LFB Resources NL v Minister for the Environment and Water [2025] FCA 898

1. By Interlocutory Application the second respondent (WTOCWAC) seeks an order specifying maximum costs as between the applicant (LFB) and WTOCWAC in the amount of $20,000 pursuant to r 40.51(1) of the Federal Court Rules 2011 (Cth). The first respondent (Minister) takes no position on this application.
2. For the reasons below, I consider that an order specifying the maximum costs as between WTOCWAC and LFB at $20,000 is appropriate in the circumstances.

1. This Interlocutory Application arises from a substantive proceeding instituted by LFB against the Minister for a review of a decision to make the Aboriginal and Torres Strait Islander Heritage Protection (Kings Plains) Declaration 2024 (Cth) under s 10 of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) (ATSIHP Act). The person named as second respondent in the Originating Application was the applicant to the Minister for the Declaration. WTOCWAC was named in the Originating Application as the third respondent. With the consent of the other parties, the Court ordered that the original second respondent be removed as a party. Accordingly, WTOCWAC is now the second respondent.

1. WTOCWAC is an Aboriginal corporation that is registered as a charity with the Australian Charities and Not-for-profits Commission. It made submissions on the application for the Declaration to the Minister and has expressed an intention to take an active role in the substantive proceeding.
2. The Interlocutory Application was supported by an affidavit of Arlia Josephine Fleming affirmed on 30 May 2025. Ms Fleming deposed that she:

(1) is a non-voting Director of WTOCWAC who was appointed in 2023 to assist with not-for-profit governance responsibilities, providing advice and expertise including strategic input, policy development, risk management, compliance, and financial reporting;

(2) in that role as a non-voting Director of WTOCWAC, is required to be aware of its financial position; and

(3) is also the Chief Executive Officer of Central Tablelands and Blue Mountains Community Legal Centre.

(1) based on her understanding of the current financial position of WTOCWAC, she believes that it could incur up to $59,000 of unforeseen costs not currently accounted for in its budget for the next twelve months and remain solvent;

(2) that amount would need to cover all unforeseeable costs for WTOCWAC over that period; and

(3) if WTOCWAC were exposed to costs above $20,000 over the next six months, that would significantly affect the financial position of WTOCWAC and would affect a decision by the board as to whether to remain a party to the proceeding.

1. The current financial position of WTOCWAC was supported by:

(1) A copy of the financial reports filed by WTOCWAC with the Office of the Registrar of Indigenous Corporations for the financial years ended 30 June 2023 and 30 June 2024;

(2) A copy of the balance sheet for WTOCWAC as at 30 April 2025; and

(3) A copy of the profit and loss statement for WTOCWAC as at 30 April 2025.

1. The balance sheet as at 30 April 2025 shows that net assets were $180,373.77. However, Ms Fleming identified that at least $25,000 of those available assets consisted of tied grant funding (which could not be expended on legal costs), and a further $23,000 existed as non-current assets that may not be recoverable. The profit and loss statement for the 10 months ended 30 April 2025 showed a net profit of $44,582.61, with $422,660 of the total trading income of $722,123.42 identified as "Grants Received". It had $677,540.81 in total operating expenses.

1. On 7 November 2024, Regis Resources Limited, the parent company of LFB, released a media statement regarding the commencement of the substantive proceeding. At the end of that media release, Regis included the below:

Note to Editors: In accordance with the legal process required to be followed for Regis Resources to obtain judicial review and relief from Minister Plibersek's decision, the two key parties interested in maintaining the Section 10 Declaration (being the original Section 10 applicant and [WTOCWAC]), who are named nearly 20 times in the Minister's Statement of Reasons) are included as the second and third respondents to the proceedings.

Regis Resources does not intend to seek costs against either of these parties.

1. On 5 February 2025, the solicitor for WTOCWAC wrote to LFB indicating that it would take an active part in the proceeding and seeking an undertaking, to give effect to the note in the media statement, that LFB would not seek a costs order against WTOCWAC in the proceeding. In reply on 19 February 2025, solicitors for LFB represented that LFB declined to give such an undertaking (emphasis added):

We note that the Second and Third Respondents intend to take an active role in the proceeding and have requested that the Applicant give an undertaking that it will not seek a costs order against them.

The Applicant declines to give the undertaking sought in the Respondents' proposed order 15. Consistent with the media statement issued by Regis Resources Ltd on 7 November 2024, at present the Applicant does not intend to seek costs against either the Second Respondent or the Third Respondent.

1. In subsequent correspondence on 14 April 2025, solicitors for LFB maintained that LFB's position remained that "at present, consistent with [LFB]'s previously stated position, [it] does not intend to seek a costs order against either the Second Respondent or [WTOCWAC]" (emphasis added). I place emphasis on "at present" because it was revealed in the course of submissions that that was a deliberate choice of language to provide flexibility to LFB to pursue costs at its discretion if WTOCWAC "were to engage in conduct that would reasonably justify a change in position on the part of LFB".

1. As indicated, WTOCWAC relied upon the affidavit of Arlia Josephine Fleming affirmed on 30 May 2025. It also relied upon the affidavit of Ross Lennon Mackay, WTOCWAC's solicitor, affirmed on 30 May 2025. LFB did not object to those affidavits and the deponents were not required for cross-examination.

(1) A party may apply to the Court for an order specifying the maximum costs as between party and party that may be recovered for the proceeding.

1. There is no dispute about the principles to be applied to an exercise of the discretion under r 40.51(1). In Houston v New South Wales [2020] FCA 502, Griffiths J at [17] summarised the position in the following way:

The discretion is to be exercised judicially, having regard to all the relevant circumstances. Those circumstances include the nature of the relief sought, the complexity of the litigation and the interests of the parties in both prosecuting and defending the litigation, whether the applicant's claims are reasonably arguable, whether a party would otherwise be forced to abandon a proceeding if such an order were not made, whether there was a public interest element to the proceeding, the costs which are likely to be incurred in the proceeding, the timing of the maximum costs application and whether the party opposing the making of the orders has been uncooperative and/or delayed the proceedings.

1. His Honour emphasised that those factors were not exhaustive. In Australians for Indigenous Constitutional Recognition Ltd v Commissioner of the Australian Charities and Not-for-profits Commission [2021] FCA 435, Thawley J added the following factors at [10]:
   • the likely duration of the proceedings overall and the length of any trial;

...

• the basis upon which legal representatives are acting, for example, if the legal representatives for the applicant are acting on a pro bono basis ... ;

• whether the applicant has a pecuniary interest in the outcome of the proceeding; and

• ... the apparent merit of the application.

1. As his Honour said, the weight each factor carries will vary according to the particular circumstances: at [9]. I also accept what Griffith J said in Houston at [18] that the exercise of the discretion under r 40.51 seeks to displace "the normal rule" that costs are awarded to the successful party to compensate against the expense to which it has been put.

1. WTOCWAC argued that the following factors supported its position that an order should be made under r 40.51(1):

(1) The application was made early in the proceeding, prior to a substantial portion of costs being incurred. This included WTOCWAC seeking an undertaking from LFB as to costs on 5 February 2025 and then seeking LFB's consent to a maximum costs order in the amount of $20,000 on 28 February 2025.

(2) The relief sought by LFB, that is to invalidate the Declaration, did not require LFB to join WTOCWAC as a party.

(3) WTOCWAC intends to participate in the proceeding in a manner which does not unnecessarily complicate the proceeding, including by minimising duplication, and has sought timetabling orders to stagger submissions in order for it to consider whether it should file a submitting appearance. As such, it will not contribute significantly to the costs to be incurred.

(4) Exposure to costs if LFB is successful would likely influence the capacity of WTOCWAC to continue to participate in the proceeding.

(5) The proceeding for judicial review is unlikely to be complex or to require a lengthy hearing or extensive evidence.

(6) WTOCWAC does not have any financial interest in the proceeding and is seeking to maintain the protection given by the Declaration to a place of significant Wiradyuri cultural heritage. Likewise, LFB does not seek any damages from WTOCWAC.

(7) There is a public interest in the case, being proper decision-making under the ATSIHP Act.

(8) WTOCWAC is a small not-for-profit organisation, named as a respondent to the proceeding. It would not be in the interests of justice for WTOCWAC to be exposed to the risk of costs in order to participate in the proceeding.

1. Save as to the financial capacity of WTOCWAC, the applicant did not take issue with these submissions.
2. I accept that these factors either favour the making of an order under r 40.51(1) or are neutral as to whether an order should be made. First, I accept that WTOCWAC has acted without undue delay to address the costs question. The proceeding was filed on 7 November 2024. Timetabling orders were made by consent on 27 February 2025 for the filing of any proposed amended originating application. The Amended Originating Application was lodged for filing on 30 April 2025. LFB was on notice from 5 February 2025 that WTOCWAC sought a costs undertaking, and then from 28 February 2025 in relation to a proposed order under r 40.51(1).
3. Secondly, given the nature of the proceeding challenging the Minister's decision, it is likely that WTOCWAC's participation in the proceeding will be supplementary, if at all, and not significantly contribute to LFB's costs. LFB is provided with some assurance in this respect because any maximum costs order would not include an amount that WTOCWAC is ordered to pay because it "has not conducted the proceeding in a manner to facilitate a just resolution as quickly, inexpensively and efficiently as possible" and has caused the applicant to incur costs as a result: r 40.51(2)(d).
4. Thirdly, the application is for judicial review of the Minister's decision. There is a timetable in place for the filing of evidence and submissions with a hearing listed for three days. The issues to be resolved are essentially legal arguments: see Tickle v Giggle For Girls Pty Ltd [2023] FCA 553 at [62] (Bromwich J). There are unlikely to be serious factual disputes. The legal questions are likely to be complex, however, the Minister is likely to take the leading role in addressing those issues.
5. Fourthly, there is no financial interest directly in issue in this proceeding. LFB seeks relief under s 39B of the Judiciary Act 1903 (Cth) or, alternatively, under s 16 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). WTOCWAC seeks to preserve the protection afforded by the Declaration. Certainly, for WTOCWAC, there is no potential for financial gain from the proceeding that might justify taking on the risk of an adverse costs order in the absence of an order under r 40.51(1).
6. Fifthly, there is some difficulty characterising the proceeding as public interest litigation. As Griffiths J said in Houston (at [26]-[27]), "proceedings are not to be characterised as public interest litigation merely because they involve 'elements of public law or the judicial review of the exercise of executive power'", or merely because "persons other than the applicant may have an interest" in the outcome (references omitted). As noted in Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [30] (Gaudron and Gummow JJ), the category of "public interest litigation" is a "nebulous concept", unless it is given "further content of a legally normative nature": see also McHugh J at [71].
7. However, the subject matter of the proceeding concerns the validity of a declaration made pursuant to s 10 of the ATSIHP Act. A declaration can be made under s 10 where the Minister is satisfied that the area is a significant Aboriginal area that is under threat of injury or desecration. In those circumstances, there is evident strength in the argument that WTOCWAC's involvement in the proceeding has a public interest element: see, eg, Australians for Indigenous Constitutional Recognition at [32] (Thawley J). Ultimately, in the absence of argument from the other parties on this point, I do not reach a firm conclusion. It is enough to say that there is nothing in this factor that likely weighs materially against the making of an order under r 40.51(1).
8. Sixthly, I do not give much weight to the submission that it was unnecessary to join WTOCWAC as a party. That is because WTOCWAC accepted that it has an interest in maintaining the protection afforded by the Declaration and may have a unique contribution in relation to grounds two and nine of the Amended Originating Application. Ground two alleges that LFB was not provided procedural fairness to comment on certain information provided by WTOCWAC members and relied on by the Minister in making the Declaration, including WTOCWAC's submissions to the Minister. Ground nine alleges that the Minister's decision to make the Declaration was legally unreasonable on grounds including the acceptance of WTOCWAC's explanation for why the Blue Banded Bee Dreaming was only raised at a later stage of the application process.

1. LFB put forward two substantive arguments against an order under r 40.51(1). First, in written submissions, LFB confirmed its previous statements that it does not intend "at present" to seek costs against WTOCWAC. LFB submitted that:

In those circumstances, the maximum costs order sought by WTOCWAC is unnecessary. Indeed, from LFB's perspective, the making of the maximum costs order would be odd and inconsistent with LFB's position, given it would permit LFB to recover up to $20,000 in costs when it presently does not have an intention of recovering any costs from WTOCWAC.

LFB has indicated that it does not seek to recover costs "at present". That language is intended to ensure that LFB can decide to recover costs in the event that WTOCWAC were to engage in conduct that would reasonably justify a change in position on the part of LFB. Such conduct would include, for example, the unnecessary prolongation of the proceedings or the wastage of costs. The present intention of LFB will not change if WTOCWAC engages in the litigation consistently with the overarching purpose in s 37M of the Federal Court of Australia Act 1976 (Cth).

1. LFB further submitted that they would not seek costs in the event that WTOCWAC participates in the proceeding "'in a manner which does not unnecessarily complicate or extend the proceeding', including by filing a submitting appearance". As indicated, a maximum costs order does not preclude recovery of an amount that a party is ordered to pay because the party "has not conducted the proceeding in a manner to facilitate a just resolution as quickly, inexpensively and efficiently as possible" and has caused the applicant to incur costs as a result: r 40.51(2)(d). During the hearing, counsel for LFB clarified its concern that it "should not necessarily be constrained by needing to establish one of those express exceptions" in r 40.51(2). LFB submitted that (emphasis added):

[T]he applicant's representation is not to seek costs at present, and that language is intended to ensure that the applicant can decide to seek to recover costs in the event that the third respondent were to engage in conduct that, in the applicant's view, would reasonably justify a change in position on the part of the applicant.

...

It's important to observe in this regard that the third respondent has so far taken, and indeed this morning confirmed its intention to take an active role in the proceedings despite its position that it was not a necessary party to the proceedings.

1. I do not accept that an order under r 40.51(1) is inconsistent with LFB's currently expressed intention. By seeking an order under r 40.51(1), WTOCWAC exposes itself to an award of costs up to the maximum amount (subject to the qualifications in r 40.51(2)). However, while it might permit LFB to recover the amounts permitted under r 40.51(1), it does not compel LFB to do so.
2. Nonetheless, an order under r 40.51(1) would place limits on what costs might be sought if LFB formed the view that it was reasonably justified in seeking those costs. Relevantly, those limits above the maximum costs order would be set by r 40.51(2) and determined by the Court. In other words, it would not be within LFB's discretion to determine the circumstances that warranted the seeking of costs above the maximum amount.
3. As WTOCWAC submitted, allowing LFB the discretion to determine the circumstances in which LFB will seek costs provides it with little certainty about its potential exposure to costs and, consequently, in making decisions about its participation in the proceeding. That uncertainty is underscored by LFB's acceptance that its refusal to provide an undertaking is based, in part, on the difficulty of framing the undertaking "in clear and specific terms" and sits uncomfortably with the policy that underlies r 40.51(1). A maximum costs order under r 40.51(1) would allow the Court to determine the circumstances under which the maximum costs order will be qualified by r 40.51(2).
4. During the hearing, counsel for LFB submitted that the Court will always have control over what costs are awarded in the exercise of its discretion. That is true and, in some circumstances, might be an appropriate course of action. However, the difficulty with that submission in this case is that a purpose of r 40.51(1) is to limit the exposure of a party to an adverse costs order to facilitate access to justice: see, eg, Houston at [19]. As Griffiths J said in Houston at [18] (emphasis added):

In my view, another relevant factor is the normal rule in civil litigation that costs are awarded to the successful party, not to punish the unsuccessful party but rather to compensate the successful party against the expense to which it has been put by reason of the legal proceedings. It is well settled that this normal rule can be displaced in an appropriate case. The applicant's application for a maximum costs order effectively seeks to displace the normal rule at this relatively early stage of the proceeding, rather than defer the matter of costs to when the proceeding has been determined.

1. I am satisfied that deferring the matter of costs to when the proceeding has been determined is not appropriate in the circumstances of this case. It does not provide WTOCWAC with the certainty it needs in order to decide whether it is financially prudent for it to participate in the proceeding.
2. Accordingly, I do not consider that a maximum costs order under r 40.51(1) is unnecessary because LFB has indicated that, at present, it does not intend to seek any costs from WTOCWAC. LFB's statement of present intention is not an effective substitute for an order under r 40.51(1).
3. Secondly, LFB argued that there was insufficient explanation by Ms Fleming of two assertions going to WTOCWAC's financial position:

(1) That WTOCWAC "could incur up to $59,000 of costs not currently accounted for in its budget for the next 12 months and remain solvent"; and

(2) That costs exposure above $20,000 over the next 12 months would "significantly affect" WTOCWAC's financial position.

1. I commence my consideration of these matters by recognising that WTOCWAC is a registered charity. I consider it desirable that its resources be applied, to the extent possible, toward its charitable purposes. The responsible management of the charity would require prudent decision-making about its expenditure for this proceeding.
2. Ms Fleming has provided WTOCWAC's financial statements. Those statements show that WTOCWAC's financial resources are limited. In the 10 months ended 30 April 2025, it recorded a net profit of $44,582.61. As at the same date, it held net assets of $180,373.77. I accept Ms Fleming's evidence that $25,000 of its assets consist of government grants. I also accept Ms Fleming's evidence that the non-current asset consisting of a loan in the amount of $23,000 might be unrecoverable. As a person responsible for overseeing WTOCWAC's governance and financial reporting, Ms Fleming is well placed to make that assessment. Those amounts reduce appreciably the capacity of WTOCWAC to apply its resources towards this proceeding.
3. Although the precise basis for calculating the amount of $59,000 has not been provided, given its net profit and the reduced amount of available net assets as at 30 April 2025, I do not consider that an estimate of $59,000 for unforeseen expenses is unfounded. It is a greater amount than its net revenue for the 10 months ended 30 April 2025 and the net revenue recorded in its audited reports for the financial years ended 30 June 2023 and 2024. It is approximately the same amount as its net revenue for the financial year ended 30 June 2022. Furthermore, it is a little over half the value of its available net assets as at 30 April 2025.
4. Furthermore, the estimate of $20,000, as the level at which WTOCWAC's financial position would be significantly affected, is one that finds support in the financial reports. It is approximately a third of what has been estimated as available for unforeseen spending; slightly less than half of the net profit recorded for the 10 months ended 30 April 2025; and approximately the same amount of net profit recorded in the audited accounts for the year ended 30 June 2024. I accept that a costs order in the amount of $20,000 for a charity with modest means could significantly affect its financial position, and likely to be the tipping point for its involvement in this proceeding.
5. No evidence was provided in relation to LFB's likely party/party costs. However, WTOCWAC is only likely to play a supplementary role in this proceeding, if at all. In any event, LFB is in a better position to absorb the costs of the proceeding in excess of the costs cap: see Doctors for the Environment (Australia) Inc v National Offshore Petroleum Safety and Environmental Management Authority [2025] FCA 598 at [17] (McElwaine J).
6. Accordingly, I consider that the amount of $20,000 is appropriate to balance the need to limit WTOCWAC's exposure to an adverse costs order with the need for it to be "at some material financial risk in the event that [it] fails in the proceeding": Doctors for the Environment at [20] and [28] (McElwaine J).
7. LFB further submitted that:

whether or not the evidence filed by WTOCWAC is sufficient to justify the maximum costs order need not be considered by the Court in circumstances where, if WTOCWAC behaves consistently with the overarching purpose, there will be nil costs exposure to WTOCWAC. Accordingly, a decision by the Court not to make the maximum costs order should not influence the capacity of WTOCWAC to continue to participate in the proceeding.

1. The premise of this submission has already been considered. Leaving LFB with the discretion to determine whether WTOCWAC has behaved consistently with the overarching purpose provides WTOCWAC with little certainty in making decisions about the extent of its participation in the proceeding.

1. For the foregoing reasons, I am satisfied that it is appropriate to make an order under r 40.51(1) of the Rules to specify the maximum costs as between LFB and WTOCWAC that may be recovered in this proceeding. Furthermore, while the assessment of the amount is necessarily impressionistic and imprecise, in my view, $20,000 is an appropriate maximum costs order in the circumstances.

1. Prayer 5 of the Interlocutory Application sought that the costs of this application be reserved. LFB has agreed to that position. I see no good reason to depart from that agreed position.

I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stellios.