Martin v The State of New South Wales

Judgment 1This is a dispute about costs. 2In Martin v The State of New South Wales (No 4) [2012] NSWLEC 182, Mr A G Martin, a civil engineer and mining prospector, sought a number of declarations relating to the non-renewal or non-determination of a number of applications for exploration licences under the Mining Act 1992. 3At the commencement of the hearing the State accepted that the decision to refuse Mr Martin's application for the renewal of one exploration licence (EL 6949) was liable to be set aside on the ground that he had been denied procedural fairness. The State had earlier sought, in an interlocutory motion filed on 3 May 2011, a declaration to that effect, together with an order that various parts of Mr Martin's amended points of claim be struck out. That motion was heard by Pain J on 19 May 2011. Mr Martin did not consent and Pain J ordered that certain paragraphs of the amended points of claim be struck out without making any declaration regarding the validity of EL 6949: Martin v State of New South Wales (No 3) [2011] NSWLEC 88. Her Honour also set aside Mr Martin's notice to produce filed on 5 May 2011, as sought by the State's notice of motion filed on 11 May 2011. 4Pain J also heard on 19 May 2011 a notice of motion filed by Mr Martin on 13 May 2011 seeking, inter alia, the joinder of third parties and leave to amend his summons. Her Honour refused Mr Martin's application for the joinder of other parties and his application to amend his summons: Martin v The State of New South Wales (No 2) [2011] NSWLEC 108. 5The principal proceedings were heard by me on 19 and 20 June 2012. In a reserved judgment given on 3 August 2012 I made the declaration of invalidity of EL 6949. Other than observing the concession made by the State in relation to EL 6949 I found that Mr Martin had otherwise failed to establish that he was entitled to relief in relation to his various other applications and otherwise dismissed the summons, reserving the question of costs: Martin (No 4). 6The outstanding question of costs was listed before Pain J on 31 August 2012 for directions. Her Honour ordered the question of costs be dealt with by way of written submissions: Martin v The State of New South Wales (No 5) [2012] NSWLEC 214. The parties having filed their written submissions, the court is now in a position to determine the question. 7Costs are in the discretion of the court subject to the rules: s 98, Civil Procedure Act 2005. The general rule applying to orders for costs is that 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": r 42.1, Uniform Civil Procedure Rules 2005. The rule speaks for itself and a person seeking to displace the prima facie presumption that costs follow the event must show that there is something out of the ordinary to justify any departure: Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA 157 at [18] per Young JA (McColl JA concurring). 8An award of costs is, of course, not by way of punishment of the unsuccessful party, but is compensatory - the rationale being that it is just and reasonable that a party who has caused the other party to incur the costs of the litigation should reimburse that party for the expenses which it would not otherwise have incurred: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543, 563 and 586 - 587. Moreover, in Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, McHugh J (Brennan CJ concurring) said at [66]: By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs. 9Rule 42.1 expresses this principle in statutory form. Although the rule allows an apportionment of costs where a party may have succeeded in some but not all issues, the courts have held that caution should be exercised in allowing an unsuccessful party to resist the payment of costs in such circumstances: Australian Conservation Foundation Inc v Forestry Commission of Tasmania (1988) 76 LGRA 381 at 384 per Burchett J; Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145 at [39] per Basten JA. In Bullabidgee Pty Ltd v McCleary (No 2) [2011] NSWCA 343 at [10], the Court of Appeal said that s 98 of the Act gives ample authority to determine the costs according to what is "just and reasonable", but the Court also said: "We do not consider that individual issues should be isolated and weighed with minute precision." 10In resisting the State's application for costs, Mr Martin made the following submissions (as I understand them): (a)By expressly reserving the question of costs I exercised the court's discretion contrary to r 42.1 that costs follow the event - that is, I decided not to grant costs to the State - and this determination should not now be overruled. (b)This was tantamount to declaring that the State had been involved in some form of misconduct relating to the litigation leading to disentitling conduct, and/or that in reality the successful party lost the litigation and the unsuccessful party won - particularly in relation to EL 6949, as well as the two applications which the Minister had not yet determined. (c)All actions and decisions taken by the State in relation to Mr Martin's applications were done after the summons was filed and were thus in contempt of the court proceedings. (d)The State was unsuccessful in certain interlocutory proceedings. (e)The State "had been involved in outright illegality" in relation to other proceedings (being Nos 80004 of 2009, 80002 of 2010 and 80006 of 2010) brought by Mr Martin (set out in detail in Mr Martin's written submissions). (f)A citizen's right to challenge administrative decisions raises a public interest in the challenge. 11I find for the following reasons that Mr Martin's submissions do not displace the presumptive rule that costs should follow the event. Mr Martin has clearly misunderstood the effect of an order that costs be reserved. Such an order means that the question of costs has been reserved for determination, that is, the question is yet to be determined. Given that the question of costs was not the subject of submissions during the hearing of the principal proceedings, the reserving of the question of costs gives the parties the opportunity to make submissions on the question before it is determined. I thus reject Mr Martin's submissions noted at and (b) above. 12As to the submission noted at above, in the absence of any interlocutory injunction, there is nothing improper or unlawful in the State taking actions and making decisions in relation to Mr Martin's applications after the filing of the summons. 13As to the submission noted at above, the position is as follows. Where a party to an application in respect of interlocutory proceedings is successful, but fails in the ultimate trial of the action - as here - it is not appropriate that he should be entitled to recover his costs in respect of the interlocutory proceedings. Equally, the successful party in the principal proceedings having failed in the interlocutory proceedings should not be entitled to recover costs in respect of the interlocutory proceedings: Edenmead Pty Ltd v The Commonwealth [1984] FCA 368; (1984) 4 FCR 348 at 355 per Spender J. But where the successful party in the interlocutory proceedings is also successful in the principal proceedings then the costs of the interlocutory proceedings as the successful party's are costs in the cause. I note that a special order for costs was made in Martin v The State of New South Wales [2011] NSWLEC 63. The order made below reflects this principle. 14As to the submission noted at above, I can only determine the question of costs in relation to the parties' conduct in these proceedings. The other proceedings in which it is alleged that the State has been involved in illegality are not before me and may be the subject of separate costs orders in those proceedings if illegality is established. There is no evidence of any illegality in these proceedings. 15Finally, I reject the submission noted at above. It is not every administrative decision which raises matters of public interest, and this is not one of them. The dispute in the present case only concerns Mr Martin's personal and private commercial interest in the relevant licences and there was no question of general principle raising the wider public interest. 16In the present case the State has succeeded in defending all of the claims made by Mr Martin, other than his claim relating to the refusal of his application for the renewal of EL 6949. As noted at [3] above, in its notice of motion filed on 3 May 2011 the State offered a declaration that the decision to refuse the renewal of that licence is invalid, to which Mr Martin did not consent. At the outset of the hearing of the present proceedings the State again consented to a declaration that the refusal of Mr Martin's application for renewal of EL 6949 is invalid. In these proceedings the whole of the hearing time was thus taken up by evidence and submissions concerning Mr Martin's remaining claims. In these circumstances and consistently with the principles explained at [9] above it is not appropriate to deprive the State of the whole of its costs. 17The proceedings were initially set down for hearing before Sheahan J on 30 May 2012. On that day Mr Martin applied for an adjournment. In granting the adjournment Sheahan J made an order that Mr Martin pay the costs of the State thrown away. As noted at [13] above, on 7 April 2011, Craig J made an order for costs in relation to the State's notice of motion of 18 March 2011: Martin (No 1). There has been no disentitling conduct on the part of the State in these proceedings and there is no reason why it should not have the costs of the proceedings, including the costs of the interlocutory proceedings in which it was successful.