Melville v Craig Nowlan & Associates & Anor

This Court has power to grant an order for security for costs. Section s 69(2)(3) of the Land and Environment Court Act 1979 ("the LEC Act") provides:- The Court may order a party instituting proceedings in the Court to give security for the payment of costs that may be awarded against that party. Section 69(4) of the LEC Act provides that any security so awarded shall be given in such amount, and in such manner and form as the Court directs.

The applicant disputes that the Court has an inherent power to award costs and relies upon the decision of the High Court of Australia in DJL v Central Authority (2000) 201 CLR 226 in support of its contention. In view of the express statutory provision enabling this Court to make an order for security it is unnecessary however to consider this issue. It should, however, be noted that Pt 6 rule 1 of the Land and Environment Court Rules 1996 ("the LEC rules") adopts Pt 53 of the Supreme Court Rules 1970 ("the SC Rules"). Pt 53 of the SC Rules contains provisions enabling the Supreme Court of New South Wales to order security for costs. A combination of Part 6 rule 1 the LEC rules and Part 53 of the SC Rules, together with the power provided by s 23 of the LEC Act to the Court to make orders in matters in respect of which it has jurisdiction 'to make orders of such kinds, including interlocutory orders as the Court thinks appropriate' would provide the Court with an auxiliary potential power to make an order for security for costs.

The evidence establishes that the professional legal costs of the hearing are estimated to be approximately $12,000 together with disbursements which include counsel's fees. Mr Leveny has been advised by his solicitors that legal costs, including disbursements may amount to $15,000.

In Oshlack v Richmond River Council (1998) 193 CLR 72 Kirby J said at 113:- Inherent in the foregoing legislative innovation is a parliamentary conclusion that it is in the public interest that such individuals and groups be able to engage the jurisdiction of the Land and Environment Court, although they have no personal, financial or like interest to do so … the removal of the barrier to standing might amount to an empty gesture if the public character of an applicant's proceedings could in no circumstances be taken into account in disposing of the costs of such proceedings, either where they succeeded or (as here) where they failed. 11. When determining an application for costs a Court is obliged to consider the existence of any special circumstances exist sufficient to justify a departure from the usual rule that costs will generally follow the event. Such 'special circumstances' will include the fact that the litigation is 'public interest litigation' (see Kirby J in Oshlack at 115; Save the Showground for Sydney Inc v Minister for Urban Affairs and Planning (Pearlman J, NSWLEC, 26 November 1998, unreported)). However such factor may not be sufficient by itself to warrant an exception to the usual practice that a successful party will or should be entitled to recover its costs (Timbarra Protection Coalition Inc v Ross Mining NL & Ors (Talbot J, NSWLEC, 5 May 1998, unreported). The guiding principle is that costs are compensatory (see Latoudis v Casey (1990) CLR 534). There is no reason, in principle, to treat an application for security for costs differently to an application for costs.

The Court has been referred by each of the parties to decisions concerning applications for security for costs. In Razorback Environment Protection Society Inc v Wollondilly Council & Anor [1999] NSWLEC 8 Lloyd J reviewed the principles concerning security for costs applications in public interest litigation and determined that an order for security for costs should be made despite characterisation of the proceedings as 'public interest' litigation.

The applicant has referred the Court to several authorities, such as F Hannan Pty Ltd v Electricity Commission of New South Wales [No 3] (1985) 66 LGRA 306; Maritime Services Board of New South Wales & Federal Airports Corporation v Citizens Airport Environment Association Inc (1994) 83 LGERA 107; Donnelly v Capricornia Prospecting Pty Ltd (1999) 102 LGERA 310. These authorities do not displace the principles repeatedly followed in this Court as referred to in Razorback.

Each application for security for costs must be considered on its merits. Whilst public interest litigation per se may be insufficient to justify a departure from the usual rule, other factors may exist from which the Court can conclude that an order for security should not be made. Those cases may, for example, involve an apparent breach of the planning laws or conduct which suggests that, on its merits, the applicant has established a strong prima facie case for relief (see Ryde Pool Action Group Inc v Ryde City Council [1999] NSWLEC 96).

Accordingly I concur with the observations of Pearlman J in Town Watch Incorporated v Grafton City Council (1997) 93 LGERA 401 at 405 that the mere fact that the proceedings are brought pursuant to the 'open standing' provision of s 123 of the EP&A Act to remedy an alleged breach of that Act 'is not, of itself, sufficient to refuse to grant security for costs'. In Razorback Lloyd J at par [20] observed that the matters to be considered on an application for security for costs include 'the nature of the litigation and the strength of the applicant's case'. At this preliminary stage of the proceedings it is not possible to assess the strength of the applicant's case, and in the absence of evidence that the application has strong prospects of success, the respondent is entitled to be provided with security to avoid the risk of an order for costs in his favour will be unfulfilled.

The amount of costs claimed by the first respondent by way of security, namely $23,500 is not justified by any calculation. However the affidavit of Stephen John Titus, solicitor for the first respondent establishes the foundation for the assessment of costs of at least $12,500 costs.

Accordingly, the Court is satisfied that an initial order for security for costs should be made in the sum of $12,500, the adequacy of such amount can be reviewed as the litigation continues.

1. The applicant give security for the costs of the first respondent of and incidental to the proceedings in the amount of $12,500 in a form satisfactory to the Registrar.
2. This notice of motion be adjourned to enable the first respondent to seek a further order for security in the event that the amount ordered as security is exhausted prior to or during the conduct of the proceedings.
3. The proceedings be stayed until the security in order 1 is given.
4. The question of costs of the notice of motion be reserved pending determination of the proceedings or pending further application.

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