McCallum v Sandercock

Land and Environment Court (NSW)|2011-11-10|Before: Pepper J, Raymond J, Russell J

Appropriate Relief to be Ordered Consequent Upon a Finding of Water, Air and Noise Pollution 1In the decision McCallum v Sandercock [2011] NSWLEC 175 the Court held that the operation of the hard rock quarry by Mrs Wendy Sandercock and Mr Raymond Sandercock ("the Sandercocks"), which is adjacent to the property owned by Mrs Beryl McCallum, caused water (at [107]), air (at [138]) and noise (at [145]) pollution, as those terms are defined in the Protection of the Environment Operations Act 1997 ("the Act"). 2However, it was only in respect of the water pollution that the Court held that there had been a breach of the Act (at [119]). 3In respect of air pollution, the Court held that, although the quarry workings clearly emitted dust, there was no cogent basis for finding that the dust collected on Mrs McCallum's property emanated from the Sandercock quarry, nor was there any evidence that the dust complained of had been caused by the Sandercocks' failure to maintain and operate the plant and equipment located at the quarry, or to deal with materials, in a proper and efficient manner (at [138]-[139]). 4In relation to noise pollution, it was held that although the quarry emitted "offensive noise" as defined in the Act, there had been no breach of the Act in the manner alleged by Mrs McCallum because she had not established that the plant at the quarry was not being operated or maintained, or that any materials were not being dealt with, in a proper and efficient manner. In so finding, the Court rejected the submission that adherence to industry best practice or world best practice was necessary in order to avoid breaching the Act (at [158] and [161]). 5In relation to the possible relief to be ordered in respect of the offensive noise the Court stated the following (at [165]): 165 The most that the Court would be prepared to entertain by way of remedial relief would be the construction of a 3m timber lapped and capped noise barrier on the top of the ridge above the quarry on the boundary of Mrs McCallum's property. But this would require Mrs McCallum giving consent to the Sandercocks to enter onto her property in order to construct the fence, an order that the Court would be loathe to make in light of the reluctance of Mrs McCallum to date to grant this permission. 6In relation to both air and noise pollution, the Court indicated, however, that even if the conclusions it had reached in relation to the breach of the Act were incorrect, and there had been a contravention of the legislation as alleged, the Court would have nevertheless declined, as a matter of discretion, to grant the relief Mrs McCallum sought, namely, the closure of the quarry, because of the fact that: the quarry had been in operation for over 35 years prior to Mrs McCallum commencing the proceedings and its existence predated the ownership by Mrs McCallum of the property; the Sandercocks had taken genuine and adequate steps to minimise the quarry's dust and noise emissions; the life expectancy of the quarry was limited and its future operational capacity was anticipated to be short term; and prior to the proceedings having been instituted, Tweed Shire Council ("the council") and the Department of Environment and Climate Change ("DECC") had investigated Mrs McCallum's noise, air and water pollution complaints and had not recommended the quarry's closure, either temporarily or permanently, and had been satisfied with the Sandercocks' response to requested changes in the quarry's operating procedures in order to ameliorate any noise, air and water issues (at [124], [142] and [163]). 7The Court now has before it orders, the contents of which have been agreed by the parties, which give effect to the substance of the Court's findings. 8Upon modification pursuant to discussion with the parties, the Court is satisfied that the orders proffered by the parties are appropriate. It is therefore proposed that the orders be made. 9These orders include the construction of an additional sump pit and the erection of a noise barrier, both similar to that discussed in the Court's earlier judgment. 10The ordering of the construction of a noise barrier is made on the basis that both parties agree that the quarry produces offensive noise; that the expert evidence was unanimous that it is appropriate that such attenuation occur; that the parties consent to the orders being made even absent any breach of the Act as alleged; and that this relief is reflective of earlier offers made by the Sandercocks to resolve this particular issue. 11As early as 25 February 2010 the Sandercocks' offered to construct a noise fence at their cost. This offer was repeated again by letter dated 21 July 2010. In that letter it was stated that the barrier was to be constructed as near to the common boundary as possible, on the top of the escarpment adjacent to Mrs McCallum's house. A quote in the amount of approximately $7,600 for the construction of the fence was attached to the written offer. Regrettably the offers were not accepted by Mrs McCallum, and therefore, the fence was not constructed because to do so required her consent to enable entry onto her property. 12The offer was repeated by the Sandercocks during the hearing. Again, it was not taken up by Mrs McCallum. 13The significance of these rejections is discussed further below in relation to the issue of costs.

Mrs McCallum is Not Entitled to Her Full Costs 14Because these proceedings were conducted in Class 4 of the Court's jurisdiction, generally costs follow the event (r 42.1 of Uniform Civil Procedure Rules 2005 and s 98 of the Civil Procedure Act 2005). 15There is no question that on the issue of water pollution, to the extent that the Court held that this resulted in a breach of the Act as alleged, Mrs McCallum was successful in establishing water pollution pursuant to the Act and that in the alternative to the quarry being shut down, that remediation should occur by way of alteration to the sump pit design to ensure that there was no further, or at the very least that there was a minimisation of, water pollution caused by the activities of the quarry. 16At issue, however, is whether or not Mrs McCallum should be entitled to all of the costs the proceedings in light of the decision of the Court to reject her claims for relief (that the quarry cease operation) in respect of noise and air pollution. 17In addition, and it was not a matter of controversy, in close proximity to the commencement of the hearing the fourth basis for relief that had initially been pursued in the proceedings, namely, a breach of the Act occasioned by land pollution as a result of the operation the quarry, was abandoned by Mrs McCallum. While this obviously resulted in a savings in the time required to hear the proceedings, due to the late notification by Mrs McCallum that this issue was no longer being pressed, no savings occurred with respect to the preparation of evidence by the Sandercocks, including expert evidence, required to meet this claim. 18Mrs McCallum submitted that because the water pollution claim was the issue that occupied the majority of the proceedings, both in respect of hearing time and expert evidence, and because some form of relief was ordered in relation to the proven noise pollution, no apportionment or discounting of the costs to be awarded to her should occur. 19Alternatively, Mrs McCallum submitted that because these proceedings were bought in the public interest, she should either be awarded her costs in full or, if costs were to be apportioned, the majority of her costs. 20The Sandercocks, first, refute the suggestion that the proceedings were brought in the public interest, and second, argue that in circumstances where Mrs McCallum enjoyed success in only one of three (initially four) issues raised by her in the proceedings, she should not be entitled to all of her costs. The Sandercocks submit that the appropriate order is that each party bear their own costs.

The Proceedings Were Not Brought in the Public Interest 21Rule 4.2 of the Land and Environment Court Rules 2007 states that the Court may decide not to make an order for the payment of costs against an unsuccessful applicant in any proceedings if it is satisfied that the proceedings have been brought in the public interest. 22The usual circumstance in which particular consideration is given to a public interest litigant in the context of a costs order is where a litigant is unsuccessful in the proceedings. Recourse to the rule is not usual to support the proposition that a successful litigant who has brought proceedings in the public interest should be entitled to receive special consideration where it would otherwise be appropriate to order that a portion of the costs be payable ( Friends of Turramurra Inc v Minister for Planning (No 2) [2011] NSWLEC 170 at [30] per Craig J). 23But having regard to the scope, purpose and objects of r 4.2 there is no immediate discernable reason why the rule may not be utilised in this way. However, the question need not be finally determined in light of my conclusion that the litigation was not, in any event, brought by Mrs McCallum in the public interest. 24The principles to be applied when exercising the costs discretion in public interest litigation have been stated by Preston CJ in Caroona Coal Action Group Inc v Coal Mines Australia Pty Limited and Minister for Mineral Resources (No 3) [2010] NSWLEC 59; (2010) 173 LGERA 280 and applied and endorsed subsequently by this and other Courts (see, for example, Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263; (2010) 176 LGERA 424 at [202], Martin v New South Wales Minister for Mineral and Forest Resources [2011] NSWLEC 38 at [43], Olofsson v Minister for Primary Industries [2011] NSWLEC 137 at [58], McGinn v Ashfield Council [2011] NSWLEC 105 at [17], Friends of Turramurra at [31] and Snowy River Alliance Inc v Water Administration Ministerial Corporation (No 2) [2011] NSWSC 1132 at [6]). 25In Caroona , his Honour formulated a three-step approach for determining when litigation may be properly said to have been brought in the public interest (at [13]). Step one is the characterisation of the proceedings as 'public interest' litigation. The following considerations are relevant in determining whether litigation can be properly characterised as having been brought in the public interest: (a) the public interest served by the litigation; (b) whether that interest is confined to a relatively small number of members from the applicant group in the immediate vicinity of the development, concerned with their own private amenity, or whether the interest is wider involving a significant number of members of the public in concern for a wider and significant geographic area; (c) whether the applicant is seeking to enforce public law obligations; (d) whether the prime motivation of the litigation is to uphold the public interest and the rule of law; and (e) whether the applicant has no pecuniary interest in the outcome of the proceedings. 26These considerations are not exhaustive and it is not necessary to answer them in any particular way in order for litigation to be classified as in the public interest or not. 27Step two is to determine whether there are any additional circumstances that may render the litigation public interest litigation. Merely because a litigant makes claim to some notion of public interest does not entitle her to be granted an indemnity from costs. Thus the "something more" requirement ( Caroona at [13] and [17]). 28In the second step, once litigation has been characterised as having been brought in the public interest it is necessary to examine closely the nature, extent and other features of the public interest involved in the particular litigation to ascertain whether or not they provide justification in the circumstances of the case for departure from the usual costs follow the event rule ( Caroona at [15]-[16]). 29The "something more" may, for example, be found in the magnitude of the public interest itself ( Caroona at [59]). There are at least five additional categories of circumstances that have been identified as constituting "something more" for the purpose of step two ( Caroona at [60]): (a) the litigation raises one or more novel issues of general importance; (b) the litigation has contributed, in a material way to the proper understanding, development or administration of the law; (c) where the litigation has been brought to protect the environment or some component of it, the environment or particular component of it is of significant value and importance; (d) the litigation affects a significant section of the public; and (e) there was no financial gain to the applicant in bringing the proceedings. 30Step three is to determine whether there are any countervailing circumstances ( Caroona at [18]-19]). These may include that ( Caroona at [61]): (a) the applicant is seeking to vindicate rights of a commercial character and stands to benefit from the litigation; (b) the question of public interest raised is narrow; (c) the applicant has unreasonably pursued or persisted with points that had no merit or with issues that were not eminently arguable; and (d) there was disentitling conduct by the applicant, such as the impropriety or unreasonableness in the conduct of the litigation. 31Turning to the first step, I am unable to characterise the proceedings as public interest litigation. While I would have no hesitation in doing so if the complaints were confined to water pollution, this cannot be done in respect of the claims of noise and air pollution. In relation to both these latter claims, the only interest served by the litigation was that of the private interest of Mrs McCallum. There was certainly no wider interest involving a significant number of members of the public. 32While it is true that Mrs McCallum has sought to enforce public law obligations under the Act, I do not accept that the prime motivation of the litigation was to uphold the public interest or the rule of law. Rather, it was to ensure that the quarry was permanently closed in order to alleviate the impact of its operations on Mrs McCallum and her property. 33Furthermore, and although it is not necessary for me to determine the question, if pressed I would be willing to infer that had Mrs McCallum been successful in causing the operation of the quarry to cease, it would follow that the value of her property would increase and in this way, it could be said that she has a pecuniary interest in the outcome of the proceedings. 34But even if I am incorrect in relation to my findings with respect to step one, I am unable to identify the "something more" required by step two. 35In this regard, Mrs McCallum submitted that, first, the litigation raised a novel issue of general importance, namely, whether or not world or industry best practice was necessary in order to satisfy the terms "proper and efficient manner" and "efficient condition" contained in ss 139 and 140 of the Act. She submitted that resolution of this issue by the Court had contributed in a material way to the proper understanding and development of the law with respect to, at the very least, a breach of the Act occasioned by noise and air pollution. 36But upon proper analysis, the reasons of the Court do not go as far as Mrs McCallum suggests. The Court noted that the Act set no criteria for what constituted an "efficient condition" or a "proper and efficient manner" in those provisions. While it is correct that the Court rejected the submission that adherence to industry best practice or world best practice was necessary and that neither ss 139 nor 140 mandated that the quarry operate with new equipment (at [158] and [159] respectively), the decision of the Court stands for no more than on the evidence before it, especially having regard to the measures implemented by the Sandercocks to reduce the noise emanating from the quarry and the fact that the level of noise was consistent with a quarry of this type, the Sandercocks were operating the plant and equipment at the quarry, and handling the materials, efficiently and properly, and thus ss 139 and 140 were not infringed. It is, in other words, a decision confined very much to its facts. 37It should be noted, moreover, that neither party agitated the meaning of the terms referred to above in a way that elevated their construction to a matter of general significance. The real focus of the proceedings in relation to the issue of noise pollution was not whether industry or world best practice was required in order to ensure that ss 139 and 140 were not contravened, rather, it was squarely on the steps that the Sandercocks had taken to reduce to noise emanating from the quarry and whether, as a consequence of these steps, the plant and equipment and handling of materials was conduced in a proper and efficient manner. 38On a fair reading of the decision it does not, in my view, contribute in any material way to the proper understanding, development or administration of the law with respect to the Act. 39Second, Mrs McCallum contended that the "something more" was provided by the fact that the quarry had been operating without any controls in place since its inception, and therefore, the proceedings were a necessary device to impose some form of regulatory oversight on its operation. But given the oversight by the council and by DECC in response to numerous complaints Mrs McCallum had made in respect of the operations of the quarry to these and other government bodies, this statement is plainly incorrect and must be rejected. 40Furthermore, it cannot be said that the litigation was brought to protect a component of the environment, be it water, air or noise, that was of significant value and importance. For example, it was not seriously in dispute that the unnamed creek the subject of the water pollution claim had already been degraded and polluted by the operation of two other quarries nearby and by reason of naturally occurring acid rock drainage. 41Also, it cannot be said that the litigation affects a significant section of the public. The only evidence before the Court was that, with the possible exception of water, the various forms of pollution complained of principally affected Mrs McCallum. 42With respect to step three, as the Court has already stated, were it necessary to determine the issue, it was Mrs McCallum who stood to benefit the most from the litigation in so far as she was to be the principal beneficiary of the closure of the quarry and any mitigation measures imposed on its operation. 43Finally, it cannot be said that the questions of public interest raised by the litigation involved anything other than discrete points of statutory interpretation and application, absent broader application. 44However, it should be noted that Mrs McCallum did not unreasonably pursue or persist with the claims of water, air and noise pollution. In respect of each, the pollution complained of was eminently arguable. There has also been no disentitling conduct on the part of Mrs McCallum. 45However, for the reasons referred to above the Court is unable to conclude that the proceedings have been brought by Mrs McCallum in the public interest.

The Costs Should be Apportioned 46It has been held that something "out of the ordinary in the case" is required to justify departure from the general rule that costs follow the event ( Hastings Point Progress Association v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA157 at [18]). 47As noted by Craig J in Friends of Turramurra (at [15]) , one set of circumstances in which events out of the ordinary exist are where multiple issues are involved and a successful party fails on an issue, or group of issues, that are discrete from those upon which it has succeeded. In these circumstances, it may be appropriate that the successful party receives only a portion of the costs of which it would have otherwise been entitled to. 48The principles by which it may be determined that only a portion of the costs should be paid to a successful party were summarised by Biscoe J in F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 5) [2008] NSWLEC 235 and Australians for Sustainable Development Inc v Minister for Planning (No 2) [2011] NSWLEC 70. They were endorsed and applied recently by Craig J in Friends of Turramurra. In all three cases, Craig and Biscoe JJ relied upon and applied the decision of the Court of Appeal in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 (at [34]). 49The principles may be summarised as follows: (a) unless a particular issue, or group of issues, is clearly dominant, separable or discrete, it will be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those issues on which it was successful and those upon which it failed ( James at [32]-[34] and Australians for Sustainable Development at [13]); (b) where a court exercises its discretion to apportion costs, any apportionment itself involves an exercise of discretion ( Australians for Sustainable Development at [13]); (c) mathematical precision is illusory and the exercise of discretion will often depend on matters of impression and evaluation ( Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261 at [29], Australians for Sustainable Development at [13] and Friends of Turramurra at [21]); (d) justice may not be served if parties are dissuaded from canvassing all material issues for fear of an adverse costs order ( Australians for Sustainable Development and the authorities cited thereat at [14]-[16]); (e) equally, litigants should not be rewarded for the pursuit of issues without real merit (as above); and (f) it is one thing to deprive a successful applicant of the costs of severable issues upon which it failed, but it is another to order it to pay the other party's costs of those issues. The latter order should only be made where the raising of a severable issue of a successful applicant was so unreasonable that it is fair and just to do so ( Australians for Sustainable Development at [20]). 50Mrs McCallum submitted that in the present case the issues were not discrete and severable, as evidence by the fact that, with the exception of noise, Mr Ron McMahon provided expert evidence on behalf of the Sandercocks in relation to all other forms of claimed pollution. 51I do not accept this submission. Mrs McCallum raised three (initially four) discrete complaints of pollution. Evidence was prepared and submissions were addressed specifically directed towards each form of pollution. While it is correct that the relief initially sought in relation to all three was the same, it cannot be said, irrespective of Mr McMahon's expert evidence, that the evidence and submissions were not severable. They were, and the proceedings were prepared and the hearing was conducted accordingly. And, as it transpired, the relief granted was not uniform but was tailored to the particular species of pollution to which it was directed. 52Having said this, it must nevertheless be acknowledged that the majority of the evidence, and time taken at the hearing, was attributable to the issue of water pollution, upon which Mrs McCallum was successful. 53However, the dominance of water pollution was not so great that the evidence and hearing time taken to deal with the remaining claims can be ignored. It must also be born in mind, as Mrs McCallum properly conceded, that costs were incurred by the Sandercocks in meeting the land pollution claim, even if this claim did not occupy any part of the hearing because it was not pressed by her. 54Mrs McCallum also relied upon the fact that relief was ordered in relation to the noise pollution claim and that, therefore, she was successful in respect of this 'event'. But, first, no finding was made by the Court that the Act had been breached in this regard as alleged by her. Second, the Court did not state in its judgment, as she suggested, that Mrs McCallum was entitled to relief. Relief has been ordered because it was consented to by the parties. I therefore accept the submission of the Sandercocks that in relation to noise pollution the characterisation of the event is at best "neutral". Third, it would be a perverse outcome if the Court were to order the Sandercocks to pay Mrs McCallum's costs in relation to the noise pollution claim if, as what was foreshadowed at today's hearing, the result would be that the Sandercocks simply withdrew their consent to any order by the Court that a sound barrier be constructed. Such an outcome would not be in Mrs McCallum's best interest given the agreement between the parties that noise attenuation is highly desirable. Fourth, as discussed above, prior offers were made by the Sandercocks to construct a noise barrier, all of which were spurned by Mrs McCallum. In all these circumstances, Mrs McCallum should not be awarded her costs for this claim. 55The Court also accepts the submission of the Sandercocks that they should be compensated for the costs they incurred in preparing for the land pollution claim that was subsequently abandoned by Mrs McCallum. 56For all these reasons, it would not be appropriate to order that the costs of the proceedings be paid entirely by the Sandercocks. In my opinion, a proper exercise of the Court's discretion is that Mrs McCallum be entitled to some lesser proportion of her costs. Having regard to the discussion above, in my opinion, it is therefore appropriate that Mrs McCallum be entitled to 60% of the costs of the proceedings. 57With respect to the costs of today, as neither party has enjoyed complete success it is appropriate that each party bear their own costs.

Orders 58The orders of the Court are as follows: (1) that no later than 9 December 2011, the Respondents: (a) have prepared a design for an additional sump pit or pits and necessary associated works ("the Pits") to be constructed on the subject site, such design to be certified by consulting civil engineers to be effective to capture any runoff from the quarry not caught by the sump pit presently erected on the site; and (b) lodge with the council and all authorities all such applications for such approvals as shall be necessary to permit the construction of the Pits; (2) the Respondents are to do all such things including payment of fees and provision of all such things as the council and all authorities shall require in relation to such applications, and as shall otherwise be reasonable or necessary to permit the granting of such authorities' approvals as referred to in order 1b; (3) the Respondents are to complete the construction of the Pits as so designed and approved within two months of such approvals; (4) the Respondents are to extract sediment from the existing sump pit, and from any additional sump pit or pits constructed under the system referred to in Order 1 and remove the sediment off site to a location approved to receive and dispose of it at regular intervals so as to, amongst other purposes, ensure that no sediment escapes the site into any waterway; (5) no later than 9 December 2011, the Respondents are to: (a) have prepared a design for a 3m timber lapped and capped noise barrier on top of the ridge above the quarry on the boundary of the parties' properties and necessary associated works ("the Barrier"), to attenuate noise from the quarry; and (b) lodged with the council and all authorities all such applications for such approvals as shall be necessary to permit the construction of the Barrier; (6) the Respondents are to do all such things including the payment of fees and provision of all such things as the council or such other authorities shall require in relation to such applications, and as shall otherwise be reasonable or necessary to permit the granting of such authorities' approvals as referred to in Order 5; (7) the Respondents are to complete the construction of the Barrier as so designed and approved within two months of such approvals; (8) the Applicant will provide all such consents in respect of applications for approvals and for the construction of the Barrier and shall permit the Respondents and their contractors reasonable access over the Applicant's land to permit the construction of the Barrier; (9) the Respondents are to make good all unreasonable or unnecessary damage caused to the Applicant's land by reason of the construction of the Barrier and the access granted pursuant to Order 8; (10) the Respondents are to provide to the Applicant within seven days of receipt or of despatch by them, copies of all such designs, certifications, applications, written communications and material in respect of compliance with Orders 1-9 above passing between the Respondents and the council; (11) the Respondents are to pay 60% of the Applicant's costs of these proceedings; (12) the proceedings are to be stood over to 23 February 2012 at 9.30am before Pepper J; and (13) liberty to restore the proceedings for directions before Pepper J on seven days notice in writing to the other party including any application to vary Order 1.

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: 15 November 2011

(2010) 173 LGERA 280

(2010) 176 LGERA 424

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