560 ("the primary judgment") was published on 13 December 2023. In the primary judgment, the Court applied the three-part test established by the High Court to establish whether a law contravenes the implied freedom: McCloy v New South Wales (2015) 257 CLR 178; [2015] HCA 34 ("McCloy") at [1]-[2]; Brown v Tasmania (2017) 261 CLR 328; [2017] HCA 43 ("Brown") at [104] (Kiefel CJ, Bell and Keane JJ), [155]-[156] (Gaegler J), [277] (Nettle J) and [481] (Edelman J). The test as re-stated in Clubb v Edwards (2019) 267 CLR 171; [2019] HCA 11 ("Clubb") at [5] and the answers provided by the Court in that respect were as follows: 1. Does the law effectively burden the implied freedom in its terms, operation or effect? The Court answered the question in the affirmative with respect to subs 214A(1)(c) (as to partial closure of a major facility) and subs 214A(1)(d). 2. If "yes" to question one, is the purpose of the law legitimate, in the sense that it is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government? The Court answered this question in the affirmative; the purpose of the impugned provision was legitimate. 3. If "yes" to question two, is the law reasonably appropriate and adapted to advance that legitimate object in a manner that is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government? [1] Question three was answered by the Court embarking upon a structured proportionality analysis to determine whether the restriction which the impugned provision imposes on the implied freedom is justified. [2]

The Plaintiffs Position

The plaintiffs' submitted that the defendant should be ordered to pay 50% of the plaintiffs' costs of the proceedings (to be agreed or assessed on the ordinary party/party basis).
The plaintiffs' submissions were, in summary, as follows: 1. In their constitutional challenge to s 214A of the Crimes Act, the plaintiffs were successful in obtaining declarations as to the invalidity of subss (1)(d) and (c), in a certain respect. The plaintiffs were unsuccessful in their challenge to the validity of cl 48A(1) of the Roads Regulation pursuant to principles of administrative law. In relation to the issue of standing, which was relevant to both the constitutional challenge and the administrative law challenge, the plaintiffs were wholly successful. Plainly, mixed success was enjoyed by the parties in respect of distinct issues. 2. An order that apportions costs is appropriate in this case to reflect that there is not one single "event" but distinct events. That is already reflected in the Court's preliminary view, expressed in the primary judgment at [576], that each party should pay their own costs, because the disposition of the proceedings has variously favoured both parties. The plaintiffs seek a variation from that preliminary position on the basis that a closer consideration of the nature of the issues determined by the Court demonstrates that the plaintiffs have enjoyed far greater success than the defendant and it is just that this be reflected in a costs order in favour of the plaintiffs. 3. The plaintiffs enjoyed success in respect of the constitutional challenge which occupied the vast bulk of the time devoted by the parties to the matter (as reflected in the Court's judgment). The plaintiffs also prevailed in relation to standing, which was the issue that required the bulk of the evidence and associated work. Those were the most complex and time-consuming issues, as can be shown by multiple measures. An order that the defendant pay 50% of the plaintiffs' costs would do justice between the parties. 4. The plaintiffs should be seen as having prevailed to the extent of 75% of the substantive resolution of the matter. The defendant, having enjoyed 25% success, is entitled to have that set off against the plaintiffs' position, resulting in the outcome of an order that the defendant pay 50% of the plaintiffs' costs.
As to the application of the apportionment principles in this case, the plaintiffs submitted the following: 1. Notwithstanding the general position that costs should not be determined on an issue-by-issue basis that involves disaggregation of overall "events", [3] the two challenges brought by the plaintiffs in the present case were discrete and separable claims. [4] It is appropriate to differentiate between the two challenges. [5] There was not a single "event" in the proceedings which costs should follow. 2. Both the general rule that costs should follow the event, and departures from that rule in cases of mixed success, are informed by the "idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs". [6] The following matters are relevant to such an assessment in the present case: 1. The defendant challenged the plaintiffs' standing to bring both the constitutional challenge to s 214A of the Crimes Act and the administrative law challenge to cl 48A(1) of the Roads Regulation. The plaintiffs were successful in establishing their standing. A significant portion of the evidence prepared and read by the plaintiffs was responsive to the defendant's challenge to their standing. That evidence demonstrated the plaintiffs' "extensive history in expressing their opinion through elaborate and coordinated protest actions about environmental and climate change issues", so as to establish that the plaintiffs were in a different position to an ordinary member of the public. [7] The substantial nature of the issue as to standing is reflected in the lengthy analysis in the reasons of the Court: at [98]-[139] of the primary judgment, building on the analysis of the evidence at [57]-[97]. 2. The constitutional challenge to s 214A of the Crimes Act constituted a far more substantial portion of the work associated with the proceedings than the administrative law challenge to cl 48A(1) of the Roads Regulation. The complexity of the issues involved in the constitutional challenge is an important consideration as it reflects the "overall forensic effort required" for the plaintiffs to achieve success on those issues. [8] That is reflected in submissions and also in the evidence which was almost entirely directed to questions of standing and the constitutional challenge. [9] 3. Further, although not a precisely accurate measure, it is relevant to note that the constitutional challenge consumed the bulk of the submissions of the parties. The plaintiffs' opening submissions dedicated 41 paragraphs to the constitutional challenge and only 12 to the administrative law challenge. The defendant's submissions dedicated 24 paragraphs to the constitutional challenge and 13 to the administrative law challenge. The plaintiffs' reply submissions addressed the constitutional challenge in 21 paragraphs and the administrative law challenge in 4 paragraphs. 4. The same substantial disparity is reflected in the judgment. The Court's analysis of the constitutional challenge proceeds from [140]-[519] in the primary judgment. The Court's analysis of the administrative law challenge to the Roads Regulation proceeds from [520]-[556]. Particularly in circumstances where the work devoted to the respective issues in the judgment mirrors the attention devoted to those issues in the submissions, the Court can and should infer that there was likewise a great disparity between the forensic work of the parties devoted to the constitutional challenge as opposed to the administrative law challenge. 5. Although the terms of the declaration sought by the plaintiffs in the Summons was that s 214A of the Crimes Act (in its entirety) be declared invalid, the Court's observation that the focus of the argument in the proceedings was on the validity of subs (1)(d) and, to a lesser extent, (1)(c) was, with respect, fair and accurate. [10] The fact that the Court did not declare the entirety of s 214A to be invalid does not detract from the plaintiffs' success on the constitutional challenge in terms of the issues that were argued and the consumed time and costs in the proceedings.

The State's Position

The State's primary position was that the appropriate order was the one made, order 4. In the alternative, if the Court considered it appropriate to re-engage with the process of apportioning costs as between different issues in the proceedings, the State submitted that it would be open to the Court, in the exercise of its discretion, to order that the plaintiffs pay 25% of the State's costs. This order would fairly take account of the State's success in defending the constitutional challenge to subss 214A(1)(a), (b) and part of (c) of the Crimes Act as well as the administrative law challenge to cl 48A(l) of the Roads Regulation.
The State made the following submissions, in summary: 1. The bulk of the plaintiffs' evidence that went to their standing to make the constitutional and administrative law challenges was prepared and filed before the State raised standing as an issue in the Response to Summons filed on 24 November 2022. [11] The evidence filed after the State raised the standing issue comprised of two affidavits (each only two pages in length) and some documentary material in the form of newspaper articles and an extract from a book. The State did not object to this evidence, minimising time spent on the standing issue at the hearing. Further, as the Court accepted in the primary judgment at [60], the Court would have, in any event, taken judicial notice of the history of political activities described in the documentary material. There is no further mention of the documentary material under the "Consideration: Standing" heading of the primary judgment at [106][139]. 2. The costs incurred by the State in successfully defending the validity of subss 214A(1)(a), (b) and part of (c) should be reflected in the costs order. 3. The administrative law challenge by the plaintiffs to cl 48A of the Roads Regulation was predicated on the grounds that it lacked reasonable proportionality and/or impermissibly sub-delegated. Those issues were substantive, complex, and time-consuming and comparable to the standing issue.

LEGAL PRINCIPLES

The parties agreed as to the relevant legal principles, which are as follows.
In Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40 ("Ryde") at [6], the New South Wales Court of Appeal described the general position on apportioning costs in cases of mixed success as follows: "[6] Section 98 of the Civil Procedure Act 2005 (NSW) confers on the Court a wide discretion with respect to costs. Under rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) the general rule is that the Court is to order that costs follow the event. The "event" may be characterised in more than one way. Generally the "event" refers to the result of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] per Ward, Emmett and Gleeson JJA. Where there has been a mixed outcome in the proceedings, and it is appropriate to entertain the process of apportioning costs as between different issues in the proceedings, in general such an exercise will be carried out on a relatively broad brush basis, and largely as a matter of impression and evaluation by the Court: Doppstadt at [19]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36]; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22."
The principles applicable to determining when and how costs should be apportioned between issues in proceedings were stated by the Court of Appeal in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]: [12] "[38] … • Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. 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: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported). • In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal. • If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27]. • Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed). • A separable issue can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34]. • Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272.
In appropriate circumstances, the Court may, after considering the respective costs entitlements of the parties by a consideration of their success or failure, conclude that the costs entitlements of the parties are broadly equivalent. [13] In that case, an appropriate outcome is that each party should bear its own costs. But if the Court is satisfied that the respective costs entitlements are not equivalent, because one party has enjoyed a greater share of the success, that may be reflected in the costs outcome.
I will approach the consideration of this matter in accordance with those principles.

CONSIDERATION

In my view, the State is correct to submit that the assessment made by the Court resulting in orders made on 13 December 2023 should not be disturbed and, in particular, it is unnecessary to reengage in a process of apportioning costs. The cost entitlements of the parties are, on a broad approach, equivalent.
In any event, no different conclusion would follow from re-engagement in a process of apportionment based on the submissions on costs received from the parties and a review of the proceedings.
As agreed by the parties the exercise of apportioning costs between different claims or issues defies arithmetical precision and necessarily requires an impressionistic discretionary evaluation. [14] The exercise should be carried out on a broad-brush basis, taking account of the degree of success and the likely extent of costs associated with different aspects of the case.
The Court is entitled to take into account the importance of the matters upon which the parties have been successful or unsuccessful, the time occupied, and the ambit of the submissions made, as well as any other relevant matter. [15]
The starting point of this analysis must be an acknowledgment that there were two discrete issues before the Court in this matter: the administrative law challenge and the constitutional law challenge. The State was successful in defending the administrative law challenge and partly successful in defending the constitutional law challenge.
The plaintiffs challenged the validity of s 214A in its entirety. The Court was not required to deal with that challenge with respect to s 214A(1)(a)( b) and (c) (in part) beyond the question of the burden on the implied freedom because the Court concluded that only subss 214A(1)(d) and part of (c) imposed an incremental burden on the implied freedom. Hence, the State successfully defended the challenge to the validity of subss 214(1)(a), (b) and part of (c). The State is correct to submit that costs incurred by the State in successfully defending the validity of subss 214A(1)(a), (b) and part of (c) should be reflected in the costs order.
The plaintiffs also failed to make good their contentions as to legitimate purpose.
In terms of the structured proportionality test, and by expansion on my earlier observations, the Court found as follows: 1. The plaintiffs failed in establishing that the law was not suitable for the achievement of the purpose in the sense of having a rational connection to the purpose found in the primary judgment. [16] 2. The impugned law failed at the stage of 'reasonable necessity'. The second alternative means (or a law of that kind) may be reasonably expected to have imposed a significantly lesser burden upon the implied freedom and still achieved Parliament's purpose to the same or a similar effect. [17] This was a success for the plaintiffs. 3. It was found that, even if subss 214A(1)(c) and (d) were suitable and necessary, the provisions were not adequate in their balance. [18] This was a success for the plaintiffs, although strictly unnecessary to decide.
There is some force in the submission advanced by the plaintiffs that the length of time spent in the primary judgment on the consideration of subs 214A(1)(d), as well as the ultimate conclusions drawn by the Court suggest the constitutional challenge substantially hinged upon subs 214A(1)(d). [19]
However, care needs to be taken in examining arguments of that kind. A significant part of the primary judgment dealt with the construction of s 214A, including the chapeau and the provisions of subs 214A(1) and its various components. This attention to consideration of the construction of s 214A was not replicated in the parties' submissions (written or oral).
The State was correct to submit that the administrative law challenge by the plaintiffs to cl 48A of the Roads Regulation was predicated on the grounds that it lacked reasonable proportionality and/or was impermissibly sub-delegated. Those issues were substantive, complex, and time-consuming and had some aspects comparable to the standing issue. It may be observed, in that respect, that there was an approximately equal number of paragraphs devoted to the administrative and constitutional legal challenges in both parties' written submissions and the primary judgment. Argument related to the administrative law challenge to cl 48A of the Roads Regulation occupied a substantial amount of time during the hearing (about 1.5 hours).
The fact that evidence was not required to be filed in support of this part of the administrative law challenge of the plaintiffs' case does not undermine the significance of the issue or the time spent preparing each parties' case. The State's success in defending both limbs of the plaintiffs' administrative law challenge should be reflected in the costs order.
The plaintiffs were correct to contend that it was the State who challenged the plaintiffs' standing to bring both the constitutional challenge and the administrative law challenge and that that issue was ultimately resolved in the plaintiffs' favour. I also agree with the plaintiffs' submission that a substantial part of the evidence was prepared in response to the State's contention as to standing and was not relevant to the administrative law challenge, which did not involve any factual dispute.
However, the evidence that was brought by the plaintiffs in support of their submissions as to standing had a wider compass at hearing than just that issue. So much was reflected in the primary judgment.
In the primary judgment, the Court found that the documentary evidence of the plaintiffs was relevant to the Court's consideration of the question of burden, together with forming part of the factual background. That evidence was also utilised by the Court in construing subs 214A(1). [20] The affidavit evidence of the plaintiffs was primarily directed to standing but was also relevant to burden. [21]
Further, there was no demur to the State's submission that the bulk of the plaintiffs' evidence that went to their standing to make the constitutional challenge was prepared and filed before the State raised standing as an issue in response to the Summons filed on 24 November 2022. The evidence raised after the State identified the standing issue comprised of two affidavits and some documentary material in the form of newspaper articles and an extract from a book. Additionally, the Court accepted at [60] that it would have in any event taken judicial notice of the history of political activities described in the documentary material.
As to the question of relevance, the Court made the following observations and findings in the primary judgment at [52]-[60]: "[52] Upon the tendering of the plaintiff's evidence, Mr M Sexton, SC who appeared for the State with Mr M Pulsford of counsel, initially submitted that it may be that "there would be no relevant evidence that would be required in this kind of case". He further submitted that the plaintiff's affidavits and documentary evidence were not relevant, except perhaps as to the question of standing. (Mr Sexton SC confirmed, however, that the State contested the standing of the plaintiffs). Mr Sexton SC accepted that there would be difficulties in ruling on questions of relevance in a constitutional case and "all of the materials should go in, subject to relevance." [53] The disposition of this question was left on the following basis, as articulated by the Court and agreed to by the parties: "The material would come in without any desire for cross examination on the material…there may or may not be questions of relevance. To the extent there is questions of relevance then counsel can identify that in their submissions, to the extent they may wish to raise it. I will treat the material then, to the extent that it's raised in that fashion, as provisionally relevant subject to my ultimate judgment in the matter." [54] The Court then emphasised the need for counsel to state their position with respect to the "factual material very clearly and [the] finding that they seek with respect to [the material] very clearly." [55] During the course of the final submissions, no submission was advanced by counsel appearing for either party in the proceedings raising an issue of admissibility of the evidence, including questions of relevance. Hence, no issue arises for the Court to determine in that respect. However, given the way in which this issue was developed, I will briefly consider the relevance of and weight to be given to the documentary evidence of the plaintiffs. [56] In my view, the documentary evidence of the plaintiffs is relevant to the question of burden together with forming part of the factual background. The affidavit evidence of the plaintiffs is primarily directed to standing but is also relevant, as I will discuss, to burden. I reject the State's contention that the consideration of such material with respect to the question of validity "[distorted] possibilities" for reasons developed below. No different conclusion should be reached with respect to the State's (counterpart) evidence. … [60] I have drawn attention to the plaintiffs' documentary material in this way, notwithstanding, at the end of the day, no apparent objection was taken to it because of the nature of the material; being primarily newspaper articles. It is no doubt for this reason that the plaintiffs' submitted that the Court would, in any event, take judicial notice of the long history of political activities of the kind described in the newspaper articles in Australia (centred around Sydney Town Hall). …"
In that light, the State is incorrect to say that it did not object to the evidence but is correct to say that the State's ultimate position as to the admission of evidence minimised time spent on the standing issue and the issue of relevance fell away during the hearing.
Accordingly, notwithstanding the success of the plaintiffs in their challenge to subss 214A(1)(c) (with respect to partial closure of major facilities) and (d), overall, the parties had mixed success over major issues of importance in the matter and about which the attribution of time and the ambit of submissions was not significantly different. On a closer analysis, the issue of standing was not as poignant a consideration in resolving the issue of costs as contended for by the plaintiffs. Those conclusions do not indicate support for either the costs order sought by the plaintiffs, nor the costs order sought by the State (in its alternative submission). The interests of justice as to costs is best served by the order made by the Court in the primary judgment.

CONCLUSION

In the circumstances, in my view, the interests of justice dictate that the costs order in the primary judgment (order 4) remain unaltered.

Endnotes

This test was applied by Kirk JA (with whom Bell CJ and Leeming JA agreed) in Burton v Director of Public Prosecutions (NSW) [2022] NSWCA 22 at [16] ("Burton"). The second and third questions set out in McCloy by French CJ, Kiefel, Bell and Keane JJ at [2] and Gordon at [306] were reformulated in Brown by Kiefel CJ, Bell and Keane JJ at [104] and approved by Gageler J at [155] - [156] and Gordon J at [481] ("McCloy/Brown analysis").
Clubb at [5].
See Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53; 90 ALJR 270 at [6] per French CJ, Kiefel, Nettle and Gordon JJ.
See Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] per Ward, Emmett and Gleeson JJA.
See Mobis Parts Australia Pty Ltd v XL Insurance Company SE (No 2) [2019] NSWCA 19 at [5]; Allianz Australia Insurance Ltd v Rawson Homes Pty Ltd (No 2) [2021] NSWCA 334 at [16] per White JA (Meagher and Leeming JJA agreeing).
Turkmani v Visvalingam (No 2) [2009] NSWCA 279 at [13] per Hodgson JA (Beazley and McColl JJA agreeing). See also Allianz Australia Insurance Ltd v Rawson Homes Pty Ltd (No 2) [2021] NSWCA 334 at [17] per White JA (Meagher and Leeming JJA agreeing); Cassaniti v Katavic (No 3) [2023] NSWCA 247 at [11] per Gleeson JA (Kirk and Adamson JJA agreeing).
Kvelde v State of New South Wales [2023] NSWSC 1560 at [131]-[133], [138].
See O'Donnell v O'Donnell [2023] NSWSC 1196 at [146].
See the primary judgment at [57]-[97].
Kvelde v State of New South Wales [2023] NSWSC 1560 at [567].
See the affidavit of Helen Laura Kvelde affirmed 24 October 2022 and the affidavit of Dominique Anne Jacobs affirmed 22 October 2022.
Those principles were recently applied in Larsen v Tastec Pty Ltd (No 2) [2023] NSWCA 141 at [20]; Sims v The Commonwealth (No 2) [2023] NSWCA 30 at [6]-[9]; Taylor v Stav Investments Pty Ltd (No 2) [2023] NSWCA 322 at [6]-[12] per Mitchelmore JA (Simpson AJA agreeing). See also Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [6]-[12]; Barbieri v Pirovic [2022] NSWCA 76 at [36] per Gleeson and Mitchelmore JJA.
McFadzean v Construction Forestry Mining and Energy Union (2007) 20 VR 250 at [158].
Chen v Chan [2009] VSCA 233 at [10]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36], citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261.
Ibid citing Major Engineering Pty Ltd v Helios Electroheat Pty Ltd (No 2) [2006] VSCA 114 at [5].
See the primary judgment at [448]-[463].
See the primary judgment at [464]-[499].
ibid at [500]-[518].
Section 214(1)(c) received considerably less attention in the submission of the parties.
See the primary judgment at [151]-[255].
Ibid [266]-[267]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 March 2024

(2022) 110 NSWLR 145

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