Conclusion
16 The considerations that bear upon whether the applicant should be required to pay the first respondent's costs are finely balanced.
17 The principles that govern the general discretion of the courts to award costs are set out in the joint judgment of Black CJ and French J in Ruddock v Vadarlis (No 2) at [11]:
"…
· Ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order.
· Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed.
· A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other parties' costs of them. In this sense "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or law."
18 Their Honours went on to say at [13]:
"It has been argued, in academic commentary, that the general compensatory principle rests upon two alternative rationales. The first is that the successful party is entitled to be compensated for its costs because it has been wronged at the hands of the unsuccessful party. Costs under this rationale function as a species of damages. But that characterisation is not always tenable. Where, for example, declaratory relief is sought because of genuine uncertainty about the interpretation of a document or a statute, it will not explain why the successful party should be reimbursed at the cost of its opponent where the legal issue is novel and has consequences extending beyond the particular litigation. The alternative rationale for the compensation principle is simply that the winner should not have to suffer financially for vindicating its rights. The criticism of this intuitively attractive approach is again that it does not necessarily follow that the obligation to compensate the winner should be imposed on the losing party. For the losing party may have had very good legal grounds for its position and have conducted itself in the litigation in an entirely reasonable way. Where the case is close or difficult and involves no obvious element of fault on the part of the loser the proposition that costs automatically follow the event may work unfairness. Moreover it may set up a significant barrier against parties of modest means even if the contemplated claim has substantial merit: See Tollefson, "When the 'Public Interest' Loses: The Liability of Public Interest Litigants for Adverse Costs Awards" (1995) 29 University of British Columbia Law Review 303 at pp 309-311; see also McCool, "Costs in Public Interest Litigation: A Comment on Professor Tollefson's Article" (1996) 30 University of British Columbia Law Review 309. These criticisms will not justify a global modification, in public interest cases, of the usual rule that costs follow the event. They do however indicate the desirability of avoiding calcification of the discretion with rigid rules governing its exercise."
19 At the same time, it is necessary to bear in mind the cautionary observations of the Full Court of the Supreme Court of Western Australia in Buddhist Society of Western Australia (Inc) v Shire of Serpentine-Jarrahdale at [11]:
"In our opinion great care must be taken with the concept of public interest litigation that it does not become an umbrella for the exercise of discretion with respect to costs in an unprincipled, haphazard and unjudicial manner. As McHugh J, with whom Brennan CJ agreed, in dissenting in Oshlack put it at [72]:
"If discretions concerning costs are to be exercised consistently and rationally, it is essential that the courts formulate principles and guidelines that can be applied with precision in most cases. If characterisation as 'public interest litigation' is a factor to be considered when making costs orders, courts must be able to define the term with precision. They must eschew any notion of the 'I know it when I see it' type of reasoning. If courts are to retain the confidence of litigants and the wider community, they must continually reaffirm and demonstrate that their decisions are based on objective reasons that are articulated and can be defended."
In our view, the denial of costs to successful litigants upon the ground that the litigation bears a public interest character should continue to be the rarity which this Court supposed it would be in the South-West Forests Defence Foundation case."
20 There are, in the present case, factors that point both ways. It is true, as the first respondent submits, that the applicant was entirely unsuccessful in his challenge to the two decisions that were the subject of the application for review. It is also true that the challenge failed on grounds that did not require a ruling on any important question of principle, namely that it was brought out of time and, in relation to the second decision, that it was not a decision under an enactment.
21 Nonetheless, the applicant raised several difficult, and important, questions of construction regarding the operation of key provisions of the Environment Protection Act. He did so selflessly, in the context of an issue that has sharply divided the community, in order to promote and protect critical environmental values. He also conducted his case in a manner that was wholly commendable.
22 There is some substance in the applicant's contention that, although the first respondent's reasons satisfied the requirements of s 13 of the ADJR Act, they could have been more fully expressed, setting out precisely the matters that the Minister had taken into account and, more importantly, those that he had deliberately ignored.
23 The award of costs need not be an "all or nothing" proposition. Costs are discretionary, and although the discretion to award costs must be exercised judicially, reasonable minds can differ as to what would be appropriate in any given case.
24 In the present case, bearing in mind the various factors to which I have referred, justice will be done if the applicant is required to pay some, but not all, of the first respondent's costs. In my view, the applicant should be required to pay fifty per cent of the first respondent's costs, such costs to be taxed in default of agreement.
25 I propose to exclude from that order the costs involved in the preparation of the written contentions regarding costs, given that each party has had a measure of success on that issue.