Gunning Sustainable Development Association Incorporated v Upper Lachlan Council

[2004] NSWLEC 603

Land and Environment Court

of New South Wales

CITATION:	Gunning Sustainable Development Association Incorporated v Upper Lachlan Council and Anor [2004] NSWLEC 603
PARTIES:	APPLICANT: Gunning Sustainable Development Association Incorporated FIRST RESPONDENT: Upper Lachlan Council SECOND RESPONDENT: Tinvest Pty Limited
FILE NUMBER(S):	40498 of 2004
CORAM:	Pain J
KEY ISSUES:	Practice and Procedure :- Whether further security for costs should be provided
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979, s 123 Land and Environment Court Act 1979 s 69(3), s 69(6) Land and Environment Court Rules, Pt 6 r 1 Supreme Court Rules, Pt 53 r 2(1)
CASES CITED:	Hunter Ecologically Sustainable Employment Group Inc v HEZ Pty Ltd & Ors (2003) 129 LGERA 344; KP Cable investments Pty Ltd v Meltgow Pty Ltd (1995) 56 FCR 189 ; Razorback Environmental Protection Society Inc v Wollondilly Council & Anor [1999] NSWLEC 8; Town Watch Incorporated v Grafton City Council and Anor (1997) 93 LGERA 401
DATES OF HEARING:	22/10/2004
DATE OF JUDGMENT:	10/29/2004
LEGAL REPRESENTATIVES:	APPLICANT: Mr G. Stewart-Richardson FIRST RESPONDENT: Mr J. Robson (barrister) instructed by Minter Ellison SECOND RESPONDENT: Mr P. Clay (barrister) instructed by Michell Sillar

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

PAIN J

29 OCTOBER 2004

40498 of 2004 GUNNING SUSTAINABLE DEVELOPMENT ASSOCIATION INCORPORATED v UPPER LACHLAN COUNCIL and TINVEST PTY LIMITED

JUDGMENT

1 Her Honour: The Applicant, an incorporated association, commenced Class 4 proceedings pursuant to s 123 of the Environmental Planning and Assessment Act 1979 on 29 April 2004 challenging, on numerous judicial review grounds, a development consent granted by the First Respondent, the Upper Lachlan Council, to the Second Respondent, Tinvest Pty Ltd. The First and Second Respondents have filed Notices of Motion dated 29 September 2004 and 30 September 2004 respectively, seeking orders that the Applicant provide additional security for costs. The Applicant has already paid into Court:

(a) $25,000 as security for the costs of the First Respondent pursuant to a consent order made on 8 July 2004; and
(b) $20,000 as security for the costs of the Second Respondent pursuant to a consent order made on 10 June 2004.
The Applicant was represented at the hearing before me by Mr Geoffrey Stewart-Richardson, a committee member of the Applicant.

2 The Notice of Motion filed by the Second Respondent seeks additional security in the sum of $48,000. This motion is supported by an affidavit sworn by Alan Nicol, the solicitor for the Second Respondent, on 30 September 2004 and an affidavit sworn by Ian Thompson, director of the Second Respondent, on 9 June 2004. The evidence of Mr Nicol was that the Second Respondent has already incurred legal costs and disbursements of approximately $52,386 in relation to the proceedings and anticipates that a further $15,600 will be incurred before the proceedings are completed.

3 The Notice of Motion filed by the First Respondent seeks further security in the amount of $80,000. This motion is supported by an affidavit sworn by Allen Bradbury, solicitor for the First Respondent, on 29 September 2004. The affidavit evidence of Mr Bradbury was that the First Respondent has already incurred approximately $64,825 in legal costs and disbursements in relation to the proceedings and anticipates that a further $40,000 will be incurred before the proceedings are completed.

4 The Respondents also relied on a number of documents concerning the membership and financial arrangements of the Applicant which were produced by the Applicant in response to a Notice to Produce. These documents were said to be relevant to the issue of whether the Applicant was acting on behalf of members of the community generally and whether it had the capacity to meet further costs if called on to do so.

5 The Applicant relied on an affidavit sworn by Jeremy Cook, treasurer of the Applicant, on 12 October 2004 and an affidavit sworn by Geoffrey Stewart-Richardson on 12 October 2004. Brief oral evidence was also given by Mr Stewart-Richardson to the effect that he does not believe that it will be possible for the Applicant to raise substantially more funds from the community beyond the $45,000 already provided as security for costs and the $8,000 which the Applicant currently holds. Mr Stewart-Richardson’s evidence was that, given this, if the Court were to make the further orders sought by the Respondents the Applicant would be unable to continue with the litigation.

6 The Applicant’s objectives are set out in its rules as follows:

(1) To monitor development and proposed development within the Upper Lachlan Shire;
(2) To monitor the regulation of development and proposed development within the Upper Lachlan Shire by local council and State authorities;
(3) To ensure, so far as lawfully possible, that development and proposed development promotes the environmental, economic and social well-being of the people of the Upper Lachlan Shire; and
(4) To ensure, as far as lawfully possible, that local council and state authorities regulate development and proposed development in accordance with the law and so as to promote the environmental, economic and social well-being of the people of the Upper Lachlan Shire.

7 The development consent granted by the First Respondent to the Second Respondent authorises the construction of a large highway service centre, covering several hectares and located adjacent to the highway within the village limits of Gunning. Gunning is a small town with a population of approximately 500 people.

8 The First and Second Respondents argued that the appropriate considerations in applications of this nature are those set out by Beazley J in KP Cable investments Pty Ltd v Meltgow Pty Ltd (1995) 56 FCR 189 (“KP Cable investments“) at p197 – 198. These considerations were summarised by McClellan CJ in Hunter Ecologically Sustainable Employment Group Inc v HEZ Pty Ltd & Ors (2003) 129 LGERA 344 (“Hunter Ecologically Sustainable Employment Group”) at par 18 as follows:

(1) whether the application for security has been brought promptly;
(2) the strength and bona fides of the case in which security is sought;
(3) whether the impecuniosity of the applicant results from the respondent’s conduct the subject of the claim;
(4) whether the application for security is oppressive in the sense of denying an impecunious citizen or organisation a right to litigate;
(5) whether there are persons standing behind the plaintiff applicant who are likely to benefit and willing to provide the security;
(6) whether persons standing behind the plaintiff applicant have offered any personal undertaking to be liable for the costs and if so the form of any such undertaking; and
(7) whether the applicant for security is in substance the plaintiff or the proceedings are defensive in nature.

9 In relation to consideration (1), both Respondents argued that the application for security of costs has been brought promptly having been filed on 30 September 2004. Neither Respondent raised any issue in relation to consideration (2), the strength and bona fides of the Applicant’s case, as both Respondents accepted that, for the purposes of these proceedings, the Applicant had an arguable case and was bona fide in commencing proceedings. The Respondents submitted that consideration (3) is not applicable.

10 In relation to consideration (4), the Respondents argued that their applications were not oppressive as it was necessary to ensure that, in the event the Applicant was unsuccessful, there was appropriate security for costs. Further, the Respondents argued that the Applicant was not representative of the whole community. Rather, the Respondents argued that the Applicant’s two main supporters were Mr Stewart-Richardson and Mr Cook, as evidenced by the fact that it was these two persons and their families who contributed most of the $45,000 which has already been paid into Court as security for costs, and that the purpose of the litigation was for their benefit. The Respondents argued that the Applicant, which was incorporated on 21 April 2004 and has 12 members was formed for the primary purpose of conducting the litigation the subject of these proceedings. This was said to be evidenced by the fact that the proceedings were commenced on 29 April 2004, shortly after the Applicant was incorporated. The Respondents argued that, unlike those considered in the case of Hunter Ecologically Sustainable Employment Group, the proceedings commenced by the Applicant do not seek to protect any aspect of public resource or the public environment. This case has greater similarity to Razorback Environmental Protection Society Inc v Wollondilly Council & Anor [1999] NSWLEC 8 (“Razorback”) where an incorporated association was ordered to pay security for costs by Lloyd J. The Respondents argued that the main focus of the Applicant appears to be the prevention of development because the particular members of the Association do not want it.

11 Further in relation to consideration (4), the Second Respondent accepted that the concept of public interest litigation is a nebulous concept but argued that here there is no particular public benefit resulting if the litigation is successful as this is not a case involving any allegations of a denial of natural justice or any specific environmental harm.

12 In relation to consideration (5), the Respondents argued that Mr Cook and Mr Stewart-Richardson, as two of the primary donors to and committee members of the Applicant, stand to obtain a personal benefit if the Applicant’s proceedings are successful but they have not offered any personal undertaking as to costs. In relation to consideration (6), the Respondents noted that no personal undertakings have been offered. The Respondents did not consider that consideration (7) was applicable to these proceedings.

The Applicant’s Submissions

13 The Applicant, as represented by Mr Stewart-Richardson, argued that the billings attested to by the Respondents’ respective solicitors did not necessarily reflect the actual costs which should be involved in proceedings of this nature. A submission was also made that it was inexplicable that the Respondents’ costs had risen so dramatically since July 2004 when the Respondents indicated, as a basis for the consent orders that were made in relation to security for costs, that their costs were approximately $45,000. The Applicant submitted that since July 2004 there has only been one substantial change to the nature of the proceedings, being the expansion of the hearing time from two to three days and this change alone does not explain such a large increase in the Respondents’ anticipated and incurred costs. The Applicant also submitted that it was unclear as to why the Respondents needed to be separately legally represented.

14 The Applicant relied on Oshlack v Richmond River Council (1998) 193 CLR 72 (“Oshlack”) to support its argument that the proceedings clearly relate to a matter of public interest, having been brought in relation to a matter of public concern and not in relation to any private or contractual right.

15 In particular, the Applicant argued that the issues raised in its Statement of Issues in relation to the First Respondent’s failure to consider:

(a) the suitability of the bore water as a potable water supply;
(b) a geotechnical report; or
(c) the economic impact of the proposal on the town of Gunning;
in determining the First Respondent’s development application are issues which are necessarily in the public interest.

16 The Applicant also relied on Town Watch Incorporated v Grafton City Council and Anor (1997) 93 LGERA 401 where Pearlman J took into account, in determining whether litigation was in the public interest, whether there was any evidence of public interest in the matter itself. The Applicant argued that the report prepared by the Council’s town planner in relation to the development application, as attached to the affidavit of Mr Thompson, makes it clear that the matter is controversial in the local community with a number of people both supporting and not supporting the proposal.

Finding

17 The Court is able to award security for costs in accordance with s 69(3) of the Land and Environment Court Act 1979 and Pt 53 of the Supreme Court Rules, adopted by Pt 6 r 1 of the Land and Environment Court Rules.

18 Section 69(3) of the Land and Environment Court Act 1979 states:

The Court may order a party instituting proceedings in the Court to give security for the payment of costs that may be awarded against that party.

19 Part 53 r 2(1) of the Supreme Court Rules provides that the Court may order a party to give security for costs where inter alia, there is reason to believe that an applicant will be unable to pay the costs of the defendant if ordered to do so. No limitation is placed in Part 53 r 2 of the Supreme Court Rules on the number of applications which may be made by a defendant for security for costs. Section 69(6) of the Land and Environment Court Act 1979 recognises that more than one application for security for costs can be made.

20 In considering an application for security for costs, thise Court must considers not only the matters identified in KP Cable investments set out at par 8 above but also whether there is a public interest in the outcome of the litigation. Of the considerations identified in KP Cable investments, considerations (1), (2), ((4) and (5) are most relevant here. The Respondents’s have not raised any contrary submissions in relation to consideration (2) and accept that the Applicant has an arguable case and is bona fide.

21 Given the costs incurred by the First and Second Respondents to date, as attested to in their respective solicitors’ affidavits, the current amount paid into the Court for security for costs will not meet all the costs likely to be incurred and awarded if the plaintiff is unsuccessful. If the Applicant is unsuccessful the likely costs order will be that it pay the Respondents’ costs, unless the Applicant is able to argue successfully that, due to the public interest nature of the proceedings and other factors referred to in Oshlack, no such order ought be made. It is difficult to say whether such an application, if made, would succeed.

22 Balanced against this consideration is the Applicant’s evidence that if the security for costs orders in the amounts sought by the two Respondents are made the Applicant will not be able to raise funds to meet these orders. As set out above, the Applicant has already provided $45,000 in as security for costs. The amounts now sought as security by the two Respondents are $48,000 and $80,000. These proceedings would therefore be permanently stayed if I madke the orders sought, a matter which falls within consideration (4) identified in KP Cable investments.

23 The Applicant is a small incorporated association with only 12 members which was incorporated approximately one two weeks before these proceedings were commenced. The objectives of the Applicant include ensuring that appropriate development occurs in the Upper Lachlan Shire and the Applicant’s members are drawn from the small community of Gunning. I consider there is a substantial similarity between the Applicant and the applicant in Razorback. In Razorback Lloyd J held, at par [23], that the case was one involving purely inter-parties litigation. I consider that, given the Applicant’s aims and objectives include that of ensuring that the Respondent Council adheres to the relevant planning instruments, and that there is no suggestion that the Applicant’s members stand to gain financially from this action, these comments are applicable to the Applicant here. Accordingly, I conclude that this is not a private matter of interest only to the Applicant’s members, a matter which is relevant to consideration (5) identified in KP Cable investments.

24 In Razorback Lloyd J ordered that the applicant in that case pay security for costs in the sum of $25,000 in favour of each of the first and second respondents because, while he found it was not private litigation, he considered that the applicant were was exposed to an order for costs in circumstances where there was reason to believe it could not pay the respondents costs if ordered to do so. A claim of public interest litigation alone by an applicant will not be sufficient to warrant that no order as to costs be made in the absence of any other ameliorating factors; Oshlack. Such ameliorating factors were not immediately apparent to Lloyd J in Razorback, where his Honour held the applicant had an arguable but not particularly strong case.

25 It can be inferred from the report prepared by the Council’s town planner’s in relation to the proposed development and adduced into evidence that the proposal is, for Gunning, a very large one and clearly will be a major landmark if built. The proceedings brought by the Applicant challenge the validity of a consent granted by the First Respondent for a development which is clearly controversial in the Gunning area. However I note that controversy, of itself, does not mean that the proceedings necessarily relate to a matter of public interest.

26 The Another principal basis on which the matter was said to be in the public interest, in addition to the fact that it is controversial, is that the Applicant is seeking to enforce public planning laws. I have set out above at par 15 the other matters raised in argument by Mr Stewart-Richardson to support the Applicant’s argument that this matter is in the public interest. The Applicant’s Amended Points of Claim also raise issues about heritage protection in the town of Gunning. I agree with the Respondents that the issues raised by the Applicant do not suggest one of the outcomes of the litigation is the protection of the environment for the public good such as was found to exist by McClellan J in Hunter Ecologically Sustainable Employment Sustainable Group where his Honour refused to make any order for security for costs.

27 Consideration (1) identified in KP Cable Investments also needs to be considered. No specific opposition was raised by the Applicant’s representative to the Respondents’ submissions that there had been no delay in seeking further security for costs, although the point was made by the Applicant that a great deal of cost has been incurred by the respective parties, given the imminent hearing date. Despite this, I have concerns regarding the lateness of this application, given that the case has been set down for hearing on 8, 9 and 10 November 2004 since 27 August 2004 and the bulk of the costs required to prepare for the hearing have already been incurred as evidence has now been prepared and filed. In my view iIt would be highly regrettable if the proceedings had to stop now that preparation for the hearing is almost complete.

28 Taking into account the above factors, I would have been minded to order that the some security sought by the Respondentsfor costs be provided, had no security for costs already been provided by the Applicant. However, given that a substantial sum has already been provided by consent the question is whether further security should be required. I consider a further small amount of $5,000 for each Respondent ought be provided by the Applicant as security for costs. Accordingly I make the following orders:

(1) The Applicant to provide additional security for the costs of the First Respondent of and incidental to the proceedings in the amount of $5,000, in a form satisfactory to the Registrar, by 4 November 2004.
(2) The Applicant to provide additional security for the costs of the Second Respondent of and incidental to the proceedings in the amount of $5,000, in a form satisfactory to the Registrar, by 4 November 2004.

(3) If the security referred to in orders (1) and (2) is not provided by 4 November 2004 the proceedings are stayed.

(4) The question of the costs of the Respondents’ Notices of Motion is are reserved.