Friends of King Edward Park Inc v Newcastle City Council - [2012] NSWLEC 113

Land and Environment Court

New South Wales

Amendment notes

Medium Neutral Citation: Friends of King Edward Park Inc v Newcastle City Council [2012] NSWLEC 113
Hearing dates: 27 April, 7 May 2012
Decision date: 16 May 2012
Jurisdiction: Class 4
Before: Biscoe J
Decision:
(1) First respondent's notice of motion for security for costs filed on 16 April 2012 is dismissed. (2) Direct that the applicant may file and serve an expert report by Dr Philip Pells limited to engineering and safety issues in relation to the walking track in its proposed location and substantially to the same effect as his draft report of 29 March 2012.

Catchwords: COSTS:- whether security for costs should be ordered in judicial review proceedings - public interest litigation exception.
EVIDENCE:- expert evidence - whether direction should be made for expert evidence in judicial review proceedings - whether expert evidence reasonably required to resolve the proceedings - relevance of allegation that consent authority was under a duty to inquire.
Legislation Cited: Civil Procedure Act 2005 Part 6, ss 56-60,
Crown Lands Act 1989 ss 112, 112A, 114
Environmental Planning and Assessment Act 1979 ss 5(c), 79C, 80, 91(1), 91A, 101, 123
Mine Subsidence Compensation Act 1961 ss 4 and 15
Uniform Civil Procedure Rules 2005 Part 31 Division 2, rr 31.17, 31.19, 31.20, 42.1, 42.4, 42.21
Land and Environment Court Rules 2007 r 4.2
Newcastle Local Environmental Plan 2003 cl 27, 31
Cases Cited: Acohs Pty Ltd v Ucorp Pty Ltd [2006] FCA 1279, 155 FCR 181
Anderson on behalf of Numbahjing Clan within Bundjalung Nation v NSW Minister for Planning (No 2) [2008] NSWLEC 272,163 LGERA 132
Attorney-General for the Northern Territory v Minister for Aboriginal Affairs (1989) 23 FCR 536
Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707, 148 FCR 446
Bizzanelli v Bizzanelli [2007] NSWSC 1085
Burrell Place Community Action Group Incorporated v Griffith City Council [2009] NSWLEC 120
Caldera Environment Centre Inc v Tweed Shire Council [1993] NSWLEC 102
Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59, 173 LGERA 280
Carriage v Stockland (Constructors) Pty Ltd (No 2) [2002] NSWLEC 217, 123 LGERA 214
Chandra v Webber [2010] FCA 705, 187 FCR 31
Chapman v Chapman [2007] NSWSC 1109
Countouris v Kallos [2007] NSWSC 944
Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263, 176 LGERA 424
DEXUS Funds Management Ltd v Blacktown City Council [2011] NSWLEC 156
Engadine Area Traffic Group Inc v Sutherland Shire Council (No 2) [2004] NSWLEC 434, 136 LGERA 365
Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664, 208 ALR 564
Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39, 172 LGERA 157
Hill Top Residents Action Group Inc v Minister for Planning (No 3) [2010] NSWLEC 155, 176 LGERA 20
Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744
INL Group Ltd v Director-General of the New South Wales Department of Planning [2011] NSWLEC 256
John Williams Neighbourhood Group Inc v Minister for Planning [2011] NSWLEC 100, 183 LGERA 327
Kennedy v Stockland Development Pty Ltd (No 2) [2011] NSWLEC 10
King v Great Lakes Shire Council (1986) 58 LGRA 366
KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76, 56 FCR 189
Luu v Renevier (1989) 91 ALR 39
Martin v NSW Minister for Mineral and Forest Resources [2011] NSWLEC 38
Merribee Pastoral Industries Pty Ltd v Australia and New Zealand Banking Group Ltd [1998] HCA 41, 193 CLR 502
Minister for Immigration and Citizenship v SZGUR [2011] HCA 1, 241 CLR 594
Minister for Immigration and Citizenship v SZIAI [2009] HCA 39, 259 ALR 429
Minister for Immigration and Ethnic Affairs v Teoh [1995] HCA 20, 183 CLR 273
Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6, 214 CLR 1
Minister for Planning v Walker [2008] NSWCA 224, 161 LGERA 423
Minister for Planning v Walker (No 2) [2008] NSWCA 334
Moolarben Coal Mines Pty Ltd v Director-General of the (former) Department of Industry and Investment NSW (Agriculture Division) [2011] NSWLEC 191
Oshlack v Richmond River Council [1998] HCA 11, 193 CLR 72
Pioneer Park Pty Ltd (in Liq) v Australia and New Zealand Banking Group Ltd [2007] NSWCA 344, 65 ACSR 383
Prasad v Minister for Immigration and Ethnic Affairs [1985] FCA 47, 6 FCR 155
Ruangrong v Minister for Immigration and Ethnic Affairs [1988] FCA 87
Shellharbour City Council v Minister for Planning [2011] NSWCA 195
Shellharbour City Council v Minister for Planning (No 2) [2011] NSWLEC 107
Shellharbour City Council v Minister for Planning (No 2) [2012] NSWLEC 96
State of Western Australia v Ward [2002] HCA 28, 213 CLR 1
Street v Luna Park Sydney Pty Ltd [2009] NSWSC 1, 223 FLR 245
Tickner v Bropho (1993) 40 FCR 183
Category: Interlocutory applications
Parties: Friends of King Edward Park Inc (Applicant)
Newcastle City Council (First Respondent)
King Edward Headland Reserve Trust (Second Respondent)
Minister for Primary Industry (Third Respondent)
Annie Street Commercial Pty Ltd (Fourth Respondent)
Representation: COUNSEL:
Mr T Robertson SC and Mr J Lazarus (Applicant)
Mr A Shearer (First Respondent)
Mr J Maston (Second and Third Respondents)
Submitting appearance (Fourth Respondent)
SOLICITORS:
The University of Newcastle Legal Centre (Applicant)
Newcastle City Council (First Respondent)
Crown Solicitor's Office (Second and Third Respondents)
Keystone Lawyers (Fourth Respondent)

File Number(s): 40089 of 2012

Judgment

CONTENTS

Paragraphs

BACKGROUND
THE APPLICANT
THE APPLICANT'S CASE
SECURITY FOR COSTS
EXPERT EVIDENCE
ORDERS

1 - 7
8 - 13
14 - 31
32- 65
66 - 90
91 - 93

These are motions in judicial review proceedings by:

(a) the first respondent, Newcastle City Council, that the applicant, Friends of King Edward Park Inc, provide security for the council's costs in the sum of $70,000; and

(b) the applicant for directions that the applicant may file and serve reports by a geotechnical expert, Dr Philip Pells, and an appropriate expert surveyor. During the hearing of this motion, the survey issue was disposed of by consent orders.

BACKGROUND

The applicant challenges the validity of a development consent granted on 8 November 2011 by the council to the fourth respondent, Annie Street Commercial Pty Ltd, for a function centre, kiosk and carpark. The function centre and kiosk are to occupy the whole of the King Edward Headland Reserve (the Reserve), which is surrounded by the much larger 38 hectare King Edward Park (the Park). The carpark is adjacent to the Reserve, in the Park. The applicant also challenges the validity of a plan of management for the Reserve under the Crown Lands Act 1989 adopted by the third respondent, the Minister for Primary Industry. The second respondent is the King Edward Headland Reserve Trust, the trustee of the Reserve.

Set on top of a headland, the Reserve provides panoramic views of the Newcastle coastline, the Pacific Ocean and the adjoining Park. The Reserve is the site of a former bowling club, which is now derelict.

The proceedings have progressed to the stage where the applicant, during the hearing of the motion, filed Amended Points of Claim (APOC). No Defence has yet been filed.

According to the APOC, the Park and the Reserve are places of heritage and cultural importance. They are listed as a heritage item of State significance in the Newcastle Local Environmental Plan 2003 (LEP), listed in the Register of the National Estate, and are part of the Hill Heritage Conservation Area in the LEP. It is also pleaded that in the area of the cliff adjoining the Reserve is a place of Aboriginal cultural significance, which is listed as a heritage item in the LEP, known to the council as a sacred site, and described in the National Parks and Wildlife Services Sites Register (APOC 4).

The Park and the Reserve are places of public significance. The Park is a public park. The dedicated purpose of the Reserve is public recreation under its plan of management pursuant to the Crown Lands Act. The plan of management includes an indicative concept plan based on site attributes and stated design principles, which include creating vantage points that provide views of the ocean and the Park, and ensuring equality of access to all areas of the Reserve. A plan at the end of the indicative concept plan shows within the Reserve a public access path with viewing areas and seats, public turfed areas with park benches, and a "Park parking" area. It also shows a "1 or 2 storey development envelope (restaurant/reception venue)" occupying roughly 30 per cent of the Reserve.

Some of the grounds of challenge concern a condition of the development consent which requires a public access pathway to be located partly in the Reserve but mostly in the adjacent Park on the southern and eastern sides of the proposed development, along or under the top part of the slopes of a cliff and crossing slope lines. In contrast, the pathway shown in the concept plan is on flat ground in the Reserve with a landscaped terrace and seating areas.

THE APPLICANT

In the context of its security for costs application and the applicant's reliance on the public interest exception in r 4.2 of the Land and Environment Court Rules 2007 (LECR), the council contends that the real aims and concerns of the applicant are local amenity concerns which do not satisfy LECR 4.2. It is therefore necessary to consider the applicant's position in some detail.

The applicant was formed in early 2011 in response to concerns that the fourth respondent's proposal (later the subject of the development application) did not comply with the plan of management for the Reserve and that it had three environmental impacts. First, diminution of the amenity of the Park. Secondly, interruption of the community's enjoyment of spectacular views of the coastline from the Reserve. Thirdly, inconsistency with the historic significance of the site in relation to Newcastle's convict, defence, indigenous and coal mining history. In early 2011, before the applicant was incorporated, letters from its current President, Dr Kim Ostinga, to the council expressed objections on local amenity grounds. However, they also referred to broad environmental grounds, such as the historical importance of the site and the notion that the Reserve belongs to all the people and should not be passed over to a developer. By July 2011, his correspondence with the council and a newspaper had a broader emphasis, objecting that the proposed development lacked equal use between public and private interests, that it did not comply with the plan of management, and that the plan of management should be withdrawn with an increased emphasis on public open space.

The applicant was incorporated in November 2011, shortly after the development consent was granted. The reason for incorporation, according to Dr Ostinga's evidence, which I accept in this and all other respects, was to do something positive for the Park, and also to raise funds and awareness for the Park and its surrounds, to assist the council to maintain the Park, and to monitor further commercialisation of the coastal reserve. The objects expressed in its constitution are quite broad and not anchored only to narrow local amenity issues:

The Friends of King Edward Park seek to promote and protect the historic values and public recreational purposes of King Edward Park and the King Edward Headland Reserve. We seek to involve the community in our objectives for the Park and the Reserve as a place of special significance in the Hunter, both in Aboriginal and European history. We seek to ensure any changes in the Park comply with its dedicated purpose.

The friends also seek to promote interest and respect for the surrounding coastal regions and to provide a model for coastal public recreational reserves.

Motto: It should be good for the life of the people. Joern Utzon.

In cross-examination, Dr Ostinga indicated that:

(a) he had proposed to the council prior to the development consent that there should be a footway south and east of the development, but that the applicant challenged the footway introduced by the development consent because it was a poor substitute for what the plan of management required;

(b) the reason for the proceedings being brought by the applicant was the extent of community concern, and the impediment to proceedings being brought in his name was his own good sense;

(c) he is happy with a proposal to develop the Reserve but objects to this proposal because it does not comply with the plan of management; and

(d) the applicant had not engaged in financing activities to meet, and nobody associated with the applicant has offered a personal undertaking to meet, the respondents' costs. The applicant had been advised by its lawyers that if it is was unsuccessful it would be potentially liable for the respondents' costs, and of the potential amount of those costs.

The applicant has about 115 members (including one overseas member) of which 63 reside in Newcastle and 22 in suburbs of Newcastle. A good number reside within streets in the immediate vicinity of the Reserve and the Park. Four of its five office bearers live in adjacent streets.

Since incorporation, the applicant has raised approximately $16,650 to fund its activities. At present its only asset is about $12,700 cash at the bank. Dr Ostinga indicated in an affidavit that the applicant could raise some additional funds from members but not in the order of the amount of security sought by the council. For this reason, he said, the applicant would not be able to continue the proceedings if security for costs in that amount were ordered. Its current funds are committed, mainly to its own legal costs and it also seeks to call expert evidence. Its junior counsel has capped his fees at $10,000 if the proceedings are unsuccessful, and its senior counsel and solicitors are retained on a contingency fee basis (no win no fee).

THE APPLICANT'S CASE

The applicant in its APOC pleads a number of grounds of invalidity of the development consent. They may be broadly categorised under two headings: Crown land grounds and non-Crown land grounds. The latter mainly relate to the pathway. The applicant contends that they demonstrate that these are public interest proceedings sufficient to attract a favourable exercise of the Court's discretion not to order security for costs under LECR 4.2. In that regard, the grounds relate both to the use of the Park and to the use of the Reserve. It is convenient to consider the grounds of invalidity in a different order to the order in which they are pleaded in the APOC.

Crown land grounds

First, the applicant pleads that a function centre is prohibited in the Reserve (APOC 48-51). Under the LEP, the Park and the Reserve are in Zone 6(a) Open Space and Recreation Zone. The objectives of this zone are as follows:

(a) To accommodate leisure, recreation and sports facilities in parks, gardens, plazas and other open spaces, for the general use of the community, where consistent with an adopted plan of management under the Local Government Act 1993 or the Crown Lands Act 1989.

(b) To provide for the conservation of urban bushland where associated with parks and other open spaces.

(c) To accommodate other facilities for the benefit of the community that are compatible and consistent with the heritage and character of the open space and with the character and amenity of the neighbourhood.

Development for the purpose of a function centre is prohibited in this zone unless it falls within a list of specified developments permitted with development consent. That list does not include function centres, but includes: "Any development allowed by a plan of management under the Local Government Act 1993 or Crown Lands Act 1989". There is a plan of management under the Crown Lands Act for the Reserve which allows two additional developments in the 6(a) zone, namely, "conference centres and commercial facilities that provide for public recreation". The applicant submits that neither of those two additional uses includes a function centre because a function centre is not a "conference centre", and if a function centre is "commercial facilities" it does not "provide for public recreation". The public will have no access as of right to it. Therefore, the applicant submits that a function centre is prohibited in the Reserve.

Next, the applicant contends that the plan of management for the Reserve does not lawfully provide for those two additional uses (APOC 50(a), (c) and (d)). Section 112 of the Crown Lands Act permits the Minister to prepare a draft plan of management for a reserve that would, if adopted, authorise the reserve to be used for an "additional purpose". The expression "additional purpose" is defined relevantly in s 112A to mean "any purpose that is additional to: (a) the declared purpose of the reserve". The declared purpose is defined as any purpose for which the land has been dedicated or reserved and includes any purpose or use permitted under, or in connection with, the declared purpose. Section 114(1A) provides for the Minister to adopt a plan of management that authorises a reserve to be used for an additional purpose, subject to conditions. The applicant contends that:

(a) a purpose cannot be an "additional purpose" within the meaning of s 112A if it is inconsistent with, contradicts or negates the purpose for which the land is reserved;

(b) "conference centres" or "commercial facilities" are inconsistent with the plan of management's declared purpose of the Reserve for "Public Recreation";

(c) this point, if good, is important as it affects every public reserve in New South Wales because it constrains the use of public reserves in a very significant way: State of Western Australia v Ward [2002] HCA 28, 213 CLR 1 at [218], [243];

(d) that includes the subject development because the whole point of the development consent is so that the Minister may lease the Reserve to the developer;

(e) the point is novel and there has been no Court decision on any of these statutory provisions, with one irrelevant exception (Street v Luna Park Sydney Pty Ltd [2009] NSWSC 1, 223 FLR 245); and

(f) therefore the point is of great public importance.

The council submits in reply that s 114(1C)(b) of the Crown Lands Act shows that these contentions should fail because its reference to "compatibility" indicates that an additional purpose may be inconsistent with the declared purpose. Section 114(1C) lists the matters that the Minister is bound to consider in determining whether to adopt a plan of management that authorises a reserve for an additional purpose. The matter in s 114(1C)(b) is "the compatibility of the proposed additional purpose with the declared purpose".

I do not propose to decide the issue at this interlocutory hearing. At this stage, I consider that the issue which the applicant raises is reasonably arguable and, if right, potentially affects all leases and other dispositions of Crown land in NSW, including a lease of the Reserve.

Next, the applicant pleads that, in any event, the plan of management did not validly authorise the use of the Reserve for additional purposes because the third respondent, the Minister for Primary Industry, did not, before determining to adopt the plan of management, have regard to the mandatory matters referred to in s 114(1C) of the Crown Lands Act (APOC 50(b)).

Next, the applicant pleads that the car parking and access ways are prohibited development in the Park (APOC 27-29). They are ancillary to the function centre, which is a prohibited development in Zone 6(a), and therefore have the same purpose. The applicant says that there is no plan of management under the Crown Lands Act for the Park: there is no evidence or submission by the council to the contrary.

Non-Crown land grounds

Most of the applicant's non-Crown land grounds of challenge concern the proposed public access pathway which is partly on the Reserve but mostly in the adjacent Park along or about a cliff top. At the last moment at its meeting on 8 November 2011 when it consented to the development application, the council agreed to an amendment of the development application to add this pathway as shown on a specified drawing. The addition of the pathway was provided for in condition 3.28 of the development consent, which states (the Reserve is Lot 3109 DP 755247):

3.28 The applicant constructing at its cost, to the satisfaction of Council, a public access pathway generally as shown on Drawing A1101 - Revision A, prepared by EJE Architecture, dated 27.10.2011, within Lot 3109 DP 755247 and within King Edward Park, with such pathway being a minimum 2.4 metres wide. Full details of the public access pathway are to be provided to the Principal Certifying Authority prior to the issue of any Construction Certificate. Construction of the public access pathway is to be completed prior to the issue of any Occupation Certificate for the development.

Reason: To provide improved public access to and around the site.

When it granted development consent, the council was aware, or should be taken to have been aware, of the following three documents, which are relevant to the pathway issue:

(a) the plan of management for the Reserve under the Crown Lands Act, which states that its southern and eastern boundaries appear to be unstable, that a site inspection identified evidence of landslip and erosion, and that more geotechnical assessment was required to assess the actions required to manage the southern and eastern margins of the Reserve;

(b) a council officer's report on the development application, which says that the pedestrian path around the southern perimeter of the site on the indicative concept plan within the plan of management had not been provided because of (among other things) the topography of the site (changes in grade), soil instability and the need for retaining works, safety and security issues, and existing disturbed areas along the southern boundary. The report said that those reasons were considered valid; and

(c) a geotechnical report by Coffey Geotechnics Pty Ltd (provided by the developer with a statement of environmental effects), which indicates that the slopes of the southern and eastern sides of the Reserve are in a zone designating land which requires evaluation in respect of slope instability prior to developments being undertaken on such land.

Under the heading "Breach of s.79C" of the Environmental Planning and Assessment Act 1979 (EPA Act), the applicant pleads in relation to the pathway (APOC 45-47A):

(a) the council failed to consider matters relating to the pathway that it was required to consider under s 79C(1), namely, the heritage provisions of the LEP, the likely impacts of the development in various respects, the suitability of the site for the development, and the public interest. The heritage consideration arises because of the pleaded matters referred to above at [5];

(b) if (which is denied) the council did take into consideration those matters, proper consideration could not be given to them without certain further information including geotechnical assessment of cliffline instability and potential subsidence impacts, and construction methods to mitigate impacts predicted by the geotechnical assessment;

(c) in breach of s 80 of the EPA Act, the council deferred, by condition 3.28 of the development consent, consideration of impacts of the pathway to the certification stage; and

(d) in light of the findings in the council officer's report on the development application, the council was under a duty to make further inquiries, which it did not make. The further inquiries are said to include a geotechnical assessment of the amended development proposal addressing the impacts of cliffline instability, potential subsidence impacts, the existing landslips, the works necessary to make good any unstable areas upon the design of the pathway and the extent to which surrounding land would be consumed by the works, in order to determine the area of land affected, the extent and appearance of the works, the impacts on the heritage items, the visual amenity of the coastline and the Park, and residual risks to public safety from use of the pathway or of surrounding areas, so as to perform its functions under s 79C (APOC 47A).

Next, it is pleaded that in breach of cl 27(1) of the LEP the council failed to have regard to the extent to which construction and use of the pathway would affect the heritage significance of the heritage items and conservation area, or did not give proper consideration to them in various respects (APOC 37-40).

Next, there is a pleading that the pathway is likely to have an impact on a place of Aboriginal heritage significance, that, in breach of cl 31 of the LEP, the council did not obtain a heritage impact statement and did not notify local Aboriginal communities of the development proposal and take into account their comments, and that cl 31 precluded the council from granting development consent without first complying with its provisions (APOC 41-44).

Next, the applicant pleads that an amended development proposal including the pathway was required to be re-advertised, but was not (APOC 30-36).

Next, there is a pleading that by reason of the matters relating to the breach of s 79C, breach of heritage provisions, breach of Aboriginal heritage provisions and no advertising, the development consent decision was so unreasonable that no reasonable decision-maker would have made it because (APOC 52A):

(a) the council knew that the area of the pathway and surrounding land were heritage items of public and historic significance and cultural sensitivity and in a visually prominent location;

(b) the council knew that the area was particularly dangerous and unstable because the pathway was to be constructed on sloping land with cliffline instability, potential mine subsidence and existing land slips;

(c) the council could not have known the likely impacts of the development referred to in APOC 45 (b) without having conducted the inquiries referred to in APOC 47A (to which I have referred at [24] above);

(d) those inquiries were not made; and

(e) council abdicated its functions under ss 79C and 80 of the EPA Act by deferring the investigation of the likely impacts of the development pleaded at APOC 45(b) to a certifier whose functions do not include the assessment of environmental impacts and the consideration of s 79C factors which the Act required the consent authority to undertake. This is a reference to condition 3.28 of the development consent set out above at [22].

The applicant submits that the public interest in the breaches alleged at [27] - [28] above is that they offend the object of the EPA Act to provide increased opportunity for public involvement and participation in environmental planning and assessment: s 5(c) EPA Act.

Next, the applicant pleads that no owner's consent by the council was given for the car parking in, and access from the road over, the Park (APOC 20 - 21).

Finally, the applicant pleads that no integrated development approval for the pathway was obtained from the Mines Subsidence Board as required by ss 91(1) and 91A of the EPA Act (APOC 22-25). It is alleged that the pathway was integrated development because it was an improvement within ss 4 and 15 of the Mine Subsidence Compensation Act 1961.

SECURITY FOR COSTS

The council relies upon two jurisdictional bases for its security for costs application: r 42.21 of the Uniform Civil Procedure Rules 2005 (UCPR) and the inherent jurisdiction of the Court. UCPR 42.21 relevantly provides:

42.21 Security for costs

(1) If, in any proceedings, it appears to the court on the application of a defendant:

...

(d) that there is reason to believe that a plaintiff, being a corporation, will be unable to pay the costs of the defendant if ordered to do so, or

...

the court may order the plaintiff to give such security as the court thinks fit, in such manner as the court directs, for the defendant's costs of the proceedings and that the proceedings be stayed until the security is given.

(2) Security for costs is to be given in such manner, at such time and on such terms (if any) as the court may by order direct.

(3) If the plaintiff fails to comply with an order under this rule, the court may order that the proceeding on the plaintiff's claim for relief in the proceedings be dismissed.

...

The applicant is an incorporated association. The reference to a corporation in UCPR 42.21(1)(d) includes an incorporated association: Burrell Place Community Action Group Incorporated v Griffith City Council [2009] NSWLEC 120 at [7].

There is no dispute that the applicant will be unable to meet an adverse costs order if it is unsuccessful in the proceedings. Its only asset comprises about $12,700 cash at the bank, which is committed mainly to its own legal costs. The applicant has also commissioned a report from an engineering expert, Dr Pells, and proposes to call survey evidence. The applicant's junior counsel has capped his fees at $10,000 if the applicant is unsuccessful. The applicant's solicitors and senior counsel are retained on a contingency fee basis. The council's solicitor has estimated that the council's fees will be in the vicinity of approximately $79,000 to $89,000, which is largely not contested and which I accept as a reasonable estimate. Therefore, the discretion to award security is triggered and the applicant has an onus to demonstrate why security for costs should not be ordered: Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744 at [60], [62]; John Williams Neighbourhood Group Inc v Minister for Planning [2011] NSWLEC 100, 183 LGERA 327 at [28] - [29].

Putting public interest litigation considerations aside for a moment, the exercise of the power to order security for costs is a "balancing process", requiring the doing of justice between the parties. The Court should have a concern to achieve a balance between ensuring that adequate and fair protection is provided to a respondent, and avoiding injustice to an impecunious applicant by unnecessarily shutting it out or prejudicing it in the conduct of the proceedings: Idoport at [47] per Einstein J. The exercise of the power requires consideration of the particular facts of the case: Merribee Pastoral Industries Pty Ltd v Australia and New Zealand Banking Group Ltd [1998] HCA 41, 193 CLR 502. The weight to be given to any particular consideration depends upon its own "intrinsic persuasiveness" and its impact on other circumstances, which have to be weighed: Acohs Pty Ltd v Ucorp Pty Ltd [2006] FCA 1279, 155 FCR 181 at [11]. There is no code to be strictly applied: John Williams at [24].

In Merribee the defendant bank unsuccessfully sought security for costs against the insolvent corporate plaintiffs in their proceedings challenging the jurisdiction of the Federal Court to make winding up orders against them, which the defendant had obtained. In declining to order security for costs, Kirby J identified a number of propositions relevant to the exercise of discretion. They include the following:

(a) "what should be done in each case depends entirely on the circumstances of the case. The governing consideration is what is required by the justice of the matter";

(b) the evaluation of the plaintiff's prospects of success is necessarily tentative "given that the real merits of a case might not emerge until the final hearing or might not sufficiently emerge in the necessarily brief proceedings typically involved in an application for security for costs"; and

(c) important considerations include that the proceedings raise matters of general public importance quite apart from the interests of the parties and that the nature of the proceedings is such that, even if unsuccessful, an order for costs in favour of the winning party might not be made or might be limited: at [26].

The consideration critical to his Honour's decision was the importance to the plaintiffs and the public of an early resolution of constitutional questions concerning the jurisdiction of the Federal Court: at [31].

The often-quoted factors to be taken into account in the exercise of the Court's discretion to order security for costs, as set out in KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] 56 FCR 189 at 197-198 per Beazley J, are as follows:

(a) whether the application for security has been brought promptly;

(b) the strength and bona fides of the case in which security is sought;

(c) whether the impecuniosity of the applicant resulted from the respondent's conduct which is the subject of the claim;

(d) whether the application for security is oppressive, in the sense of denying an impecunious individual or organisation a right to litigate;

(e) whether there are any persons standing behind the applicant who are likely to benefit and be willing to provide the security;

(f) whether persons standing behind the applicant offered any personal undertaking to be liable for the costs and, if so, the form of any such undertaking; and

(g) whether the applicant for security is in substance a plaintiff or the proceedings are defensive in nature.

Addressing those factors in the present case:

(a) the application for security has been brought reasonably promptly;

(b) the council concedes that the claim is bona fide and has reasonable prospects of success. At this early stage of the proceedings, and having regard to the complexity of the issues, I do not propose to go further than this in assessing the strength of the applicant's case. There are potential difficulties in assessing the merits of an applicant's claim in complex cases in a preliminary way at an early stage of the proceedings: for example, see Pioneer Park Pty Ltd (in Liq) v Australia and New Zealand Banking Group Ltd [2007] NSWCA 344, 65 ACSR 383 at [45]; see also Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664, 208 ALR 564 at [37] - [38];

(c) there is no suggestion that the impecuniosity of the applicant was caused by the council;

(d) the applicant is financially unable to provide security, at least in the sum sought by the council: see [13] above. However, this does not lead to the inevitable conclusion that the making of the order is oppressive in the sense that it will stultify the applicant's claim, nor does it lead to the automatic refusal of a security order;

(e) the members of the applicant will not benefit financially. While the applicant could raise some additional funds from its members, it could not do so in the amount of security sought by the applicant;

(f) the members of the applicant have offered no personal undertaking to be liable for the council's costs; and

(g) factor (g) is inapplicable.

The discretion does not begin and end with consideration of the circumstances of the impecunious corporation that wishes to litigate. The position of those who would benefit economically from the corporation's success is also relevant. This underlies factors (d), (e) and (f) in the KP Cable list. It has been said in the context of trading corporations that it is generally inappropriate to refuse an order for security where the persons behind a corporate applicant are financially able to produce adequate security or in the absence of evidence of the financial status of those who stand behind it: Idoport at [50]. Austin J in Morningstar at [83] considered it:

...unrealistic for the court to decline to order security on the ground that to do so would stultify the litigation, if it took into account only the financial ability of the plaintiff, and disregarded the financial ability of those who would benefit from the plaintiff's success and who would therefore have an economic incentive to bear the burden of a security order. More broadly, it is fair for the courts to proceed on a basis which reflects the proposition that those who seek to benefit from litigation should bear the risks and burdens that the process entails.

In the present case, as the council emphasises, there is no evidence of the financial status of the members of the applicant. However, I do not think that the principle of scrutiny of those who stand behind a commercial corporation is of much significance where the corporation that wishes to litigate is not a commercial corporation and brings the proceedings in the public interest to enforce obligations under environmental legislation, and its members will not benefit economically from the corporation's success. The members of such a corporation are not like the members of a trading company who may expect to receive dividends or other financial benefits from the fruits of litigation. As has been said, "Public-minded citizens may well be able to obtain donations of time and expertise from professional witnesses and lawyers, but will find it less easy to raise funds to meet the costs of the other party": Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263, 176 LGERA 424 at [218] per Basten JA (MacFarlan JA agreeing). In the present case, the applicant is not a commercial corporation and it has not been shown that its members will benefit economically if it were to succeed. The members of the applicant will benefit only in the same sense as all members of the public will benefit: from their entitlement to use and enjoy the Park as a public park and the Reserve for its dedicated public recreation purpose. Of course, it may be accepted that those members of the applicant who reside closer to the Park and Reserve will enjoy that benefit more regularly than members of the applicant and members of the general public who reside further away.

The applicant relies on the following factors as warranting refusal of security for costs:

(a) the public interest nature of the litigation;

(b) the applicant's strong prospects of success; and

(c) the likelihood that the proceedings would be stifled if an order for security for costs were made.

In relation to the second factor, as stated above, having regard to the early stage of the proceedings and the complexity of the issues, I do not propose to assess the strength of the applicant's case beyond that which the council concedes: it is bona fide and has reasonable prospects of success. As to the third factor, I accept Dr Ostinga's evidence that the applicant could raise some additional funds from its members but not in the order of the amount of security sought by the council. I conclude that these proceedings by the applicant are likely to be stultified if it had to provide all the security sought by the council but not if it had to provide part of it. Dr Ostinga did not specify the quantum of that part. It is too late for anyone else to bring equivalent proceedings because the limitation period under s 101 of the EPA Act has expired.

I turn to the first factor, the public interest nature of the litigation.

The awarding of costs in civil litigation such as this is always in the discretion of the Court: s 98 Civil Procedure Act 2005. However, it is not a free-ranging discretion. Section 98 provides that it is subject to rules of Court, and the rules are qualified. The usual costs order under UCPR 42.1 is that costs follow the event. That is, the loser pays the reasonable costs incurred by the winner. That rule is expressed to be subject to the qualification "unless it appears to the Court that some other order should be made". One circumstance where the usual costs order may be departed from is when the proceedings are brought in the public interest: Oshlack v Richmond River Council [1998] HCA 11, 193 CLR 72 at [48] -[49], [104], [133] -[134]; Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39, 172 LGERA 157 at [3].

Building on the public interest litigation exception recognised by the High Court in Oshlack, LECR 4.2 now provides:

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.

(2) The Court may decide not to make an order requiring an applicant in any proceedings to give security for the respondent's costs if it is satisfied that the proceedings have been brought in the public interest.

....

In Anderson on behalf of Numbahjing Clan within Bundjalung Nation v NSW Minister for Planning (No 2) [2008] NSWLEC 272,163 LGERA 132 at [5] - [28] I analysed the new LECR 4.2 which was introduced in 2007, the earlier cases concerning public interest litigation, the concept of "public interest", and public interest litigation in this Court.

LECR 4.2 should be read in the context of open standing provisions in legislation such as the EPA Act (s 123), which enable and encourage members of the public to police environmental legislation in the public interest by bringing responsible litigation to protect the environment. There is little point in the legislature opening the door to public participation in this way if the doorway is then blocked by a menacing costs hound which threatens to savage the responsible public interest litigant who dares to enter and loses.

In Minister for Planning v Walker [2008] NSWCA 224, 161 LGERA 423 Ms Walker failed on appeal in her claim that the Minister's concept plan approval under Part 3A of the EPA Act for a retirement village was invalid because the Minister had not taken into account the principles of ecologically sustainable development, in particular the effect of climate change floor risk on a flood constrained coastal plain where the proposed development was to occur. On the question of costs, the Court of Appeal declined to order her to pay costs at first instance or on appeal: Minister for Planning v Walker (No 2) [2008] NSWCA 334. After referring to Oshlack and the factors referred to in Engadine Area Traffic Group Inc v Sutherland Shire Council (No 2) [2004] NSWLEC 434, 136 LGERA 365 at [15] (set out below at [51]), Hodgson JA (with whom the other members of the Court agreed) held at [8] - [10]:

8 In my opinion, there is clearly a public interest in the principles of ecologically sustainable development (ESD) and in climate change flood risk in relation to properties near the coast. In my opinion, it is clear that this interest is not confined to a small number of people in the immediate vicinity of the development in this case. I would infer that the prime motivation of this litigation was to uphold the rule of law in relation to that matter of public interest. Accordingly, in my opinion, this was plainly public interest litigation.

9 I accept the Minister's submission that more is required to displace the ordinary rule as to costs. In this case, in my opinion, there are the following additional factors:

(1) The proceedings did raise a novel point of law, namely the extent to which the objects of the EPA Act, set out in s 5 of that Act, could constitute mandatory requirements in respect of decisions of the Minister.

(2) The point was reasonably arguable, and in effect was upheld by the primary judge.

(3) According to the primary judge and a majority of the Court of Appeal, Ms Walker did establish that the Minister had not taken into account one of those objects, namely ESD.

(4) According to that majority, the Minister's failure to do so was contrary to good decision-making, albeit not something that invalidated the decision, and ESD was something that should be taken into account when approval of the development was sought.

10 In all the circumstances, in my opinion, the proper exercise of discretion is to order that each party pay its own costs at first instance and on appeal.

The operation of LECR 4.2 of the LECR was addressed by the Court of Appeal in the context of an application for a maximum costs order under UCPR 42.4 in Delta. Basten JA noted at [203] that LECR 4.2 had the following significant aspects:

(a) it removes any argument that the bringing of proceedings in the public interest might be an extraneous factor which could not influence an order as to costs;

(b) satisfaction of the Court that the proceedings are brought in the public interest provides an affirmative reason for not making an order for costs against an unsuccessful applicant, and thus qualifies the operation of UCPR 42.1, which would otherwise be applicable; and

(c) LECR 4.2 qualifies any expectation that a respondent may have that it would receive its costs if successful.

In Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59, 173 LGERA 280, (summarised in Martin v NSW Minister for Mineral and Forest Resources [2011] NSWLEC 38 at [41] - [48] and endorsed by the Court of Appeal in Delta at [80] - [86]) Preston CJ laid down a principled three step approach to determine whether to depart from the usual costs rule in public interest proceedings at [13] - [20]:

(a) first, can the litigation be characterised as having been brought in the public interest?

(b) secondly, if so, is there "something more" than the mere characterisation of the litigation as being brought in the public interest? and

(c) thirdly, are there any countervailing circumstances, including those relating to the conduct of the applicant, which speak against a departure from the usual costs rule in respect of the public interest litigation?

In relation to the first step, Caroona at [38] endorsed the following summary in Engadine at [15] of the factors that assist in determining whether litigation can properly be characterised as having been brought in the public interest:

(a) whether the public interest is served by the litigation;

(b) whether that interest is confined to a relevantly small number of members from the group or association in the immediate vicinity of the development, or whether the interest is wider, involving a significant number of members of the public and is concerned with a wider and significant geographic area;

(c) whether the applicant seeks to enforce public law obligations;

(d) whether the prime motivation of the litigation is to uphold the public interest and the rule of law; and

(e) whether the applicant has a pecuniary interest in the outcome of the proceedings.

The first step is relatively undemanding. It has been held that where proceedings are brought to uphold and enforce public law obligations under the EPA Act and to ensure that the decision-maker's exercise of power thereunder was lawful, this constitutes a public interest of a sufficient kind as to allow characterisation of the proceedings as being brought in the public interest: Hill Top Residents Action Group Inc v Minister for Planning (No 3) [2010] NSWLEC 155, 176 LGERA 20 at [40] per Preston CJ.

In relation to the second step, Caroona identified at [60] at least five categories of cases containing additional factors (the "something more"), namely whether:

(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 is brought to protect the environment or some component of it, and the environment or component is of significant value and importance;

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

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

There appears to be some overlap between factors (d) and (e) here and factors (b) and (e) relating to the first step set out above at [51].

Finally, in relation to the third step, the following are some of the countervailing circumstances that may weigh in favour of the application of the usual costs rule (Caroona at [61]):

(a) the applicant is seeking to vindicate rights of a commercial character and stands to benefit from the litigation;

(b) the applicant is an incorporated association and the private interests of members of the association would be affected legally or financially by the outcome of the litigation;

(c) the applicant is supported financially by persons or bodies who benefit from, or would have their legal or financial interests affected by, the outcome of the litigation;

(d) the narrowness of the question of public interest raised, such as only involving a discrete point of interpretation without broad ramifications; and

(e) the applicant unreasonably pursues or persists with points which have no merit or issues that were not eminently arguable.

In considering whether proceedings are in the public interest and the breadth or ramifications of the public interest raised, it is necessary to look not just at the pleaded causes of action but at the consequences of the proceedings if the applicant succeeds. For example, in Delta, where a maximum costs order was made, the fundamental legal issue concerned the construction of Delta's pollution licence. The consequence of a construction favourable to the applicant would be to protect from pollution a river that was an important watercourse feeding into Sydney's water supply. Basten JA observed that the public interest in preventing or limiting pollution in that body of water was readily apparent, and that the proceedings would not lose their public interest character because the Court might ultimately not be satisfied that the water was being polluted, or that there was any imminent threat thereof: at [209]. His Honour also observed that the respondent was a State-owned corporation whose principal function is to provide electricity for consumers in the Sydney region, that the proper exercise of that function was itself a matter of public interest, and that this was relevant to the characterisation of the litigation: at [213].

In Hastings Point Young JA (with whom McColl JA agreed) said at [33] - [34]:

It must be remembered that so-called public interest groups may fall into five categories. First, there are genuine groups of people whose sole interest is the protection of the environment. Secondly, there are groups whose real aim is to preserve their existing amenities and are happy for the proposed development to proceed in another area. Thirdly, there are groups which are a facade for a competitor who wishes to protect its own commercial interests. Fourthly, there are groups which have been formed for purposes of maintaining religious or ethical standards. Fifthly, there are groups which might contain representatives of all four categories or groups who have formed for some other purpose.

Clearly the third group cannot expect mercy on costs and the second group would have great difficulty. Thus, it is necessary for the court to look further than the name of the group and its professed aims.

Basten JA (with whom McColl JA also agreed) did not categorise and pass preliminary judgment on public interest groups in this way but focused on the circumstances of the particular case, at [11]:

I would accept the fact that the proceedings were brought predominantly in the public interest. In this Court, that fact is one which may be weighed against the preferred outcome identified in r 42.1, namely that costs follow the event. There are three particular factors which militate in this case, against departure from that rule. First, the defendant is a commercial enterprise, and not the State or a governmental authority. Secondly, 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. Thirdly, the matter was not entirely without consequence for the private interests of members of the Association. Most, if not all, were local residents and overdevelopment would affect the amenity of the area within which they lived and owned property. Although they were not personally applicants in the proceedings, nor liable for the debts of the incorporated Association, for this purpose one is entitled to look behind the legal structure of the applicant to identify whose interests, both legal and financial, may be affected in a practical sense.

Basten JA's judgment in Hastings Point was cited in Shellharbour City Council v Minister for Planning (No 2) [2012] NSWLEC 96 at [25] - [26]. Craig J, in a costs contest between two governmental authorities, acknowledged that there was a public interest in the litigation and therefore LECR 4.2 was engaged, but declined to exercise the discretion not to order costs under that provision because "something more" was not present. In particular, the proceedings turned on a relatively discrete point of interpretation involving the operation of a local environmental plan, did not raise any novel issue of general importance, did not contribute in a material way to the proper understanding or administration of planning law, and were not brought to protect a component of the environment that was of value or importance.

In John Williams the applicant challenged the validity of an approval under Part 3A of the EPA Act. Sheahan J ordered security for costs and dismissed a motion for a maximum costs order. In relation to LECR 4.2, his Honour declined to classify the challenge as public interest litigation because while there was some element of a broader public interest nature involved in the matter, the real aim of the challenging group was to preserve the amenity of the residential neighbourhood where its members resided, in the face of a threat posed to it by a six storey private hospital: at [49] - [50].

The council places particular reliance on John Williams where some key members of the applicant lived near the proposed development of a six storey private hospital and had private amenity concerns. The facts of John Williams and the other cases to which I have referred (and other cases discussed in them) are illustrative of a wide range of circumstances which may fall to be considered in the context of LECR 4.2. In my view, they are factually distinguishable from the present case, which should be decided on its own facts in accordance with established principles.

The council submits that the proceedings do not warrant characterisation as public interest proceedings justifying any costs dispensation for the following reasons:

(a) the proceedings involve merely an issue of local concern to a local group of persons residing in the area;

(b) the key officers and most of the members reside in the local vicinity;

(c) the issue does not concern a broad and serious environmental issue;

(d) the proceedings do not involve any complex or novel legal matters or any legal principle of general significance;

(e) even if they do involve some element of a broader public interest nature, that does not mean they can be classified as public interest litigation; and

(f) the onus is on the applicant to demonstrate something more than the mere fact of public interest litigation so as to warrant departure from the ordinary costs rule. There is nothing more.

I am satisfied that the proceedings have been brought in the public interest having regard to the following:

(a) the applicant is seeking to enforce public law obligations on the part of the council and the Minister;

(b) the proceedings relate in part to the protection of heritage items, including Aboriginal heritage items: Carriage v Stockland (Constructors) Pty Ltd (No 2) [2002] NSWLEC 217, 123 LGERA 214 at [15]; Kennedy v Stockland Development Pty Ltd (No 2) [2011] NSWLEC 10 at [58];

(c) the proceedings have been brought to preserve the Reserve for its dedicated purpose of public recreation and to preserve the Park which is a public park;

(d) the applicant's members are geographically wide spread and are not just limited to those in the immediate vicinity of the development proposal;

(e) none of the members of the applicant has any pecuniary interest in the outcome of the proceedings; and

(f) if members of the applicant living in close proximity to the development are motivated in part by a perspective of a local amenity impact, nevertheless there is a broad public interest at stake given that the Park is open to use by all members of the public, the dedicated purpose of the Reserve is public recreation, and given the heritage considerations. There is a distinction between the public interest nature of proceedings and the motives of an applicant. An applicant's motive may be influenced by local amenity impacts. But if there is also a broad public interest in the outcome of the proceedings, that is not diminished by the applicant's motive.

In some cases, the Court's perception of whether there is "something more" than characterisation of the proceedings as public interest litigation may not necessarily be the same at an early stage as it is at the end of the case. In my opinion, judged at this early stage, something more is present in this case for the following reasons:

(a) the proceedings raise novel issues of general importance, particularly in terms of the operation of relevant provisions of the Crown Lands Act;

(b) the litigation should contribute materially to the proper understanding of provisions of the Crown Lands Act;

(c) the proceedings have been brought to protect the environmental and heritage values of the subject land which are of significant value and importance. The constitution of the applicant and the evidence of its President, Dr Ostinga, show that it was incorporated not solely for the purpose of the proceedings but to do something positive for the Park, raise funds and awareness for the Park and surrounds, assist the council to maintain the Park and monitor further commercialisation of the coastal reserve. On Dr Ostinga's evidence, questions arise as to whether sufficient consideration has been given to the significant early history of the site, including its convict and coal mining history, its importance as a defence site during the Second World War, its proximity to the original Newcastle Government House and Barracks, and its significance to the local Aboriginal people pre and post-settlement as a place for ceremony;

(d) the litigation affects a significant section of the public and not just nearby members of the applicant because it concerns the Park, which is a public park that all members of the public are entitled to access, and the Reserve whose dedicated purpose is public recreation. The case may be contrasted with a case where, for example, the applicant is purely concerned to preserve an existing private amenity such as a view from the applicant's home which would be obstructed by the proposed construction of a large building; and

(e) there is no financial gain for the applicant or its members in bringing these proceedings.

In the circumstances and on balance, I have concluded that security for costs should not be ordered.

EXPERT EVIDENCE

I turn to the applicant's motion pursuant to UCPR 31.19 for directions that the applicant may file and serve expert geotechnical evidence from Dr Philip Pells opining in respect of two questions:

(a) Is the site of the walking track within a mines subsidence district?

(b) Will any engineering/safety issues arise with the placement of the walking track in its proposed location?

UCPR Part 31 Division 2

Under UCPR Part 31 Division 2, the use of expert evidence at trial (but not at interlocutory hearings) is conditional on first applying for and complying with directions from the court in that regard, unless the court otherwise orders. Division 2 does not require the Court's leave, as such, to call expert evidence but empowers the Court to restrict expert evidence by declining to give directions where (inter alia) expert evidence is not required to resolve the proceedings. On that exclusionary criterion, which reflects one of the main purposes of the Division, expert evidence may be excluded even if it is admissible. Division 2 applies in Classes 1, 2, 3, 4 and 8 of this Court's jurisdiction: UCPR Schedule 1. It is the practice of this Court to give directions as to expert evidence, usually at the first directions hearing.

UCPR 31.17 and 31.19 within Division 2 provide:

31.17 Main purposes of Division

The main purposes of this Division are as follows:

(a) to ensure that the court has control over the giving of expert evidence,

(b) to restrict expert evidence in proceedings to that which is reasonably required to resolve the proceedings,

(c) to avoid unnecessary costs associated with parties to proceedings retaining different experts,

(d) if it is practicable to do so without compromising the interests of justice, to enable expert evidence to be given on an issue in proceedings by a single expert engaged by the parties or appointed by the court,

(e) if it is necessary to do so to ensure a fair trial of proceedings, to allow for more than one expert (but no more than are necessary) to give evidence on an issue in the proceedings,

(f) to declare the duty of an expert witness in relation to the court and the parties to proceedings.

31.19 Parties to seek directions before calling expert witnesses

(1) Any party:

(a) intending to adduce expert evidence at trial, or

(b) to whom it becomes apparent that he or she, or any other party, may adduce expert evidence at trial,

must promptly seek directions from the court in that regard.

(2) Directions under this rule may be sought at any directions hearing or case management conference or, if no such hearing or conference has been fixed or is imminent, by notice of motion or pursuant to liberty to restore.

(3) Unless the court otherwise orders, expert evidence may not be adduced at trial:

(a) unless directions have been sought in accordance with this rule, and

(b) if any such directions have been given by the court, otherwise than in accordance with those directions.

(4) This rule does not apply to proceedings with respect to a professional negligence claim.

This UCPR regime is to be distinguished from s 192A of the Evidence Act 1995, which empowers the Court to rule on the admissibility or use of evidence proposed to be adduced before the evidence is adduced in the proceedings. There is no s 192A motion before me.

The main purposes of Division 2 of Part 31 include "to ensure that the court has control over the giving of expert evidence" and "to restrict expert evidence in proceedings to that which is reasonably required to resolve the proceedings": UCPR 31.17(a) and (b). UCPR 31.19 imposes an obligation on any party intending to adduce expert evidence to promptly seek directions from the court, and imposes a prohibition on adducing expert evidence which can only be lifted by seeking and complying with directions permitting such evidence to be given, unless the Court otherwise orders. Thus, UCPR 31.19 operates as a threshold step to expert evidence being permitted, independent of admissibility. That the Court may refuse to permit expert evidence under that rule is reinforced by UCPR 31.20(2)(b), which lists as an example of directions that may be given "a direction that expert evidence may not be adduced on a specified issue"; see also subrules (2)(c) and (2)(d).

In considering whether or not to grant leave under UCPR 31.19 the Court should have regard to the guiding principles in ss 56 to 60 of the Civil Procedure Act, including the following:

(a) the discretionary power should be exercised in accordance with the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings: s 56(1) and (2);

(b) for the purpose of furthering the overriding purpose, the proceedings are to be managed having regard to (amongst other things) the "efficient disposal of the business of the court" and "the timely disposal of the proceedings ... at a cost affordable by the respective parties": s 57;

(c) the Court is obliged to follow the "dictates of justice" which include having regard to the degree of difficulty or complexity to which the issues in the proceedings give rise: s 58; and

(d) the Court must also implement its practice with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute: s 60.

In Shellharbour City Council v Minister for Planning (No 2) [2011] NSWLEC 107 Pain J dismissed an application for leave to rely upon expert evidence in judicial review proceedings. Leave to appeal that decision was unanimously refused by the Court of Appeal: Shellharbour City Council v Minister for Planning [2011] NSWCA 195. Hodgson JA (Giles and Campbell JJA agreeing) held that the primary judge "could properly take the view that a substantial contest of experts would be a waste of time and money, having regard to her assessment of the unlikelihood that it could be of assistance": at [29]. In concurring supplementary reasons, Giles JA (Campbell JA agreeing) rejected the submission that for leave to be granted it need only be demonstrated that the evidence might be relevant and admissible. His Honour stated, at [35]:

It should be made clear that this is not the correct approach to directions under r 31.19 of the UCPR. The primary purpose of the rule is to control the calling of expert evidence, restricting it to that which is reasonably required to resolve the proceedings having regard to the admonition of just, quick and cheap. That evidence may be relevant and admissible is not enough, let alone that it is possible to argue that it is relevant and admissible.

The approach in Shellharbour is consistent with other authority. In Countouris v Kallos [2007] NSWSC 944 at [5], Young CJ in Eq observed that, when determining whether to give leave under UCPR 31.19, the Court must bear in mind the overriding purposes in ss 56 to 60 of the Civil Procedure Act. In Chapman v Chapman [2007] NSWSC 1109, Brereton J held that foremost amongst the purposes of the UCPR is ensuring that the Court has control over the giving of expert evidence, and restricting expert evidence to that which is reasonably required to resolve the proceedings. His Honour refused to allow expert accounting evidence to be adduced as it was not reasonably required; it being "just [the] type of evidence that the rules were intended to empower the court to discourage and disallow": at [11]. That was so notwithstanding that the report had already been prepared and it was accepted that aspects of it were admissible: at [10]. So too in Bizzanelli v Bizzanelli [2007] NSWSC 1085, Brereton J refused to allow expert evidence to be adduced under UCPR 31.19 as it would not assist in informing "the real issues in the proceedings": at [10].

Admissibility of extraneous evidence in judicial review proceedings

In judicial review proceedings, the general principle is that the only documents that are admissible are those which were before the decision-maker when he made his decision or which, if not actually before him, were or should have been in the hands of his officers and should have been brought to his attention. This is a concomitant to the principle that judicial review is not concerned with the merits of a decision but with its lawfulness. There are a number of limited exceptions to the general rule in respect of certain grounds of review depending on the circumstances of the case: Attorney-General for the Northern Territory v Minister for Aboriginal Affairs (1989) 23 FCR 536 at 539-540 per Lockhart J; Ruangrong v Minister for Immigration and Ethnic Affairs [1988] FCA 87 at [11] per Davies J; Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707, 148 FCR 446 at [442], [445] per Weinberg J; Chandra v Webber [2010] FCA 705, 187 FCR 31 at [40] per Bromberg J; DEXUS Funds Management Ltd v Blacktown City Council [2011] NSWLEC 156 at [9] per Craig J; Moolarben Coal Mines Pty Ltd v Director-General of the (former) Department of Industry and Investment NSW (Agriculture Division) [2011] NSWLEC 191 at [69] - [76] per Moore AJ; INL Group Ltd v Director-General of the New South Wales Department of Planning [2011] NSWLEC 256 at [31] - [32] per Pepper J.

As discussed below, the limited exceptions to the general rule, depending on the circumstances of the case, include where the grounds of review are manifest unreasonableness (Moolarben, INL) or constructive failure to exercise jurisdiction and there is a duty to inquire. The exceptions also include denial of procedural fairness in one category of case.

Additional evidence may be admissible in a case alleging invalidity on the ground of denial of procedural fairness based on an expectation that the decision-maker would follow a procedure which an officer of the decision-maker represented would be followed. Failure to meet the expectation does not establish practical unfairness, which it is necessary to establish. Therefore evidence is admissible to establish subjective expectation and reliance causing detriment amounting to practical unfairness, for example by not putting material or submissions to the decision-maker that otherwise would have been urged upon it: Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6, 214 CLR 1 at [37] - [38], [106].

The discussion in Prasad v Minister for Immigration and Ethnic Affairs [1985] FCA 47, 6 FCR 155 by Wilcox J has proved influential to the recognition that a duty to inquire may arise in limited circumstances and may inform grounds of judicial review comprising or including manifest unreasonableness and constructive failure to exercise jurisdiction. Wilcox J said at 169-170:

The circumstances under which a decision will be invalid for failure to inquire are, I think, strictly limited. It is no part of the duty of the decision-maker to make the applicant's case for him. It is not enough that the court find that the sounder course would have been to make inquiries. But, in a case where it is obvious that material is readily available which is centrally relevant to the decision to be made, it seems to me that to proceed to a decision without making any attempt to obtain that information may properly be described as an exercise of the decision-making power in a manner so unreasonable that no reasonable person would have so exercised it. It would follow that the court, on judicial review, should receive evidence as to the existence and nature of that information.

Prasad has been approved and applied in the Federal Court and in the High Court. In Luu v Renevier (1989) 91 ALR 39 the Full Federal Court held that because the information before a decision-maker raised a doubt as to whether a convicted sex offender would re-offend, the decision-maker should have sought additional expert medical opinion before refusing an application for permanent residence. After referring to Prasad, the Full Court said at 50:

...one may be able to say that a decision is unreasonably made where, to the knowledge of the decision-maker, there is readily available to him or her other factual material, likely to be of critical importance in relation to a central issue for determination, and which has not been obtained.

That reasoning was applied in Tickner v Bropho (1993) 40 FCR 183 by Black CJ (presiding in the Full Court of the Federal Court). His Honour held that a Commonwealth minister, who declined to make an Aboriginal heritage protection order for the old Swan Brewery site in Perth, should have first sought up-to-date information from his State counterpart as to whether State law was still protecting the site. His Honour reasoned at 199:

...up to date information about a matter that went directly to the fundamental basis for the Minister's decision was readily available to him for the asking. Given the crucial importance of that information and the serious prospect of a fundamental change in the situation with regard to the protection of the site under State law, the making of the decision to refuse the s 9 application without obtaining up to date information was, I conclude, an improper exercise of the Minister's power. It was improper because the making of the decision involved an exercise of the power that was unreasonable in the sense used in s 5(2)(g) of the ADJR Act.

In Minister for Immigration and Ethnic Affairs v Teoh [1995] HCA 20, 183 CLR 273, Mason CJ and Deane J accepted the correctness of the approach in Prasad "in an appropriate case": at 290. In Minister for Immigration and Citizenship v SZIAI [2009] HCA 39, 259 ALR 429 the majority in the High Court said at [25]:

Although decisions in the Federal Court concerned with a failure to make obvious inquiries have led to references to a "duty to inquire", that term is apt to direct consideration away from the question whether the decision which is under review is vitiated by jurisdictional error. The duty imposed upon the Tribunal by the Migration Act is a duty to review. It may be that a failure to make an obvious inquiry about a critical fact, the existence of which is easily ascertained, could, in some circumstances, supply a sufficient link to the outcome to constitute a failure to review. If so, such a failure could give rise to jurisdictional error by constructive failure to exercise jurisdiction. It may be that failure to make such an inquiry results in a decision being affected in some other way that manifests itself as jurisdictional error. It is not necessary to explore these questions of principle in this case.

In Minister for Immigration and Citizenship v SZGUR [2011] HCA 1, 241 CLR 594 French CJ and Kiefel J (with whom Heydon and Crennan JJ agreed) acknowledged that although a statutory inquisitorial power of the Refugee Review Tribunal did not impose on the Tribunal a legal duty to consider whether to exercise it, circumstances may arise in which the Tribunal has a duty to make particular inquiries (which does not necessarily require application of that statutory provision): at [22]. Gummow J (with whom Heydon and Crennan JJ also agreed) said that "the point left open in SZIAI ["was"] that a failure to make an obvious inquiry as to a critical fact may give rise to jurisdictional error": at [78].

In the environmental planning context, authorities in this Court also support the admissibility of evidence where a duty of consultation or inquiry in the decision-making process is alleged, as it is in the present case. In King v Great Lakes Shire Council (1986) 58 LGRA 366 one of the grounds of challenge to the validity of a development consent for a caravan park was that the council was under an obligation to consult with the National Parks and Wildlife Service, and that had it done so it would have received material information from the Service that the development was not compatible with a national park that the Service was then proposing to extend to include land upon which it was proposed to locate the evaporative ponds for the development. Cripps CJ identified the question in the proceedings as whether the Service ought to have been consulted and, if so, what information it would have provided: at 383. His Honour admitted evidence of an officer of the Service as to what information the Service would have provided: at 371, 376. His Honour said at 371:

I reject the submission that in such a challenge as is before me expert planning material is not admissible unless it is established that that material was actually before the council when it determined the matter or was deemed to be before the council because it was contained within council's files at that time. In my opinion, evidence is admissible to establish what a council, in the proper discharge of its duty, ought reasonably to have done in the course of the decision-making process. Where, as here, the breach alleged is the failure to make inquiries, receive reports or consult with authorities, evidence is admissible as to what inquiries, reports or consultations would have revealed. That is to say, evidence is admissible as to what a council acting reasonably ought to have done. It may be accepted that councils are not normally obliged to consult with independent town planners, or to solicit independent planning opinions about the appropriateness of the grant or refusal of consent. But that circumstance does not preclude the admission into evidence of what a council, acting reasonably, ought to have done with respect to a particular development application. To understand the basis and validity of the challenge, the court needs to understand the environmental consequences of the action or inaction of the council.

In Caldera Environment Centre Inc v Tweed Shire Council [1993] NSWLEC 102 Talbot J, after reviewing the authorities including Prasad and King, identified the following circumstances in which the Court could go beyond the material before the decision-maker in judicial review proceedings:

1. Where there is a failure to make inquiries, receive reports or consult with authorities, evidence is admissible as to what inquiries, reports or consultations would have revealed.

2. To show what a council acting reasonably ought to have done.

3. To achieve an understanding of the environmental consequences of the action or inaction of the council.

4. To explain factors, principles or materials relevant to the determination.

5. In a challenge to the reasonableness of the decision where all of the relevant material before the council is in the possession of the witness to explain what was before the council.

6. As to the existence and nature of information said to be relevant to the decision where council proceeds to a decision without making any attempt to obtain that information

The present case

As stated earlier, Dr Pells has been asked to consider two questions:

(a) Is the site of the walking track within a mine subsidence district?

(b) Will any engineering/safety issues arise with the placement of the walking track in its proposed location?

In the Court of Appeal's decision in Shellharbour (above at [72]), it was observed that "where ... it may very reasonably seem highly unlikely that expert evidence will be relevant to an issue, it may be necessary for an applicant for directions for expert evidence to provide some specificity as to the proposition or propositions that the expert evidence is expected to support": at [26] per Hodgson JA (Giles and Campbell JJA agreeing). In the present case, the applicant has provided Dr Pells' draft report.

Dr Pells' opinion on the first question is said to be relevant to the pleaded claim that the development application, insofar as it might have included the pathway, was integrated development because the pathway was an improvement within ss 4 and 15 of the Mine Subsidence Compensation Act and therefore should have been referred, but was not, to the Mines Subsidence Board for general approval pursuant to ss 91(1) and 91A of the EPA Act (APOC 22-25). The council told me that it does not dispute that the relevant area is within a mine subsidence district. Therefore, it says, any opinion as to the first question is unnecessary. Given this concession, in my view the proposed expert evidence as to the first question is not reasonably required. I expect the council to formalise its concession in its pleading when it is filed so that this matter becomes an undisputed fact.

Relevantly to the second question, Dr Pells' draft report refers to the Coffey geotechnical report that was before the council, referred to above at [23]. Based on the Coffey report, he concludes that the proposed footpath is located in an area with a high probability of further subsidence movements. He expresses the opinion that the footpath could not be placed in this location without appropriate engineering works to ensure an adequate level of safety against instability.

The applicant's written submission was that the purpose of the opinion on the second question is:

(a) pursuant to the first, third and fourth elements listed in Caldera:

(i) there having been a failure to consider the suitability of the relevant part of the site for a walking track as required by s 79C(1)(c) of the EPA Act, to suggest what enquiries or what reports into this matter would have revealed;

(ii) to provide evidence to achieve an understanding of the environmental consequences of the inaction of the council in not considering the suitability of the relevant part of the site for the walking track;

(iii) to explain factors, principles or materials relevant to the determination, that is, the suitability of that part of the site for the walking track consented to;

(b) to establish whether the development consent finally resolved the location of the walking track; and

(c) to identify the geotechnical factors which the council should have taken into account, had it properly adverted to s 79C, , in determining whether to grant consent.

When the expert evidence motion was argued there was no pleading by the applicant that the council was under a duty to make further inquiries, in particular by obtaining a geotechnical assessment. The council stressed this in submissions as a basis for distinguishing Caldera and opposing the introduction of Dr Pells' evidence. At the next tranche of the hearing a week later to address the council's security for costs motion, I granted leave to the applicant to amend its Points of Claim. One of the key amendments (APOC 47A) was that in the context of mandatory consideration under s 79C of the EPA Act, the council was under a duty to make further inquiries, including by obtaining a geotechnical assessment of the amended development proposal, in particular addressing the impact of cliffline instability, potential subsidence impacts, existing landslips, and the works necessary to make good any unstable areas upon the design of the pathway, etc. There was a related key amendment (APOC 52A) alleging manifest unreasonableness because the council could not have known the likely impacts of the development as required by s 79C(1)(b) without having conducted those inquiries. Thus, the APOC anchors the alleged breach of duty to inquire to s 79C of the EPA Act and manifest unreasonableness. I indicated that I would have regard to the amendments when deciding the expert evidence motion.

In my opinion, on the authorities to which I have referred, the pleaded duty to make further inquiries by obtaining a geotechnical assessment in the context of breach of s 79C and manifest unreasonableness allegations, suffices to make admissible evidence as to what that assessment would have revealed and in order to assess the environmental consequences of the inaction. This assumes that the Court finds that there was such a duty, which I understand will be in issue (no Defence to the APOC has yet been filed). At this stage, I should proceed on the basis that the duty allegation is reasonably arguable, perhaps having regard to the information of which the council was aware, or should be taken to have been aware, referred to above at [23]. Those authorities were concerned with admissibility, whereas under the UCPR regime the question is whether the expert evidence is "reasonably required to resolve the proceedings": UCPR 31.17. However, the principle endorsed by the authorities in this Court is that the environmental consequences of the inaction disclosed by such evidence is material to the resolution of the proceedings. In the absence of other considerations, in the present case that means, I think, that such evidence is reasonably required to resolve the proceedings. The part of Dr Pells' draft report which in my view satisfies this criterion, and which I therefore propose to direct that the applicant may adduce, is that which concerns engineering and safety issues in relation to the footpath (which he also calls a walking track) in its proposed location. In that regard paragraph 7.2 of the draft report includes the statements that: "the location of the footpath is in an area with a high to very high probability of slope instability, and the footpath could not be placed in this location without appropriate engineering works to ensure an adequate level of safety against instability", and "the proposed footpath is located in an area with a high probability of further subsidence movements".

ORDERS

The applicant has succeeded on both motions but would have been unsuccessful on its expert evidence motion except for its late amendment on the second day of the hearing to plead a duty on the council to inquire by obtaining a geotechnical assessment. In the circumstances, I propose to order that the costs of both motions be costs in the cause.

The orders of the Court are as follows:

(1) The first respondent's notice of motion for security for costs filed on 16 April 2012 is dismissed.

(2) Direct that the applicant may file and serve an expert report by Dr Philip Pells limited to engineering and safety issues in relation to the walking track in its proposed location and substantially to the same effect as his draft report of 29 March 2012.

(3) The costs of the first respondent's notice of motion filed on 16 April 2012 and the applicant's notice of motion filed on 13 April 2012 will be costs in the cause.

(4) The exhibits may be returned.

I will hear the parties forthwith as to directions to progress the proceedings to a final hearing.

Amendments

25 July 2012 - "slip rule" amendment to typographical errors to UCPR 31.19

Amended paragraphs: 70, 71

Decision last updated: 26 July 2012

Citations

Friends of King Edward Park Inc v Newcastle City Council [2012] NSWLEC 113

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Medium Neutral Citation:	Friends of King Edward Park Inc v Newcastle City Council [2012] NSWLEC 113
Hearing dates:	27 April, 7 May 2012
Decision date:	16 May 2012
Jurisdiction:	Class 4
Before:	Biscoe J
Decision:	(1) First respondent's notice of motion for security for costs filed on 16 April 2012 is dismissed. (2) Direct that the applicant may file and serve an expert report by Dr Philip Pells limited to engineering and safety issues in relation to the walking track in its proposed location and substantially to the same effect as his draft report of 29 March 2012.
Catchwords:	COSTS:- whether security for costs should be ordered in judicial review proceedings - public interest litigation exception. EVIDENCE:- expert evidence - whether direction should be made for expert evidence in judicial review proceedings - whether expert evidence reasonably required to resolve the proceedings - relevance of allegation that consent authority was under a duty to inquire.
Legislation Cited:	Civil Procedure Act 2005 Part 6, ss 56-60, Crown Lands Act 1989 ss 112, 112A, 114 Environmental Planning and Assessment Act 1979 ss 5(c), 79C, 80, 91(1), 91A, 101, 123 Mine Subsidence Compensation Act 1961 ss 4 and 15 Uniform Civil Procedure Rules 2005 Part 31 Division 2, rr 31.17, 31.19, 31.20, 42.1, 42.4, 42.21 Land and Environment Court Rules 2007 r 4.2 Newcastle Local Environmental Plan 2003 cl 27, 31
Cases Cited:	Acohs Pty Ltd v Ucorp Pty Ltd [2006] FCA 1279, 155 FCR 181 Anderson on behalf of Numbahjing Clan within Bundjalung Nation v NSW Minister for Planning (No 2) [2008] NSWLEC 272,163 LGERA 132 Attorney-General for the Northern Territory v Minister for Aboriginal Affairs (1989) 23 FCR 536 Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707, 148 FCR 446 Bizzanelli v Bizzanelli [2007] NSWSC 1085 Burrell Place Community Action Group Incorporated v Griffith City Council [2009] NSWLEC 120 Caldera Environment Centre Inc v Tweed Shire Council [1993] NSWLEC 102 Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59, 173 LGERA 280 Carriage v Stockland (Constructors) Pty Ltd (No 2) [2002] NSWLEC 217, 123 LGERA 214 Chandra v Webber [2010] FCA 705, 187 FCR 31 Chapman v Chapman [2007] NSWSC 1109 Countouris v Kallos [2007] NSWSC 944 Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263, 176 LGERA 424 DEXUS Funds Management Ltd v Blacktown City Council [2011] NSWLEC 156 Engadine Area Traffic Group Inc v Sutherland Shire Council (No 2) [2004] NSWLEC 434, 136 LGERA 365 Fiduciary Ltd v Morningstar Research Pty Ltd [2004] NSWSC 664, 208 ALR 564 Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39, 172 LGERA 157 Hill Top Residents Action Group Inc v Minister for Planning (No 3) [2010] NSWLEC 155, 176 LGERA 20 Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744 INL Group Ltd v Director-General of the New South Wales Department of Planning [2011] NSWLEC 256 John Williams Neighbourhood Group Inc v Minister for Planning [2011] NSWLEC 100, 183 LGERA 327 Kennedy v Stockland Development Pty Ltd (No 2) [2011] NSWLEC 10 King v Great Lakes Shire Council (1986) 58 LGRA 366 KP Cable Investments Pty Ltd v Meltglow Pty Ltd [1995] FCA 76, 56 FCR 189 Luu v Renevier (1989) 91 ALR 39 Martin v NSW Minister for Mineral and Forest Resources [2011] NSWLEC 38 Merribee Pastoral Industries Pty Ltd v Australia and New Zealand Banking Group Ltd [1998] HCA 41, 193 CLR 502 Minister for Immigration and Citizenship v SZGUR [2011] HCA 1, 241 CLR 594 Minister for Immigration and Citizenship v SZIAI [2009] HCA 39, 259 ALR 429 Minister for Immigration and Ethnic Affairs v Teoh [1995] HCA 20, 183 CLR 273 Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6, 214 CLR 1 Minister for Planning v Walker [2008] NSWCA 224, 161 LGERA 423 Minister for Planning v Walker (No 2) [2008] NSWCA 334 Moolarben Coal Mines Pty Ltd v Director-General of the (former) Department of Industry and Investment NSW (Agriculture Division) [2011] NSWLEC 191 Oshlack v Richmond River Council [1998] HCA 11, 193 CLR 72 Pioneer Park Pty Ltd (in Liq) v Australia and New Zealand Banking Group Ltd [2007] NSWCA 344, 65 ACSR 383 Prasad v Minister for Immigration and Ethnic Affairs [1985] FCA 47, 6 FCR 155 Ruangrong v Minister for Immigration and Ethnic Affairs [1988] FCA 87 Shellharbour City Council v Minister for Planning [2011] NSWCA 195 Shellharbour City Council v Minister for Planning (No 2) [2011] NSWLEC 107 Shellharbour City Council v Minister for Planning (No 2) [2012] NSWLEC 96 State of Western Australia v Ward [2002] HCA 28, 213 CLR 1 Street v Luna Park Sydney Pty Ltd [2009] NSWSC 1, 223 FLR 245 Tickner v Bropho (1993) 40 FCR 183
Category:	Interlocutory applications
Parties:	Friends of King Edward Park Inc (Applicant) Newcastle City Council (First Respondent) King Edward Headland Reserve Trust (Second Respondent) Minister for Primary Industry (Third Respondent) Annie Street Commercial Pty Ltd (Fourth Respondent)
Representation:	COUNSEL: Mr T Robertson SC and Mr J Lazarus (Applicant) Mr A Shearer (First Respondent) Mr J Maston (Second and Third Respondents) Submitting appearance (Fourth Respondent) SOLICITORS: The University of Newcastle Legal Centre (Applicant) Newcastle City Council (First Respondent) Crown Solicitor's Office (Second and Third Respondents) Keystone Lawyers (Fourth Respondent)
File Number(s):	40089 of 2012