Botany Bay City Council v Minister for Local Government (No 2)

[2016] NSWLEC 73

Land and Environment Court

New South Wales

Medium Neutral Citation:	Botany Bay City Council v Minister for Local Government (No 2) [2016] NSWLEC 73
Hearing dates:	26 April 2016 Applicant’s submissions (costs), 29 April 2016 Respondents’ submissions (costs), 4 May 2016 Applicant’s reply written submissions (costs)
Date of orders:	16 June 2016
Decision date:	16 June 2016
Jurisdiction:	Class 4
Before:	Pain J
Decision:	Botany Bay City Council is to pay the costs of the Respondents of the summons dated 23 March 2016
Catchwords:	COSTS – whether unsuccessful local council liable for costs – Court of Appeal finding that should be no departure from usual costs rule in UCPR r 42.1 binding at first instance also – costs order made
Legislation Cited:	Land and Environment Court Rules 2007, r 4.2 Local Government Act 1993, s 263 Civil Procedure Act 2005, s 98 Uniform Civil Procedure Rules 2005, r 42.1
Cases Cited:	Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts (No 2) [2011] FCAFC 84; (2011) 280 ALR 91 Botany Bay City Council v Minister for Local Government [2016] NSWLEC 35 Botany Bay City Council v Minister for Local Government [2016] NSWCA 74; (2016) 214 LGERA 173 Botany Bay City Council v Minister for Local Government (No 2) [2016] NSWCA 127 Botany Bay City Council v Minister for Transport and Regional Development [1999] FCA 65 Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59; (2010) 173 LGERA 280 Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263; (2010) 176 LGERA 424 Kindimindi Investments Pty Ltd v Lane Cove Council [2007] NSWCA 38; (2007) 150 LGERA 333 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Category:	Costs
Parties:	Botany Bay City Council (Applicant) Minister for Local Government (First Respondent) Local Government Boundaries Commission (Second Respondent) Chief Executive of the Office of Local Government (Third Respondent) Mr Rod Nockles (Fourth Respondent)
Representation:	COUNSEL: M Robinson SC and A Poljak (Applicant) A Mitchelmore (Respondents)   SOLICITORS: Houston Dearn O’Connor (Applicant) Crown Solicitor for NSW (Respondents)
File Number(s):	16/165261

Judgment

1. In Botany Bay City Council v Minister for Local Government [2016] NSWLEC 35 I dismissed the summons filed by Botany Bay City Council (“the Council”) dated 23 March 2016 seeking judicial review of decisions made by the Minister for Local Government in relation to council amalgamation proposals. By notice of motion dated 14 April 2016 the Council submits there should be no order as to costs, effectively that each party pay their own costs. The Respondents seek an order that their costs be paid.

2. Under s 98 of the Civil Procedure Act 2005 (NSW) the Court has a wide discretion to determine costs. Under r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) costs generally follow the event unless court rules provide otherwise. Rule 4.2(1) of the Land and Environment Court Rules 2007 (NSW) (“LEC Rules”) is such a rule and is relied on by the Applicant. It states:

4.2 Proceedings brought in the public interest

(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.

3. Principles governing the application of the rule were usefully identified by Preston J in Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59, (2010) 173 LGERA 280. His Honour reviewed relevant decisions on costs and identified a three-step approach in determining whether to depart from the usual costs rule at [13]:

First, can the litigation be characterised as having been brought in the public interest?; secondly, if so, is there “something more“ than the mere characterisation of the litigation as being brought in the public interest?; and thirdly, are there any countervailing circumstances, including relating to the conduct of the Applicant, which speak against departure from the usual costs rule?

4. Five categories of circumstances were identified citing numerous cases as constituting “something more” at [60]:

(a)   the litigation raises one or more novel issues of general importance;

(b)   the litigation has contributed, in a material way, to the proper understanding, development or administration of the law;

(c)   the litigation was brought to protect the environment, or some component of it, and the environment or particular component is of significant value and importance;

(d)   the litigation affects a significant section of the public; and

(e)   there was no financial gain to the applicant in bringing the proceedings.

5. Six countervailing considerations identified in the cases are set out at [61] but I do not need to consider these.

6. The Council submits that it acted in the public interest and consequently relies on r 4.2(1) of the LEC Rules, Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 and Caroona Coal at [38], [39] cited in Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263; (2010) 176 LGERA 424 per Basten JA at [202]-[203]. The proceedings were brought in the public interest because they required consideration by the Court for the first time of provisions in the Local Government Act 1993 (NSW) (“LG Act”), particularly the construction of s 263 of the LG Act. The decision clarified the relevant law and how the amalgamation provisions of the LG Act should work. The Council was representing the elected council and its ratepayers and residents. In a Council plebiscite conducted in February 2016 98% of its ratepayers and residents were opposed to a forced merger with Rockdale City Council who in turn elected the councillors. A wide range of members of the public were represented through the litigation. The proceedings raised a new point of law and statutory construction and were reasonably arguable.

7. The Respondents submitted that the proceedings were not brought in the public interest within the scope of r 4.2(1) of the LEC Rules. The proceedings were self-interested in that the Council sought to have an amalgamation proposal considered at the same time as a proposal that the Minister for Local Government had referred earlier to a delegate for consideration. The Council was actively opposing an outcome that might see its local government area dissolve. Characterising proceedings as public interest is insufficient to avoid costs following the event. That there were a number of amalgamation proposals by the Minister for Local Government under active consideration does not elevate the arguments in this case specific to its circumstances to being in the public interest. Justice Finn in Botany Bay City Council v Minister for Transport and Regional Development [1999] FCA 65 at [5]-[6] should be considered.

Finding

8. An appeal by the Council from my first instance decision was dismissed in Botany Bay City Council v Minister for Local Government [2016] NSWCA 74. In Botany Bay City Council v Minister for Local Government (No 2) [2016] NSWCA 127 the Court of Appeal ordered that the usual costs rule under UCPR r 42.1 applied so that the Council was liable for the costs of its unsuccessful appeal. The Council had submitted in the Court of Appeal that it acted in the public interest and its proceedings clarified the law in attempting to resist the usual costs order being made.

9. The Court of Appeal does not have a rule equivalent to r 4.2(1) of the LEC Rules and the consideration of costs at appellate level is not identical to first instance consideration in the LEC. The Court of Appeal quoted authorities at [18]-[20] to the effect that at appellate level it is less likely that public interest considerations will give rise to an “other order” citing Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts (No 2) [2011] FCAFC 84; (2011) 280 ALR 91 and Kindimindi Investments Pty Ltd v Lane Cove Council [2007] NSWCA 38; (2007) 150 LGERA 333 per Hodgson JA at [52], [54]. In this case the considerations of the Court of Appeal included at least two of the factors identified in Caroona at [60] which I must also consider. The Court did not accept the Council’s argument that the case raised a novel point of law of general importance or contributed in a material way to the proper understanding of the law through considering a section of the LG Act not previously considered. Given that consideration of the precise matter I must determine (on the assumption the proceedings were brought in the public interest) I am bound by the following parts of the Court of Appeal’s decision:

17   For the reasons we have stated above at [11]-[12], we do not place much, if any weight, on the perceived benefit to the respondents from the clarification of the law in this appeal. It was not suggested that these proceedings involved a ‘test case’ of any kind. In any event, by the very nature of our adversarial common law tradition, the success of one party in proceedings will often, if not inevitably, entail a clarification of the law to some extent or in some respect. In that light, it is hard to see how clarification of the law could amount to a factor tending strongly in favour of a departure from the usual rule as to costs.

And at [21]:

21 We accept that, in an appropriate case, the pursuit of proceedings through the appellate hierarchy may sufficiently be in the public interest as to warrant a costs order other than that costs follow the event in accordance with UCPR, r 42.1. For the reasons we have given above, this is not such a case, nor was it such a case at first instance.

10. The Court of Appeal expressly referred to the first instance decision as part of the reasoning at the end of [21].

11. I have not formally determined whether the proceedings before me were brought in the public interest and need not do so. Even if I did so find, the Council cannot satisfy the “something more” requirement identified in Caroona at [60] given the views expressed in the Court of Appeal. The usual costs rule applies. The Council must pay the Respondents’ costs of the proceedings before me.

Order

12. The Court orders:

1. Botany Bay City Council is to pay the costs of the Respondents of the summons dated 23 March 2016.

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Decision last updated: 17 June 2016