Laurie v New South Wales Aboriginal Land Council

Aboriginal Land Rights Act 1983 s 132, 135 LEGISLATION CITED: Civil Procedure Act 2005 s 98 Uniform Civil Procedure Rules r 6.2, 12.1, 42.1, 42.3, 42.19

Bitannia Pty Ltd v Parkline Construction Pty Ltd [2009] NSWCA 32 Cummins v Australian Jockey Club Ltd [2009] NSWSC 254 Doulaveras v Daher (2009) 253 ALR 627 Farah v Warringah Council [2006] NSWLEC 544 Hawksford v Hawksford [2005] NSWSC 463 Hillig v Darkinjung Pty Ltd (No 2) [2008] NSWCA 147 CASES CITED: Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 Laurie v New South Wales Aboriginal Land Council (2009) 166 LGERA 157 Laurie v New South Wales Aboriginal Land Council (No 2) [2009] NSWLEC 73 Laurie v NSW Aboriginal Land Council (No 3) [2009] NSWLEC 108 Laurie v New South Wales Aboriginal Land Council (No 4) [2009] NSWLEC 161 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 Waters v PC Henderson (Australia) Pty Ltd (1994) 254 ALR 328 Zimmerman Holdings Pty Ltd v Wales [2002] NSWSC 447

APPLICANT/FIRST CROSS-DEFENDANT Ms S Docker SOLICITORS Conroy Steward Spagnolo

FIRST RESPONDENT/CROSS-CLAIMANT Mr J Kirk SOLICITORS Legal Services Unit, New South Wales Aboriginal Land Council

FOURTH TO SEVENTH RESPONDENTS ON APPLICANT'S NOTICE OF MOTION DATED 24 JUNE 2009 Mr D Lloyd LEGAL REPRESENTATIVES: SOLICITORS Chalk and Fitzgerald

SECOND RESPONDENT Submitting appearance

SECOND CROSS-DEFENDANT Submitting appearance

THIRD CROSS-DEFENDANT Submitting appearance

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40616 of 2008 Laurie v NSW Aboriginal Land Council and Ors; New South Wales Aboriginal Land Council v Laurie and Ors (No 5)

JUDGMENT 1 Her Honour: In Laurie v New South Wales Aboriginal Land Council (2009) 166 LGERA 157 (Laurie No 1) I found that the Applicant was elected as a councillor of the New South Wales Aboriginal Land Council (NSWALC) for the north coast region on 19 May 2007. I did not make a declaration to that effect because, given my findings, the question of whether the Applicant's position as an elected councillor was subject to a casual vacancy arose. Declarations were made in Laurie v New South Wales Aboriginal Land Council (No 4) [2009] NSWLEC 161 (Laurie No 4) that (i) the Applicant was elected as a councillor representing the north coast region on 19 May 2007 and that (ii) there is a casual vacancy in that office, which order was stayed on certain conditions. The remaining issue to be resolved is that of costs between the Applicant and NSWALC and between the Applicant and NSWALC's solicitors on a Notice of Motion not proceeded with by the Applicant. The other parties to the proceedings have resolved costs between themselves, the Applicant and NSWALC. Applicant's claim for costs against NSWALC 2 The Applicant seeks an order that NSWALC pay the Applicant's costs of the proceedings up to the end of the first hearing, which concluded on 10 December 2008, when judgment in Laurie No 1 was reserved. Alternatively the Applicant seeks costs incurred solely in relation to the issues upon which NSWALC was unsuccessful, being the issues argued in the first hearing on 25-26 August 2008 and 9-10 December 2008. NSWALC seeks an order that each party pay its own costs. 3 The Applicant relied on her affidavit sworn 24 June 2008 which was read in part in Laurie No 1. This affidavit set out events leading up to the commencement of litigation in this Court. The facts relevant to the costs dispute, provided in part in the Applicant's written submissions and as contained in Laurie No 1 at [10] and [157], are as follows: a) On 20 April 2007, the Applicant swore a statutory declaration that incorrectly stated she is not disqualified from holding office as a councillor under s 132 of the Aboriginal Land Rights Act 1983 (the ALR Act) b) In May 2007, the Applicant became a councillor on NSWALC after she won the election conducted on 19 May 2007. c) On 17 January 2008 NSWALC raised the Applicant's conviction for unlicensed driving (the traffic offence) with the Registrar in light of her election as a councillor. d) On 10 March 2008 the Applicant requested the Registrar to ignore the driving offence for the purposes of s 132 of the ALR Act. e) On 19 May 2008, the Registrar determined not to ignore the driving offence for the purposes of s 132 of the ALR Act. f) On 17 June 2008, the Chief Executive Officer of NSWALC, Geoff Scott, rang the Applicant and told her that her position was vacant because she was disqualified from being a councillor. He sought her resignation. She refused to give it. g) On 18 June 2008, Mr Scott telephoned the Applicant and told her that there was no need for an application to be made to the Administrative Decisions Tribunal (ADT) (for an order declaring the Applicant's position had become vacant pursuant to s 135 of the ALR Act because she was automatically disqualified from holding office as a councillor. He stated that he would be stopping all further payments of salary and travel allowance to the Applicant. h) On 20 June 2008, the Applicant's solicitors sent a letter to NSWALC setting out the relevant events and her position. It referred to the mechanism in the ALR Act which allows any person to apply to the ADT for an order declaring that a position has become vacant if there was a dispute about it (s 135). The letter questioned whether NSWALC had the power to unilaterally declare the Applicant's position vacant. The letter sought undertakings from the NSWALC that it would not interfere with the Applicant's exercise of her functions as a councillor. i) On 20 June 2008, a letter was sent to the Applicant's solicitors by NSWALC, stating that his letter would be responded to in detail and enclosing a copy of a letter from NSWALC to the Applicant dated 18 June 2008. The letter stated that: (i) as the Applicant was disqualified from holding office as a NSWALC councillor, she formally being advised that the effect of her disqualification was that the office of NSWALC Councillor for the North Coast Region is vacant and this vacancy dates back to 30 May 2007; (ii) NSWALC was making arrangements to cease payment of her remuneration effective today; (iii) the provisions of the legislation are clear and the Applicant's disqualification is automatic; (iv) NSWALC reserves the right to take any other recovery action against the Applicant it may deem necessary in relation to the vacancy of her office. j) On 23 June 2008, NSWALC sent a letter to Conroy Stewart Spagnolo. The letter states that: (i) as the Applicant was not qualified to hold office when she was elected, her election was void; (ii) as s 135 of the ALR Act relates to the vacation of office by a person who is a councillor it is not relevant because the Applicant was never a councillor; (iii) the issue of authority to prevent her performing her functions did not arise because the ALR Act operated automatically; (iv) The Applicant's position is untenable; (v) if the Applicant commences proceedings as foreshadowed, her case will have little merit and no prospects of being successful; (vi) The Applicant is put on notice that the proceedings will be defended strongly and an order for costs will be sought against her; and (vii) NSWALC will consider seeking an order for a security for costs and for costs on an indemnity basis. k) On 24 June 2008, the Applicant filed the application to commence these proceedings. The application sought the following relief: (i) A declaration that the Applicant held the office of councillor since the declaration of the election and that she continued to hold the office; (ii) An order restraining NSWALC from interfering with the performance of the Applicant's functions as councillor; (iii) An order requiring NSWALC to pay the Applicant remuneration, travelling and other allowances; and (iv) An order that the decision of the Registrar of the ALR Act (the Second Respondent) to decline to ignore the Applicant's conviction for driving whilst disqualified be set aside. l) On or about 4 August 2008, a cross-claim was filed by NSWALC joining Brian Decilis in his capacity as returning officer for elections of councillors under the ALR Act (the Returning Officer) as Second Cross-Defendant and the Electoral Commissioner as Third Cross-Defendant to the proceedings. The Applicant was named as the First Cross-Defendant. The cross-claim in its original form provided that: (i) the Applicant's election was not effective to fill the position because she was disqualified from holding office (paragraphs [14]-[22] of the pleadings and particulars and referred to as issue 1 in Laurie No 1 ); and (ii) the Returning Officer had erred in not rejecting the Applicant's nomination as a candidate for the election (paragraphs [23]-[32] of the pleadings and particulars and referred to as issue 3 in Laurie No 1 ). m) The relief sought by the cross-claim was as follows: (i) A declaration that the declaration by the returning officer that the Applicant was elected as councillor was void and of no effect or, in the alternative, an order quashing the returning officer's declaration; (ii) An order quashing the decision of the returning officer not to reject the Applicant's nomination as candidate for election as councillor; (iii) A declaration that the Applicant had not at any from 22 May 2007 been councillor; and (iv) An order for either the recounting of ballot papers cast in the election to determine which other candidate was entitled to be declared elected as councillor or for the a new election to be held. n) On 25 August 2008, the hearing commenced. On the second morning of the hearing, amendments to the cross-claim were allowed. The first amendments introduced the argument that the Applicant vacated office immediately upon filling it (referred to as issue 2 in Laurie No 1 ). The amendment sought further relief being a declaration that there was presently a casual vacancy in the office of councillor. This reflected an amendment to issue 2 to be considered by the Court. o) On 9 and 10 December 2008, the hearing continued before Pain J and, at the conclusion of the fourth day of hearing, her Honour reserved judgment. p) On 4 May 2009, the Court delivered reasons for judgment in Laurie No 1 . Issues 1-3 were identified at [46] and were determined separately. The Court held that the Applicant had been elected as a councillor. At [260]-[261] of Laurie No 1 the possibility was raised that the Applicant's position may have become vacant at some time other than that argued for by NSWALC in the proceedings and that further submissions may need to be made. The judicial review challenge to the Registrar's decision to decline to ignore the Applicant's conviction for driving whilst disqualified was not successful. q) On 13 May 2009, Laurie v New South Wales Aboriginal Land Council (No 2) [2009] NSWLEC 73 ( Laurie No 2 ) Pain J held that if NSWALC wished to allege that the Applicant's office had been vacated at some time other than immediately upon her election, it should further amend the cross-claim to state the date on which the casual vacancy arose. The Court made directions for a draft amendment to be circulated, which occurred on 20 May 2009. r) On 2 July 2009, the Court heard further argument on whether the proposed amendments to the cross-claim (the second amendment) should be allowed. The amendments were allowed with no order as to costs. The second amendments sought a further declaration that the Applicant was and continued to be disqualified from holding office as a councillor. s) On 3 July 2009, the Court heard further argument on issue 2 as amended and reserved judgment. t) On 21 September 2009, the Court delivered judgment in Laurie v New South Wales Aboriginal Land Council (No 4) [2009] NSWLEC 161 ( Laurie No 4 ), finding for NSWALC on issue 2 as raised by the second amendments. The Court declared that the Applicant was elected as a councillor and separately declared that there was a casual vacancy in that office, inter alia.

Applicant's submissions 4 The Court is able to exercise its costs discretion under s 98 of the Civil Procedure Act 2005 (the CP Act) and rule 42.1 of the Uniform Civil Procedure Rules 2005 (the UCPR) in respect of issues rather than based on the ultimate outcome of proceedings, Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748. This is appropriate where the issues are separable, Waters v PC Henderson (Australia) Pty Ltd (1994) 254 ALR 328 at 330-332. An example of costs being awarded on an issues basis is Farah v Warringah Council [2006] NSWLEC 544. In that case the applicant succeeded on the basis of a late amendment. The respondent was successful on four of the five issues raised. 5 These proceedings were commenced as a result of NSWALC's actions in refusing to recognise the Applicant as a councillor and pay her. NSWALC's argument that the Applicant had never been a councillor was held in Laurie No 1 to be incorrect. The Applicant was defending her position in commencing these proceedings. 6 The issues raised by NSWALC and the manner in which they were raised caused the proceedings to be long and complicated. NSWALC's original position caused the proceedings to be commenced in this Court rather than in the ADT which caused a jurisdictional argument to arise. There should be costs consequences for NSWALC in refusing to take action in the ADT because this substantially increased the costs of the dispute as the issues raised in this Court were complex and involved multiple parties. The Applicant was unable to apply to the ADT for an order protecting her position. NSWALC's joinder of the Returning Officer and the Electoral Commissioner and the first amendment to its cross-claim both added to the length of the hearing. 7 Issues 1-3 in the Applicant's claim against NSWALC were all decided in the Applicant's favour which led to a declaration being made that she was elected to office. Without NSWALC's second amendment to its cross-claim the Applicant would have succeeded in the proceedings despite not obtaining orders in the form contained in the application. The fact that leave was granted to make the amendments is irrelevant to the question of costs. It is also irrelevant that the Court held that an amendment was required which lead NSWALC to seek an amendment. 8 The issue on which NSWALC succeeded was by way of the second amendment and is readily discernable from issues 1-3 considered in Laurie No 1. The issue on the second amendment was not the same as issue 2 considered in Laurie No 1. At [71]-[72] of Laurie No 4 it was stated that the Court's ultimate finding was not inconsistent with the finding on issue 2 because the issue was different. The second amendment to the cross-claim was totally confined to the July 2009 hearing which occurred after judgment in Laurie No 1 was delivered. Issues 1-3 were separable and totally dominant in the first hearing. NSWALC's submissions 9 It is not correct that issues 1-3 were all decided in the Applicant's favour. NSWALC ultimately succeeded on issue 2. Overall NSWALC substantially succeeded in the case. The Applicant's failure to obtain a declaration that she continued to hold office was central to the proceedings. The main dispute was the Applicant's right to remain in office and she failed on that issue. She therefore in substance failed in her application. Conversely, NSWALC succeeded in obtaining the declaration of casual vacancy it sought in its cross-claim. 10 No criticism can be reasonably sustained that NSWALC failed to take action in the ADT to determine the issue of the vacancy of the office of councillor. The Court stated in Laurie No 1 at [64] that it was not self evident that proceedings should have been taken by NSWALC (or anyone else) in the ADT to seek an order. 11 Nothing of significance turned on the second amendments made to NSWALC's cross-claim after judgment in Laurie No 1 was delivered. The declaration made by the Court was the declaration sought by NSWALC in the first amendments made at the beginning of the second day of the hearing on 26 August 2008. 12 NSWALC did not in any way protract or complicate the proceedings. NSWALC sought expedition of the proceedings, agreed to continue paying the Applicant her salary and allowances as a councillor and also agreed not to seek costs. The proceedings were commenced by the Applicant and involved a challenge by the Applicant to the decision of the Registrar which failed. The Court has noted that the issues were complex and involved a complicated statutory scheme. Further, based on the Applicant's concession that the disqualification of the Applicant could still arise after the five year time period had expired, the remaining arguments that the Applicant had against NSWALC's position had been either rejected in Laurie No 1 or had been tentatively resolved in NSWALC's favour in Laurie No 1. 13 Real difficulties arise by the Applicant seeking to have costs determined on an issues basis per Hughes v Western Australian Cricket Association. There was no separation of issues by way of separate submissions or hearings, the principles concerning the interpretation of the ALR Act were common to all issues and there is likely to be considerable difficulty in identifying those costs that are applicable directly and exclusively to the respective elements of the parties' claims. Finding 14 I have broad discretion to determine costs under s 98(1) of the CP Act. Rule 42.1 of the UCPR provides a usual costs rule in Class 4 proceedings in this Court. Rule 42.1 states: 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. As submitted by the Applicant, in the exercise of that discretion in appropriate cases (such as those referred to in the Applicant's submissions at par 4), the Court can award costs on the basis of which party was successful in relation to separate issues argued in a matter. Were the issues discrete? 15 The Applicant argues that issues 1-3 were dealt with quite separately in Laurie No 1 from the amended issue 2 considered in Laurie No 4. Issues 1 and 3, which considered whether the election of the Applicant was valid were separate in a legal sense from issue 2. That issue considered whether the Applicant was disqualified from holding office with the consequence that the office of councillor was vacant after her election. The other issue which occupied hearing time was the challenge by the Applicant to the Registrar's decision to decline to ignore the Applicant's driving conviction for the purposes of the disqualification provisions in s 132. The Applicant was unsuccessful in that challenge. While issues 1 and 3 were legally separate, I agree with NSWALC's submission that as a practical matter it would be difficult in cost terms to separate out the costs incurred in relation to those issues from issue 2. All the issues were heard together. Issue 2 in relation to which NSWALC was ultimately successful in obtaining a declaration was considered at the first hearing and was also the subject of Laurie No 1. Who is the successful party? 16 The relevant event for the purposes of determining costs under r 42.1 is the determination of who is the successful party. The chronology and the issues raised between the parties as set out above in par 3 demonstrate that the issues were complicated because of the particular facts in the context of the statutory provisions of the ALR Act. I observed as much in Laurie No 1 at [260]. The Applicant commenced the proceedings to defend her position as an elected councillor because NSWALC considered she could not continue in her position as she was disqualified by virtue of s 132 of the ALR Act, as identified in the correspondence between the Applicant's solicitor and NSWALC set out above in par 3(e)-(f). 17 The Applicant sought a declaration that she held the office of councillor since the declaration of the election and that she continued to hold the office. She also sought orders restraining NSWALC from interfering with the performance of the Applicant's functions as a councillor and requiring NSWALC to pay the Applicant's remuneration, travelling and other allowances. The Applicant further sought to have the decision of the Registrar not to ignore her driving conviction for the purposes of s 132 of the ALR Act judicially reviewed.

18 In its cross-claim, amended on the second day of the first hearing, NSWALC raised the issue of whether, if the Applicant were elected, her position immediately became vacant due to her conviction for a driving offence which meant that she was disqualified from holding her position as a councillor by virtue of s 132 of the ALR Act. The relief sought by NSWALC included an order setting aside the decision of the returning officer for the election of councillors to not reject the Applicant's nomination as candidate and to later declare the Applicant elected as a councillor, a declaration that the Applicant was at no time a councillor, an order that a new election for the position of councillor ought be held a declaration there existed a casual vacancy in the position of councillor.The argument that the position immediately became vacant was rejected in Laurie No 1. That ground was later amended (the second amendment) to the effect that her position became vacant at some time after her election. I upheld this argument in Laurie No 4 at [72]. Issue 2 remained as an issue because the Applicant's challenge to the Registrar's decision not to ignore the driving conviction was not successful. That outcome was not known until the determination of issues in Laurie No 1.

19 Final declarations were made by this Court following judgment in Laurie No 4 and after the cross-claim was amended the second time seeking a declaration that the Applicant was and is disqualified from holding office. The declarations made by the Court were that the Applicant was elected to the office of councillor on 19 May 2007 and a declaration of a casual vacancy in the office of councillor. The declaration of casual vacancy was the relief sought in the first amendments made to the cross-claim on the second day of the hearing. The declaration of casual vacancy was stayed pending the Applicant's appeal to the Court of Appeal (yet to be determined). The Applicant was not successful in obtaining a declaration that she remained in the office of councillor and that her remuneration and expenses should be paid. 20 While I declared the Applicant elected as a councillor, the substantive relief I have granted in these proceedings concerns the cross-claim filed by the NSWALC. I declared that the Applicant's office of councillor was vacant. I consider that the party which was ultimately successful was NSWALC. That finding suggests the Applicant should not be awarded her costs as she was not a successful party. Another reason why costs should not be awarded in her favour on the issues in which she succeeded is that her judicial review challenge of the Registrar's decision was not successful. That issue occupied a substantial amount of hearing time and was quite separate from issues 1-3 at the first hearing. Matter should have been commenced in the ADT? 21 The Applicant's counsel argued that any action should have been commenced in the ADT by NSWALC if it wished to obtain a declaration of casual vacancy. As stated in Laurie v NSW Aboriginal Land Council (No 3) [2009] NSWLEC 108 (Laurie No 3) at [23] it was not immediately obvious that such action should have been taken given the untested provisions of the ALR Act which arose for consideration in these proceedings. The circumstances which precipitated NSWALC's letter to the Applicant dated 18 June 2008 and subsequent letters was the discovery that the Applicant had a traffic conviction to which s 132 (grounds for disqualification from office) of the ALR Act applied at the time of her election. This raised issues about the statutory declaration that the Applicant signed in April 2007 as a mandatory requirement for eligibility for election as required by the Aboriginal Land Rights Regulation 2002, hence the challenge to her election as a councillor. 22 During the hearing it was agreed that the Applicant's judicial review challenge to the Registrar's decision could not have been taken in the ADT, only in this Court. That further suggests that it was not unreasonable that the matter was not commenced in the ADT. Conclusion 23 I would characterise the events giving rise to the proceedings for all parties as unfortunate. There was no unreasonable behaviour on the part of the NSWALC in filing a cross-claim joining additional parties in relation to issues 1 and 3 and pursuing issue 2. There is no disentitling conduct or unreasonableness on its part in not commencing proceedings in the ADT seeking an order for a casual vacancy in the office of councillor. As the NSWALC does not seek its costs of the proceedings the appropriate costs order is that each party pay its costs of the proceedings. 24 Each party should pay its own costs of the argument on costs on 18 December 2009. Chalk & Fitzgerald's costs of the Applicant's Notice of Motion dated 24 June 2009 25 A separate costs issue from that in the main proceedings arises in relation to a Notice of Motion filed on 24 June 2009 by the Applicant seeking an order that NSWALC's cross-claim be dismissed and an order that the partners of the law firm Chalk & Fitzgerald, solicitors on the record for NSWALC, pay the Applicant's costs of the proceedings on an indemnity basis or alternatively on an ordinary costs basis. The motion was served on Chalk & Fitzgerald on 24 June 2009. On 2 July 2009 when the parties were before the Court for the hearing on whether NSWALC should amend the cross-claim the Applicant's counsel told the Court that the motion would not be pressed. The issue of the costs of the motion was stood over to the date when the issue of costs as between the Applicant and NSWALC would be argued. Chalk & Fitzgerald seeks an order that the Applicant pay its costs of responding to the Applicant's motion. The Applicant argues that each party should pay its own costs of the motion. Chalk & Fitzgerald was not a party in the main proceedings. The parties to the motion agree that the Court can determine the costs in relation to it. 26 Chalk & Fitzgerald relied on an affidavit of James Walkley sworn 2 November 2009 which set out events relevant to the Applicant's motion. The submissions of Chalk & Fitzgerald summarise the facts relevant to its motion, which are evidenced by the annexures to Mr Walkley's affidavit: 11. On 30 June 2008 the applicant raised in correspondence addressed to Chalk & Fitzgerald an issue about whether Chalk & Fitzgerald were properly instructed by NSWALC; see annexure C to the applicant's affidavit of 22 June 2009 [annexure A to the affidavit of James Walkley] 12. On the next day, Chalk & Fitzgerald responded by saying: "We are satisfied that we are properly instructed by NSWALC to act in these proceedings, including to brief counsel to appear on behalf of NSWALC. If Ms Laurie seriously asserts there is a deficiency in NSWALC's authority to participate in the proceedings, including to respond to her urgent application or interlocutory relief brought on 24 hours' notice, please advise the basis for this assertion". 13. No response was received to that letter. 14. Nothing further happened in relation to the issue until 10 June 2009, when counsel for the applicant raised at a direction hearing a concern about a perceived lack of authority for NSWALC to conduct the proceedings; paragraph 11, Walkley affidavit. 15. On 15 June 2009 the applicant issued a notice to produce to NSWALC seeking a copy of resolutions relevant to the proceedings; paragraph 13, Walkley affidavit. 16. On 16 June 2009 the third tranche of the proceedings was fixed for hearing on 2 and 3 July 2009. NSWALC was ordered to file and serve written submissions by 24 July 2009; paragraphs 14 and 16, Walkley affidavit. 17. On 19 June 2009 NSWALC responded to the notice to produce by advising that it had no knowledge, information or belief as to the existence or whereabouts of the resolutions sought to be produced; paragraph 14, Walkley affidavit. 18. On 24 June 2009 (the same day that NSWALC's submissions were due to be filed) the applicant filed a notice of motion seeking an order that NSWALC's cross claim be dismissed, and that Chalk & Fitzgerald pay the costs of the proceedings on an indemnity basis or alternatively ordinary basis. That motion was served personally on the partners of Chalk & Fitzgerald at 3.40pm on 24 June 2009; paragraph 16, Walkley affidavit. 19. At 5.27pm on 24 June 2009 Chalk & Fitzgerald wrote to the solicitors for the applicant advising that they had suspended work on the matter as a consequence of the notice of motion and were required to notify their insurers of a potential claim, and that alternate representation for NSWALC was being obtained; paragraph 18, Walkley affidavit. 20. On 25 June 2009 Chalk & Fitzgerald notified the Court that they could not continue to act in the litigation; paragraph 19, Walkley affidavit. 21. On 30 June 2009 NSWALC passed a resolution relevantly as follows: "... 2. To confirm that: (a) the CEO of the NSWALC has kept the council of the NSWALC informed as to the nature, status of and developments in the Proceedings from the time of the inception of the Proceedings on wards, including in relation to the judgments handed down by Justice Payne on 4 May 2009 and 13 May 2009; (b) the provision of this information by the CEO, and the discussions within the Council as to how to proceed, had occurred in 'in camera' sessions of the Council, for which no formal minutes were kept; (c) in these discussions the Council has taken the view that no formal, vision resolution was required to approve the CEO's conduct of the Proceedings, taking account of the 'in camera' nature of the discussions along with s139 of the Aboriginal Land Rights Act 1983 (NSW) (ALRA). 3. To confirm for the avoidance of doubt that the CEO has always been authorised, and remains authorised, and directed to: (a) seek legal advice from and representation on behalf of the NSWALC by Chalk & Fitzgerald lawyers (or such other solicitors as it sees fit) and by Counsel; (b) defend the NSWALC; (c) to bring cross claims as considered appropriate on behalf of NSWALC, including against Ms Laurie and the relevant electoral official; and (d) to seek amendments to any cross claims, and otherwise conduct and provide instructions with respect to the litigation in order to seek to resolve the legal issues involved (including making decisions with regard to costs and any appeals); In relation to the Proceedings: "4. To direct the CEO of the NSWALC in accordance with s139 of the ALRA to continue to regularly inform the Council of the NSWALC on the proceedings, as he has properly done throughout the proceedings". 22. Later that day, the applicant's solicitors advised that the applicant was no longer proceeding with the notice of motion; Exhibit K, Walkley affidavit. Chalk & Fitzgerald's submissions 27 Chalk & Fitzgerald's position is analogous to that of a party who seeks leave to discontinue proceedings under r 12.1 of the UCPR. Whilst a motion is not a proceeding to which r 12.1 applies, the motion against Chalk & Fitzgerald sought final relief and was a claim separate from the relief sought in the principal proceedings. A similar consequence should follow as if a notice of discontinuance was filed so that r 42.19 and r 12.1 of the UCPR apply by analogy. 28 Rule 12.1 and r 42.19 were considered in Bitannia Pty Ltd v Parkline Construction Pty Ltd [2009] NSWCA 32. The Court of Appeal held that a plaintiff must show positive ground or good reason in seeking an order that it not pay the costs incurred by the defendant where proceedings are discontinued. In this matter the Applicant should be required to demonstrate that its decision to abandon the relief sought in its motion came about for a good reason or that there is a positive ground for departing from the ordinary course set out in r 42.19. 29 NSWALC's resolution of 30 June 2009 does not constitute a positive ground or good reason to explain why the Applicant abandoned the motion because it would not have altered the fact that Chalk & Fitzgerald had acted up until 24 June 2009 without authority had that been the case. The decision by the Applicant not to press the motion was effectively a capitulation on the issue which does not protect the discontinuing party from a costs order against it, per Cummins v Australian Jockey Club Ltd [2009] NSWSC 254 at [22]. 30 There was no basis for the Applicant to seek a personal costs order against Chalk & Fitzgerald at the time she did. At the hearing on 2 July 2009 (six days after the motion was filed and served) the Applicant's counsel conceded that the question of costs on the Applicant's motion (which included the issue of the personal costs order as against Chalk & Fitzgerald) was not ever going to be dealt with that day. The Applicant therefore prematurely joined Chalk & Fitzgerald to the motion. This meant Chalk & Fitzgerald was prematurely put in a position of conflict where it could not act for NSWALC. It was necessary that Chalk & Fitzgerald cease to act once joined to the motion and facing a personal costs order. 31 That the proceedings were brought without authority was a claim by the Applicant that lacked substance. Chalk & Fitzgerald relied on submissions made by NSWALC on 2 July 2009 to this effect. The internal management of NSWALC is not the Applicant's or the Court's concern at least until some ultra vires point is raised. If the Applicant's point is an attempted defence on the basis of ultra vires action by NSWALC then it should have been pleaded. 32 The Applicant did not correspond with Chalk & Fitzgerald before filing the motion. Chalk & Fitzgerald did not receive a reply from Chalk & Fitzgerald's advice to the Applicant that they held instructions from NSWALC on 1 July 2008 and seeking a response if the Applicant was asserting that NSWALC's authority to participate in the proceedings was deficient. 33 If there was a finding that Chalk & Fitzgerald acted without instruction, it did not necessarily follow that Chalk & Fitzgerald would have to pay the costs of the proceedings. This would have required the exercise of the Court's discretion, per Hillig v Darkinjung Pty Ltd (No 2) [2008] NSWCA 147. 34 The costs incurred by Chalk & Fitzgerald were not negligible despite there being six days between the motion being filed and the Applicant indicating the motion would not be pressed. Applicant's submissions 35 Chalk & Fitzgerald and the Applicant should each pay their own costs of the motion. Contrary to Chalk & Fitzgerald's submissions, neither r 42.19 nor r 12 of the UCPR apply in terms or by analogy. When the motion was filed, NSWALC had not authorised the cross-claim or the amendments to it and the motion was the appropriate way to raise this issue at the time. Hillig v Darkinjung Pty Ltd sets out the principles on which a local aboriginal land council (and by extension NSWALC) can act. Unless and until NSWALC passed a resolution to bring the cross-claim it had not made a decision to file the cross-claim and nobody else had authority to cause it to be brought on behalf of NSWALC. 36 The decision-making operations of NSWALC are relevant to the Court in these proceedings and would have been considered had the motion been pressed. There are many cases where courts have interfered in circumstances where the authority of a person to commence proceedings on behalf of a corporation is at issue. Chalk & Fitzgerald's reliance on the authority of the CEO of NSWALC to continue the proceedings is a novel proposition and is inconsistent with Hillig v Darkinjung Pty Ltd. A resolution was required and when it was passed it was not merely confirmatory of some earlier grant of authority. NSWALC's view of whether a resolution was required is irrelevant. 37 The motion was the appropriate way to raise the issue of authority. A challenge to a solicitor's retainer may not be made by way of pleading, per Doulaveras v Daher (2009) 253 ALR 627. It is incorrect for Chalk & Fitzgerald to contend that the issue should have been raised earlier in the Applicant's defence by way of pleading. 38 The motion was also raised at an appropriate time. On 1 July 2008 Chalk & Fitzgerald had asserted their authority to act for NSWALC. The Applicant's concern about authority was again raised after reviewing the minutes of NSWALC's meeting on 13 May 2009. The Applicant's Notice to Produce was answered on 19 June 2009 which revealed that there was no resolution authorising the amendment to the first cross-claim. The inclusion of the costs order was not premature because it did not give Chalk & Fitzgerald an opportunity to show cause. It is ordinary practice that an order for costs be claimed in a Notice of Motion. The question of showing cause only arises once an application for costs has been made and the Applicant did not seek to deny Chalk & Fitzgerald the opportunity to argue why a costs order should not be made. 39 It was also appropriate for the Applicant to seek costs as against Chalk & Fitzgerald for the proceedings where an absence of authority to act on NSWALC's behalf is alleged, per Hillig v Darkinjung Pty Ltd (No 2) citing Hawksford v Hawksford [2005] NSWSC 463 and Zimmerman Holdings Pty Ltd v Wales [2002] NSWSC 447. Such an order is specifically referred to in r 42.3(2) of the UCPR.

40 The action of the Applicant did not deprive NSWALC of legal representation. There was no conflict between Chalk & Fitzgerald's interests and duty especially if NSWALC had authorised the first cross-claim. There was no prospect the costs issue would dealt with on 2 July 2009. It was also appropriate that at the hearing on 2 July 2009 that the issue of costs of the Notice of Motion be stood over because no agreement had been reached and the hearing of NSWALC's amended cross-claim was due to commence.

41 The substantive relief and costs order as against Chalk & Fitzgerald which was sought in the motion was abandoned once NSWALC passed the resolution of 30 June 2009. The resolution ratified the authority of NSWALC's CEO to commence, carry on and amend the cross-claim and was retrospective in effect. The motion was not pursued because of something which happened after it was filed, which supports the argument that the costs should not follow the event of the motion.

42 The quantum of Chalk & Fitzgerald's costs of the motion should have been negligible. Chalk & Fitzgerald's application for costs of the motion has caused significantly more costs to be incurred than are in issue on the costs application. Finding 43 The provisions of the UCPR which Chalk & Fitzgerald argue should apply by analogy are: 42.19 Proceedings discontinued (1) This rule applies to proceedings that are discontinued by the plaintiff, as referred to in rule 12.1.

(2) Unless the court orders otherwise or the notice referred to in rule 12.1 (2) otherwise provides, the plaintiff must pay such of the defendant's costs as, at the date on which the notice of discontinuance was filed, had been incurred by the defendant in relation to each claim in respect of which the proceedings have been discontinued.

…. 12.1 Discontinuance of proceedings (1) The plaintiff in any proceedings may, by filing a notice of discontinuance, discontinue the proceedings, either as to all claims for relief or as to all claims for relief so far as they concern a particular defendant: (a) with the consent of each other active party in the proceedings, or (b) with the leave of the court…

44 As the motion commenced but not pursued by the Applicant is not a proceeding, because it was not commenced by way of summons or application per r 6.2 of the UCPR, r 42.19 and r 12.1 do not strictly apply. The Court is therefore exercising the general costs discretion that it has under s 98 of the CP Act to award costs on any basis at any stage in proceedings. As submitted by Chalk & Fitzgerald the circumstances of this matter do suggest that an approach analogous to the operation of those rules is appropriate. As submitted in par 28, where the Applicant does not press its motion as occurred here, r 42.19 and r 12.1 are analogous. 45 This suggests there must be good reason shown by the Applicant for doing so in order to avoid the costs consequences of not proceeding with the notice of motion. The Applicant's Notice of Motion having been filed and served on 24 June 2009 and then not proceeded with on 2 July 2009, and Chalk and Fitzgerald having incurred costs, unless circumstances suggest otherwise they should have a costs order in their favour, per Cummins Barrett J at [22]. 46 I need to consider whether there is good reason for not making an order in favour of Chalk & Fitzgerald. Numerous authorities state that a court determining costs where the substantive issue has not been determined should not decide an issue for the purposes of determining whether there is a relevant event for costs purposes. For example McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624-625 stated: In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided.

47 The Applicant put on substantial written submissions dealing with the substance of whether there was proper authorisation of these proceedings by the NSWALC to the effect there was not. These were contradicted by Chalk & Fitzgerald. It is not appropriate that I form any view on that substantive matter for the Applicant's Notice of Motion that was not pursued in this Court. I simply note that the Applicant's views are not shared by Chalk & Fitzgerald. It is not self-evident that the qualified resolution passed by NSWALC on 30 June 2009 justified the Applicant's decision not to proceed with her motion. I do not intend to form a view as to whether the Applicant's case that NSWALC did not properly authorise these proceedings underpinning the motion was met by the passage of the resolution dated 30 June 2009 by NSWALC. 48 I accept that the Applicant's motion raised a serious issue for Chalk & Fitzgerald given that one of the orders sought included that that firm pay the costs of the whole proceedings on an indemnity basis. Those costs would have been potentially substantial given the amount of hearing time spent in the substantive proceedings. The motion was filed after Laurie No 1 and Laurie No 2 were delivered. Further I agree with Chalk & Fitzgerald's submissions at par 30 that the motion placed them in a potential conflict position in relation to their interests and those of the NSWALC for the reasons given in their submissions. I agree that it was necessary that they cease to act once joined to the motion, which raised the issue of whether they had authority to act, and facing a personal costs order. These circumstances further suggest that I should exercise my discretion to make an order for costs in favour of Chalk & Fitzgerald. I should stress that the order for costs can only relate to the costs incurred in relation to the Notice of Motion and not Chalk & Fitzgerald's costs, if any, in ceasing to act for NSWALC in the matter. While a possible consequence of the Applicant's motion, that consequence is separate from the costs I can order be paid in relation to matters arising solely from responding to the Notice of Motion. Each party to the motion should pay its costs of the argument on costs of that motion. Orders 49 The Court makes the following orders: 1. The Applicant and NSWALC are to pay their own costs of the proceedings. 2. The Applicant is to pay Chalk & Fitzgerald's costs of the Applicant's Notice of Motion dated 24 June 2009.

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