Save the Ridge Inc v Commonwealth

REASONS FOR JUDGMENT 1 Judgment was delivered in this appeal by the Full Court on 16 September 2005: Save the Ridge Inc v Commonwealth [2005] FCAFC 203. This judgment concerns the costs of the appeal. Before judgment was delivered, the appellant, Save the Ridge Incorporated, had argued (in its written submissions in reply) that if it failed in the appeal, there should be no order as to costs. In subsequent written submissions the respondents, the National Capital Authority (an agency of the Commonwealth), and the Australian Capital Territory, have sought orders that the appellant pay their costs of the appeal either in whole or in part. 2 Before discussing the applicable principles, brief reference should be made to aspects of the history of the litigation leading to the judgment of 16 September 2005. The appellant's application was filed on 10 June 2004. On 27 July 2004, the appellant made an urgent application for interlocutory injunctive relief. The urgent relief was refused by Stone J on 30 July 2004: Save the Ridge v National Capital Authority [2004] FCA 996. On the same day, a Full Court dismissed an appeal: Save the Ridge v National Capital Authority [2004] FCAFC 209. However, of some significance were the observations of Wilcox J concerning one issue raised in the proceedings. His Honour said (Moore J generally agreeing) at [20]: As set out above, the activities of the NCA fall into two distinct areas: first, submitting two amendments to the National Capital Plan to the Minister for approval and second, approving works proposed to be undertaken by Roads ACT, the ACT government construction authority. It seems to me, perhaps without there being a substantial argument to the contrary, that the latter actions of the NCA fall within the exclusion contained in s 524(2) of the Act. Each work approval was a decision by a government body to grant a governmental authorisation for another person to take an action. The critical question concerns the former activities: submitting amendments to the National Capital Plan to the Minister for approval. As is apparent from the extract from her judgment I have read, Stone J was of the opinion that these activities are also excluded by s 524(2). The matter was not fully argued before us, so I do not wish to express a final opinion. However, with respect, I do not share her Honour's view. It presently seems to me that, in submitting amendments to the National Capital Plan to the Minister for approval, the NCA was not exercising a regulatory function in relation to activities of others. It was acting as a principal decision-maker, performing a discretionary function conferred by statute upon it. Accordingly, I do not share Stone J's view that there is no arguable basis for the case sought to be made against the NCA. Notwithstanding this, it seems to me her Honour was correct to refuse to grant an interlocutory injunction. 3 On 8 September 2004, Whitlam J ordered the appellant to provide security for costs: Save the Ridge Inc v Commonwealth of Australia [2004] FCA 1167. Leave to appeal against that judgment was refused by Emmett J on 16 September 2004: Save the Ridge Inc v Commonwealth of Australia [2004] FCA 1289. In both judgments, and to varying degrees, a relevant consideration addressed by their Honours was the appellant's position as a body with special standing to bring the proceedings in the community interest. In the application for leave to appeal, the appellant put in issue whether all aspects of its arguments on the question of security had been dealt with by Whitlam J in his reasons. 4 Whitlam J disposed of the principal application in a judgment delivered on 20 January 2005: Save the Ridge Inc v Commonwealth of Australia [2005] FCA 17. His Honour did so by answering two questions, effectively against the appellant. In a separate judgment given that day, his Honour ordered that the application be dismissed with costs: Save the Ridge Inc v Commonwealth of Australia [2005] FCA 157. His Honour refused to allow the appellant the opportunity to provide written submissions on the question of costs, a course opposed by the respondents. His Honour's reasons for ordering costs against the appellant were expressed with considerable economy in the following passage (at [3]): Mr Woulfe [solicitor for the appellant] made no further submissions why my discretion as to costs should not be exercised in accordance with conventional practice. Nothing in Oshlack requires that, just because of the applicant's statutory standing, there should be a departure from the ordinary rule that costs follow the event: South-West Forest Defence Foundation Inc v Executive Director of Department of Conservation and Land Management (No 2) (1998) 72 ALJR 1008. The proceeding will be dismissed with costs. 5 In the appeal, Gyles J granted an application for security for costs in the appeal:Save the Ridge Inc v Commonwealth of Australia [2005] FCA 355. In so doing, his Honour at [2]-[3] said: It is then put that I should give great weight to the public interest nature of this appeal and reference was made to the decisions both at first instance and on appeal in the Friends of Hinchinbrook litigation (Friends of Hinchinbrook Society Inc v Minister for Environment and Others (No 1) (1996) 69 FCR 1; Friends of Hinchinbrook Society Inc v Minister for Environment & Ors [1997] FCA 295). Counsel for the second respondent has submitted that the present case can be contrasted to that in Hinchinbrook, where an application for security for costs was declined at first instance. In this matter, orders were made for security for costs at first instance (Save the Ridge Inc v Commonwealth of Australia & Australian Capital Territory [2004] FCA 1167) and it was thus submitted that there should be a similar order on appeal. It seems to me that whatever arguments there may be concerning public interest litigation at first instance it will be rare that an unsuccessful applicant would be entitled to, in effect, a free appeal. There are in my view good reasons why at this point in litigation the public interest nature of the matter being pursued cannot outweigh the legitimate interests of the respondents so far as costs are concerned. I am therefore satisfied that an order for security ought be made. 6 It may be accepted that the starting point in considering the question of costs in the appeal is that costs ordinarily follow the event: see, for example, Ruddock v Vardalis (No 2) (2001) 115 FCR 229 at [11]. Moreover, the courts have held that there is no special costs regime applicable to "public interest" litigation: South West Forest Defence Foundation v Department of Conservation and Land Management (No 2) (1998) 72 ALJR 1008 at 1009 per Kirby J; Hollier v Australian Maritime Safety Authority (No 2) [1998] FCA 975; Edgely v Federal Capital Press of Australia Pty Ltd (2001) 108 FCR 1 at 25 per Beaumont ACJ. In a passage cited with approval by Weinberg J in Mees v Kemp (No 2) [2004] FCA 549 at [19], the Full Court of the Supreme Court of Western Australia stated in Buddhist Society of Western Australia (Inc) v Shire of Serpentine-Jarrahdale [1999] WASCA 55 at [11]: 'In our opinion great care must be taken with the concept of public interest litigation that it does not become an umbrella for the exercise of discretion with respect to costs in an unprincipled, haphazard and unjudicial manner…In our view, the denial of costs to successful litigants upon the ground that the litigation bears a public interest character should continue to be the rarity which this Court supposed it would be in the South West Forests Defence Foundation case.' 7 The conventional rationale underlying orders for costs is not punishment of the parties against whom they are made, but indemnification of successful parties against the expense to which they have been put: Latoudis v Casey (1990) 170 CLR 534. However, the courts have taken into account various factors in exercising their discretion not to award costs against an unsuccessful plaintiff in public interest litigation. As was said in Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 236 per Black CJ and French J, "The term ['public interest'] may best be seen as an envelope or class description for a range of circumstances which, upon examination, may be found to be relevant to the question whether there should be a departure from the ordinary rule that costs follow the event". 8 The appellant identified several features of the litigation which, it contended, pointed to some other result on the question of costs. First, the proceedings raised important questions of law concerning the operation of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) ("the Act"). Second, there was no financial gain to the appellant in bringing the case. Third, the Act contains provisions granting extended standing which, it was said, suggests an intention to create the opportunity for public participation in environmental planning. 9 The first respondent submitted that there was no special rule as to costs in proceedings brought in the public interest and that a party to such proceedings should be treated (in relation to costs) in the same way as any other litigant in the Court. The circumstance that the appellant brought the proceedings in the "public interest" and did not stand to make any financial gain did not automatically exempt it from the general presumption as to costs, nor did the fact that a matter raised important questions of law, by itself, constitute a sufficient basis upon which to refrain from making the normal costs order. The first respondent contended the applicant had been wholly unsuccessful in the appeal and that the extended standing provided for by the Act did not create "a special or privileged position so far as costs of concerned": see South West Forest Defence Foundation (1998) 72 ALJR 1008 and 1009 per Kirby J. 10 The second respondent adopted a similar approach. Additionally, it submitted that care needs to be taken in public interest litigation so that it does not become "an umbrella for the exercise of discretion with respect to costs in an unprincipled, haphazard and unjudicial matter": see Mees v Kemp [2004] FCA 549. The second respondent identified several further features as supporting a costs order in its favour. The first was that such an approach would be consistent with the approach taken by Whitlam J at first instance. The second was that, while the position might be different if the appellant's challenge had greater merit or involved issues of particular complexity, the appeal did not have these features. Additionally, it submitted, these proceedings were but one of a multiplicity of proceedings brought by the appellant challenging the building of the Road. The second respondent submitted that, at the very least, the appellant should be required to pay fifty per cent of the second respondent's costs. 11 In the appeal determined by the Full Court in its judgment of 16 September 2005, the respondent's success was by no means complete. The first question answered by Whitlam J was not answered in the appeal. The reasoning of Whitlam J in answering the second question in the respondents' favour, was not the reasoning adopted in the Full Court. Indeed in the appeal it was not really sought to support the reasoning of Whitlam J on the second question. While the issues raised in the appeal were not of particular complexity, they have been addressed in a variety of ways by number of judges. In addition, the issues raised in the appeal, in particular the issue raised by the second question, are not unimportant. It is true that the outcome of the appeal was by no means certain. 12 Where an appeal raises a novel question of much general importance and some difficulty, the appeal court may decline to order costs against the unsuccessful appellant: see Re Mersey Railway Co (1888) 37 Ch D 610 per Cotton LJ at 619, Lindley LJ and Bowen LJ agreeing at 621. In Ruddock v Vadarlis (No 2) the majority took into account that the proceedings raised novel and important issues of law concerning the alleged deprivation of the liberty of the individual, the Executive power of the Commonwealth, the operation of the Migration Act 1958 (Cth) and Australia's obligations under international law. It was also taken into account that there was divided judicial opinion on these issues, illustrating their difficulty (at 241). 13 The present appeal did not, however, raise questions of the same nature as those at issue in Ruddock v Vadarlis; it concerned two points of statutory construction the ramifications of which were, although not unimportant, much more limited in their application.As in South Melbourne City Council v Hallam (No 2) (1994) 83 LGERA 307 (in which the Supreme Court of Victoria made an order for costs against an unsuccessful plaintiff), the case "involved a relatively conventional, though interesting and not altogether straightforward, exercise in statutory interpretation" (per Tadgell J at 308-309). As Heerey, Whitlam and North JJ observed in Hollier v Australian Maritime Safety Authority (No 2) [1998] FCA 975 at [13]: 'In a common law jurisdiction decisions of the courts, in private as well as public law, often clarify the law or lay down new law for the benefit of citizens, taxpayers, traders, patentees, insurers and insureds, landlords and tenants, etc etc. To that extent, much litigation has a public interest going beyond the interests of the parties. But this feature is inherent in common law litigation and provides no ground for departure from the usual rule as to costs.' 14 In Construction Forestry Mining & Energy Union v Queensland Coal & Oil Shale Mining Industry (Superannuation) Ltd [2003] FCA 1174 Wilcox J acknowledged that the case raised important and difficult questions of law affecting many people; but he added at [6] that, "standing alone, that circumstance has not generally been considered a sufficient basis upon which to refrain from making the conventional costs order". 15 The fact that the appellant sought no financial gain from the litigation is not, of itself, sufficient reason for departing from the usual order as to costs: Ruddock v Vadarlis (No 2) at 237-238 per Black CJ and French J. Moreover, the "public interest" nature of an association's objects and its consequent lack of potential financial gain from the litigation has not, at least generally, been considered a reason to depart from the ordinary rule as to costs. In Australian Conservation Foundation v Forestry Commission (1988) 81 ALR 166, Burchett J considered the exercise of the discretion as to costs in respect of an unsuccessful application under the Administrative Decisions (Judicial Review) Act 1977 (Cth). His Honour stated the general rule that costs in judicial review matters follow the event unless there are special circumstances that justify an exception. At 171 he continued: 'If a body is set up to pursue causes, which its founders consider to be in the public interest, and which generally may be in the public interest, by means including court proceedings against others, it does not follow that those proceeded against should be deprived of the ordinary protection of a right to an order in respect of their costs in the even the claims made against them prove unfounded.' 16 This passage was cited with approval by Gummow J in Council of the Municipality of Botany & Ors v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories & Ors (1992) 34 FCR 412 at 416. In Save the Showground for Sydney Inc v Minister for Urban Affairs and Planning (1998) 105 LGERA 254, in the context of the costs discretion granted to the New South Wales Land and Environment Court under s 69 of the Land and Environment Court Act 1979 (NSW) it was submitted that the fact that the applicant never stood to gain personally from the outcome of the litigation justified a departure from the ordinary rule as to costs. Importantly, the applicant had been incorporated for the purpose of opposing the rezoning of the Sydney showground site to permit its redevelopment as a film studio. At 259 Pearlman J (as she then was) stated that, while it was a relevant factor, it did not justify departure from the ordinary rule: 'That is because the applicant was incorporated to pursue public purposes as its objects demonstrate. It could not pursue private ends. This is to be contrasted with a litigant in person, such as Mr Oshlack, who could pursue private ends but chose to bring litigation from which he had nothing to gain except a public interest. It can also be contrasted with another corporation which might have wider objects permitting it to pursue private ends but which chooses to bring litigation in the public interest.' 17 It remains to consider the appellant's submission that the extended standing provisions of the Act show an intention to increase the opportunity for public participation in environment and planning such as to encourage a departure from the general rule that costs follow the event. This submission is inconsistent with the approach taken by Branson J in Booth v Bosworth [2001] FCA 1718 and by the Full Court in Friends of Hinchinbrook Society Inc v Minister for the Environment (1998) 84 FCR 186. It is not supported by the decision of the High Court in Oshlack v Richmond River Council (1998) 193 CLR 72. In that case, only Kirby J considered that the wide standing provisions of the Environmental Planning and Assessment Act 1979 (NSW) had a relevance to the question of costs, stating at 122: 'Given that statutory context and the clear purpose of parliament to permit, and even encourage, individuals and groups to exercise functions in the enforcement of environmental law before the Land and Environment Court, a rigid application of the compensatory principle in costs orders would be completely impermissible. It would discourage, frustrate or even prevent the achievement of parliament's particular purposes.' 18 By contrast McHugh J at 89 said: 'Under wide standing provisions … applicants are simply given enhanced access to restrain or remedy breaches of the law by respondents. Since the respondent is already expected to comply with the law, giving a member of the public a right to ensure that the respondent has so complied causes no relevant prejudice to the respondent.' 19 Although McHugh J was in the minority in the outcome of Oshlack, Gaudron and Gummow JJ, similarly dealt with the concept of "public interest litigation" only in so far as it was relevant to distinguishing Latoudis v Casey (1990) 170 CLR 534, and not in relation to the statutory framework from which it had come. (For a discussion of this aspect of the decision in Oshlack, see K Edwards, "Costs and Public Interest Litigation After Oshlack v Richmond River Council" (1999) 21 Sydney Law Review 680 at 686-690.) 20 The courts in England have recently developed principles governing the making of protective costs orders in public law cases: see Regina (Corner House Research) v Secretary of State for Trade and Industry [2005] 1 WLR 2600, where the authorities in England and other common law countries, including Australia, are reviewed. (See also the statutory regime for special cost orders, including protective costs orders, provided for by Judicial Review Act 1991 (Qld), s 49(1) and Alliance to Save Hinchinbrook Inc v Cook [2005] QSC 355.) Although protective costs orders are, of their nature, made early in proceedings and not at their conclusion, they involve many of the same considerations as costs orders made after the event. Allowing for that, the principles developed in the English cases, which include that the issues raised are of general public importance and that public interest requires their resolution; do not provide any assistance to the appellants in the present case. 21 It follows that we consider that in the present appeal there is insufficient reason to depart from the ordinary rule that the unsuccessful party should bear the costs of the appeal. 22 After these reasons for judgment were finalised but before judgment was given, an agreement was reached between the appellant and the second respondent on the question of costs in various proceedings including this appeal. Consent orders have been made to give effect to that agreement. Accordingly the only order that will now be made is that the appellant pay the costs of the appeal of the first respondent. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black and the Honourable Justices Moore and Emmett.