CWO Pty Ltd v Muswellbrook Shire Council (No 2)

[2024] NSWLEC 115

Land and Environment Court

New South Wales

Medium Neutral Citation:

CWO Pty Ltd v Muswellbrook Shire Council (No 2) [2024] NSWLEC 115

Hearing dates:

03 October 2024

Date of orders:

01 November 2024

Decision date:

01 November 2024

Jurisdiction:

Class 1

Before:

Duggan J

Decision:

See orders at [65]

Catchwords:

COSTS – Application for costs in relation to Class 1 proceedings – r 3.7 of the Land and Environment Court Rules 2007 (NSW) – whether fair and reasonable that costs order be made – unreasonableness alleged in bringing proceedings – unreasonableness not made out – application for costs in relation to suppression orders – unreasonableness made out – costs of current motion – mixed result – each party bear their own costs

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Court Suppression and Non-publication Orders Act 2010 (NSW)

Environmental Planning and Assessment Act 1979 (NSW)

Land and Environment Court Rules 2007 (NSW)

Cases Cited:

ACM Landmark Pty Ltd v Cessnock City Council [2006] NSWLEC 256

Arden Anglican School v Hornsby Shire Council (2008) 158 LGERA 224

Community Association DP270253 v Woollahra Municipal Council (No 2) [2014] NSWLEC 8

Community Association DP270253 v Woollahra Municipal Council [2015] NSWCA 80

CWO Pty Ltd v Muswellbrook Shire Council [2024] NSWLEC 61

Darcy Peter Smith and D.P. Smith (Homes) Pty Ltd v Wyong Shire Council [2007] NSWLEC 395

DRJ v Commissioner of Victims Rights [2020] NSWCA 136

Dunford v Gosford City Council (No 3) [2015] NSWLEC 96

Fairfax Digital Australia and New Zealand Pty Ltd v Ibrahim (2012) 83 NSWLR 52

Grant v Kiama Municipal Council [2006] NSWLEC 70

John Fairfax Publications Pty Ltd & Anor v District Court of NSW & Ors (2004) 61 NSWLR 344

Liverpool City Council v Moorebank Recyclers Pty Limited; Benedict Industries Pty Ltd v Minister for Planning (No 4) [2017] NSWLEC 116

Mike George Planning Pty Ltd v Woollahra Municipal Council (No 4) [2014] NSWLEC 187

Port Stephens Council v Sansom (2007) 156 LGERA 125

Rinehart v Welker (2011) 93 NSWLR 311

Stockland Development Pty Ltd v Manly Council (2004) 136 LGERA 254

Category:

Costs

Parties:

CWO Pty Ltd (Applicant, Applicant on the Motion)
Muswellbrook Shire Council (First Respondent, no appearance on the Motion)
Commonwealth of Australia (Second Respondent, Respondent on the Motion)

Representation:

Counsel:
A Stafford and S Hanscomb (Applicant, Applicant on the Motion)
No appearance (First Respondent, no appearance on the Motion)
D Robertson (Second Respondent, Respondent on the Motion)

Solicitors:
Sekel Grinberg Judd (Applicant, Applicant on the Motion)
Moray & Agnew (First Respondent, no appearance on the Motion)
Maddocks Lawyers (Second Respondent, Respondent on the Motion)

File Number(s):

2022/00325617

Publication restriction:

Nil

JUDGMENT

Nature of Proceedings

1. By Notice of Motion filed 19 July 2024 (Current Motion), CWO Pty Ltd (Applicant) seeks orders as to costs in the following terms:

(1)   The Second Respondent is to pay the Applicant’s costs of an occasioned by the claims in the proceedings comprising the Second Respondent’s first and second contentions, as agreed or assessed.

(2)   The Second Respondent is to pay the Applicant’s costs of the Second Respondent’s motion filed 2 August 2023, as agreed or assessed.

(3)   The Second Respondent is to pay the Applicant’s costs of this motion.

(4)   Such further order [sic] as the Honourable Court deems fit.

2. The Applicant seeks costs against the Commonwealth of Australia (Commonwealth), the Respondent on the Current Motion and Second Respondent and intervenor in the substantive proceedings (Costs of the Proceedings). The substantive proceedings concerned a Class 1 appeal that I heard and determined (assisted by Commissioner Porter) against the deemed refusal by Muswellbrook Shire Council (Council) of the Applicant’s amended development application (Amended DA) seeking change of use of the subject site at 516 Rosemount Road, Denman NSW (Site) from a former winery, storage and distribution complex to an information and education facility referred to as the “Museum of Colour” (Proposed Development). In CWO Pty Ltd v Muswellbrook Shire Council [2024] NSWLEC 61 (Primary Judgment), I upheld the appeal and made findings in respect of the two subject contentions (collectively the Contentions, separately Contention 1 and Contention 2).

3. The Applicant also seeks costs in respect of the Commonwealth’s 2 August 2023 Motion (Costs of the Suppression Order). That Motion concerned a suppression order brought by the Commonwealth pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW) (CSPO Act) in respect of various documents deemed confidential and sensitive (Suppression Orders), many of which were relied on as evidence in the substantive proceedings.

4. Finally, the Applicant seeks the costs of the Current Motion.

Facts

5. The facts relevant to the substantive proceedings are set out in [1]-[19] of the Primary Judgment, which are relied upon and not repeated here. Further facts are set out below, as and where appropriate.

Evidence

6. At the hearing of the Current Motion, held on 3 October 2024, the Applicant read the Affidavit of Christoper James Hamilton affirmed 19 July 2024, annexed to which, as tendered, was Exhibit CJH-7 (Exhibit A). The Applicant also read, and tendered, the affidavit of Christoper James Hamilton affirmed 18 August 2023 (Exhibit B).

7. The Commonwealth read the Affidavit of Michael James Winram sworn 13 August 2024, annexed to which was Exhibit MW-1 (Exhibit 1), which was tendered.

8. The parties otherwise relied upon a Court Book (CB).

Applicable Principles

9. The award of costs is a matter of discretion for the Court (s 98(1)(a) of the Civil Procedure Act 2005 (NSW) (CPA)). Such discretion is subject to, inter alia, “the rules of the court”: s 98(1) of the CPA.

10. Rule 3.7 of the Land and Environment Court Rules 2007 (NSW) (LEC Rules) provides, relevantly:

3.7 Costs in certain proceedings (cf Land and Environment Court Rules 1996, Part 16, rule 4)

(1)   This rule applies to the following proceedings:

(a)   all proceedings in Class 1 of the Court’s jurisdiction,

…

(2)    The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances.

(3)    Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following:

…

(d)    that a party has acted unreasonably in the conduct of the proceedings,

…

(f)    that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where:

(i)    the claim or defence (as appropriate) did not have reasonable prospects of success, or

(ii)    to commence or continue the claim, or to maintain the defence, was otherwise unreasonable.

11. By r 3.7(1) of the LEC Rules, r 3.7 applies, as in this case, to Class 1 proceedings.

12. As is well-established, r 3.7(2) of the LEC Rules creates the presumption that there be no orders as to costs in such proceedings unless it would be “fair and reasonable” to do so in the circumstances: Dunford v Gosford City Council (No 3) [2015] NSWLEC 96 (Dunford No 3) at [23]-[37] (per Sheahan J); Liverpool City Council v Moorebank Recyclers Pty Limited; Benedict Industries Pty Ltd v Minister for Planning (No 4) [2017] NSWLEC 116 at [10]-[14] (per Robson J). Rule 3.7(2) is underpinned by the “no discouragement” principle, according to which persons should not generally be discouraged from exercising their rights of appeal in relation to planning decisions by reason of the prospect of an adverse costs order: Port Stephens Council v Sansom (2007) 156 LGERA 125 (Sansom) at [22]-[23] (per Spigelman CJ).

13. Determining the question as to whether it is fair and reasonable in the circumstances such that the relevant presumption should be displaced calls for an evaluative determination, as opposed to the exercise of discretion, albeit the former still involves the conferral for a wide degree of discretion: Sansom at [51].

14. Rule 3.7(3) of the LEC Rules enumerates a series of factors – adumbrated by Preston CJ in Grant v Kiama Municipal Council [2006] NSWLEC 70 (Grant) under the predecessor provision, Pt 16 r 4(2) – relevant to the evaluative determination at hand. Such factors are informative of the determination required under r 3.7(2); they are neither prescriptive nor exhaustive: Dunford No 3 at [30]. Biscoe J likened such factors to “indicative guidelines”: Arden Anglican School v Hornsby Shire Council (2008) 158 LGERA 224 (Arden) at [7] (per Biscoe J).

15. Accepting as much, the considerations applicable in the Current Motion are
    r 3.7(3)(d) and (f)(ii) of the LEC Rules, both of which invoke “unreasonableness”. The unreasonableness to which those provisions are directed, being unreasonableness in respect of a party’s conduct in proceedings, is different in kind from unreasonableness as a ground of judicial review: Community Association DP270253 v Woollahra Municipal Council [2015] NSWCA 80 (Community Association) at [53] (per Barrett JA, with whom Emmett and Leeming JA agreed).

16. Ultimately, such factors, requiring demonstration in the relevant circumstances, have to be of sufficient weight to displace the presumption otherwise created by r 3.7(2) of the LEC Rules: Arden at [9]. Success alone in a Class 1 proceedings is insufficient to justify an award as to costs: Community Association DP270253 v Woollahra Municipal Council (No 2) [2014] NSWLEC 8 at [18] (per Pain J) and Community Association at [19]).

Costs of the Proceedings

Background

17. The Contentions, as presented by the Commonwealth in its further amended Statement of Facts and Contentions dated 9 May 2023, were (certain particulars omitted) as follows:

1. Site suitability

The Site is not suitable for the Proposed Development. If development consent is granted, the Development may pose a safety risk to the public on the Site immediately or shortly after an explosion or multiple explosions arising from a major incident at the EO Depot. This contention is confined to the impact of the proposed development on the Myambat Explosive Ordnance Depot and/or the impact of the Myambat Explosive Ordnance Depot on the proposed development.

…

(b)    In order to ensure that incompatible development is not sited near EO storage facilities, explosive safeguarding lines have been defined in the Defence Reference Book No. 42.

(c)    The Safeguarding Map in Figure 5 of Council’s SFC was generated on 13 December 2021 as a public version of a classified document.

(d)    As demonstrated in Figure 5 of Council’s SFC, the Purple Safeguarding Line crosses through the Site, and the Proposed Development is within the Purple Safeguarding Line.

(e)    The Purple Safeguarding Line defines the minimum distance large public buildings, where many people may congregate, or major community amenities, must be sited from the EO Depot.

(f)    The Proposed Development constitutes a large public building, where many people may congregate, given the Applicant’s estimate that the Information and Education Facility will attract up to 500 visitors per day and employ up to 83 staff per day, and will operate 365 days per year.

(g)    The Proposed Development is less than the minimum distance in which such a development must be sited from the EO Depot, and therefore its location to the EO Depot poses the risk of death or serious injury to visitors and employees at the Information and Education Facility, in the event of an explosion or multiple explosions arising from a major incident at the EO Depot.

(h)    In particular, in the event of an explosion or multiple explosions arising from a major incident at the EO Depot, there is a risk of death or serious injury to persons at the Site caused by:

(i)    Blast overpressure (any blast overpressure at the Site is not expected to exceed 5 kilopascals, and therefore death or injuries to persons within buildings from blast overpressure are considered unlikely at these distances, although death or injuries from glass breakage and other structural damage to buildings caused by blast overpressure may occur).

(ii)    Lobbed projections and rogue fragments from the EO Depot.

(iii)    Fire (spread from the EO Depot as a result of an explosive ordnance incident).

(i)    The Proposed Development significantly increases the public safety exposure risk by reason of the congregation of large groups of persons in an area considered to be in close proximity to a MHF. In the event of an explosion or multiple explosions arising from a major incident at the EO Depot. An accidental explosion at the EO Depot would be considered catastrophic in itself given the likelihood of EO Depot personnel being severely injured or killed. Such an incident would challenge the capacity of local emergency services organisations. If development consent was granted, it is likely that the required emergency response and evacuation plan to account for the increased public safety exposure would overwhelm local emergency services and resources.

…

2. Impacts on the ongoing operation of the EO Depot

The Proposed Development is likely to significantly impact the ongoing operation of the EO Depot, and the ADF's ability to store and distribute explosive ordinances in Australia. This contention is confined to the impact of the proposed development on the Myambat Explosive Ordnance Depot and/or the impact of the Myambat Explosive Ordnance Depot on the proposed development.

….

18. In determining the Contentions under the relevant provisions of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act), I found, firstly, that having regard to s 4.15(1)(c) of that Act, I was not satisfied that the Site was unsuitable for the Proposed Development in light of the risk to public safety posed by the EO Depot.

19. In particular, recourse was made by the Commonwealth to its policy document, the Department of Defence Explosives Regulations (Defence Regulations), in order to assess the risk posed to members of the public on the Site, the Defence Regulations providing a basis for the assessment of such risk by means of the classification of buildings into various categories and “safeguarding lines” determined in relative proximity to the EO Depot, I found at [82]-[83] of the Primary Judgment:

82.    Accordingly, I find that on the evidence, the building is not of vulnerable construction and consequently, I also find that the building is not of “especially vulnerable construction” such that the provisions of the Group V classification would apply.

83.    I therefore accept the evidence and submissions of the Applicant that the building proposed to be used in the Amended DA is appropriately classified as being (conservatively) of Group IV as a facility in which people assemble. Consistent with the Defence Regulations, the risk associated with its location within the Purple Line is acceptable.

20. Secondly, having regard to s 4.15(1)(b) of the EP&A Act, I was not satisfied that the likely impacts of the Proposed Development would adversely affect the operation of the EO Depot so as to warrant refusal of the Amended DA.

21. Accordingly, I ordered that, subject to imposition of various conditions, the application for the Amended DA be granted consent: see Primary Judgment at [145].

Submissions

Applicant

22. The Applicant approached the question of its asserted entitlement of its Costs of the Proceedings on the following bases:

1. As to Contention 1, the Commonwealth had no reasonable prospects of demonstrating that the Proposed Development, putatively a Group V structure, was relevantly unsuitable based on the applicable safeguarding line, the “purple line” (Purple Line). Such a category of structure, to the extent that it was defined under the Defence Regulations as either “large facilities of special/vulnerable construction or importance” or “facilities of vulnerable construction … used for mass gatherings”, was not open from the point of view of classification on the basis of the available evidence. Rather, in the Applicant’s view, the highest that the Commonwealth’s evidence was capable of demonstrating was that the Proposed Development was a Group IV structure (in which case, no relevant risk arose); and

2. The Commonwealth, in relying upon the evidence of Dr Green regarding of “residual risk” (see Primary Judgment at [51]) adopted an approach that meant that, in effect, it was arguing against its own policy. That, it was submitted, was within the purview of Dunford No 3, being authority for the proposition that it was neither fair nor reasonable for a respondent to argue against its own instruments, lest an arbitrary decision-making approach be adopted. It was contended that, taking both limbs together, the Commonwealth “maintained the proceedings unreasonably because the claim had no reasonable prospects of succeeding at hearing”.

3. As for Contention 2, the Applicant argued that, in light of the findings set out in the Primary Judgment, the Commonwealth failed to marshal sufficient evidence in support of the Contention: ACM Landmark Pty Ltd v Cessnock City Council [2006] NSWLEC 256 (ACM), being authority for the proposition that a Council had acted relevantly unreasonably in raising issues without reasonable grounds and in certain instances without any evidentiary foundation. By way of analogy to ACM, the Contention that approved of the Proposed Development would relevantly impact the EO Depot was reduced to mere assertion and speculation.

23. As relates to both Contentions, the Applicant submitted that the Commonwealth was on notice as to the possibility of its inability to make good both Contentions as early on in proceedings as at the time of its joinder, in February 2023, a position made worse by the fact the Council played no active role in the proceedings from on or about 19 July 2023.

Commonwealth

24. The Commonwealth resisted any order that it be made to pay the Applicant’s Costs of the Proceedings, denying that, in respect of the Contentions, it either acted unreasonably in the conduct of the proceedings (r 3.7(3)(d) of the LEC Rules), or commenced or continued a claim lacking in reasonable prospects of success (r 3.7(3)(f)(ii)).

25. The Commonwealth sought to clarify the manner in which Contention 1 was framed by reference to its particulars. Counsel submitted that the particulars were only partly based on a contention of the Proposed Development, itself deemed a Group V structure for the purposes of the Defence Regulations to the extent that it constituted a “large public building, wherein many people congregate”, was located within the Purple Line. Against that, the Commonwealth disputed that its evidence was deficient. Otherwise, the particulars were said to address the risk to public safety posed to members of the public situated on the Site from the EO Depot were an explosion or explosions to occur taking into account additional factors, including that local emergency services may be overwhelmed in the circumstance contemplated.

26. Moreover, the Commonwealth denied that what was proffered from its expert in that of Dr Green regarding residual risk contradicted the Defence Regulations, rather it was an additional consideration, notwithstanding my findings in the Primary Judgment.

27. As for Contention 2, it was submitted that the Court, whilst ultimately not satisfied as to question of “likely impacts”, nonetheless had before it in the form of the Affidavit of Commodore Nash evidence of the kind capable of supporting its position. To argue to the contrary, namely that there was no evidence of the contention in question, was not only to misrepresent how the Commonwealth conducted itself in the substantive proceedings but also to assume that certain evidence, regarding the possibility of Comcare changing the licence for the EO Depot, could in fact be adduced – whether from Comcare or otherwise.

Consideration

28. Whilst the Applicant sought to treat Contentions 1 and 2 the subject of the substantive proceedings separately, I do not consider that appropriate in the circumstances of this case. Contentions 1 and 2 were interlinked in the sense that my findings on Contention 1 were likely to inform my findings on Contention 2, as was acknowledged and accepted by the Applicant in oral submissions.

29. In considering whether to award costs, I accept the Commonwealth’s submissions. Notwithstanding that I made adverse findings in respect of the Contentions against the Commonwealth in the Primary Judgment, that alone is insufficient to justify a finding of unreasonableness for the purposes of r 3.7(3)(d) and (f)(ii) of the LEC Rules.

30. I do not accept the Applicant’s submissions as to the characterisation of the Commonwealth’s position as to Contention 1 in the substantive proceedings. What was ultimately in dispute in those proceedings was the appropriate classification of the Proposed Development and whether it was considered relevantly suitable in such a location by reference to the Purple Line.

31. Relevantly, the Defence Regulations left undefined important terms (for example, “mass gathering” and “large use” [of land]), presenting scope for different possible constructions of the Proposed Development. Such scope was reflected not just in the views taken by the respective parties’ experts, each of which made opposing contentions as to the appropriate classification; but more, the parties’ originating documents and submissions employed language (“large public building” and “educational facility”) which appeared to straddle the definitions and examples for Group IV and Group V facilities. In other words, the classification of the Proposed Development was a live merits issue.

32. In order for the Proposed Development to have constituted a Group V structure it must have been found as a threshold matter to be either a “large facility…” or a facility of “vulnerable construction”. However, it does not follow that the Commonwealth’s assertions as to the characterisation of the Proposed Development a “large public building, where many people congregate”, was, on its face, either unreasonable or without prospects of success.

33. Insofar as the classification of the Proposed Development under the Defence Regulations was sufficiently arguable, it cannot be said of this limb of Contention 1 that it was relevantly unreasonable. Nor, in consequence, was there a want of relevant evidence.

34. Even if I am wrong, as the Commonwealth correctly submitted, Contention 1 was not exclusively focused on, nor reducible to, a determination of risk under the Defence Regulations having regard to the classification of the Development and its distance, marked by the Purple Line, from the EO Depot. Other elements factored into the alleged risk to public safety, including emergency management and (as discussed below) “residual risk”. This is not to say that the Defence Regulations were not the kind of decisive tool in the assessment of risk in the substantive proceedings that they ultimately were; rather, for current purposes, it is to acknowledge that this limb of the Applicant’s submissions, even assuming they were sound, were rather narrowly drawn in the context of the Current Motion. The existence of the aforementioned considerations, which required separate determination in the Primary Judgment, further militates against a finding that Contention 1 was unreasonable as relates to the Defence Regulations.

35. There is a threshold consideration regarding the status of those Regulations. In the Primary Judgment, I found that the Defence Regulations, not of the same status of the policy documents referred to in Stockland Development Pty Ltd v Manly Council (2004) 136 LGERA 254 at [88]-[92] (per McClellan CJ), was a relevant tool in terms of which the relevant risk may be considered and determined, albeit its provisions were neither mandatory nor conclusive (at [61]).

36. The Defence Regulations are not relevantly an “instrument”. They cannot be given the same significance of an instrument in Dunford No 3 as presently in the context of an argument regarding the Commonwealth allegedly arguing against them.

37. As to the Applicant’s criticisms of Dr Green’s evidence regarding residual risk I accept the Commonwealth’s characterisation of this evidence as an additional element of the Commonwealth’s ultimately unsuccessful case as regards to Contention 2, going specifically to a demonstration of the existence of a specifically unexpected kind of risk supposedly bearing upon the Amended DA. Whilst the evidence of Dr Green regarding residual risk was ultimately rejected in the Primary Judgment, that does not render reliance upon it by the Commonwealth unreasonable. The second limb of Contention 1 therefore fails too.

38. Turning to Contention 2, it is to be remembered that, in relation to s 4.15(1)(b) of the EP&A Act, the argument as put by the Commonwealth in the substantive proceedings proceeded in distinct steps, being: (i) that approval of the Amended DA would require on the part of Thales, the operator of the EO Depot, notification to Comcare; and (ii) that such notification may in turn result in a revision to the licence required for the EO Depot’s operation, in which case there was a further potential for adverse impact on both the ADF and Commonwealth, respectively the ability to store and distribute explosive ordnances and financially as well as strategically. In the Primary Judgment at [125], I found that, for the purposes s 4.15(1)(b) of the EP&A Act, the first of those steps was insufficient whilst the second step remained entirely speculative.

39. Notwithstanding my findings, it is not true to say of Contention 2 that it altogether lacked an evidentiary foundation. It was supported by the affidavit of Commodore Nash, who also gave oral testimony at the hearing.

40. That evidence was ultimately found to be insufficient, for the very same reasons that the Applicant refers to in its written submissions. The Applicant, in my view, conflates the absence of evidence with whether the evidence was ultimately persuasive. Any analogy between the approach of the Commonwealth in maintaining Contention 2 and the council in ACM, wherein it was said of the latter that it had “acted unreasonably in raising over 20 issues, many of which had no evidentiary foundation…” (at [94]), is therefore inapt.

41. As noted above, it was accepted by the Applicant that the two Contentions were linked. The fact that it was open to me to find otherwise in relation to Contention 1, in which case such findings would have influenced my findings in relation to Contention 2, speaks against an approach which permits a separate consideration of Contentions 1 and 2 any finding of unreasonableness founded on an alleged absence of evidence.

42. Accordingly, I find that, having regard to the provisions of r 3.7 of the LEC Rules, I am not satisfied that the Commonwealth acted unreasonably in the relevant sense such as to warrant a finding that it would be fair and reasonable in the circumstances that the Commonwealth be ordered to pay the Applicant’s Costs of the Proceedings.

Costs of the Suppression Order

Background

43. The 2 August 2023 Motion sought orders for the making of suppression orders pursuant to s 7 of the CSPO Act in respect of the following documents:

(1)   The documents produced in answer to a Notice to Produce made by the Applicant on 3 May 2023;

(2)   The documents in Packet S-2 [being documents produced by Comcare in response to the Applicant's subpoena];

(3)   The affidavit of Commodore James Nash affirmed 21 July 2023 together with Exhibit JN-1; and

(4)   The expert report of Dr Tony Green dated 21 July 2023.

44. Categories (1) and (2) refer, respectively, to the Notice to Produce issued to the Commonwealth and the Subpoena to Produce issued to Comcare, both filed and served on 3 May 2023, in which the Applicant sought various documents from each.

45. The parties contest the characterisation of respective steps taken both prior and subsequent to filing of the 2 August 2023 Motion (as discussed below).

46. Ultimately, the 2 August 2023 Motion was resolved without the need for a hearing by means of Short Minutes of Order which were made Pritchard J on 30 August 2023 (30 August 2023 Short Minutes of Order), who also reserved the question of costs.

Submissions

Applicant

47. The Applicant sought its costs incurred in relation to the Suppression Orders. It contended that from the email correspondence between the parties both prior to, and following, the filing of the 2 August 2023 Motion the Court would be satisfied that it had raised the issue of the doubts as to the undue breadth of the Suppression Orders from at least late May 2023.

48. The Applicant also submitted that, on their face and from their very nature, certain documents the Commonwealth sought a suppression order over were not amendable to the order sought given that they were either already publicly available or did not go to matters of Australia’s national interest, both of which were contrary to the overriding principle of “open justice”: John Fairfax Publications Pty Ltd & Anor v District Court of NSW & Ors (2004) 61 NSWLR 344 at [18] (per Spiegelman J).

49. Further, it was submitted, given that it was as late as 29 August 2023, notwithstanding the Applicant’s objection and the Commonwealth’s indication of being amendable to reducing the scope of proposed orders, that the Commonwealth persisted in seeking to suppress, until the “eleventh hour”, a large number of documents that ought not be so protected, which was relevantly unreasonable.

50. To the extent of the Commonwealth’s unreasonableness within r 3.7(3)(d) of the LEC Rules, the Applicant ought therefore to recover the costs it incurred in relation to the 2 August 2023 Motion.

Commonwealth

51. The Commonwealth resisted the order sought by the Applicant in relation to the Costs of the Suppression Orders. It was submitted that in the period prior to the hearing of the 2 August 2023 Motion, the Commonwealth engaged and negotiated with the Applicant regarding the scope of the Suppression Orders, culminating in the agreed position ultimately reached, which obviated the need for a full hearing. Indeed, in the Commonwealth’s view, the actions taken in the period prior to the position reached, and the position itself, being one of consent, fails to evidence unreasonableness on the part of the Commonwealth in its conduct of in relation to the substantive proceedings.

52. In oral submissions, counsel for the Commonwealth pointed additionally to the haste with which the application for the Suppression Orders was made, together with the fact that such an application concerned national security, an example par excellence of public interest: Tcpt, 3 October 2024, p29(46-50).

53. Given this, the Commonwealth submitted that the Court would be minded not to order that it be made to bear the Applicant’s costs of the Suppression Motion.

Consideration

54. I accept the Applicant’s submissions. Notwithstanding the consent position ultimately reached between the parties, the Commonwealth may be said to have acted unreasonably in respect of the 2 August 2023 Motion for reasons that concern the scope of the documents over which the Suppression Orders were sought, which was illustrative of a lack of genuine intellectual engagement with whether such a claim could be maintained in respect of all the documents over which the claim was made; the kind of the documents the subject of the Suppression Orders; and the lateness of its negotiation in reaching the ultimate consent position as to the Suppression Orders.

55. The Applicant is correct, in my view, to contend that from the outset and “up until the eleventh hour”, the scope of the documents over which the Suppression Orders were sought was unduly broad. This is by no means to undermine the operation of the CSPO Act, or the necessity of documents being appropriately the subject of orders under that Act, particularly where, as here, matters of the national security are at stake (s 8(1)(b)). The legislative intention behind the regime of the CSPO Act is that suppression orders should only be made in exceptional circumstances (see Rinehart v Welker (2011) 93 NSWLR 311 at [27] (per Bathurst CJ and McColl JA)), where such orders are deemed relevantly “necessary” (see Fairfax Digital Australia and New Zealand Pty Ltd v Ibrahim (2012) 83 NSWLR 52 at [45]- [51] (per Basten JA)), so as justify the departure from the fundamental principle of open justice.

56. Where a party, such as the Commonwealth in this case, seeks orders which are from the outset framed in a “blanket” fashion, covering a breadth of documents in their entirety, immediate doubts arise as to its ability to discharge its onus in demonstrating the necessity of the orders it seeks: DRJ v Commissioner of Victims Rights [2020] NSWCA 136 at [40]. Instead, as I put to counsel for the Commonwealth, the Commonwealth appeared to reverse the onus, in effect, requiring the Applicant to identify the appropriate scope of the order and to justify the narrowing of the scope of the Suppression Orders.

57. I also accept, as the Applicant correctly contends, that in certain instances the documents in question were not appropriately the subject of the application for Suppression Orders, given that they were, for example, already publicly available. The Defence Regulations are but one such example. Here, as in respect of other documents or parts thereof, orders were therefore sought in relation to documents that could never properly be the subject of a suppression order under the CSPO Act. I note that, in relation to the 30 August 2023 Short Minutes of Order that were reached by consent, nearly one third of the documents that were intended to be subject of orders under the CSPO Act were excluded.

58. The final consideration relates to the manner in which the negotiations between the parties, particularly in the period leading up to the consent position that was ultimately reached, were conducted. True it is that by email correspondence on 2 August 2023, the Commonwealth’s legal representatives noted “…the Second Respondent welcomes the opportunity to negotiate and discuss the scope of the suppression orders with the Applicant”: CB at p151. Intimations of such an intent can be gleaned from earlier correspondence, dated 25 May 2023, some months before the Motion in question was filed. However, it was not until 29 August 2023, being a single business day prior to the hearing of the Motion otherwise listed for 31 August 2023, that the Commonwealth made good on its intention to reduce the scope of the Suppression Orders, providing in a schedule a list of documents and the relevant parts thereof that were proposed to be covered, as they were, by the 30 August 2023 Short Minutes of Order. By which stage, as the Applicant also rightly points out, it had already incurred considerable costs in preparation of its defence the 2 August 2023 Motion.

59. That the Commonwealth eventually reduced the scope of the orders sought, and moreover that parties reached the consent position that they ultimately did, which counsel for the Commonwealth placed emphasis on, is not sufficient to remove the element of relevant unreasonableness from the Commonwealth’s conduct: Darcy Peter Smith and D.P. Smith (Homes) Pty Ltd v Wyong Shire Council [2007] NSWLEC 395 at [8]-[9] (per Talbot J).

60. The above considerations, taken together, are consistent with what Preston CJ said in Grant at [15], relevantly extracted as follows:

[15]   An examination of the cases reveals a variety of circumstances where courts have considered that it would be fair and reasonable to make an order for costs. These include the following circumstances, although these do not exhaust the circumstances:

…

(d)    where a party has acted unreasonably in the conduct of the proceedings such as:

(i)   delaying unreasonably in taking action or making proper concessions or agreeing to proper amendments to originating process, pleadings, evidence or interlocutory directions and orders: Statewide Developments Pty Limited v Minister for Infrastructure and Planning [2005] NSWLEC 353 (1 July 2005) at [26] and [27] and Prestige Building Services Pty Ltd v Coffs Harbour City Council [2006] NSWLEC 72 (21 February 2006) at [22] [emphasis added]

Though decided before the enactment of the LEC Rules, Grant, being the leading authority under the predecessor provision to r 3.7, continues to apply to r 3.7: Mike George Planning Pty Ltd v Woollahra Municipal Council (No 4) [2014] NSWLEC 187 at [25] (per Pepper J).

61. I therefore find that in the circumstances it is appropriate that the Commonwealth pay the Applicant’s costs incurred in relation to the 2 August 2023 Motion.

Costs of the Current Motion

Submissions

62. As noted above, the Applicant also seeks the costs of the Current Motion. Whilst in oral submissions pressing that should the Applicant be successful in relation to Order 2, but not Order 1, that would be sufficient for the award of costs on the Current Motion. Counsel did ultimately accept that in such a mixed result situation the appropriateness of each party bearing its own costs: Tcpt, 3 October 2024, p16(43).

63. The Commonwealth submitted that the Current Motion should be dismissed with costs. Counsel for the Applicant accepted that in circumstance of a mixed result, as between the Orders, then no order as to the costs would be appropriate: Tcpt, 3 October 2024, p30(33-34).

Consideration

64. Having made adverse findings against each party, I find it appropriate in the circumstances that each party pay its own costs of the Current Motion.

Orders

65. For the reasons set out herein, I order as follows:

1. Order 1 of the Applicant’s Notice of Motion dated 19 July 2024 is dismissed;

2. Order 2 of the Applicant’s Notice of Motion dated 19 July 2024 is upheld;

3. Each party pay their own costs incurred in respect of the Applicant’s Notice of Motion dated 19 July 2024;

4. The Applicant’s Notice of Motion dated 19 July 2024 is otherwise dismissed; and

5. The exhibits are returned.

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Decision last updated: 01 November 2024