Shellharbour City Council v Minister for Planning

The costs rules 6What has been described as the "usual order" is now the product of legislation and rules of court. Section 98(1) of the Civil Procedure Act 2005 provides: "(1) Subject to rules of court and to this or any other Act: (a)costs are in the discretion of the court, and (b)the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c)the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis." 7The "rules of court" referred to in s 98(1) that are applicable in the present case are found both in the Uniform Civil Procedure Rules 2005 (UCPR) and in the Land and Environment Court Rules 2007 (LECR). Part 42 r 42.1 of the UCPR provides: "Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs." 8The specific rules of the Land and Environment Court, including those made in relation to costs, can prevail over the provisions of the UCPR, but only to the extent of any inconsistency between them. Part 4 of the LECR is expressed to apply to proceedings brought in Class 4 of the Court's jurisdiction. Rule 4.2(1) provides: "(1) The Court may decide not to make an order for the payment of costs against an unsuccessful applicant in any proceedings if it is satisfied that the proceedings have been brought in the public interest." 9It will be seen that r 42.1 of the UCPR is now the source of the "usual order". While identifying the position that should ordinarily pertain, namely that costs follow the event, the rule preserves the discretion of the Court to make "some other order". Rule 4.2 of the LECR informs the exercise of that discretion, requiring the Court to consider whether the proceedings have been brought in the public interest and, if so, whether that circumstance justifies a departure from the usual order. 10Unsurprisingly, LECR 4.2(1) does not state the criteria which are to inform the determination that proceedings have been brought in the public interest. That determination must therefore be undertaken by applying general principles applicable to determining that particular proceedings may be categorised as public interest litigation, having the consequence that the usual order should not be made.

Applicant's reliance on LECR 4.2(1) 11As the Council conceded, resolution of its claim ultimately involved a "narrow or discrete" question of interpretation. The Council contended that the Minister's power to grant the concept plan approval given to DLL was denied by cl 8N of the Environmental Planning and Assessment Regulation 2000 (the Regulation). Clause 8N(1) operated to prevent the Minister from granting the approval if the Calderwood project was to be "located within an environmentally sensitive area of State significance", as that phrase was defined in cl 3(1) of the State Environmental Planning Policy (Major Projects) 2005 (the Major Projects SEPP). In essence, I was required to determine whether the provisions of Shellharbour Rural Local Environmental Plan 2004 (the LEP) identified the Calderwood Project Site "as being of ... high biodiversity significance". I determined that the provisions of the LEP did not so identify the Site (at [73]). 12Having identified the narrow issue of interpretation upon which its claim turned, the Council asserts that in agitating that issue it acted in the public interest. As I understand its submission, it contends that its proceedings were brought "to uphold and enforce public law obligations" and to ensure that the Minister's exercise of power under Part 3A of the Environmental Planning Assessment Act 1979 (the EPA Act) was lawful. In this context, it drew attention to the necessity to consider, in the course of proceedings, the provisions of s 75O(3) of the EPA Act, cl 8N of the Regulation, the relevant definition in the Major Projects SEPP and the provisions of the LEP. 13I do not find reference to these matters to be persuasive of the "public interest" element so as to determine the exercise of discretion by reference to the provisions of LECR 4.2. All proceedings in the nature of judicial review, as were the present proceedings, are brought "to uphold and enforce public law obligations". That fact alone does not satisfy me that the proceedings were brought in the public interest. 14The Council's reference to the statutory and regulatory provisions that I have identified does not, to my mind, advance its claim in reliance upon LECR 4.2(1). No novel question of interpretation was involved nor was the interpretation question one which had broad application throughout the State. As I have already identified, the decision involved a consideration of the provisions of the LEP in order to determine whether it engaged the provisions of cl 8N(1) of the Regulation. Nothing before me in the proceedings generally, or in the context of this costs application, indicated that the provision of the LEP upon which reliance was placed were provisions common to a number of other local planning instruments. 15In its written submissions, the Council asserted a "concern" on its part and also on the part of Wollongong City Council that the Minister's determination to grant concept plan approval "was not economically responsible" and that it would have an impact upon another urban development project. The submission also asserts that Wollongong City Council financially assisted Shellharbour Council in funding the present proceedings. Further, the Council asserts a concern as to an ecological impact upon identified endangered ecological communities within the Calderwood Project Site. 16None of the matters or concerns identified in the preceding paragraph, including the concern claimed on the part of Wollongong City Council, were the subject of any evidence before me. They first found expression in the Council's submissions on costs. I am therefore unable to take these matters into account in assessing whether the proceedings were brought in the public interest. 17I can accept, by inference, that the Council disagreed with the Minister's determination to grant concept plan approval to DLL. However, given the confined issue upon which the Council based its challenge, I cannot speculate upon its reasons for disagreement, beyond assuming its intention to remedy what it perceived to be a breach of the law. As I have already said, that fact alone would not establish an entitlement to the public interest "exception" to the usual order for costs. 18The Council cites the decision of the Chief Judge of this Court in Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59; (2010) 173 LGERA 280 in support of its submission that in bringing these proceedings it acted in the public interest. However, apart from citing the case, the Council's submission does not seek to address the reasoning of the Chief Judge in order to demonstrate how that reasoning, applied to the relevant facts and circumstances of the present case, would or should result in the exercise of discretion under LECR 4.2(1) to refrain from making a costs order against the Council. Indeed, my reading of the reasoning in Caroona, when applied to the present case, would support an order that the Council pay the costs of each respondent. 19The proceedings determined in Caroona were in Class 8 of the Court's jurisdiction. Therefore, LECR 4.2 did not apply when determining costs. That determination was made by reference to UCPR 42.1 (at [7]). Applying the latter rule, his Honour acknowledged that litigation brought in the public interest may be a circumstance that would justify "some other order", within the meaning of that rule (at [9]). For that reason his Honour's discussion of costs in public interest litigation is relevant when considering the exercise of discretion under LECR 4.2(1). 20In Caroona, the Chief Judge identified a three-stage process to determine the exercise of the costs discretion where a "public interest" litigant has been unsuccessful. Those steps involved: (i) characterisation of the litigation as having been brought in the public interest; (ii) if so categorised, is there "something more" than the mere characterisation of the litigation has having been brought in the public interest; (iii) are there countervailing circumstances? I do not intend to rehearse all that his Honour wrote when addressing each of those steps. However, it is appropriate that I make observations as to their application in the circumstances of the present case. 21The characterisation of litigation as having been brought "in the public interest" is fraught with difficulty. The "public interest" is a multi-faceted concept. This is well illustrated by the present case. 22The Council, as a public body exercising planning functions under the EPA Act, is assumed to be acting in the public interest when it acts to protect the current planning regime as it applied to the Calderwood Project Site. Equally, the Minister is the repository of planning powers under the EPA Act and is assumed to have acted in the public interest when exercising those powers to determine that a different planning regime should apply to that Site. Although each of them exercised their respective statutory powers in the public interest, they find themselves opposed in the present proceedings. 23In circumstances such as the present, it will generally be inappropriate for the Court to determine which of the two "public interests" should prevail in order to determine the appropriate exercise of the costs discretion. Certainly, on the facts before me, I am not prepared to determine that the public interest represented by the Council is one that should prevail for the purpose of exercising the costs discretion. That observation is made recognising factors which overlap with those factors to be considered when addressing the second of the three steps identified in Caroona. 24The fact that the Council in exercising its powers and functions under both the Local Government Act 1993 and the EPA Act is assumed to act in the public interest when bringing these proceedings does not, of itself, justify departure from the usual costs order. The need for "something more" is discussed in Caroona at [53] - [59]. 25Illustrative of the "something more" concept are the observations of Basten JA in Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA 157. Relevantly, his Honour observed that once "a public interest" is involved in proceedings, the provisions of the LECR 4.2(1) are engaged. While the rule did not apply to the determination of costs in the Court of Appeal, his Honour accepted that the proceedings were brought "predominantly in the public interest". Notwithstanding his acceptance of that fact, he identified a numbers of factors weighing against departure from the usual order, including the following (at [11]): "...the question of public interest was not one having broad ramifications for the community at large, or even for the protection of the natural environment. It involved a relatively discrete point of interpretation involving the operation of a local environmental plan in the context of the EP&A Act. It may thus be contrasted with a case, such as Ruddock v Vadarlis, which involved issues of constitutional importance regarding the executive power of the Commonwealth, on the one hand, and issues of liberty of the individual, on the other." 26I have earlier referred to the narrow issue of interpretation upon which determination of the proceedings ultimately turned. Adopting the language of Basten JA, the resolution of the proceedings did turn upon "a relatively discrete point of interpretation" involving the operation of the LEP in the context of a single provision of the EPA Act and a clause of the Regulation. The public interest in the determination of that issue, represented only by the fact that the proceedings were brought by the Council and therefore assumed to have a public interest component, was not of "such moment or magnitude" as to warrant the exercise of discretion to relieve the Council from the obligation to pay costs (Caroona at [59]). 27Moreover, the proceedings did not raise for determination any novel issue of general importance nor did the determination of the issue contribute in any material way to the proper understanding or administration of planning law. Further, in the absence of any evidence adduced by the Council, it cannot be said that the proceedings were brought to protect a component of the environment that was of value or importance. These are all factors relevant to be considered when determining, as I have, not to make an order for costs in the present proceedings, notwithstanding the element of public interest that I have identified as being involved in the prosecution of those proceedings. 28My determination in this regard renders it unnecessary to consider in any detail the third factor relevant to the costs discretion identified in Caroona. However, there is one matter in this context that should briefly be noticed. The Council sought, by notice of motion, leave to adduce expert evidence in support of its case. That leave was refused by Pain J. The Council's appeal to the Court of Appeal from that decision was unsuccessful. Notwithstanding that circumstance, the Council served an expert report prior to the hearing before me with the apparent intention of seeking further leave to rely upon that report. As it happened, no leave was sought from me and no expert evidence was received. 29In the circumstances, it was unreasonable on the part of the Council to have served that report. Its service unnecessarily added to the costs of the respondents in preparing their case for hearing.

Summary of consideration relevant to LECR 4.2(1) 30For reasons I have given, I can accept that there is a public interest, as distinct from a private interest, involved in the present ligation. As a result, LECR 4.2 is engaged (Hastings Point Progress Association Inc v Tweed Shire Council (No 3) at [8]). However, that fact, of itself, does not determine the manner in which the discretion afforded by the rule is to be exercised. The terms of the rule acknowledge that a discretion as to costs is maintained by providing that the Court "may decide not to make an order". The discretion so reserved must be exercised in a principled way. 31Application of principle requires that something more than the presence of an element of public interest be demonstrated in order to deny a successful party an order for costs (Caroona). For reason that I have explained, no element in the proven facts and circumstances of the present litigation demonstrates that "something more" is present, such as would justify the exercise of discretion against the making of the usual order for payment of costs.

The "Hardiman" contention 32The Council's submissions under this head were, in substance, twofold, although those submissions tended to conflate the two bases of argument. First, the Council submitted that "only one of the respondents should be entitled to a cost order in its favour, in accordance with the 'Hardiman' principle". The second submission under this head seems to suggest that there was an unnecessary duplication of costs involved by having separate representation for each respondent.

Application of the 'Hardiman' principle 33The principle which the Council seeks to invoke is that stated in the judgment of the High Court in R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; (1980) 144 CLR 13. Prerogative orders were sought against the Broadcasting Tribunal in the High Court. On the hearing before the Full Bench, the Tribunal was represented by counsel. Through that counsel it took an active role in the conduct of the appeal. It was in that context that the Court said (at 35-36): "In cases of this kind the usual course is for a tribunal to submit to such order as the court may make. The course which was adopted by the Tribunal in this Court is not one which we would wish to encourage. If a tribunal becomes a protagonist in this Court there is the risk that by so doing it endangers the impartiality which it is expected to maintain in subsequent proceedings which take place if and when relief is granted. The presentation of a case in this Court by a tribunal should be regarded as exceptional and, where it occurs should, in general, be limited to submissions going to the powers and procedures of the Tribunal." Although this passage was quoted in the Council's submissions, no attention was given to the last sentence of that passage. 34In Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Gaudron and Gummow JJ made observations as to the position which it is appropriate for a council to take when a decision by it is sought to be impugned in judicial review proceedings. In their joint judgment, their Honours stated (at [46]) that it would "be entirely appropriate for, if not incumbent upon, the local government body not to assume the position of a protagonist and to avoid incurring substantial costs." The passage from Hardiman earlier quoted was cited by their Honours as support for this proposition. 35The Council relies upon the observations of Gaudron and Gummow JJ in Oshlack to support their alternate submission that the Council should only be liable for one set of legal costs. The submission does not state, in terms, that the costs of the Minister should be denied having regard to those observations, as well as those made in later cases applying them, although that is the only inference properly to be drawn. However, if that is the intention of the submission then it overlooks the final sentence of the passage from Hardiman earlier quoted. The proposition there contained was neither gainsaid nor qualified in any way in Oshlack. 36The issue raised in these proceedings was directed to the power of the Minister to grant the concept plan approval in favour of DLL. The Minister did not participate in the proceedings in a manner that contravened any principle applying to proceedings of the present kind. He did no more than seek to sustain the exercise of his power to grant the approval that he did. This involved providing a contradictor to the argument advanced by the Council as to the proper interpretation of the relevant provisions of the EPA Act, the Regulation and the provisions of the LEP. 37The entitlement of the Minister to participate in judicial review proceedings where that participation is limited to the exercise of power has been confirmed in more recent decisions of the Court, including by the Chief Judge in Caroona at [103]. It follows that the active participation of the Minister in the proceedings, seeking to sustain the source of power that he invoked, was appropriate. That participation did not impeach the Minister's impartiality to determine the application in the event that the challenge was successful and reconsideration was required, although had the statutory status quo been maintained and the Council's submission upheld, the occasion for further consideration would not have arisen.

Duplication of costs 38The Council submits that it was unnecessary for both respondents to take an active role in the proceedings, having regard to the fact that the challenge essentially involved a process of statutory interpretation. Reliance was placed upon the dicta of Gaudron and Gummow JJ in Oshlack; observations of Cowdroy J in Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWLEC 17; (2006) 143 LGERA 268 at [35] and Basten JA in McGovern v Ku-ring-gai Council [2008] NSWCA 209; (200by 8) 72 NSWLR 504 at [228] and [229]. 39In the circumstances of this case, it has not been established to my satisfaction that the usual order should not be made so as to deny each respondent an order for costs. The Council has not discharged the onus that it bears in this regard (Caroona at [102]). 40The submissions of the Council bear a remarkable similarity to those advanced by the unsuccessful applicants in Caroona, as recorded by his Honour at [97]. Those submissions were unsuccessful in that case as they are in the present case. 41The Council joined both respondents to the proceedings. Having regard to the basis of challenge, each of them was a necessary party (cf UCPR Pt 6 r 6.24). As was submitted on behalf of the Minister, he had a legitimate interest in upholding the exercise of power under the EPA Act and in so doing limited his role in the manner that I have already identified. The interests of the Minister were different from those of DLL who held a commercial interest in seeking to sustain the concept plan approval which the Minister had granted to it. The submission by the Council that there was no conflict between the respondents overlooks their different interests. In this context I also accept the submissions on behalf of the Minister that it would be inappropriate for a Minister of the Crown, in the position of a decision maker, to share legal representation with a commercial proponent. 42Furthermore, I do not accept the submission of the Council that there was a "substantial degree of duplication and overlap" in the manner in which the respondents presented their respective arguments to the Court. Given the nature of the issue, some overlap was inevitable but, having regard to the manner in which the respective counsel for the Minister and DLL presented their submissions, that overlap was minimised. Each addressed the essential argument from a different perspective. Moreover, DLL advanced a ground of argument that was additional to that advanced by the Minister. 43Ultimately, it was unnecessary for me to determine the additional ground argued by DLL, having regard to the conclusion that I had otherwise reached (Judgment at [74]). However, it could not be said that the additional ground advanced by DLL lacked substance. 44While recognising that there may be circumstances in which the costs of two respondents will be ordered against an unsuccessful applicant for judicial review, the Council submits that the making of such order in other cases has been "qualified" by requiring demonstration that the two respondents have "worked in tandem and have not caused any unjustified duplication in the proceedings". The decision of the Chief Judge in Caroona, as well as the decision of Jagot J in Pearse v Sharpe (No 2) [2008] NSWLEC 81 are each cited in support of this proposition. 45The judgment in neither of those two cases refers, in terms, to the successful respondents working "in tandem". Focus was upon the particular circumstances that justified their separate participation and upon the avoidance of unnecessary duplication by them. In the present case, the respondents agreed, as between themselves, upon the material necessary to be tendered to the Court in order to have determined the ground of challenge relied upon by the Council. That cooperation resulted in the lack of duplication in presentation of evidence and other material and so involved them working "in tandem". Further, as I have already indicated, there was no undue duplication in the making of submissions to the Court. 46A further submission advanced by the Council needs to be addressed. It submitted that, having regard to the terms in which my reasons for judgment were expressed, it appeared that I could have reached the conclusion that I did "without recourse to anything added by either respondent". As framed, that submission is founded upon the lack of express reference, except in "minor" respects, to the terms of the submissions made before me by each of the respondents. The submission is also said to be founded upon the fact that in my judgment I cited only two of the cases that were listed by the respondents in the list of authorities that each of them had provided to the Court prior to the commencement of the hearing. 47I do not accept that submission. While the judgment reflected my own process of reasoning and my own manner of expression, it was substantially informed by the submissions of all parties, including those advanced by the respective respondents. As all parties accepted, the determination of the Council's claim essentially involved an exercise of statutory interpretation. The principles in this regard were not in issue: the focus was upon the particular statutory and regulatory provisions to which I have earlier referred (see Judgment at [20]). Extensive reference to authority was unnecessary. As the transcript of oral argument reveals, there was sparse reference to authority by counsel appearing for any party. 48For the reasons I have given, the circumstances of this case do not warrant either denying each of the respondents their costs or limiting those costs by apportioning a percentage between them. The Council will be required to pay the costs of each respondent.

Orders 49The order that I make is: The applicant must pay the costs of each respondent, including the costs that each of them has incurred in addressing the application for costs.

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: 04 May 2012