CPB Contractors Pty Ltd and Hansen Yuncken Pty Ltd v State of SA (No 2)

[2024] SASC 86

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

CPB CONTRACTORS PTY LTD AND HANSEN YUNCKEN PTY LTD v STATE OF SA (No 2)

[2024] SASC 86

Judgment of the Honourable Chief Justice Kourakis  

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - GENERAL PRINCIPLES AND EXERCISE OF DISCRETION

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - OTHER PARTICULAR CASES AND MATTERS

This was an application for costs.

In the underlying proceedings (CPB Contractors Pty Ltd and Hansen Yuncken Pty Ltd v South Australia [2024] SASC 46), the respondent succeeded on each of its claims of public interest immunity and parliamentary privilege, thereby resisting the production of documents sought by the applicant for use in extant arbitral proceedings afoot in New South Wales. Following its success in those proceedings, the respondent sought the payment of its costs on a party-party basis. In this regard, the respondent submitted that, it having entirely succeeded at the hearing of the applicant’s application, and there being no disentitling conduct on its part, there was no reason to depart from the usual rule that costs follow the event. Against this, the applicant submitted that, the related arbitral proceedings still pending determination, the Court ought not to make an order for costs at this stage.

Held, ordering the applicant to pay the respondent’s costs of the substantive proceedings and the present application on a party-party basis:

1.There existed no reason in the present case to justify departure from the usual exercise of the costs discretion. In this regard, the respondent had prevailed on each contested issue at the hearing of the application, the proceedings could not be characterised as having been instituted in the public interest, there was an absence of disentitling conduct on the part of the respondent, and the proceedings were inevitable insofar as the subject matter thereof could not have been properly resolved in the arbitral proceedings.

Supreme Court Act 1935 (SA) S 40(1); Uniform Civil Rules 2020 (SA) rr 194.5(1)(d), 194.5(2), referred to.

Australian Institute for Progress Ltd v Electoral Commission of Queensland [2020] QSC 174; Bell v Deputy Coroner of South Australia (No 2) [2020] SASC 77; Botany Municipal Council v Secretary, Department of Arts, Sport, Environment, Tourism and Territories (1992) 34 FCR 412; Carter v Brine (No 2) [2016] SASC 36; Cretazzo v Lombardi (1975) 13 SASR 4; GR Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263; Holt v Bunney (No 2) [2020] SASCFC 120; Hosanna Excelsis One Universal Church Inc v Pastina Pty Ltd (No 2) [2021] SASCFC 19; Jarjo v Patterson (No 2) [2022] NSWSC 1311; Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd (2010) 31 VR 46; Kitanovski v Ibrahim (No 2) [2022] NSWSC 1371; Latoudis v Casey (1990) 170 CLR 534; Les Laboratoires Servier v Apotex Pty Ltd (2016) 247 FCR 61; Northern Territory v Sangare (2019) 265 CLR 164; Oshlack v Richmond River Council (1998) 193 CLR 72; Qantas Airways Ltd v Cameron (No 3) (1996) 68 FCR 387; Re Smith; Ex parte Rundle (No 2) (1991) 6 WAR 299; Redden v Chapman (1949) 50 SR (NSW) 24; Ruddock v Vadarlis (No 2) (2001) 115 FCR 229; Sankey v Whitlam (1978) 142 CLR 1; Save the Ridge Inc v Commonwealth (2006) 230 ALR 411; Slater v Ecosol Pty Ltd (No 2) [2024] SASC 29; Sloan (a Pseudonym) v DPP (Vic) [2016] VSCA 104; Victoria v Seal Rocks Victoria (Australia) Pty Ltd (2001) 3 VR 1; White v SA Amateur Football League Inc (No 2) [2022] SASC 113; Wilderness Society Inc v Turnbull, Minister for the Environment and Water Resources (2007) 98 ALD 651, applied.

A, DC v Prince Alfred College Inc (No 2) (2016) 139 SASR 396, considered.

CPB CONTRACTORS PTY LTD AND HANSEN YUNCKEN PTY LTD v STATE OF SA (No 2)
[2024] SASC 86

Civil:  Application

1. KOURAKIS CJ:   This is an application for costs following the disposition of the substantive proceedings between the parties, at first instance, on 28 March 2024.[1]  In those proceedings, I upheld all of the respondent’s contested claims of public interest immunity and parliamentary privilege in respect of numerous documents pertaining to the deliberations of Cabinet and the briefing of Ministers regarding the construction of the New Royal Adelaide Hospital.[2]   The result was, accordingly, a failure on the part of the applicant to make good any of its claims to production of the relevant documents in arbitral proceedings currently afoot in New South Wales.[3]  The question of costs remains outstanding.  For the reasons that follow, I have determined that the applicant ought to pay the respondent’s costs on a party-party basis, as taxed should they be unable to be agreed.  This judgment assumes familiarity with, and should be read alongside, the primary judgment.

   [1]    CPB Contractors Pty Ltd and Hansen Yuncken Pty Ltd v South Australia [2024] SASC 46.

   [2] Ibid [82], [86], [89], [93], [95], [98], [100], [107], [114]-[115], [125].

   [3] See ibid [26]-[45].

   The discretion to award costs

2. It is convenient, at the outset, briefly to restate some of the considerations that guide the exercise of the judicial discretion to award costs upon the determination of proceedings.  It is well-established that the discretion to award costs is, generally, untrammelled, and constrained only by the imperative that it ‘be exercised judicially, not arbitrarily or capriciously and that it cannot be exercised on grounds unconnected with the litigation’.[4] That is the position preserved by the combination of s 40(1) of the Supreme Court Act 1935 (SA) and r 194.5(1)(d) of the Uniform Civil Rules 2020 (SA).[5]

   [4]    Cretazzo v Lombardi (1975) 13 SASR 4, 11 (Bray CJ, Zelling and Jacobs JJ agreeing). See also Re Smith; Ex parte Rundle (No 2) (1991) 6 WAR 299, 300-01 (Malcolm CJ, Pidgeon and Rowland JJ agreeing); Oshlack v Richmond River Council (1998) 193 CLR 72, 81 [22] (Gaudron and Gummow JJ), 96 [65] (McHugh J); Lou v IAG Ltd (2019) 101 NSWLR 606, 613 [42] (Payne JA, Gleeson JA agreeing); Slater v Ecosol Pty Ltd (No 2) [2024] SASC 29, [76] (Blue J).

   [5]    Holt v Bunney (No 2) [2020] SASCFC 120, [9] (Kourakis CJ, Nicholson and Hughes JJ); White v SA Amateur Football League Inc (No 2) [2022] SASC 113, [3] (Tilmouth AJ).

3. Following the determination of contested proceedings, such as the present, the judicial exercise of the costs discretion often, though not invariably, calls for costs to follow the event.[6]  The rationale for that position, preserved as it is by r 194.5(2) of the Uniform Civil Rules 2020 (SA), was explained by plurality in Northern Territory v Sangare[7] on the basis that the ‘successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited’[8] thereagainst. 

   [6]    See, eg, Latoudis v Casey (1990) 170 CLR 534, 557 (Dawson J), 568-9 (McHugh J); Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd (2010) 31 VR 46, 50 [15] (Maxwell P, Tate JA and Habersberger AJA); Bell v Deputy Coroner of South Australia (No 2) [2020] SASC 77, [16] (Blue J).

   [7] (2019) 265 CLR 164.

   [8]    Northern Territory v Sangare (2019) 265 CLR 164, 173 [25] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ).

4. Special circumstances displacing the usual exercise of the costs discretion in that way may arise: where the conduct of the successful party effectively invited or misled the unsuccessful party as to the basis for instituting the proceedings;[9] or where there has been mixed success on the issues presented for judicial determination, such that the litigants ought to bear the costs of the issues upon which they have failed;[10] or, in far more restricted cases, where the litigation the subject of an application for costs can properly be characterised as ‘public interest litigation’, such that there are ‘sufficient public interest related reasons connected with or leading up to the litigation that warrant a departure from’[11] the usual exercise of the costs discretion.  In cases of the kind last mentioned, while appeals to the vindication of the public interest in litigation cannot, in themselves, supplant the application of ordinary principles governing the award of costs,[12] they may, in particular cases, ‘envelop or class description for a range of circumstances which … may be found to be relevant to the question whether there should be a departure from the ordinary rule that costs follow the event’.[13]

   [9] Ibid. See also Redden v Chapman (1949) 50 SR (NSW) 24, 25 (Roper CJ in Eq); GR Vaughan (Holdings) Pty Ltd v Vogt [2006] NSWCA 263, [16]-[19] (Bryson JA, Hodgson and Santow JJA agreeing); Jarjo v Patterson (No 2) [2022] NSWSC 1311, [18] (Darke J); Kitanovski v Ibrahim (No 2) [2022] NSWSC 1371, [11] (Darke J).

   [10] See, eg, Carter v Brine (No 2) [2016] SASC 36, [13]-[14] (Blue J); Les Laboratoires Servier v Apotex Pty Ltd (2016) 247 FCR 61, 130 [297] (Bennett, Besanko and Beach JJ); A, DC v Prince Alfred College Inc (No 2) (2016) 139 SASR 396, 397-8 [5] (Kourakis, Gray and Peek JJ); Hosanna Excelsis One Universal Church Inc v Pastina Pty Ltd (No 2) [2021] SASCFC 19, [16]-[17] (Kelly, Peek and Blue JJ).

   [11] Wilderness Society Inc v Turnbull, Minister for the Environment and Water Resources (2007) 98 ALD 651, 657 [30] (Marshall J).

   [12] See, eg, Botany Municipal Council v Secretary, Department of Arts, Sport, Environment, Tourism and Territories (1992) 34 FCR 412, 416-17 (Gummow J); Qantas Airways Ltd v Cameron (No 3) (1996) 68 FCR 387, 389-90 (Lindgren and Lehane JJ); Ruddock v Vadarlis  (No 2) (2001) 115 FCR 229, 235-6 [13]-[14] (Black CJ and French J); Save the Ridge Inc v Commonwealth (2006) 230 ALR 411, 413 [5]-[6] (Black CJ, Moore and Emmett JJ).

   [13] Ruddock v Vadarlis (No 2) (2001) 115 FCR 229, 236 [14] (Black CJ and French J).

5. In the circumstances of the present case, I am unable to discern any reason justifying departure from the usual exercise of the costs discretion.  It is, first, trite to observe that, on each of the contested claims of either public interest immunity or parliamentary privilege, the respondent prevailed.  True it is that, as the applicant submits, during the course of proceedings, the respondent withdrew a great many of its claims to immunity or privilege over certain documents, but the fact remains that, at trial, the respondent succeeded on each discrete contest still agitated by the parties.  Relatedly, I am not persuaded by the applicant’s submission that, these proceedings supposedly being mere satellite proceedings to the arbitral proceedings afoot in New South Wales, the question of costs should be approached from the perspective that the respondent had acted in such a way in the arbitral proceedings that should deprive it of costs in this Court.  As the respondent correctly submits, the questions of public interest immunity and parliamentary privilege were unable to be determined in the arbitral proceedings, such that these proceedings were, from the applicant’s perspective, necessary in order to ascertain whether the documents it sought to be disclosed ought to be disclosed.[14]  These proceedings were also necessary from the respondent’s perspective, given that public interest immunity and, ordinarily, parliamentary privilege are not capable of being waived at will.[15]

   [14] See generally Victoria v Seal Rocks Victoria (Australia) Pty Ltd (2001) 3 VR 1, 7 [18]-[19] (Ormiston JA, Phillips and Buchanan JJA agreeing).

   [15] See, eg, ibid 7 [18] (Ormiston JA, Phillips and Buchanan JJA agreeing); Sankey v Whitlam (1978) 142 CLR 1, 38-9 (Gibbs ACJ); Sloan (a Pseudonym) v DPP (Vic) [2016] VSCA 104, [47] (Priest, Santamaria and Kyrou JJA).

6. I also accept the respondent’s submission that the substantive proceedings were not of a kind that naturally attracts the label of ‘public interest litigation’.  As explained by Applegarth J in Australian Institute for Progress Ltd v Electoral Commission of Queensland (No 2):[16]

   [38]The term “public interest litigation” suggests that the public, or at least some section of it, has an interest in the litigation which is being pursued. It also invites the distinction between the public interest and interests of a private nature which the litigant may be seeking to advance. It prompts an inquiry whether the unsuccessful litigant did indeed pursue the interests of the public, rather than its own private interests, in bringing the litigation.

   [16] [2020] QSC 174.

7. While it may be said that, in a broad and indirect way, members of the public do have an interest in litigation concerning the construction of a publicly available hospital, the underlying proceedings cannot, in my view, be characterised as having been brought in the interests of the public, rather than in the commercial interest of the applicant as an unincorporated joint venture.  The applicant, in this regard, was more than entitled to pursue its commercial interests in litigation against the respondent, but the subject matter of that litigation does not correspond with the public interest.  In this regard, I further accept the respondent’s submission that its identity as the body politic of the State is incapable of influencing the exercise of the costs discretion.  It is the parties’ conduct, not identity, to which attention must be focussed.[17]

   [17] Oshlack v Richmond River Council (1998) 193 CLR 72, 107 [92] (McHugh J); Northern Territory v Sangare (2019) 265 CLR 164, 174-5 [28]-[29] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ).

8. Finally, it does not seem to me that the question of costs should be deferred until the resolution of the arbitral proceedings between the parties, for the reasons submitted by the respondent.  Whatever may be the outcome in those arbitral proceedings, and whatever the factual interconnectedness may be between the subject matters of those and these proceedings, the present dispute was not a simple interlocutory contest in the course of arbitration.  Instead, it was the contest of a discrete issue concerning the validity of the respondent’s claims to public interest immunity and parliamentary privilege, neither of which was the subject of agitation before the arbitrator.  In those circumstances, it is not desirable to keep the respondent out of its costs until the resolution of the arbitration.

   Conclusion

9. For the reasons given, the respondent, having succeeded on all contested issues at trial and having engaged in no disentitling conduct, should be given its costs of the proceedings on a party-party basis, to be taxed should the parties be unable to agree thereon.