Donnelly v Capricornia Prospecting Pty Ltd

[2001] NSWLEC 249

Land and Environment Court

of New South Wales

CITATION:	Donnelly and Anor v Capricornia Prospecting Pty Ltd and Ors [2001] NSWLEC 249
PARTIES:
FILE NUMBER(S):	40243 of 1998
CORAM:	Bignold J
KEY ISSUES:	Practice and Procedure :- Refund of money held as security for costs to successful applicant-Refund opposed by Respondents
LEGISLATION CITED:
CASES CITED:	Woods v Walsh (1989) 22 FCR 204; Oshlack v Richmond River Council (1998) 193 CLR 72; O'Keefe Nominees Pty Ltd v B P Australia Ltd (No 2) (1995) 55 FCR 591; The Bernisse and The Elve (1920) P1
DATES OF HEARING:	24 and 25 October 2001
EX TEMPORE JUDGMENT DATE :	10/25/2001
LEGAL REPRESENTATIVES:	APPLICANTS: Mr A Oshlack (Agent) SOLICITORS N/A RESPONDENTS: Ms J Hughes (Solicitor) SOLICITORS Phillips Fox

JUDGMENT:

IN THE LAND AND

Matter No. 40243 of 1998

ENVIRONMENT COURT OF

Coram: Bignold J.

NEW SOUTH WALES

25 October 2001

DONNELLY AND ANOR

Applicants

v

CAPRICORNIA PROSPECTING PTY LTD AND ORS

Respondents

JUDGMENT

Bignold J:

1. This is a Notice of Motion originally brought by the Applicants on 15 August 2001 seeking the refund of the remaining amount of money deposited with the Court as security for the first to third Respondents costs in the proceedings.

2. In my judgment delivered on 31 August 2001 (2001) NSWLEC 203 I declined to grant the relief claimed in the Notice of Motion for the reasons therein stated. However, I adjourned the Motion for mention on 12 September 2001 being the date that I anticipated giving my final judgment in the proceedings. As it happened, final judgment in the class 4 proceedings was delivered on 21 September 2001. In that judgment (2001) NSWLEC 225, the Applicants were successful in obtaining the principal declaratory and injunctive relief claimed.

3. By consent of the parties, the Applicant’s Notice of Motion was thereafter adjourned on a number of occasions to enable the Solicitors for the first to third Respondents to obtain instructions as to whether the Motion would be opposed.

4. On 10 October 2001, the first to third Respondents consented to a reduction of the amount of security then deposited with the Court from $17,000 to $10,000 and on that occasion I directed, by consent, the payment of $7,000 out of the monies deposited with the Court. As requested by the parties, the cheque was made payable to the “Timbarra Campaign Account”.

5. A further adjournment was granted to enable the first to third Respondents to decide whether they wished to oppose the refund to the Applicants of the remaining amount of $10,000 deposited as security.

6. Yesterday, when the Motion was again before me, the first to third Respondents opposed the refund to the Applicants of the remaining $10,000 on the following grounds:
(i.) The proceedings had involved several interlocutory proceedings (in all but one of which, costs had either been reserved or not dealt with). The first to third Respondents had been successful in a number of these interlocutory proceedings eg (i) in resisting the Applicants’ claims to an interlocutory injunction; (ii) in obtaining an order from Lloyd J for the payment of $20,000 as security for the Respondents’ costs in the proceedings; and (iii) in obtaining a self-executing order from Pearlman CJ on 20 December 1999 for the dismissal of the proceedings in the event of the required security not being furnished by 1 March 2000. It was only the last mentioned interlocutory proceeding in which a costs order had been made (this order was made in favour of the first to third Respondents). The existence of these several interlocutory proceedings was apt to render complex the resolution of the question of costs in the proceedings generally.
(ii.) Even assuming that the Applicants, as the successful parties at the final hearing, had a reasonable expectation on that account, of receiving an order for costs, any such order would be necessarily limited by the fact that the Applicants were not legally represented (having been represented by an authorised agent, Mr Oshlack, who is not a legal practitioner). Moreover, since in the Court’s final judgment the Applicants had not been successful in respect of all of its claims in that they failed to establish a breach of s 118A of the National Parks and Wildlife Act and they failed to establish relevant breaches of conditions of the relevant development consent and water permits, there may be justification for only a mixed or partial costs order in favour of the successful Applicants.
(iii.) Moreover, it was open to the first to third Respondents on the hearing for any costs claims in the proceedings, in resisting the Applicants’ claim against them, to argue that an appropriate costs order in favour of the Applicants should be made against the Tenterfield Shire Council and the Water Administration Ministerial Corporation since it was these bodies whose actions in granting the relevant development consent and the relevant water permits had been held to be invalid.
(iv.) The first to third Respondents had filed, in the Court of Appeal a holding appeal against the Court’s final judgment in the proceedings.
(v.) The first to third Respondents held a wholly unsatisfied judgment debt in the sum of $87,504 against the Applicants in respect of the assessed costs for a costs order made by this Court in separate proceedings (Matter No 40295 of 1997) involving the same parties as in the present proceedings.

In an attempt to enforce this judgment debt, the first to third Respondents wished to revive with appropriate amendments a lapsed or dormant Motion that had been filed in this Court on 16 May 2000, but had never been prosecuted by the first to third Respondents. This Motion had sought the following relief:

1. The proceedings be dismissed.
2. The money paid into Court by the Applicants be paid forthwith to the First, Second and Third Respondents as payment for their costs in these proceedings ordered to be paid by this Court on 20 December 1999.
3. In the alternative to Order 2 above, the money paid into Court by the Applicants be paid to the Second Respondent forthwith in execution of the costs order of this Court in proceedings No. 40295 of 1997 of 9 July 1998 and the costs assessment certificate of 16 April 1998 as filed in the Land and Environment Court.

7. For all of the foregoing reasons the first to third Respondents submitted that the remaining amount of security should be retained until the Court had determined the question of costs in the proceedings, because it was possible that the outcome of the adjudication on costs would be that costs would be owing to the first to third Respondents (particularly having regard to the fact that the first to third Respondents had been legally represented throughout the proceedings and had incurred considerable Solicitor/Client costs whereas that the Applicants had not been legally represented in the proceedings).

8. When I enquired of the parties as to whether and when the Applicants would be seeking a costs order in the proceedings and as to when the first to third Respondents could revive the dormant or lapsed Notice of Motion that had been filed on 16 May 2000, I was informed that the Applicants were about to file a Motion seeking an order for costs in the proceedings and that the first to third Respondents would file that day a fresh Notice of Motion reviving the claim to relief contained in par 3 of their dominant or lapsed Motion. (Today, the Applicants have filed a Motion seeking an order for costs in the proceedings.)

9. Because of the obvious connection between the Applicants’ current Notice of Motion seeking the refund of the remaining amount of security deposited with the Court and the first to third Respondents’ proposed Notice of Motion, I decided that I should postpone my decision on the Applicant’s Notice of Motion until the next day so that I would first hear and adjudicate upon the first to third Respondents’ anticipated Notice of Motion. I so decided after the Applicants informed me that they would not be disadvantaged if I entertained the first to third Respondents’ anticipated Notice of Motion the next day before adjudicating upon the Applicants’ Notice of Motion in order to preserve the subject matter of the first to third Respondents’ anticipated Notice of Motion.

10. However, at 5.30 pm yesterday, I received by facsimile transmission advice from the first to third Respondents’ Solicitors that they had been instructed not to file the anticipated Notice of Motion and that the Applicants’ agent, Mr Oshlack had been so informed.

11. Upon resumption of the adjourned hearing of the Applicants’ Notice of Motion, the first to third Respondents’ Solicitors have confirmed in the facsimile transmission and tendered a copy of it (Exhibit 1). Accordingly, I am now in the position to adjudicate upon the Applicants’ Notice of Motion.

12. In my judgment, there is no justification to withhold the refund to the Applicants of the remaining amount of security deposited with the Court for the first to third Respondents’ costs in the proceedings for the fundamental reason that the purpose for holding the security, namely to avoid any injustice being occasioned to the first to third Respondents in the event of the proceedings brought against them being unsuccessful, ceased to exist on 21 September 2001 upon delivery of my final judgment in the proceedings in which the Applicants were wholly successful in obtaining the principal declaratory and injunctive relief they had claimed.

13. In my judgment, the decisive and determinative fact is that the Applicants have been successful in the proceedings and it is not necessary to consider in advance of any claim for costs and the requisite adjudication thereon, whether the ultimate outcome on the costs question may result in the successful Applicants being ordered to pay some of the unsuccessful first to third Respondents’ costs.

14. However, in deference to the detailed submissions advanced on behalf of the first to third Respondents which have emphasised the ultimate complexity of the costs adjudication and the possibility that in the result, the unsuccessful first to third Respondents may nonetheless be the beneficiary of a costs order for an amount that exceeds the amount of any costs order made in favour of the Applicants, I shall deal with the submission, not as if I were adjudicating upon the costs question (which is not formally or properly before me) but on the basis of general and established principles concerning costs.

15. The first matter raised in the first to third Respondents’ submissions concerns the fact that there were a number of interlocutory proceedings, upon a number of which the first to third Respondents succeeded, where costs (except for the one interlocutory proceeding determined by the Chief Judge on 20 December 1999) were either reserved or not dealt with.

16. In my judgment, this submission overlooks the established principle which is stated in Ritchie’s Supreme Court Practice at p 3158 in the following passage:

[52A.11.6] Reserved costs — interlocutory orders Where costs of interlocutory proceedings are reserved the effect of so doing is to make the costs those of the successful party in the proceedings — unless some contrary order is made by the court: Woods v Walsh (1989) 22 FCR 204. But this does not include the costs of any interlocutory application that was collateral to the proceedings: Mummery v Campbell 2 Dowl 798 ; Wentworth v Wentworth (CA(NSW), Clarke JA, 21 February 1996, unreported).

17. In addition to the judgment of Lee J in the Federal Court in Woods v Walsh reference may usefully be made to the additional remarks made by Spender J in O’Keefe Nominees Pty Ltd v B P Australia Ltd (No 2) (1995) 55 FCR 591 at 598/599:

The primary concern that an order for costs reflect the justice of the situation is the reason that on many interlocutory questions the costs are reserved. In most cases, when an order for costs of the principal proceedings is made, no specific reference is made to costs which are reserved and they are, by the order for costs which is made, picked up in favour of the party that has been successful in the litigation. This circumstance reinforces the not uncommon position that in respect of the payment of costs of an interlocutory application, it is not necessarily just that the costs of an interlocutory application should follow the result of that interlocutory application but rather should be determined by the result of the principal litigation of which the interlocutory application forms but a part. For the same reason, costs orders on interlocutory applications are sometimes made whereby the costs of the application are the costs of the applicant in the principal proceedings or of a respondent in the principal proceedings, so that the benefit of that costs order is dependent on the outcome of the principal litigation.

18. The second matter relied upon by the first to third Respondents submission concerns the fact that the Applicants failed in their claims to alternative relief alleging breaches of conditions of the relevant development consent and water permits and in their claim alleging a breach of the National Parks and Wildlife Act, s 118A. It was suggested that this outcome may justify a partial costs order or competing costs orders.

19. Again, this submission overlooks the general approach taken by Courts in application of the “follow the event” costs rule where there are multiple issues raised and the successful litigant does not succeed on all of them. The following passage from Ritchie expresses the general approach taken in these circumstances:

[52A.11.2] Multiple Issues The propositions that successful parties are generally entitled to costs, and the follow the event rule can combine to produce difficult discretionary considerations where the proceedings involve multiple issues and a party succeeds on some issues and fails on others. Particularly this is so where, for example, a defendant succeeds on issues that occupied the bulk of time taken by the proceedings. The general approach taken by the courts in these situations is that it will ordinarily be appropriate to award the costs of proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed — unless a particular issue or group of issues is clearly dominant or separable: Waters v P C Henderson (Aust) Pty Ltd (CA(NSW), Kirby, Mahoney and Priestley JJA, 40678/1991, 6 July 1994, unreported BC(402822) (which approved the proposition stated in this note);

20. As I have already noted, the Applicants obtained all of the principal declaratory and injunctive relief that they claimed in the proceedings and in these circumstances, it may be doubted whether the case is really one that calls for an apportionment of costs.

21. The third matter relied upon by the first to third Respondents’ submission raises the possibility that they may resist a costs order in favour of the successful Applicants by inviting the Court to make an order against the Tenterfield Shire Council and/or the Water Administration Ministerial Corporation. There are, in my view, two very obvious difficulties with this submission. Firstly, those bodies, who were parties to the proceedings, filed submitting appearances, save as to costs. Secondly, the fact that those bodies did not actively participate in the proceedings and the validity of their respective actions was defended by the first to third Respondents accords with what Gaudron and Gummow JJ in their joint judgment in Oshlack v Richmond River Council (1998) 193 CLR 72 regarded as “entirely appropriate conduct: at 90

22. The fourth matter relied upon by the first to third Respondents’ submission is that they have filed a holding appeal against my final judgment. This provides no basis for retaining the security: see Halsbury’s Laws of England (4th Ed) Volume 37 par 309.

23. In The Bernisse and The Elve (1920) P1, Lord Sterndale dealt with an opposed application for the return to the successful plaintiffs of the security for costs in the following passage at 11:

They now ask that that security should be paid out to them, and the Crown ask, on the other hand, that it may be retained in Court, because the Crown have got a stay of execution. The effect, however, of ordering that money to remain in Court would be to give them one or other of two things—either security for the costs of their own appeal, or security for the satisfaction of the judgment which may be given on her. Therefore, I shall make an order for payment out appeal, and they are not entitled to eit to the claimants of the money paid in as security.

24. The fifth matter relied upon by the first to third Respondents’ submission is the fact that they have a wholly unsatisfied judgment debt against the present Applicants in separate proceedings. In my judgment, this is irrelevant to the question of the return of the security.

25. For all of the foregoing reasons, I do not think that the first to third Respondents’ opposition to the return of the security to the successful Applicants has been substantiated to any extent.

26. Accordingly, I order that the amount of $10,000 (being the remaining security deposited with the Court) be paid to the Applicants. The cheque is to be made out to the Timbarra Campaign Account. I order the first to third Respondents to pay the Applicants’ costs on the Motion in the sum agreed, or as assessed.

27. Leave is granted to the parties to obtain a hearing date for the Applicants’ Motion for a costs order in the proceedings.