Oshlack v Rous Water

Can the Proceedings be Characterised as "Public Interest" Litigation? 15Mr Oshlack conceded that he brought the proceedings on behalf of himself and not a wider group of people. 16While he submitted that his prime motivation in commencing the litigation was to uphold the public interest in the rule of law, I remain unconvinced that this is so. The inference that is more readily drawn is that the proceedings were commenced to prevent the uplift of flouride in the relevant public water supply affecting Mr Oshlack. As stated in the principal judgment, Mr Oshlack opposes the flouridation of public water. 17Having said this, I accept that the public interest was served by the litigation insofar as the proceedings generally affected the public in the local government areas of Ballina Shire Council, Lismore City Council and Richmond Valley Council, and the litigation concerned the lawfulness of the activities of local government authorities, even if only indirectly. I further find that Mr Oshlack, in bringing the proceedings, sought, at least collaterally, to enforce public law obligations imposed by s 111 of the Environmental Planning and Assessment Act 1979 ("the EPAA"), and that he had no pecuniary interest in the outcome of his application. 18On balance, I am prepared to give Mr Oshlack the benefit of the doubt and find that the proceedings may properly be characterised as public interest litigation.

Is there "Something More"? 19Turning to step two, it was submitted by Mr Oshlack that the "something more" in the litigation was satisfied because the proceedings raised several novel issues of general importance. This was evident, Mr Oshlack submitted, from the decision of Biscoe J in Oshlack v Rous Water [2011] NSWLEC 73; (2011) 184 LGERA 365. 20It is, in my view, necessary to distinguish between the decision of Biscoe J in Oshlack v Rous Water and my decision in Oshlack v Rous Water (No 2) for the purpose of determining whether step two has been completed. The two decisions, although ultimately dealing with the same subject-matter, are materially different for the purpose of determining any liability for the costs of the proceedings. This is apparent when regard is had to the general importance of the matters determined by the two decisions. 21There is no doubt that Oshlack v Rous Water (No 2) and Oshlack v Rous Water are unique in the sense that they are the only decisions to date to examine the operation of the Fluoridation of Public Water Supplies Act 1956 ("the Fluoridation Act"). 22Mr Oshlack submits that Oshlack v Rous Water is particularly significant because Biscoe J determined that ss 111 and 112 of the EPAA applied to local councils adding fluoride to public water supplies. 23I accept that the preliminary questions determined by Biscoe J in Oshlack v Rous Water raised novel issues of general importance, even if, as the first and second respondents noted, the resolution of those issues was directed only towards the activities of local government authorities and not to persons authorising the uplift of fluoride in public water supplies. 24The same conclusion cannot, however, be arrived at in relation to the decision in Oshlack v Rous Water (No 2). 25Ultimately the proceedings before me turned almost exclusively on a study of the particular factual circumstances giving rise to the decisions under review. This is demonstrated by an examination of the further amended points of claim filed in Court on 22 June 2011: (a)ground 1, that the first and second respondents failed to comply with s 111 of the EPAA, turned on an examination of the conduct of those respondents and the specific information that they took into account in determining to construct and operate the flouridation plants in question; (b)ground 3, that the first respondent, Rous Water, had regard to an irrelevant consideration, concerned whether or not the legal advice dated 16 April 2010 received from Lindsay Taylor Lawyers could be properly characterised as such, thereby vitiating the decision of Rous Water; (c)ground 4, the alleged constructive failure by the first and second respondents to exercise jurisdiction, involved an examination of the factual circumstances informing the conduct of those two public authorities; and (d)ground 5, that Rous Water had made an error of law, was also determined by reference to the specific facts surrounding Rous Water's resolution to construct and operate the proposed flouridation plants and its reliance on the Lindsay Taylor Lawyers advice. 26The only issue in the proceedings before me that could conceivably have raised a matter of general importance was ground 2, that is, whether s 112 of the EPAA required the determination of a jurisdictional fact by the Court that the uplift in the fluoridation of the public water supplies would have a significant impact on the environment. Mr Oshlack, through his scientific expert evidence, initially contended that the fluoridation of public water had a detrimental impact on human health and the environment. The first and second respondents met these allegations with their own expert evidence. However, this ground was abandoned by Mr Oshlack on the second day of the hearing. 27Accordingly, while I accept that the determination of the preliminary questions raised significant issues of general importance, the resolution of which contributed, in a material way, to the proper understanding and development of the law, and that therefore "something more" has been demonstrated by Mr Oshlack in relation to the proceedings before Biscoe J, I do not consider that the same characterisation can be made of the issues raised for determination in the hearing before me. 28The abandonment of the second ground of review has also rendered the task of assessing whether the litigation was brought to protect the environment, or some component of it, and whether that environment was of significant value and importance, problematic. Again I am prepared to give Mr Oshlack the benefit of the doubt in accepting that he commenced the proceedings motivated by an altruistic desire to safeguard the environment from the perceived dangers imposed by the addition of fluoride to public water supplies. But beyond this generalised finding, it is not possible to identify what 'environment' Mr Oshlack was seeking to protect, or to determine its value and importance. For example, if the relevant environment is limited to the sites where the flouridation plants are to be constructed, as the judgment in Oshlack v Rous Water (No 2) demonstrates (at [77(e)]), these sites were generally degraded and were of limited environmental value. At its very highest, this factor is therefore neutral. 29Thus, although I agree that, as found above, the litigation affects a significant section of the public insofar as the decision to uplift the fluoride levels in public waters affects the water supplies of persons located in Ballina Shire Council, Lismore City Council and Richmond Valley Council, and that there was no financial gain to Mr Oshlack in bringing the proceedings, I cannot find that "something more" has been demonstrated by Mr Oshlack with respect to the proceedings argued before me. 30The implications of a finding that the second step has been satisfied with respect to Oshlack v Rous Water but not Oshlack v Rous Water (No 2) are discussed below.

Are there any Countervailing Circumstances? 31In my opinion, there are countervailing circumstances that preclude Oshlack v Rous Water (No 2) from being characterised as having been brought in the public interest. There are no such circumstances, however, in Oshlack v Rous Water. 32I make this finding notwithstanding that at no point was Mr Oshlack seeking to vindicate interests of a commercial character and, to reiterate, has never stood to benefit from the litigation. My reasons for this finding are as follows. 33First, as stated above, in Oshlack v Rous Water (No 2) the matters of public interest raised in that part of the proceedings were narrow, concerned as they were with the particular factual circumstances of the proceedings. Even the matters of public interest inherent in the questions raised for separate determination before Biscoe J in Oshlack v Rous Water were circumscribed, involving only discrete points of interpretation of ss 6 and 6A of the Fluoridation Act. However, their scope was not so narrow that this amounted to a countervailing circumstance for the purpose of step three. 34Second, I find that there was disentitling conduct by Mr Oshlack occasioned by his late abandonment of ground 2 (s 112 of the EPAA), and to a lesser extent ground 1A (manifest unreasonableness), of his grounds of review on the second day of the hearing. I make this finding mindful of the contrary submission by Mr Oshlack that if any party had engaged in disentitling conduct, it was the first and second respondents. 35In order to understand this latter submission and the Court's rejection of it, it is necessary to briefly outline the chronology of events leading up to the abandonment by Mr Oshlack of the claim with respect to s 112 of the EPAA. 36The points of claim filed by Mr Oshlack on 6 September 2010 pleaded in relation to ground 2 that: 44It is a jurisdictional fact that the proposal to fluoridate ought to have been accompanied by an Environmental Impact Statement pursuant to s112(1)(a)(i) of the EP&A Act. 37The points of defence of both the first and second respondents filed on 17 September 2010 pleaded in answer to the allegation that (emphasis added): In response to the first paragraph numbered 44 on page 8 of Points of Claim the First Respondent admits that the question of whether or not an Environmental Impact Statement is required pursuant to s 112 of the EP&A Act may raise a question of "jurisdictional fact" in an appropriate case, namely, whether or not an activity is likely to effect the environment, and otherwise denies the paragraph. 38Amended points of claim were filed on 7 June 2011. The pleadings in respect of the allegation concerning s 112 of the EPAA did not change. 39As a consequence, the amended points of defence of the first and second respondents filed on 1 March 2011 remained the same, save that a new paragraph 37A was inserted into the pleadings. It stated that neither respondent was "required to comply with the other provisions of Pt 5 of the EP&A Act in determining to add fluorine to those water supplies". Section 112 is included in Pt 5 of the EPAA. 40On 14 March 2011, the proceedings came before Biscoe J for the determination of the following two preliminary questions (at [3]): (a)Was the first respondent, Rous Water, required to comply with the provisions of ss 111 and 112 of the EPA Act with respect to the impacts on human health and the environment of adding fluorine to the water supply when determining to approve the construction and operation of the Clunes, Dorroughby, Corndale and Knockrow fluoridation plants? (b)Was the second respondent, Ballina Shire Council, required to comply with the provisions of ss 111 and 112 of the EPA Act with respect to the impacts on human health and the environment of adding fluorine to the water supply when determining to approve the construction of the Marom Creek Fluoridation plant? 41Transcript of the hearing before Biscoe J was not before the Court on this costs application. It appears, however, from paragraph [5] of his Honour's judgment that it was accepted for the purpose of the hearing before him, that if s 112 of the EPAA applied, the Court would be required to determine at the final hearing, as a matter of jurisdictional fact, whether the activity of adding fluoride to the water supply was likely to significantly affect the environment or threatened species, populations or ecological communities or their habitats. But if s 112 did not apply, as the first and second respondents contended, it would be unnecessary for the parties to call expert scientific evidence as to the jurisdictional fact contained in that provision (at [6]). 42His Honour answered the preliminary questions as follows (at [58]): (a)Was the first respondent, Rous Water, required to comply with the provisions of ss 111 and 112 of the EPA Act with respect to the impacts on human health and the environment of adding fluorine to the water supply when determining to approve the construction and operation of the Clunes, Dorroughby, Corndale and Knockrow fluoridation plants? Yes, except that insofar as any of those plants was the subject of the direction of 12 December 2007 to add fluorine to the Richmond Valley Water Supply the first respondent was required to comply with s 111 but not s 112 of the EPA Act. (b)Was the second respondent, Ballina Shire Council, required to comply with the provisions of ss 111 and 112 of the EPA Act with respect to the impacts on human health and the environment of adding fluorine to the water supply when determining to approve the construction of the Marom Creek Fluoridation plant? Yes. 43Accordingly, having held that s 112 of the EPAA was applicable to the activities of both the first and second respondents, the issue of whether or not it gave rise to a jurisdictional fact in the manner pleaded remained extant. On this basis the parties served and filed competing scientific expert evidence. 44On 15 June 2011, however, the first and second respondents filed further amended points of defence. These defences pleaded a bare denial to the allegation contained in paragraph 44 of the amended points of claim. That is to say, the respondents' admission that the question of whether or not an environmental impact statement ("EIS") was required pursuant to s 112 of the EPAA may give rise to a question of jurisdictional fact in an appropriate case, was withdrawn. At no point did Mr Oshlack object to the filing of these further amended pleadings. 45On 15 June 2011, the first and second respondents also filed and served their written submissions, which included argument on whether s 112 of the EPAA involved a jurisdictional fact. The first and second respondents relied on authorities preceding the decision in Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55 for the proposition that whether a particular activity is likely to affect the environment is not a jurisdictional fact for the purpose of s 112 of the EPAA. In the alternative, the first and second respondents contended that the evidence supported the conclusion that the proposed fluoridation was not likely to significantly affect the environment. 46Upon receipt of these submissions, Mr Oshlack continued to prepare for hearing. On 17 June 2011, he notified the first and second respondents of the precise parts of his expert evidence upon which he intended to rely at the hearing. 47On 21 June 2011, following argument on the first day of the hearing before me concerning the admissibility of the evidence of Mr Oshlack's principal scientific expert, Professor Connett, Mr Oshlack foreshadowed the possible abandonment of the s 112 claim. This in fact occurred the next day, 22 June 2011. 48Mr Oshlack submitted that ultimately the s 112 claim was abandoned by him because of the late change by the first and second respondents to their points of defence, withdrawing the admission, and as a consequence of the respondents changing their position on whether the matters contained in s 112 were matters of jurisdictional fact. Mr Oshlack further submitted that, in any event, the expert evidence served and filed by the first and second respondents was required because it was relevant to the issue of discretion, which was ultimately not pressed, having been abandoned by the first and second respondents on the last day of the hearing. 49I do not agree with either submisson. First, since the filing of their original points of defence, the first and second respondents continued to deny that it was a jurisdictional fact that the proposed fluoridation ought to have been accompanied by an EIS pursuant to s 112 of the EPAA. This position was never resiled from by them. 50Whatever the understanding may have been before Biscoe J for the limited purpose of the determination of the separate questions, at no point did either respondent concede, for the purpose of the final hearing, that s 112 required the establishment of a jurisdictional fact. Rather, had the first and second respondents been successful before his Honour, then the issue of whether s 112 of the EPAA required the determination of a jurisdictional fact, and with it a concomitant evidentiary burden, would have been resolved and neither party would have been put to the trouble and expense of adducing scientific expert evidence to prove satisfaction of s 112. 51The fact remains that at all times up to the second day of the final hearing, Mr Oshlack continued to maintain the allegations contained in paragraph 44 of his points of claim and, as a consequence, the first and second respondents, as public authorities, were entitled to rebut the claims made against them and their activities by way of expert evidence. The actions of the first and second respondents in this regard were entirely reasonable. The blame for the financial burden of the costs thrown away by the abandonment by Mr Oshlack of this ground of review cannot be laid at the feet of the first and second respondents. Having said this, Mr Oshlack should be commended for acting responsibly for not pursuing what would, in all likelihood, have been an untenable ground of review in light of the existing authorities. 52Second, although the expert evidence of the first and second respondents served the dual purpose of refuting the claims made by Mr Oshlack with respect to the application of s 112 of the EPAA and resisting, as a matter of discretion, the relief claimed by him, it is unclear to what extent, if any, it would have been necessary for the first and second respondents to adduce this expert evidence in the absence of the s 112 claim. 53I am unable to conclude that, even if Mr Oshlack had not abandoned his s 112 claim, the first and second respondents would have filed and served their expert evidence in any event. Moreover, I accept the submission of the first and second respondents that, upon the abandonment of the s 112 claim, the decision by them not to press matters going to discretion was both reasonable and responsible, resulting in a significant saving of Court time and parties' costs.

Summary of Findings on Public Interest 54In summary, I find that whereas Oshlack v Rous Water was litigation that was conducted in the public interest for the purpose of r 4.2(1) of the LECR, Oshlack v Rous Water (No 2) was not. 55It follows that, subject to the terms of the costs order made by Biscoe J in Oshlack v Rous Water, the appropriate costs order should be that Mr Oshlack pay the first and second respondents' costs of Oshlack v Rous Water (No 2), but that there be no order as to costs in respect of the costs of Oshlack v Rous Water.

Effect of an Order that Costs be "Costs in the Cause" 56In Oshlack v Rous Water, however, Biscoe J ordered that the costs of the application before him be "costs in the cause" (at [59]). 57In His Eminence Metropolitan Petar, Diocesan Bishop of The Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 142 the New South Wales Court of Appeal said in relation to an order that costs be "costs in the cause" (at [18]): 18An order that the costs be 'costs in the cause' or 'costs in the proceedings' (the terms are interchangeable) means that the costs of the interlocutory proceedings correspond with the final order for costs in the action. Thus if, in the final proceedings, the plaintiff is successful and an order for costs of the final hearing is made in the plaintiff's favour, the plaintiff gets the costs of the interlocutory proceedings as part of the costs of the action against the defendant, regardless of who was successful on the interlocutory application: see J T Stratford Ltd v Lindley [1969] 1 WLR 1547 at 1553 per Lord Denning MR. 58This was endorsed in Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 (at [44]) and is consistent with authorities cited by the learned author G E Dal Pont in Law of Costs (2nd ed (2009) LexisNexis Butterworths, Australia) at [14.24]-[14.25]. 59In my opinion, therefore, the costs order proposed by me above would be inconsistent with Biscoe J's order in Oshlack v Rous Water and should not be made.

The Costs Should be Apportioned 60More appropriate is an order apportioning the costs payable by Mr Oshlack so as to exclude the costs associated with Oshlack v Rous Water. 61It 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 Inc v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA157 at [18]). 62As 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 those circumstances, it may be appropriate that the successful party receives only a portion of the costs to which the party would have otherwise been entitled. 63The 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 and by myself in McCallum v Sandercock (No 2) [2011] NSWLEC 203 (at [48]-[49]). In all four cases, their Honours relied upon and applied the decision of the New South Wales Court of Appeal in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 (at [34]). 64The principles are summarised relevantly 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]); and (e)equally, litigants should not be rewarded for the pursuit of issues without real merit (as above). 65Applying these principles to the facts of the present case, the first and second respondents succeeded before me but, on any view, not before Biscoe J. The issues for determination before Biscoe J were dominant, discrete and wholly severable for the purpose of this costs application and a determination of whether the whole or any part of the proceedings were brought in the public interest. The costs associated with the two hearings are, in my opinon, amenable to apportionment and it is an appropriate exercise of the Court's discretion to apportion costs in such a manner that Mr Oshlack is ordered to pay only the costs associated with Oshlack v Rous Water (No 2). 66Neither party elected to address me on what would be a suitable apportionment of the costs of the proceedings in this situation. Having regard to the length of time the preliminary hearing took, namely, one day, the complexity of the issues raised for determination and the likely preparation required for it, I estimate that approximately 25% of the proceedings overall were occupied by the separate determination of the preliminary questions. Therefore, and taking a broad brush approach, I determine that it is appropriate that Mr Oshlack pay 75% of the costs of the proceedings, that is to say, 75% of the costs of both Oshlack v Rous Water and Oshlack v Rous Water (No 2). Orders 67The formal order of the Court is that the applicant is to pay 75% of the first and second respondents' costs of the proceedings.

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: 21 November 2012