Parkesbourne-Mummel Landscape Guardians Inc v Minister for Planning and Ors

Civil Procedure Act 2005 s 98 LEGISLATION CITED: Environmental Planning and Assessment Act 1979 Part 3A, s75C, s75H, s75I, s75J Uniform Civil Procedure Rules 2005 r 12.1, r 42.19

Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 Colgate Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 Fordyce v Fordham (2006) 67 NSWLR 497 Gray v The Minister for Planning (2006) 152 LGERA 258 CASES CITED: Kiama v Grant (2006) 143 LGERA 441 Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333 One.Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548 Parkesbourne/Mummel Landscape Guardians Inc v Minister for Planning [2009] NSWLEC 101 Ray Fitzpatrick Pty Ltd v Minister for Planning (No 5) [2008] NSWLEC 183 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 SCI Operations Pty Ltd v Commonwealth of Australia (1996) 69 FCR 346

PLAINTIFF Mr G Connolly SOLICITOR Colin Biggers & Paisley FIRST AND SECOND DEFENDANTS LEGAL REPRESENTATIVES: Mr J Griffiths SC with Ms A Mitchelmore SOLICITORS Department of Planning THIRD AND FOURTH DEFENDANTS Mr M Leeming SC with Mr C Ireland SOLICITORS Middletons

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

41288 of 2008 Parkesbourne/Mummel Landscape Guardians Inc v Minister for Planning and Ors

JUDGMENT 1 Her Honour: The Plaintiff commenced Class 4 proceedings on 19 December 2008 challenging the approval process for the Gullen Range Wind Farm (the project) in the Upper Lachlan local government area under Pt 3A of the Environmental Planning and Assessment Act 1979 (the EP&A Act). The project, lodged with the Department of Planning (the Department) by the Third Defendant, involved the construction and operation of 84 wind turbines and associated infrastructure and was treated as critical infrastructure by the Minister for Planning and the Director-General of the Department (the First and Second Defendants). The Plaintiff now wishes to discontinue the Class 4 proceedings because the Minister (the First Defendant) approved the project on 26 June 2009. 2 The Plaintiff sought the following orders in this Notice of Motion dated 25 August 2009:

1. The proceedings be discontinued.

As against the first and second respondents 2. The first and second respondents to pay the applicant's costs of the proceedings on an indemnity basis. 3. Or, in the alternative to order 2, the first and second respondents to pay the applicant's costs of the proceedings on a standard basis up to 1 March 2009 and on an indemnity basis thereafter. 4. Or, in the alternative to orders 2 or 3, the first and second respondents to pay the applicant's costs of the proceedings on a standard basis. 5. In respect of orders 2 or 3 or 4, such costs to include the applicant's costs associated with pursuing its case against the third and fourth respondents.

As against the third and fourth respondents 6. No order as to costs as between the applicant and the third and fourth respondents, save with respect to the costs order made by Lloyd J on 26 June 2009.

Costs of the Motion 7. The first and second respondents to pay the applicant's costs of the motion.

Relevant costs rule 3 Section 98 of the Civil Procedure Act 2005 (the CP Act) states that costs are awarded at the discretion of the Court. 4 Under r 12.1 of the Uniform Civil Procedure Rules 2005 (the UCPR) a party may discontinue proceedings with the consent of other parties or with leave of the Court. Rule 42.19 of the UCPR provides: 42.19 Proceedings discontinued (cf SCR Part 52A, rule 21; DCR Part 39A, rule 24; LCR Part 31A, rule 19) (1) This rule applies to proceedings that are discontinued by the plaintiff, as referred to in rule 12.1.

(2) Unless the court orders otherwise or the notice referred to in rule 12.1 (2) otherwise provides, the plaintiff must pay such of the defendant's costs as, at the date on which the notice of discontinuance was filed, had been incurred by the defendant in relation to each claim in respect of which the proceedings have been discontinued. … Legislation relevant to issues in the proceedings 5 Under Pt 3A of the EP&A Act the Minister can determine pursuant to s 75C that projects are critical infrastructure. The Minister can approve critical infrastructure projects under s 75J. An environmental assessment report (EAR) of the Director-General to the Minister is a prerequisite to a decision to approve a Pt 3A project, pursuant to s 75J(1)(b). Section 75J provides: 75J Giving of approval by Minister to carry out project (1) If: (a) the proponent makes an application for the approval of the Minister under this Part to carry out a project, and (b) the Director-General has given his or her report on the project to the Minister, the Minister may approve or disapprove of the carrying out of the project. (2) The Minister, when deciding whether or not to approve the carrying out of a project, is to consider: (a) the Director-General's report on the project and the reports, advice and recommendations (and the statement relating to compliance with environmental assessment requirements) contained in the report, and (b) if the proponent is a public authority - any advice provided by the Minister having portfolio responsibility for the proponent, and (c) any findings or recommendations of the Planning Assessment Commission following a review in respect of the project. (3) In deciding whether or not to approve the carrying out of a project, the Minister may (but is not required to) take into account the provisions of any environmental planning instrument that would not (because of section 75R) apply to the project if approved. However, the regulations may preclude approval for the carrying out of a class of project (other than a critical infrastructure project) that such an instrument would otherwise prohibit. (4) A project may be approved under this Part with such modifications of the project or on such conditions as the Minister may determine. …

6 The Director-General's EAR referred to in s 75J(1)(b) and s 75(2)(a) is required by s 75I: 75I Director-General's environmental assessment report (1) The Director-General is to give a report on a project to the Minister for the purposes of the Minister's consideration of the application for approval to carry out the project.

(2) The Director-General's report is to include: (a) a copy of the proponent's environmental assessment and any preferred project report, and (b) any advice provided by public authorities on the project, and (c) a copy of any report of the Planning Assessment Commission in respect of the project, and (d) a copy of or reference to the provisions of any State Environmental Planning Policy that substantially govern the carrying out of the project, and (e) except in the case of a critical infrastructure project - a copy of or reference to the provisions of any environmental planning instrument that would (but for this Part) substantially govern the carrying out of the project and that have been taken into consideration in the environmental assessment of the project under this Division, and (f) any environmental assessment undertaken by the Director-General or other matter the Director-General considers appropriate, and (g) a statement relating to compliance with the environmental assessment requirements under this Division with respect to the project.

7 The requirements for public consultation in relation to environmental assessment are provided by s 75H which states: 75H Environmental assessment and public consultation (1) The proponent is to submit to the Director-General the environmental assessment required under this Division for approval to carry out the project. (2) If the Director-General considers that the environmental assessment does not adequately address the environmental assessment requirements, the Director-General may require the proponent to submit a revised environmental assessment to address the matters notified to the proponent. (3) After the environmental assessment has been accepted by the Director-General, the Director-General must, in accordance with any guidelines published by the Minister in the Gazette, make the environmental assessment publicly available for at least 30 days. (4) During that period, any person (including a public authority) may make a written submission to the Director-General concerning the matter. (5) The Director-General is to provide copies of submissions received by the Director-General or a report of the issues raised in those submissions to: (a) the proponent, and (b) if the project will require an environment protection licence under Chapter 3 of the Protection of the Environment Operations Act 1997 - the Department of Environment and Conservation, and (c) any other public authority the Director-General considers appropriate. (6) The Director-General may require the proponent to submit to the Director-General: (a) a response to the issues raised in those submissions, and (b) a preferred project report that outlines any proposed changes to the project to minimise its environmental impact, and (c) any revised statement of commitments. (7) If the Director-General considers that significant changes are proposed to the nature of the project, the Director-General may require the proponent to make the preferred project report available to the public.

8 The Plaintiff relied on the affidavit of Robert Galland sworn 20 August 2009. Mr Galland is the chairperson of Parkesbourne/Mummel Landscape Guardians Inc. His affidavit sets out his involvement prior to and during the litigation of this matter. He first became aware of the proposal for a wind farm in mid to late 2007 and had contact with representatives of Epuron and the local community throughout the second half of 2007. He became aware of the public display of the project proponent's EAR in August 2008. On 4 September 2008 Mr Galland telephoned the Department and was advised by an officer that the project would be classified as a critical infrastructure project. As a result Mr Galland formed the view that the Plaintiff should obtain legal advice. He states that on 13 October 2008 a solicitor representing the group obtained verbal confirmation from the Department that the project was being treated as critical infrastructure. On 18 October 2008 at a committee meeting of the Plaintiff it was agreed to retain a solicitor and senior counsel to challenge the categorisation of the project as critical infrastructure and seek donations from the Plaintiff's members and the community to fund legal proceedings. The Plaintiff's solicitors were instructed to commence Class 4 proceedings. Mr Galland became aware on 3 July 2009 that the project had been approved by the Minister and was not treated as a critical infrastructure project. Mr Galland instructed the Plaintiff's solicitors to lodge a Class 1 application in relation to the approval on 11 August 2009. 9 Mr Galland's affidavit annexed a number of documents relating to events before and after the commencement of these proceedings. The Minister also relied on a bundle of documents which overlapped in part with those documents annexed to Mr Galland's affidavit. A chronology of documents/events not in dispute can be prepared from these and the parties' written submissions as follows: (i) On 13 June 2007 the Minister formed the opinion under cl 6 of State Environmental Planning Policy (Major Projects) 2005 that the project came under Pt 3A of the EP&A Act. The project was described as "a wind electricity generating facility located within the Upper Lachlan Council area, with an installed generating capacity of about 160 MW comprising up to 80 turbines" (ii) On 27 August 2007, the Third Defendant lodged a major project application with the Department seeking approval from the Minister to carry out a project under Pt 3A of the EP&A Act. (iii) On 20 September 2007, the Department provided the Third Defendant with the Director-General's environmental assessment requirements pursuant to s 75F of the EP&A Act for the preparation of an environmental assessment for the project. (iv) On 27 February 2008, the Minister made a declaration (the Ministerial declaration) under s 75C of the EP&A Act which was gazetted in the following terms: I, the Minister for Planning, having formed the opinion that the category of development referred to in the Schedule is essential for the State for economic reasons, and for social reasons, and for environmental reasons, declare projects within that category to be critical infrastructure projects under section 75 of the Environmental Planning and Assessment Act 1979. Schedule Development for the purpose of a facility for the generation of electricity, being development that: (a) has capacity to generate at least 250 megawatts, and (b) is the subject of an application lodged pursuant to section 75E or section 75M of the Environmental Planning and Assessment Act 1979 prior to 1 January 2013.

(v) On 1 August 2008 the Department placed a public notice in the Goulburn Post advertising the exhibition of the project's environmental assessment from 4 August 2008 to 5 September 2008. The public notice stated: The Minister for Planning has declared, under section 75C of the EP&A Act, electricity generation facilities with a capacity to generate at least 250MW to be critical infrastructure projects. The project is therefore a critical infrastructure project. (vi) On 29 September 2008, the Plaintiff's then solicitor, Mr George Livanes, wrote to the Director-General raising questions in respect of the project arising from project documentation. On 13 October 2008, Mr Livanes received a telephone call from an officer of the Department of Planning informing him that the project's application "had been marked by it as critical infrastructure". (vii) On 22 October 2008 Mr Livanes wrote to the Director-General seeking clarification from the Department as to whether or not the project was being dealt with by the Minister as an application for a critical infrastructure project or as an application for approval of a concept plan. (viii) On 28 November 2008, the Director-General replied that the project was being treated by the Department as a critical infrastructure project. (ix) On 2 December 2008, Mr Livanes wrote to the Minister and the Director-General in respect of the project. The letter stated the grounds for the Plaintiff's belief that the project could not be lawfully considered by the Minister and Director-General to satisfy the requirements of the Ministerial declaration of 27 February 2008 and be approved as a critical infrastructure project. (x) On 5 December 2008, the Director-General wrote to the Plaintiff's solicitors stating that the project would have the capacity to generate 277MW and that the application had been lodged as a critical infrastructure project. (xi) On 19 December 2008, the Plaintiff commenced these proceedings by Summons which sought the following relief:

1. A declaration pursuant to s 20(2) of the Land and Environment Court Act 1979 (NSW) (LEC Act) that the proposed Gullen Range Wind Farm Project (Major Project Application 07-0118) (the Project) is not a critical infrastructure project within the meaning of the First Defendant's declaration made 26 February 208 pursuant to s 75C of the EPA Act.
2. An order pursuant to s 20(2)(b) of the Court Act commanding the Second Defendant to instruct the Third Defendant to submit an Environmental Assessment Report in respect of the Project that complies with the Second Defendant's Environmental Assessment Requirements issued 21 September 2007.
3. An order pursuant to s 20(2)(b) of the LEC Act restraining the Second Defendant from providing an Environmental Assessment Report in respect of the Project to the First Defendant pursuant to ss 75I(2) and s 75J(1)(b) of the EPA Act.
4. Costs (xii) The Plaintiff filed an Amended Summons on 13 February 2009 which added the Fourth Defendant to order 2 in respect of the instruction to submit an EAR. (xiii) On 3 March 2009 the Plaintiff filed Points of Claim and a Further Amended Summons. The Further Amended Summons varied the relief sought by inserting the three orders following: 2. A declaration pursuant to s 20(2)(c) of the LEC Act that the Environmental Assessment in respect of the Project is invalid for non-compliance with the Second Respondent's Environmental Assessment Requirements issued 21 September 2007. 3. An order pursuant to s 20(2)(b) of the LEC Act restraining the First Respondent from considering or giving approval to the Project pursuant to s 75J of the EPA Act. … 6. Such further order or other orders as the nature of the case may require. The second of these three orders replaced the orders in the Amended Summons filed on 13 February 2009 which sought an order pursuant to s 20(2)(b) requiring the Second Defendant to instruct the Third or Fourth Defendant to submit an EAR and an order restraining the Second Defendant from providing an EAR to the Minister. (xiv) In its Points of Claim filed 3 March 2009 the Plaintiff pleaded as its first contention that: [23(a)] The Project Application and Environmental Assessment provide no final selection of the model and manufacture of wind turbines, or of the number of wind turbines, or of the location of any wind turbines so that the First Respondent could not in any respects be satisfied that the Project meets the minimum generating requirements of the Minister's Declaration. (xv) In a briefing note that accompanied the Director-General's EAR sent to the Minister and signed by the Director-General on 13 April 2009, the Director-General stated that the Department considered the arguments made by the proponent of the project that the project was critical infrastructure were problematic. The note cited from Director-General's EAR at page 13: Although the Department accepted, exhibited and handled the Environmental Assessment for the project in a manner consistent with that applied to critical infrastructure projects, it concedes that the status of the project as such is not entirely clear…It is the Department's contention, therefore, that the project is not critical infrastructure at the time of determination and statutory provisions that would otherwise apply to a project approval for critical infrastructure do not apply to the subject project (assuming that the Minister agrees to the deletion of 11 turbines from the project as part of the project approval).

(xvi) The Director-General's EAR, dated March 2009 and attached to the briefing note, further stated: The Proponent has asserted that the project, if fully implemented at the maximum proposed turbine capacity would lead to a total project capacity of 278 MW. As this exceeds 250MW, the Proponent considers that the project is a critical infrastructure. The Department considers that the arguments made by the Proponent in this regard are problematic, particularly in the context of the total range of generating capacities that may in fact be implemented by Proponent. The project, as implemented, may in fact be considerably less than the 250MW threshold to be considered critical infrastructure, depending on the final turbine capacity chosen…

(xvii) A further briefing note was signed by the Director-General on 13 April 2009 in relation to the deletion of 11 turbines. The briefing note referred to the Department's recommendation of the deletion of turbines within a 3600m area of the Crookwell aerodrome. Attached was a letter dated 3 April 2009 from the Third Defendant in which it contended that the Department had no technical or regulatory basis for the deletion of any wind turbines. The briefing note recommended that the Minister consider the question of whether the 11 turbines should be deleted in determining the application. (xviii) On 21 April 2009, the Minister and Director-General filed Points of Defence that contended, inter alia: [25(a)] … that the Project, comprising the construction of a wind farm facility with a maximum generating capacity of 278MW, is a critical infrastructure project under part 3A of the EPA Act. … [26]… (a) the first respondent has not made a decision under s 75J of the EPA Act; (b) were the first respondent to approve the Project, that approval may be made with conditions that may fully address the defects allged by the applicant in the Environmental Assessment; and (c) the proceedings are premature. (xix) On 29 April 2009 the Minister signed the briefing note about the Third Defendant's letter. She also wrote on 11 May 2009 to the relevant State and Commonwealth ministers about aviation safety issues relating to the project. (xx) On or about 26 May 2009, the Minister and Director-General produced documents in answer to the Plaintiff's Notice to Produce (dated 17 April 2009 and served thereabouts). Among the documents produced by the Minister and the Director-General were the briefing note referred to at (xv) and the Director General's EAR referred to at (xvi). (xxi) On 2 June 2009, the Plaintiff was invited by the Third and Fourth Defendants to withdraw a Notice to Admit Facts that the Plaintiff had issued to the proponent on 21 May 2009. The Notice sought admissions from the proponent that named land holders who had not executed or otherwise entered into agreements to permit the assessment of their land as potential sites to host turbines, or to host at least one turbine on their land. On 18 June 2009, Lloyd J heard argument on the Third and Fourth Defendant's motion to set the Notice to Admit aside; on 26 June his Honour set the Notice aside with costs, on the basis that it sought admissions for an illegitimate purpose in the sense of being irrelevant to any issue in the proceedings; see Parkesbourne/Mummel Landscape Guardians Inc v Minister for Planning [2009] NSWLEC 101. (xxii) On 26 June 2009, the Minister approved the project with conditions including the reduction of the number of turbines. This meant the project was not a critical infrastructure project because it could not generate over 250MW. (xxiii) On 3 July 2009, the Minister and Director-General notified the Plaintiff that the Minister had approved the project pursuant to s 75J of the EP&A Act. (xxiv) Public notices of the approval were published in the Goulburn Post (6 July 2009 and 10 July 2009) and Crookwell Gazette (7 July 2009 and 9 July 2009). (xxv) On 24 July 2009, the Plaintiff filed this Notice of Motion. Plaintiff's submissions 10 The Plaintiff is a not for profit association incorporated in January 2006. Its objectives include the protection and preservation of the environment of the Goulburn Mulwaree Shire Council and the Upper Lachlan Shire Council and the protection of the lifestyle and amenity of members of the community.

11 The Court has broad discretion to award costs where proceedings are discontinued. In One.Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548 Burchett J at [6] distinguished between cases where one party surrenders to another and those where there is a supervening event or settlement. In Ray Fitzpatrick Pty Ltd v Minister for Planning (No 5) [2008] NSWLEC 183 Sheahan J summarised at [31]-[39] the relevant authorities on costs where proceedings have been discontinued and stated at [39]: The conduct of the litigation by and on behalf of all parties must be examined to find "entitling or "disentitling" conduct. The "reasonableness" of their behaviour at each state must be assessed, in order to decide if costs are to be ordered, and, if so, whether on a party-party or indemnity basis. 12 In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 McHugh J (sitting alone) held at 624-625: In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation 13 Kiama v Grant (2006) 143 LGERA 441 per Preston J at [83] was also referred to by the Plaintiff. Why Plaintiff's costs are payable by the Minister and the Director-General 14 The Plaintiff accepts that it has the onus of proof that r 42.19 should be departed from. The primary basis on which the Plaintiff claims costs is that it is the successful party in these proceedings. Further the conduct of the Plaintiff was motivated by the wish to preserve its merit appeal rights which would apply under s 75L of the EP&A Act if the project were not assessed as a critical infrastructure project. This approach was supported by legal advice of the Plaintiff's then solicitor. The proceedings are being discontinued because the Minister's decision to approve the project on 26 June 2009 with conditions that mean it cannot be a critical infrastructure project, renders these proceedings inutile.

15 The chronology of events shows that the Director-General and the Minister have failed to act as model litigants particularly in asserting in the Points of Defence at par 25(a) that "the Project, comprising the construction and operation of a wind farm facility with a maximum generating capacity of 278MW, is a critical infrastructure under Part 3A of the EPA Act"

16 The requirement of the Crown to act as a model litigant was identified by Griffith CJ in Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333. In SCI Operations Pty Ltd v Commonwealth of Australia (1996) 69 FCR 346 Beaumont and Einfeld JJ held that the Crown must act and be seen to act as a model litigant. The Minister and Director-General by their letters to the Plaintiff from 29 Sept 2008 onwards and by their Points of Defence filed 21 April 2009 stated that the project was critical infrastructure. The Director-General's EAR dated March 2009 and briefing note of April 2009 indicate that the Director-General did not consider the project was a critical infrastructure project. This was misconduct which caused the Plaintiff to incur the costs of initiating and maintaining litigation to prove shortcomings that the Director-General and Department were aware of. The assertion in par 25 of the Points of Defence was unreasonable as it asserted a defence that was fundamentally flawed because it was the opposite view to that held by the Director-General by 21 April 2009. That misconduct should attract an award of indemnity costs. Whether such an order ought be made depends on the conduct of the parties in the litigation, see Colgate Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 per Sheppard J at [233].

17 These proceedings were not brought prematurely, contrary to the Minister and Director-General's Points of Defence at 26(c). The Plaintiff was not informed by the Minister or the Director-General that the project would be approved on a conditional basis and not as critical infrastructure. The Plaintiff's knowledge was obtained solely from the production of documents by the Director-General and the Minister in late May 2009 in answer to the Plaintiff's Notice to Produce dated 17 April 2009. But for the Notice to Produce these matters would not have become known to the Plaintiff. As considered by Basten JA in Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 at [65] in relation to a corporate defendant, it was the very conduct of the Minister and the Director-General from 29 September 2008 (when the Plaintiff first raised with the Department how the project would be treaded) which caused the Plaintiff to believe that litigation would be necessary to challenge any approval of the project.

Costs against Epuron and GRWF 18 There should be no order as to costs as between the Plaintiff and the Third and Fourth Defendants. Their costs should be paid by the Minister and Director-General. First and Second Defendants' submission 19 The Minister and the Director-General oppose the costs order sought by the Plaintiff. Rule 42.19(2) of the UCPR is not presumptive but the ordinary position as to costs following discontinuance is a relevant consideration and a factor of some weight; Fordyce v Fordham (2006) 67 NSWLR 497 per Santow JA at [3] and per McColl J at [84]. The Plaintiff should pay the Director-General's and the Minister's costs as it is discontinuing the proceedings.

20 The Plaintiff sought declaratory relief in its Class 4 application filed 19 December 2008. It did not seek interlocutory relief to preserve the status quo until the determination of the proceedings. The Director-General and the Minister continued to perform their respective functions under the EP&A Act as they were obliged to do. The Minister's and Director General's Points of Defence raised that the proceedings had been brought prematurely as no decision had been made to approve or refuse the project under s 75J of the EP&A Act. Section 75J(4) states that a project may be approved under Pt 3A with such modifications or on such conditions as the Minister may determine. This possibility was raised at par 26 of the Points of Defence and is clear from the EP&A Act in any event. 21 The briefing note which attached the Director General's EAR was signed on 13 April 2009 by the Director-General and on 26 June 2009 by the Minister. The briefing note indicated that the possible range of generating capacities was from 126 MW to 278 MW. Approval was recommended on condition that 11 turbines be deleted due to concerns over potential aviation hazards relating to the Crookwell airstrip. This reduced the generating capacity to a range of 110 MW to 241 MW, which was below the critical infrastructure threshold. Until the Minister made a decision about the project on 26 June 2009 its designation as critical infrastructure remained.

22 The briefing note of the Director-General stating that the project being classified as critical infrastructure was problematic is not a concession that the position taken in the proceedings was not properly maintainable or had no basis, contrary to the Plaintiff's submissions. Any assertion that the argument as to critical infrastructure would not have succeeded is to raise hypothetical questions about the merits of the substantive proceedings which is beyond the scope of an argument on costs; Lai Qin per McHugh J at 624. The briefing note was highlighting the competing arguments for the Minister's consideration. There has been no judicial consideration of the critical infrastructure provisions in Pt 3A of the EP&A Act and the issues are complex. It was not unreasonable for the Minister to treat the project as critical infrastructure while the deletion of the 11 turbines was investigated.

23 There was no obligation on the Minister to advise the Plaintiff of these matters concerning the deletion of turbines simply because the proceedings were on foot, in the absence of an interlocutory injunction being in force. That matters might change over the course of project assessment and approval is always possible as the Plaintiff should have known. The position as matters stood when the Points of Defence were filed on 21 April 2009 accurately reflected the position at that time.

24 The Minister's views were ultimately determinative of the outcome of the application. There was no obligation on the Minister to advise the Plaintiff of the Department's advice which was indecisive given the recognition that the underlying issue would fall to be determined one way or the other by the Minister's acceptance or rejection of the Department's advice to delete the 11 turbines. That there was no decisiveness on the part of the Minister is evident in the briefing note and the portion of the Director-General's report attached to the briefing note. The statement that "the project is not a critical infrastructure project" in the briefing note needs to be read in the context of the inconclusive analysis in the report and the fact that this is expressly stated to be a recommendation which the Minister may not necessarily agree to. 25 Contrary to the situation referred to by McHugh J in Lai Qin this is not a case where the Minister's conduct left the Plaintiff no reasonable alternative but to commence proceedings in December 2008. The decision of the Minister on 26 June 2009 occurred after receipt of the Director-General's EAR and briefing note and after subsequent additional inquiries by the Minister which were the product of the statutory process under Pt 3A. At the time proceedings were commenced the Third Defendant's submissions on the project had been received (in November 2008). The Director-General had not yet prepared his EAR. If the Plaintiff had awaited the outcome of the Pt 3A decision-making process it would have had no cause to commence proceedings in Class 4 of the Court's jurisdiction. It could have sought a merits review in Class 1 as it has now done by an application filed 11 August 2009. 26 These proceedings were commenced prematurely and as no interlocutory injunction was applied for or expedition sought, the process of assessing the project under Pt 3A continued. The undetermined issue is whether the project for which approval is sought has to be critical infrastructure at the time of lodgment with the Department and also at the time the Minister makes the decision. The briefing note and the Director-General's EAR prepared pursuant to s 75I were signed by the Director-General on 13 April 2009. The Minister did not sign until 26 June 2009. During April there was a second briefing note to the Minister concerning the Third Defendant's submissions that no turbines should be deleted. This resulted in consultation by the Minister with the relevant Commonwealth minister and another State minister concerning aviation safety issues around the Crookwell landing strip. No definitive decision as to the removal of turbines was made until 26 June 2009. 27 There was no reason for the Plaintiff to bring these proceedings so early in order to preserve the possibility of Class 1 proceedings. These proceedings could have been commenced once the Minister's decision was known. To commence the proceedings when the Plaintiff did was premature. 28 In relation to the application for indemnity costs, the Plaintiff must establish that the circumstances warrant the making of an order for the payment of costs on such a basis, per Sheppard J in Colgate Palmolive at 234. There was no unreasonable behaviour or misconduct by the Director-General and the Minister in filing the Points of Defence on 21 April 2009 or in any other aspect of the litigation to justify the award of costs on an indemnity basis. Third and Fourth Defendants' submissions 29 The Plaintiff bears the onus of establishing that costs should not be paid by the party discontinuing the proceedings, per Bryson J in Australiawide Airlines Ltd v Aspiron Pty Ltd at [53] and Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 at [54] (Hodgson JA with whom Tobias JA agreed). There is no attempt to discharge that onus in relation to the Third and Fourth Defendants. The Plaintiff should pay the Third and Fourth Defendants' costs. They are necessary parties to the litigation as their project is affected by the relief sought. Given the nature of the relief sought in relation to the environmental impact assessment of the project, the Plaintiff sat on its hands and did not seek to restrain the approval process by seeking interlocutory relief. It has now unilaterally abandoned its claim for final relief in relation to the invalidity of the EAR and consequential orders restraining the approval process. As outlined in the Third and Fourth Defendants' Amended Points of Defence filed 7 April 2009 at par 33, the Plaintiff also had the onus of demonstrating that its proceedings were not caught by s 75T, which prevents the commencement of proceedings challenging a critical infrastructure project under Pt 3A without having a Ministerial certificate. It has also abandoned any claim that it could commence proceedings. 30 The Plaintiff's claim that the project was not critical infrastructure has not been determined. The Third and Fourth Defendants' defence was that the project did come within the terms of the Ministerial declaration under s 75C that wind farms of a certain capacity were critical infrastructure. That issue has not been determined at a hearing and cannot be considered now in the costs hearing, per McHugh J in Lai Qin at 624-625. 31 There are five errors in the Plaintiff's submissions. Firstly, the Plaintiff was not successful. Secondly, the project lodged under Pt 3A is separate from the approval given by the Minister. The status of the approved project, being that project approved subject to conditions by the Minister, was never in issue in the proceedings. The Plaintiff cannot claim it has been successful in terms of the relief it sought as it did not challenge the approved project but rather the project for which approval was sought in the major project application. The issues raised by the Plaintiff's Points of Claim have never been tested at a hearing and have now been abandoned. The fact that the approved project may not be a critical infrastructure project by reason of the conditions of approval removing 11 of the original 84 turbines is irrelevant to this costs dispute. 32 Thirdly, there was no supervening event. The usual process for the assessment of Pt 3A projects proceeded in the absence of the Plaintiff seeking any interlocutory relief. Given that failure, or an application seeking expedition by the Plaintiff, the Minister's decision to issue an approval was not supervening in any way. It was simply the necessary statutory process proceeding. It was the Plaintiff's unreasonable conduct in commencing proceedings which has resulted in costs being incurred. 33 Fourthly, there are misconceptions in the reasons the Plaintiff commenced the proceedings when it did. It was not necessary to commence these proceedings prior to the Minister's decision in order to preserve an appeal right in Class 1. Any judicial review action could have awaited the Minister's decision. 34 Fifthly, there has been misconduct by the Plaintiff as considered by Lloyd J in Parkesbourne/Mummel Landscape Guardians Inc v Minister for Planning [2009] NSWLEC 101 concerning a notice to produce issued by the Plaintiff. He held it was oppressive and an abuse of process. 35 The Plaintiff has made no real attempt to displace the ordinary costs approach under r 42.19. There is no authority cited for the Plaintiff's proposition that the alleged misconduct in relation to the Points of Defence of the Minister and the Director-General could be a reason for r 42.19 being displaced. No positive reason has been given as to why r 42.19 should not apply, per Australiawide and Bitannia. The Minister's conditional approval of the project is no basis for displacing the usual costs discretion under r 42.19.

Finding 36 Under s 98 of the CP Act the Court has broad discretion to determine costs. UCPR r 42.19 applies in the absence of matters suggesting the Court should exercise its discretion otherwise, so that costs are payable by the party discontinuing the proceedings. In Fordyce v Fordham McColl JA (Beazley JA concurring) held at [84] that r 42.19 does not create a presumption that the discontinuing party must pay costs. It is a relevant consideration but not determinative and other considerations may well arise, as identified by McHugh J in Lai Qin at 624-625. In Bittania, a more recent Court of Appeal judgment, Hodgson J (Tobias and Basten JJA concurring) referred at [54] to Fordyce and Australiawide Airlines in holding that there is an onus on the discontinuing party to make an application in respect of costs if that party does not propose to pay the costs of the other parties. He considered there must be a sound reason to depart from the ordinary course. The party discontinuing proceedings bears the onus of establishing that circumstances exist which suggest such an order ought not be made. The parties' respective behaviour in the proceedings should be considered, per Sheahan J in Ray Fitzpatrick at [39]. Further, whether there was a supervening event, for example, also continues to be relevant, as identified by Preston J in Kiama v Grant at [83], although that case was decided before the UCPR came into force. Were proceedings commenced prematurely? 37 The first issue to deal with given the Defendants' arguments is whether the proceedings were prematurely commenced because the Plaintiff commenced proceedings before the Minister made her decision to approve the project subject to conditions in June 2009. These proceedings were commenced in November 2008. If I find they were premature then it must follow that the Plaintiff ought to pay the costs of the Defendants because the proceedings were unreasonably commenced and there could be no basis not to apply the usual costs order under UCPR r 42.19. All the Defendants argued that the proceedings were commenced prematurely because the Plaintiff should have waited until the Minister had determined the application under Pt 3A to see whether proceedings were necessary. They submitted that as there is power under s 75J(4) for the Minister to approve a project subject to conditions, which must have been known to the Plaintiff given that provision is in the EP&A Act, the possibility that the project would be approved as other than a critical infrastructure project has always existed. 38 A project is identified as critical infrastructure under s 75C of Pt 3A if, in the opinion of the Minister, it is essential for the State for economic, environmental or social reasons. A Ministerial declaration was made in February 2008 that wind farms of 250 MW capacity generation were critical infrastructure. The public notice of the environmental assessment process for the project on 1 August 2008 stated that the Third and Fourth Defendants' project was critical infrastructure. Thereafter the Director-General had oversight of the environmental assessment process under Div 2 of Pt 38 particularly s 75F headed "Environmental assessment requirements for approval", s 75H headed "Environmental assessment and public consultation" and s 75I headed "Director-General's environmental assessment report". The role of the Director-General and the environmental impact assessment process under Pt 3A is quite discrete from the approval power of the Minister. The Director-General must oversee and implement appropriate environmental assessment procedures for Pt 3A projects. That role is important under the EP&A Act. 39 It was not premature for the Plaintiff to commence proceedings challenging that discrete part of the process before the Minister had made a final decision whether to approve the project if the Plaintiff considered that there was a fundamental error with the designation of the project as critical infrastructure and consequently with the conduct of the environmental assessment process. That process underpins the Minister's consideration of whether the project ought be approved. An example of judicial review proceedings challenging the conduct of the environmental assessment process under Pt 3A (raising different issues not related to critical infrastructure) is Gray v The Minister for Planning (2006) 152 LGERA 258. 40 Further, how the relevant Minister will exercise his or her discretion to approve a project and to impose conditions is unknown at the environmental assessment stage. That also confirms my view that it was not premature of the Applicant to commence these proceedings. Having said that and given that the Applicant now seeks to discontinue the proceedings so that there is no determination of the substantive issues raised, that circumstance alone does not assist the Applicant in demonstrating why the usual order under r 42.19 of the UCPR ought not be made.

41 As identified in the Director-General's and Minister's counsel's submissions, whether a project which is identified and assessed as critical infrastructure under Pt 3A can be approved on the basis that it is not critical infrastructure, as has occurred in this matter, is a question that is undetermined (par 26). The answer to such a question is not self-evident. Here the Minister has imposed conditions of approval which render the project no longer critical infrastructure, despite it being declared to be so by the Minister and subject to environmental assessment processes, including public consultation as required by s 75H, on the basis that it is critical infrastructure. 42 I note for completeness that I am not determining whether s 75T(2) of the EP&A Act, raised by the Third and Fourth Defendants' counsel, applies as it is not appropriate to do so in a costs application. Section 75T(2) requires an application to be made or approval to be given by the Minister before proceedings can be taken to, inter alia, remedy or restrain a breach of the EP&A Act in respect of a critical infrastructure project, including the declaration of the project as a critical infrastructure project. Given the Plaintiff was seeking orders that the project was not critical infrastructure the issue of whether the section applies would appear to arise.

Was the Plaintiff successful 43 A lengthy chronology is set out a par 9 in relation to the various steps taken by the parties in the proceedings. The relief sought by the Plaintiff at the outset, as set out at par 9(xi), was a declaration that the project was not a critical infrastructure project under s 75C of the EP&A Act and an order that the Director-General require the Third Defendant to submit an EAR that complied with the Director-General's environmental assessment requirements. In the Further Amended Summons filed in early March 2009 a further declaration was sought that the environmental assessment was invalid because it did not comply with the Director-General's requirements. An order was also sought restraining the Minister from considering or giving approval for the project under s 75J. 44 The Plaintiff has argued that it is successful because it sought orders to the effect that the proposed project was not critical infrastructure. The Minister has now approved the project on the basis it was not critical infrastructure. The relief sought by the Plaintiff in the proceedings concerned declarations and orders in relation to the project as applied for by the Third and Fourth Defendants. As submitted by the respective Defendants' counsel, the project was approved on a modified basis which included a condition reducing the number of turbines. The power of the Minister to impose conditions on such a project is identified in s 75J(4). In doing so this removed all doubt about whether the project was critical infrastructure. The modified project approved by the Minister was not the project applied for and not therefore the subject of the Summons filed by the Plaintiff in December 2008 (par 9(xi)) or its Amended Summons filed in February 2009 (par 9(xii) or its Points of Claim and Further Amended Summons filed in March 2009 (par 9(xiii)).

45 It is not correct to describe the Plaintiff as successful in the absence of any hearing on the issues raised in the proceedings in light of the circumstances outlined above. Was there a supervening event? 46 The issue next arises of whether the decision of the Minister to approve the project in a modified form was a supervening event which simply resulted in the proceedings no longer being necessary through no fault of the Plaintiff. After commencing proceedings, the Plaintiff did not seek any interlocutory relief to prevent the environmental assessment process under Pt 3A from continuing, or seek an expedited hearing. The filing of a summons does not effect any stay on the process under challenge so that the Director-General and Minister were not obliged to stop the Pt 3A assessment process in relation to the Third and Fourth Defendants' application for development consent. That process continued. Nor was there any legal obligation on the Minister and Director-General to advise the Plaintiff of what steps were being taken in the assessment process. I comment below in relation to the amended defence filed in April 2009 by the Minister and Director-General and the application of model litigant rules. The Minister's decision to approve the project with modifications was not a supervening event in terms of the legal issues raised by the Plaintiff in relation to the environmental assessment process, and in the absence of an interlocutory injunction to stop that process being in place. The decision of the Minister is not a supervening event in the litigation and not a circumstance therefore which overcomes the application of the usual order under UCP r 42.19. 47 An additional issue has been raised by the Plaintiff about the conduct of one aspect of the proceedings by the Director-General in particular. Were Points of Defence fair? 48 The Plaintiff's argument that the Director-General and Minister failed to act as model litigants focussed on the joint Points of Defence filed by the Director-General and the Minister on 21 April 2009 (par 9(xviii)). That positively asserted that the project comprised the construction of a wind farm facility with a maximum generating capacity of 278 MW which is critical infrastructure under Pt 3A. As subsequently became clear, as a result of documents produced to the Plaintiff's solicitor in response to a Notice to Produce, it was not the definitive view of the Director-General in either the assessment report sent to the Minister on 13 April 2009 or the briefing note accompanying the report that the project was critical infrastructure (par 9(xv) and (xvi)). 49 I do not accept the submissions of the Minister's and the Director-General's counsel that when the Points of Defence were filed it was appropriate to do so without any qualification or indication to the Plaintiff that the position of the Director-General and his Department was not necessarily that stated in the amended defence. The Plaintiff was entirely dependent on what the Director-General through his legal representatives told it about the processes being followed within the Department in relation to the assessment process and had to chart its course in the litigation on the basis of the pleadings filed. The issue raised directly in the proceedings was whether the project applied for was critical infrastructure and in correspondence between the Plaintiff's solicitor and the Director-General before proceedings commenced (par 9(vi) - (x)) the Director-General stated that the project was critical infrastructure under s 75C. It was unreasonable for the Director-General through his legal representatives not to advise the Plaintiff more accurately of the Director-General's position on the crucial issue of whether the project was critical infrastructure at the time that the Minister and Director-General's Point of Defence were filed in April 2009. The briefing note acknowledged that the project as implemented could have been considerably less than the threshold capacity necessary to meet the critical infrastructure threshold (par 9(xv). This was regardless of whether 11 turbines were deleted as part of the approval process by the Minister. That there was doubt about this key issue should have been raised in correspondence at the very least. 50 The situation is analogous to that identified by Basten JA in Australiawide, albeit that was not a case concerned with the behaviour of the Crown but a corporate party. I note for completeness that Australiawide Airlines considered r 42.20 of the UCPR which deals with proceedings which are dismissed by the court rather than discontinued by a party. His Honour stated at [65] that in order to avoid a statutory order the plaintiff had to demonstrate that the defendant's conduct caused it to have a reasonable belief that litigation was necessary to enforce its rights. By analogy to the circumstances in this matter the Plaintiff would have considered that it should maintain the proceedings in light of the Points of Defence filed. I do not however agree with the Applicants' counsel's submission that there was unfair behaviour of the Director-General or Minister which caused it to initiate the proceedings. The argument has focussed on the actions of the Director-General leading up to the filing of the joint defence on 21 April 2009, well after the proceedings commenced. 51 The model litigant policy of civil litigation adopted by NSW government agencies on 8 July 2008 requires in cl 3.1 that the State and its agencies must act fairly in litigation, inter alia. The cases relied on by the Plaintiff, Melbourne Steamship Co Ltd v Moorehead and SCR Operations v Commonwealth of Australia, also stress the need for the Crown to act fairly. The Points of Defence as filed did not fairly communicate to the Applicant the Director-General's view at the time it was filed. While also filed on behalf of the Minister because it was a joint defence, I note that the Minister at that stage was yet to form a final view in relation to the project for which approval was sought. 52 In these circumstances, the Plaintiff continued with litigation because it believed it was necessary. Had it been aware of the Director-General's views in particular, it would have had an opportunity to modify or possibly discontinue the proceedings at an earlier stage. That is relevant in determining if the usual order under r 42.19 should apply as between the Minister and the Director-General, and the Plaintiff from 21 April 2009. Costs in relation to First and Second Defendants 53 In light of my findings above that the Plaintiff was not successful in the litigation and the Minister's approval of the modified project was not a relevant supervening event, I consider the usual costs order in relation to the Minister and Director-General is that the Plaintiff should pay the Minister's and Director-General's costs up to 21 April 2009. The Minister and the Director-General should pay the Plaintiff's costs from that date because of my finding above that the defence filed was not fair to the Plaintiff in the context of this litigation. Costs in relation to Third and Fourth Defendants 54 In relation to the Third and Fourth Defendants, they are necessary parties and have incurred expense in litigation which is now to be discontinued. The usual order under UCP r 42.19 would apply so that the Plaintiff must pay their costs. The Plaintiff argues however that the Minister and Director-General are responsible for these costs because of their failure to act as model litigants. In light of the circumstances concerning the Points of Defence filed in April 2009 I consider the Minister and the Director-General should pay the costs of the Third and Fourth Defendants from the time that was these were filed, that is from 21 April 2009. The Plaintiff should pay the Third and Fourth Defendants' costs of the proceedings up to that date. 55 I do not agree with the submission of the Third and Fourth Defendants (set out at par 34) that there has been disentitling conduct on the part of the Plaintiff because of their successful Notice of Motion to set aside the Plaintiff's Notice to Admit Facts heard by Lloyd J (par 9(xxi)). His Honour dealt with costs on that occasion and it does not have any relevance beyond that hearing in terms of the conduct of this litigation by the Plaintiff. Costs of the motion 56 The Plaintiff seeks its costs of this Notice of Motion. It has been only partially successful on its motion. The appropriate outcome is that each party pay its own costs of the motion. Orders 57 The Court makes the following orders:

1. The proceedings are discontinued.
2. The Plaintiff is to pay the costs of the First and Second Defendants and the Third and Fourth Defendants up to 20 April 2009.
3. The First and Second Respondents are to pay the costs of the Plaintiff and the Third and Fourth Defendants on and from 21 April 2009, save for the costs order made by Lloyd J on 26 June 2009 and the costs of this Notice of Motion dated 25 August 2009.

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