Ngarluma Aboriginal Corporation RNTBC v Ramirez

1. Each party to bear its own costs of the application and the cross-claim. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BANKS-SMITH J: 1 On 30 November 2018 I delivered primary reasons for judgment in these proceedings: Ngarluma Aboriginal Corporation RNTBC v Ramirez [2018] FCA 1900. As in those reasons, I will refer to the applicant as NAC. I have since made a declaration that the decisions made or resolutions passed at the meeting of NAC's directors on 31 August 2017 to 1 September 2017 and on 17 November 2017 are invalid and of no force or effect. I also made certain ancillary orders, largely by consent, but the issue of costs was contested. 2 As appears from the reasons, NAC was successful in seeking the declaratory relief that it sought. The respondents were unsuccessful in opposing that relief and were unsuccessful in their cross-claim, by which they sought orders that any contraventions in the manner in which the meetings were carried out did not invalidate the decisions made. 3 Although NAC was successful, it submitted that the appropriate costs order was that each party bear its own costs. 4 The respondents submitted that in the circumstances, NAC should pay the respondents' costs for three reasons: first, because the need for this proceeding was entirely attributable to the conduct of NAC; second, because NAC is the party that sought relief and the respondents are effectively acting as necessary contradictors; and third, because the respondents are acting as representatives of a larger group and thus are acting in a public interest character. 5 It is not in issue that under s 43(2) and s 43(3) of the Federal Court of Australia Act 1976 (Cth), I have general discretion to award costs but that this discretion must be exercised judicially, having regard to the relevant principles and the justice of the case in all the circumstances. 6 Ordinarily, costs should follow the event unless good reason is shown to the contrary: George v Fletcher (Trustee) (No 2) [2010] FCAFC 71 at [12] (Ryan, Marshall & Logan JJ). It has been said that the jurisdiction to grant costs against successful parties 'can rarely, if ever, be justified': Scherer v Counting Instruments Ltd [1986] 1 WLR 615, 622 (Buckley LJ). The principles were discussed recently in Minister for Immigration and Border Protection v CQZ15 (No 2) [2018] FCAFC 19 (Kenny, Tracey and Griffiths JJ). 7 To guide the exercise of my discretion I have had regard to the manner in which the courts have addressed costs in a number of cases where respondents have assumed the role of a contradictor or representative. 8 In Allseas Construction S.A. v Minister for Immigration and Citizenship (No 2) [2012] FCA 747, McKerracher J addressed a costs application following the Minister's unsuccessful opposition to an application for declarations affecting vessels that may enter migration zones. His Honour took into account the facts that the Minister acted as a proper contradictor, that the successful applicant secured a significant commercial advantage, that it was necessary to give serious consideration to the opposing arguments advanced for the Minister, and that the Minister's application did not add significant cost to the proceedings. The Minister was ordered to pay 50% of the applicant's costs. 9 Public interest issues arose in Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 3) [2013] NSWLEC 152. The applicants brought judicial review proceedings arising out of a decision to permit drilling in an area surrounded by national parks. They were unsuccessful and the opposing parties sought costs. In considering whether the applicants were acting in the public interest, Pepper J noted that it could not be said on the evidence that the applicants stood to benefit from the litigation, nor would their private interests be affected, legally or financially, by the outcome of the decision. There was no disentitling conduct on the part of the applicants and no legitimate complaint could be made about the manner in which they conducted the litigation. Her Honour accepted that the litigation was conducted in the public interest, and held that it was an appropriate exercise of her discretion to make no order as to costs in the proceedings. 10 Similarly, in Qantas Airways Ltd v Cameron [1996] FCA 765; (1996) 68 FCR 387 (Davies, Lindgren and Lehane JJ), the unsuccessful respondent had brought a representative action against Qantas for health and safety breaches regarding environmental tobacco smoke. Although the Court initially considered that the respondent should bear the costs of the proceedings, some weight was given to the respondent's submission that the litigation served a public purpose of clarifying the airline's duties with respect to tobacco smoke, as 'the public interest purpose and nature of a proceeding launched by an individual or individuals is not necessarily irrelevant to the issue of costs' (at 390). However, the fact that the respondent also sought damages for the group members in addition to injunctive and declaratory relief meant that the proceedings could not be viewed as having been brought and pursued purely in the public interest and were instead mixed. On that basis the respondent was still ordered to pay Qantas' costs, although those costs were discounted by 25% in light of the quasi-public nature of those representative proceedings. 11 In Minister for Immigration and Border Protection v CQZ15 (No 2) the Full Court accepted that the appeal was one of a number of appeals that were in effect being run as test cases, but rejected an argument that the unsuccessful respondent should have his costs paid by the Minister. It was decided that there be no order as to costs. 12 In this case, I accept that the proceedings were brought about solely as a result of NAC's conduct. However, it commenced the proceedings having regard to the fact that its pre-existing members were potentially affected by the decisions and resolutions that had been made. It was therefore appropriate that, absent resolution by consent, it approach the court for declaratory relief. The respondents participated in the proceedings by consent, and I acknowledge that their role and counterclaim was important in exposing and addressing the potential for the Court to make validation orders. I also accept that the task undertaken by them had the potential to affect the position of some 256 membership applicants. Having said that, the counterclaim was brought primarily to protect private rights that those persons may have as potential members of NAC. I also acknowledge that the participation of the respondents greatly assisted me in my consideration of important issues as to the governance of NAC. 13 Accordingly, in the circumstances of this case, had NAC pursued costs I would not have ordered the respondents to pay its costs. At the same time, I do not consider the circumstances are such as to require NAC as the successful party to pay the respondents' costs. 14 In my view the appropriate outcome is that there be no order as to costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Banks-Smith.