Mullaley Gas and Pipeline Accord Inc v Santos NSW (Eastern) Pty Ltd (No 2)

[2021] NSWLEC 147

Land and Environment Court

New South Wales

Medium Neutral Citation:

Mullaley Gas and Pipeline Accord Inc v Santos NSW (Eastern) Pty Ltd (No 2) [2021] NSWLEC 147

Hearing dates:

30 November 2021

Date of orders:

16 December 2021

Decision date:

16 December 2021

Jurisdiction:

Class 4

Before:

Preston CJ

Decision:

The Court orders:

(1)   There be no order as to the costs of the proceedings, including the application for costs of the proceedings, with the intention that each party pay their own costs of the proceedings.

Catchwords:

COSTS – public interest litigation – judicial review of development consent to fossil fuel project – proceedings unsuccessful – whether proceedings brought in public interest – whether unreasonable conduct of litigation – reliance on expert evidence not used by court – no order as to costs

Legislation Cited:

Civil Procedure Act 2005 s 11, s 98(1)

Environmental Planning and Assessment Act 1979 s 4.15

Evidence Act 1995 s 192A

Land and Environment Court Rules 2007 r 4.2

Uniform Civil Procedure Rules 2005 r 42.1

State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 cl 14

Cases Cited:

Anderson (on behalf of Numbahjing Clan within Bundjalung Nation) v NSW Minister for Planning (No 2) (2008) 163 LGERA 132; [2008] NSWLEC 272

Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) (2010) 173 LGERA 280; [2010] NSWLEC 59

Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No 2) (2004) 136 LGERA 365; [2004] NSWLEC 434

Hume Coal Pty Ltd v Alexander (No 4) [2013] NSWLEC 106

Mullaley Gas and Pipeline Accord Inc v Santos NSW (Eastern) Pty Ltd [2021] NSWLEC 24

Mullaley Gas and Pipeline Accord Inc v Santos NSW (Eastern) Pty Ltd [2021] NSWLEC 110

Muswellbrook Shire Council v Hunter Valley Energy Pty Ltd (2019) 238 LGERA 295; [2019] NSWCA 216

Muswellbrook Shire Council v Hunter Valley Energy Pty Ltd (No 4) [2019] NSWLEC 56

Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11

Randren House Pty Ltd v Water Administration Ministerial Corporation (No 5) [2019] NSWLEC 63

Category:

Costs

Parties:

Mullaley Gas and Pipeline Accord Inc (Applicant)
Santos NSW (Eastern) Pty Ltd (First Respondent)
Independent Planning Commissioner (Second Respondent)

Representation:

Counsel:
Ms S Pritchard SC (Applicant)
Mr R Lancaster SC with Ms C Trahanas (First Respondent)
Submitting appearance (Second Respondent)

Solicitors:
Environmental Defenders Office (Applicant)
Corrs Chambers Westgarth (First Respondent)
Crown Solicitors Office (Second Respondent)

File Number(s):

2020/363113

Publication restriction:

Nil

Judgment

1. A community action group, Mullaley Gas and Pipeline Accord Inc (MGPA), has been unsuccessful in proceedings to judicially review the decision of the Independent Planning Commission (IPC) to grant development consent to the Narrabri Gas Project (the Project): Mullaley Gas and Pipeline Accord Inc v Santos NSW (Eastern) Pty Ltd [2021] NSWLEC 110. The decision maker, the IPC, made a submitting appearance. The proponent, Santos NSW (Eastern) Pty Ltd (Santos), seeks an order that MGPA pay its costs of the proceedings or, alternatively, a limited costs order to pay Santos’ costs incurred in respect of the expert evidence in the proceedings. MGPA submits that the Court should exercise its discretion under r 4.2(1) of the Land and Environment Court Rules 2007 (LEC Rules) not to make an order for the payment of costs.

2. I am satisfied that the proceedings have been brought in the public interest and that, in the particular circumstances, an order for the payment of costs against the unsuccessful applicant, MGPA, should not be made.

The rules governing orders as to costs

3. Costs of proceedings are at the discretion of the Court and the Court has full power to determine by whom, to whom and to what extent costs are to be paid: s 98(1) of the Civil Procedure Act 2005 (CP Act). This discretion is to be liberally construed and its exercise restricted only by limitations and conditions that are clearly expressed: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [21].

4. One express limitation is that the discretion to award costs is subject to rules of court. Rule 42.1 of the Uniform Civil Procedure Rules 2005 (UCPR) provides that “if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any other part of the costs.” The expression “follow the event” refers to the practical result of a particular claim. In the present case, the result was the dismissal of MGPA’s judicial review claim. Although the general rule is that the UCPR prevail over any local rules, to the extent only of any inconsistency between them, this paramountcy is subject to the UCPR expressly providing that a provision of the local rules is to prevail: s 11 of the CP Act.

5. Rule 1.7 of the UCPR does expressly provide that the rules of court specified in Sch 2 to the UCPR prevail over the UCPR. The rules specified in Sch 2 include all of the rules in the LEC Rules. Rule 4.2(1) of the LEC Rules provides:

“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.”

6. The proceedings referred to in r 4.2(1) are proceedings in Class 4 of the Court’s jurisdiction: r 4.1 of the LEC Rules. The judicial review proceedings brought by MGPA are in Class 4 of the Court’s jurisdiction.

7. Accordingly, r 4.2(1) of the LEC Rules gives the Court a discretion to decide not to make the usual order under UCPR r 42.1 that costs follow the event and instead to decide not to make an order for the payment of costs against the unsuccessful applicant, if the Court is satisfied that the proceedings have been brought in the public interest.

8. Application of r 4.2(1) involves the Court making at least two decisions: first, deciding whether it is satisfied that the proceedings have been brought in the public interest and, if so, exercising the discretion as to whether or not to make an order for the payment of costs against an unsuccessful applicant.

9. In deciding whether it is satisfied that the proceedings have been brought in the public interest, the Court ordinarily will look for something more than the unsuccessful applicant’s bare assertion that the proceedings have been brought in the public interest; that assertion must be established in the particular circumstances of the case: Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) (2010) 173 LGERA 280; [2010] NSWLEC 59 (Caroona Coal) at [47]-[49]. Courts have identified various considerations or factors that indicate that the proceedings have been brought in the public interest. They include the five considerations identified by Lloyd J in Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No 2) (2004) 136 LGERA 365; [2004] NSWLEC 434 at [15] (Engadine), being:

1. “the public interest served by the litigation;”

2. “whether that interest is confined to a relatively small number of members from the group or association in the immediate vicinity of the development, concerned with their own private amenity; or whether the interest is wider, involving a significant number of members of the public and concern for a wider and significant geographic area;”

3. “whether the applicant sought to enforce public law obligations”;

4. “whether the prime motivation of the litigation is to uphold the public interest and the rule of law;” and

5. “whether the applicant has no pecuniary interest in the outcome of the proceedings.”

10. They also include the five factors I identified in Caroona Coal at [60], being:

1. “the litigation raises one or more novel issues of general importance;”

2. “the litigation has contributed, in a material way, to the proper understanding, development and administration of the law;”

3. “where the litigation is brought to protect the environment or some component of it, the environment or component is of significant value and importance;”

4. “the litigation affects a significant section of the public;” and

5. “there was no financial gain for the applicant in bringing the proceedings.”

11. These considerations and factors should not be regarded as “fixed criteria” for the characterisation of litigation as having been brought in the public interest: Caroona Coal at [41]; Muswellbrook Shire Council v Hunter Valley Energy Pty Ltd (2019) 238 LGERA 295; [2019] NSWCA 216 at [83]. Rather, they are considerations or factors which, if answered in a particular way, may indicate that the proceedings have been brought in the public interest. Other considerations may also be relevant to be considered: Caroona Coal at [41].

12. Not all of these considerations or factors need to be answered in a particular way in order to characterise the proceedings as having been brought in the public interest: Caroona Coal at [46]. An example given in Caroona Coal at [43] is the fact that the public interest might be confined to a small section of the community does not necessarily deny characterisation of the proceedings as having been brought in the public interest. Another example in Caroona Coal at [44] and [45] is the fact that the proceedings might involve some private interest, such as a pecuniary interest in the outcome of the litigation, does not necessarily deny characterisation of the proceedings as having been brought in the public interest. Litigation can still be of a public interest character, notwithstanding it might also advance some private interests.

MGPA’s argument that no order for costs should be made

13. MGPA submitted that the proceedings should be characterised as having been brought in the public interest and that the Court should exercise its discretion not to make an order that MGPA pay Santos’ costs of the proceedings.

14. MGPA submitted that application of the five considerations in Engadine indicate that the proceedings have been brought in the public interest. As to the first consideration, the public interest served by the litigation was in ensuring that the environmental impacts of the Project, particularly the contribution of the Project to climate change, were properly considered according to law. Ground 1 was directed to whether the IPC had lawfully assessed the environmental (climate change) impacts of the projected greenhouse gas (GHG) emissions of the Project. Grounds 3 and 4 were directed to whether the IPC’s justification for declining to impose conditions to mitigate the impacts of the Project’s Scope 3 GHG emissions was lawful. MGPA argued that the IPC was required by cl 14(1)(c) of State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (the Mining SEPP) to consider whether or not the consent for the Project should be issued with conditions to ensure that GHG emissions of all scopes, including Scope 3, are minimised to the greatest extent practicable. MGPA contended that the IPC, in failing to impose conditions of consent regulating the Scope 3 GHG emissions of the Project, had misconstrued cl 14(1)(c) of the Mining SEPP (ground 3) or made a legally unreasonable decision (ground 4).

15. MGPA submitted that the proper assessment of the environmental impacts of the Project’s GHG emissions, including consideration of how to minimise these impacts, is an especially important matter of public interest. MGPA submitted that, “at this time in history, proper assessment of the GHG emissions of a major fossil fuel extraction project, and proper consideration of ways in which the impacts of the emissions could be mitigated, is a matter of the highest order of public interest” (Applicant’s submissions on costs, [29]). The nature of the public interest is “of such moment and magnitude” as to be sufficient to justify departure from the usual order for costs: Caroona Coal at [59] citing Anderson (on behalf of Numbahjing Clan within Bundjalung Nation) v NSW Minister for Planning (No 2) (2008) 163 LGERA 132; [2008] NSWLEC 272 at [10].

16. Ground 5 was directed towards whether the likely impacts of the Project included the likely impacts of any potential gas transmission pipeline that would transport gas from the Project to the domestic market. There was a public interest in ensuring that all of the likely impacts of the Project were properly assessed.

17. As to the second Engadine consideration, MGPA submitted that the public interest is wider, involving a significant number of members of the public and concern for a significant geographic area. The climate change impacts of the Project are not confined geographically to the local area, but have State, national and global consequences. There is no limit to the breadth of the public interest (including to future generations) in ensuring climate change impacts of a major fossil fuel development such as the Project are properly assessed and decisions to decline to require these impacts to be mitigated are made lawfully.

18. The Project and its climate change impacts were the subject of enormous interest from a significant number of members of the public. Almost 23,000 submissions were made by members of the public, of which 98% were opposed to the Project, and the Project’s climate change impacts were a key aspect of that overwhelming opposition. The failure to assess the likely impacts of any gas transmission line to transport gas from the Project to the domestic market was another key concern raised in public submissions.

19. The NSW Department of Planning, Industry and Environment noted that the number of submissions made on the Project was the largest number of submissions ever received on a State significant project in NSW. A very large number of submissions was also made to the IPC. The IPC’s call for submissions in relation to the Project resulted in 11,273 submissions of which 10,720 (95%) were objections to the Project. The IPC also received two campaign petitions objecting to the Project with 13,880 signatures. The IPC identified that a key issue in the submissions it received was the Project’s GHG emissions and their contribution to global climate change.

20. As to the third Engadine consideration, MGPA submitted that the proceedings, being judicial review proceedings, did seek to enforce public law obligations. Each of the grounds of review concerned the proper discharge by the consent authority, the IPC, of the obligations under the Environmental Planning and Assessment Act 1979 (EPA Act) and the Mining SEPP to consider and determine by the grant of consent the development application for the Project.

21. As to the fourth Engadine consideration, MGPA submitted that the prime motivation of the litigation was to uphold the public interest earlier identified and the rule of law. MGPA was not motivated to bring the proceedings to protect any private interest of its members, specifically to prevent construction of the gas transmission pipeline through its members’ land. Although one of the grounds raised by MGPA did concern the proper assessment of the likely impacts of any proposed gas transmission pipeline, the raising of that ground was not motivated to protect any private interests of members of MGPA but rather to uphold public law obligations to consider properly the likely impacts of the Project. Ms Margaret Fleck, one of the members of MGPA who was authorised to speak on its behalf, gave affidavit evidence about the incorporation, objects and activities of MGPA. Based on Ms Fleck’s evidence, MGPA submitted:

“(a) the objects of the applicant, which since 2014 have been “[t]o protect the environment, agricultural productivity and communities of the Namoi Catchment for present and future generations”: Fleck Affidavit, [8]-[11]...;

(b) the activities of the applicant (explained at Fleck Affidavit, [17]-[29]) which, consistent with its objects, involve campaigning for protection of the environment and agricultural communities in the Namoi Catchment area;

(c) the stated reasons for the applicant for commencing the proceeding, as recorded in minutes of the applicant’s general meeting of 20 December 2020, which … provide as follows:

‘The committee discussed further our main concerns and reasons for wanting to pursue the case:

- exacerbating climate change and the ongoing effects this has on our farming businesses and other businesses in the community

- underground water in jeopardy

- intergenerational equity

- detrimental effects to agriculture sector

- legacy issues

- trojan horse – once they start, there is a real fear of the industry spreading at a rapid rate’

These issues are to be discussed further and in more detail. This is by no means an exhaustive list but gives an indication of many issues we have.’

(d) MGPA was keenly aware, because of its extensive participation in the assessment of the Project, of the climate change implications of the Project (see Fleck Affidavit at [24]-[26]) and this was evidently a main reason for commencing the proceeding…;

(e) that the route of the two pipelines proposed to bring the gas from the Project to market would not cross land owned by members of the applicant, nor does the Project site directly impact any MGPA members’ land: Fleck Affidavit, [14]-[16].” (at [18] of Applicant’s submissions on costs).

22. As to the fifth Engadine consideration, MGPA submitted that no MGPA member has property that will be directly affected by the Project site or the routes of the two potential options for the gas transmission pipeline to transport gas from the Project to market. Neither Ms Fleck nor any other member of MGPA that she was aware of has any direct financial interest in the proceedings.

23. MGPA similarly addressed the factors in [60] of Caroona Coal, submitting that:

1. MGPA’s grounds of review invited, and in fact resulted in, material development in the proper understanding and application of s 4.15 of the EPA Act and cl 14(1)(c) of the Mining SEPP (see [60(b)] of Caroona Coal);

2. the litigation was brought to protect the environment, both from the impacts of the GHG emissions of the Project on climate change and the impacts of any proposed gas transmission pipeline (see [60(c)] of Caroona Coal);

3. the litigation affects a significant section of the public (see [60(d)] of Caroona Coal); and

4. there was no financial gain for MGPA or its members in bringing the proceedings (see [60(e)] of Caroona Coal).

24. More generally, MGPA submitted that the considerations in Engadine and the factors in Caroona Coal should not be looked at and answered individually, but rather need to be evaluated holistically. The considerations or factors are indicators that the proceedings might have been brought in the public interest, but are not fixed criteria: Caroona Coal at [43]-[46]. MGPA submitted that, looked at holistically, the answers to the considerations and factors overwhelmingly lead to the conclusion that the proceedings have been brought by MGPA in the public interest.

25. MGPA submitted that, having found that the proceedings have been brought in the public interest, the proper exercise of the Court’s discretion under r 4.2(1) is not to make an order for the payment of costs against MGPA. MGPA submitted that none of the countervailing considerations identified in Caroona Coal at [61] apply.

26. MGPA was not motivated to bring the proceedings by the private interests of its members and no member stood to gain financially from the proceedings (the factors in paragraphs (a), (b) or (c) of [61] of Caroona Coal).

27. The questions of public interest raised in the proceedings could not be described as narrow, or as only involving a discrete point of interpretation without broad ramifications (the factor in (d) of [61] of Caroona Coal). Rather, there was a broad public interest in ensuring the proper assessment of environmental impacts, including the climate change impacts, of the Project, and identifying all of the likely impacts of the Project, including of any gas transmission pipeline needed to transport gas from the Project to market. The questions of statutory construction raised, concerning s 4.15(1) of the EPA Act and cl 14(1)(c) of the Mining SEPP, were important and had wider ramifications. The Court’s determination of the questions has contributed, in a material way, to the proper understanding, development and administration of the law: Caroona Coal at [60(b)].

24. Grounds 1 and 5 concern the IPC’s construction and application of s 4.15(1)(b) of the EPA Act, first by failing to consider the environmental impacts of the GHG emissions of the Project and secondly by failing to consider the environmental impacts of any proposed gas transmission pipeline to transport gas from the Project to market. Grounds 3 and 4 concerned the construction and application of cl 14(1) of the Mining SEPP, including whether the term “greenhouse gas emissions” in cl 14(1)(c) of the Mining SEPP includes all scopes of GHG emissions and what is the scope of the duty of a consent authority to consider imposing a condition of consent to mitigate Scope 3 GHG emissions. MGPA submitted that the Court’s determination of these issues of statutory construction clarified the scope of these statutory provisions, which is of importance given the substantial public interest in the assessment of GHG emissions under the Mining SEPP and the EPA Act and of the likely impacts of developments.

25. MGPA submitted that there was no unreasonableness in its conduct of the proceedings (the factors in paragraphs (e) and (f) of [61] of Caroona Coal). The only potential disentitling conduct relied upon by Santos is MGPA’s application to adduce and adducing the expert evidence of Dr Sackett, which Santos contended was not required in order to determine the grounds of review of the IPC’s decision to grant consent to the Project. MGPA submitted that its reliance on Dr Sackett’s expert evidence was not unreasonable conduct.

26. First, as required by UCPR r 31.19, MGPA sought the leave of the Court to adduce this expert evidence. The Court (Pain J) granted leave to MGPA to rely on this expert evidence: Mullaley Gas and Pipeline Accord Inc v Santos NSW (Eastern) Pty Ltd [2021] NSWLEC 24. MGPA argued, and the Court accepted, that the expert evidence would explain, and assist the Court to understand, technical concepts concerning GHG emissions and climate change and the environmental impacts of the GHG emissions of the Project, which would assist the Court to evaluate whether the IPC failed properly to consider these impacts.

27. Pain J agreed, finding:

“Given the nature of the issues identified in Grounds 1, 3 and 4, I accept the Applicant’s submission that this limited expert evidence enables it to better put its case and that it may be essential for the Court to hear such evidence. The evidence comes within the exceptions identified in Caldera and Haughton.” (at [20]).

32. MGPA submitted that the fact that, as events happened, the Court in determining grounds 1, 3 and 4 did not find it necessary to refer to Dr Sackett’s expert evidence does not deprive that evidence of its purpose and intent or make it unreasonable for MGPA to have adduced that evidence after having obtained leave of the Court to do so.

33. Secondly, MGPA submitted that, insofar as Santos incurred costs in responding to Dr Sackett’s expert evidence, some of these costs were an inevitable consequence of the Court’s decision to permit MGPA to adduce that evidence, but most were a result of Santos’ own unnecessary conduct. Santos chose to file its own expert report in response to Dr Sackett’s expert evidence, by Dr Pitman, but that expert evidence largely agreed with Dr Sackett’s explanation of the technical concepts and added little to Dr Sackett’s evidence. Santos also chose to file a notice of motion seeking, before the final hearing of the proceedings, an advance ruling on the admissibility of parts of Dr Sackett’s expert evidence under s 192A of the Evidence Act 1995. That was unnecessary: any objection to Dr Sackett’s evidence could have been, and ordinarily would have been, made at the substantive hearing of the proceedings. The Court declined to deal with the motion for an advance ruling on the admissibility of the evidence and instead adjourned the notice of motion to the hearing. At the hearing, some of Santos’ objections were resolved by MGPA not reading parts of Dr Sackett’s evidence and other objections were not upheld by the Court, so that the evidence was admitted. MGPA submitted that it should not now be blamed for Santos’ incurring of costs in taking these actions.

Santos’ argument that costs should be ordered against MGPA

34. Santos submitted that proceedings were not brought in the public interest, but, in any event, there were countervailing circumstances that would justify the Court not departing from the usual order as to costs.

35. Santos noted that three of the four grounds of review (grounds 1, 3 and 4) related to climate change, which Santos accepted is an important issue, but nevertheless submitted that this fact is insufficient. Not every case that raises climate change as an issue is to be characterised as having been brought in the public interest or will satisfy the requirement for “something more” than a bare claim of public interest: Caroona Coal at [13], [60].

36. Santos submitted that the proceedings do not meet the considerations or factors identified in Engadine and Caroona Coal for the proceedings to be characterised as having been brought in the public interest. The proceedings did not raise any novel issues of general importance or contribute to the proper understanding or development of the law, in respect of climate change or otherwise (see [60(a) and (b)] of Caroona Coal).

37. Of the three grounds that raised climate change, two of them (grounds 1 and 4) raised factual questions about how the IPC had considered the environment impacts of the Project. Ground 1 raised factual issues in the specific circumstances of the Project and relied on a narrow reading of the IPC’s statement of reasons. Ground 1 sought to challenge the IPC’s consideration under s 4.15(1) of the EPA Act of the likely environmental impact of the GHG emissions of the Project. This essentially concerned factual questions. Ground 4 raised the legal unreasonableness of the IPC’s decision not to impose conditions of consent mitigating Scope 3 emissions of the Project, but was essentially confined to the facts of the Project and the IPC’s grant of consent to it.

38. Ground 3 did invite consideration of the construction of cl 14 of the Mining SEPP, including whether the term “greenhouse gas emissions” in cl 14(1)(c) included not only Scope 1 GHG emissions but also Scopes 2 and 3 GHG emissions. MGPA contended that the term included all three scopes of emissions, including importantly Scope 3 emissions, so that the IPC was required under cl 14(1)(c) of the Mining SEPP to consider imposing conditions of consent minimising the GHG emissions of the Project, including Scope 3 emissions. Santos contended that the term “greenhouse gas emissions” only included Scope 1 GHG emissions and certainly not Scope 3 GHG emissions, so that the IPC was not required to consider whether to impose a condition of consent requiring that Scope 3 emissions by minimised. Notwithstanding that Santos put in issue the proper construction of cl 14(1) of the Mining SEPP, Santos nevertheless submitted that it was not necessary for the Court to resolve this question of statutory construction given its position that the IPC had in fact considered whether to impose conditions relating to Scope 3 GHG emissions but had decided not to do so, in accordance with cl 14(1)(c) of the Mining SEPP.

39. Although the Court did decide the issue of statutory construction of cl 14(1)(c) of the Mining SEPP, and did so contrary to Santos’ argument, the Court found that the IPC had in fact considered whether to grant consent on conditions minimising the Project’s Scope 3 GHG emissions but had decided not to do so. Hence, the Court’s findings on ground 3 confirmed that the construction of cl 14(1) of the Mining SEPP was not dispositive of this ground.

40. Ground 5 dealt with a different issue than climate change, being whether the environmental impacts of any proposed gas transmission line that might be constructed to transport gas from the Project to market are likely impacts of the Project, so as to be considered under s 4.15(1)(b) of the EPA Act. Santos submitted that this ground was confined to the facts of the Project and the IPC’s consideration and approval of it.

41. Insofar as grounds 1 and 5 raised issues about the correct application, as contrasted with the correct interpretation, of s 4.15(1) of the EPA Act to the particular circumstances of the Project, this is not of itself sufficient to characterise the proceedings as having been brought in the public interest: Randren House Pty Ltd v Water Administration Ministerial Corporation (No 5) [2019] NSWLEC 63 at [22].

42. Santos accepted that there was and is considerable public interest in the Project and that a large number of submissions had been made objecting to the Project. Santos submitted, however, that this does not necessarily mean that the litigation affects a significant section of the public (see [60(d)] of Caroona Coal). Santos submitted that the quantum of submissions lodged in response to a proposed development or the media attention it receives does not indicate that any judicial review proceedings in relation to the grant of consent are publicly significant or represent broader public opinion: Hume Coal Pty Ltd v Alexander (No 4) [2013] NSWLEC 106 at [41]. The question of whether the proceedings are in the public interest “is not [to be] determined by the degree of interest in it shown by members of the public, but rather objectively by the extent to which it serves the public interest”: Muswellbrook Shire Council v Hunter Valley Energy Pty Ltd (No 4) [2019] NSWLEC 56 at [59].

43. In light of Ms Fleck’s evidence, MGPA did not press its earlier submission that the proceedings were brought to protect the private interests of land owners who objected to the construction of a gas transmission pipeline over their land.

44. Santos submitted in the alternative that if the Court were satisfied that the proceedings have been brought in the public interest, there are countervailing circumstances that would justify the Court still making the usual order requiring MGPA to pay Santos’ costs. These countervailing circumstances concern MGPA’s filing and tender of Dr Sackett’s expert evidence. Santos had objected to MGPA being granted leave to adduce expert evidence from Dr Sackett, on grounds that included that the evidence would be irrelevant to the grounds of review of the IPC’s decision and would be of no assistance to the Court in understanding the issues in dispute. Santos argued that it incurred considerable costs in connection with MGPA’s application to adduce and adducing of expert evidence, including:

1. opposing MGPA’s notice of motion seeking leave to adduce expert evidence, which included an oral hearing before Pain J;

2. reviewing and responding to Dr Sackett’s expert evidence, including briefing an expert to prepare a response to that evidence;

3. preparing and filing a notice of motion seeking an advance ruling on the admissibility of parts of Dr Sackett’s expert evidence and preparing an affidavit in support of that notice of motion; and

4. addressing objections to Dr Sackett’s expert evidence at the hearing of the substantive proceedings.

45. Santos submitted that it incurred these costs unnecessarily because Dr Sackett’s expert evidence was not dispositive in the Court’s determination of any matter in dispute in the proceedings. Santos submitted, therefore, that MGPA’s conduct in seeking to rely and in relying on Dr Sackett’s expert evidence was unreasonable. In these circumstances, Santos submitted that MGPA should pay Santos’ costs incurred in respect of the expert evidence.

The proceedings have been brought in the public interest

46. Rule 4.2(1) of the LEC Rules will be engaged if the Court is satisfied that the proceedings have been brought in the public interest. In the circumstances of this case, I am satisfied that the proceedings have been brought in the public interest. Although the considerations identified in Engadine and the factors identified in Caroona Coal should not be regarded as “fixed criteria”, or as exhaustive, they do assist in characterising the nature of the proceedings and the purpose for which the proceedings have been brought.

47. Starting with the first consideration in Engadine, the aspect of the public interest sought to be enforced by the proceedings was to enforce public law obligations to ensure environmental protection: Caroona Coal at [63]. This aspect of the public interest “risks being unrepresented, or, at least, underrepresented, in the courts”: Caroona Coal at [64]. Facilitating access to justice to ensure this aspect of the public interest is represented in the courts is one justification for r 4.2(1) of the LEC Rules enabling departure from the usual costs order: Caroona Coal at [36], [40].

48. As to the third consideration in Engadine, the proceedings brought by MGPA clearly sought to enforce public law obligations to ensure the protection of the environment. The proceedings sought to judicially review the decision of the IPC to grant consent to the Project. Three of the grounds of review (grounds 1, 3 and 4) challenged the IPC’s consideration of the likely environmental impacts of the GHG emissions of the Project. Ground 1 contended that the IPC’s consideration miscarried because the IPC compared the GHG emissions of the Project with the potential GHG emissions of hypothetical coal projects. In so doing, MGPA contended, the IPC misconstrued and misapplied s 4.15(1)(b) of the EPA Act, which requires a consent authority to take into consideration in determining a development application the likely impacts of the development on the natural environment. Grounds 3 and 4 contended that the IPC’s consideration miscarried because the IPC failed to impose conditions of consent minimising the Project’s Scope 3 GHG emissions. In so doing, MGPA contended, the IPC misconstrued and misapplied cl 14(1) of the Mining SEPP, which requires a consent authority to consider whether or not the consent should be issued subject to conditions to ensure that GHG emissions are minimised to the greatest extent practicable.

49. Ground 5 also concerned the protection of the environment. The ground challenged the IPC’s failure to consider the environmental impacts of the construction of a proposed gas transmission pipeline transporting gas from the Project to market. In so doing, MGPA contended, the IPC misconstrued and misapplied s 4.15(1)(b) of the EPA Act.

50. All four grounds, therefore, were directed to enforcing the public law obligations under the EPA Act and Mining SEPP to ensure the protection of the environment, either from climate change or from construction of the gas transmission pipeline.

51. As to the fourth consideration in Engadine, the prime motivation of MGPA in bringing the proceedings was to uphold this public interest in the protection of the environment, to enforce these public law obligations to ensure environmental protection, and thereby to uphold the rule of law. In light of Ms Fleck’s evidence about the objects and activities of MGPA, and the reasons why MGPA decided to bring the proceedings, Santos no longer suggested that MGPA’s prime motivation was to pursue the private interest of its members. Nevertheless, even if the pursuit of the public interest by bringing the proceedings would also benefit some private interest, that would be of no consequence. Litigation can still properly be characterised as being in the public interest, notwithstanding it may advance private interests: Caroona Coal at [44], [45] and Hastings Point Progress Association Inc v Tweed Shire Council (2010) 172 LGERA 157; [2010] NSWCA 39 at [8].

52. These three considerations in Engadine lead to the first two factors identified in Caroona Coal, that the litigation raises one or more issues of general importance and that the litigation has contributed, in a material way, to the proper understanding, development or administration of the law. Grounds 1 and 5 raised as issues the proper construction and application of s 4.15(1)(b) of the EPA Act while grounds 3 and 4 raised as issues the proper construction and application of cl 14(1) of the Mining SEPP. In the way the grounds were determined, the litigation did contribute to the understanding and administration of the law in two ways: first, as to the scope of the expression in s 4.15(1)(b) of the EPA Act “the likely impacts of the development” and whether the likely impacts of the construction of the proposed gas transmission pipeline could be said to be likely impacts of the Project, and secondly, as to the meaning and scope of the expression in cl 14(1)(c) of the Mining SEPP “greenhouse gas emissions” and whether the indirect GHG emissions of the Project (Scopes 2 and 3 emissions) could be said to be included in that expression. The second question in particular is of importance in the proper administration of the Mining SEPP. There was uncertainty as to the construction of cl 14(1), which impeded the clear and consistent application of the clause by consent authorities in determining development applications for development to which the Mining SEPP applies. The Court’s construction of the clause and explanation as to its application are of benefit in understanding and applying the clause.

53. Turning to the second Engadine consideration and the fourth factor in Caroona Coal, the litigation involved a significant section of the public and concerned a wide and significant geographic area. As MGPA has submitted, a very large number of people made submissions on the Project, both when the development application for the Project was exhibited (around 23,000 submissions) and in response to the IPC’s call for submissions (11,273 submissions and 13,880 signatures on petitions), of which 98% and 95% respectively were opposed to the Project. Key concerns raised in the submissions were the impacts of the Project’s GHG emissions on climate change and the impacts of construction of any gas transmission pipeline. Both of these impacts would affect a wide geographic area, climate change having State, national and global consequences, and the corridor of any gas transmission pipeline from the Project site in Narrabri to the domestic market in Sydney running for a considerable length.

54. The significant degree of interest shown in the Project by the public, and the significance of the environmental impacts of the Project on many people over a wide geographic area, are indicators that the proceedings, which seek to uphold the public interest in environmental protection, have been brought in the public interest. To the extent that this Court’s decisions in Hume Coal v Alexander (No 4) at [41] and Muswellbrook Shire Council v Hunter Valley Energy Coal Pty Ltd (No 4) at [59], might be read as saying otherwise, I respectfully disagree. The degree of interest of the public in the subject matter of the proceedings is one of the considerations identified in Engadine at [15] and in Caroona Coal at [60(d)], and earlier by Stein J in Oshlack v Richmond River Shire Council and Iron Gates Development Pty Ltd (1994) 82 LGERA 236 at 246 upheld on appeal by the High Court in Oshlack v Richmond River Council at [20], [49], [121] and [144]. I do agree, however, that it is not simply a matter of numbers, either the number of interested members of the public or the extent of media interest; regard must also be had to the subject matter of such public and media interest, including the public character of the litigation and the extent to which it serves the public interest.

55. A final consideration, identified in both Engadine and Caroona Coal, is the absence of any pecuniary interest of MGPA or its members in a positive outcome of the proceedings. Whilst the existence of a pecuniary interest in the outcome of the litigation does not necessarily deny characterisation of the litigation as being in the public interest (Caroona Coal at [45]), the absence of any pecuniary interest is a factor favouring that the litigation was brought in the public interest: Muswellbrook Shire Council v Hunter Valley Energy Pty Ltd (NSWCA) at [87]. Ms Fleck’s evidence established that there was no financial gain for MGPA or its members in bringing the proceedings.

46. Having regard to all these considerations and factors, I am satisfied that the proceedings have been brought in the public interest.

No countervailing considerations

57. My satisfaction that MGPA brought the proceedings in the public interest engages r 4.2(1) of the LEC Rules. The rule confers power on the Court to decline to make the usual costs order under UCPR r 42.1 against an unsuccessful applicant: Muswellbrook Shire Council v Hunter Valley Energy Pty Ltd (NSWCA) at [90]. This involves the exercise of a discretion. There may be countervailing considerations that support the Court not exercising the power to decline to make the usual costs order. Most of the countervailing considerations identified in the cases concern the conduct of the unsuccessful applicant, including any unreasonableness in the applicant’s conduct of the litigation: see the summary in [61] of Caroona Coal.

58. In the present case, Santos relied on one aspect of unreasonableness in MGPA’s conduct of the litigation, regarding the adducing of expert evidence from Dr Sackett. I do not find that this conduct is unreasonable or disentitling.

59. Santos’ claim that it was unreasonable for MGPA to adduce Dr Sackett’s expert evidence is to cavil with the Court’s rulings, first, in allowing MGPA to rely on that expert evidence and, secondly, in admitting the expert evidence at the hearing of the proceedings.

60. Santos’ arguments that the evidence was irrelevant to establish any of the grounds of review or to assist the Court in understanding the evidence or arguments on these grounds of review were considered but rejected by Pain J on MGPA’s application for leave to rely on the expert evidence. Pain J held that the limited expert evidence MGPA sought to adduce from Dr Sackett “enables it to better put its case” at [20] and “will be necessary for the Court to gain an understanding of the environmental impacts of the Project in order to assess whether the IPC misconstrued s 4.15” of the EPA Act (at [19]) and whether “the failure to include a condition regulating Scope 3 GHG emissions was legally erroneous” (at [19]). Pain J gave leave pursuant to UCPR r 39.19 for MGPA to rely on the expert evidence of Dr Sackett on 12 identified technical concepts relating to GHG emissions and climate change. MGPA’s conduct in applying for leave to adduce Dr Sackett’s expert evidence cannot be regarded as unreasonable in circumstances where the Court granted such leave.

61. Equally, it cannot be unreasonable for MGPA to have adduced at the hearing of the proceedings and to have relied on the very expert evidence in respect of which MGPA was granted leave to rely. Santos submitted that certain parts of Dr Sackett’s evidence went beyond what Pain J had allowed, but that did not make MGPA’s adducing of Dr Sackett’s evidence unreasonable. Much of the evidence did address the matters for which leave was granted and it was not unreasonable for MGPA to adduce this evidence. The parts of Dr Sackett’s evidence that arguably addressed other matters were not read by MGPA, so that it did not seek to rely on that evidence inconsistently with the leave that had been granted. I admitted the balance of Dr Sackett’s evidence subject to relevance. That course did not make MGPA’s conduct in adducing the evidence unreasonable; it merely recognised that the relevance of the evidence to establishing any fact in issue in the proceedings was best able to be assessed after the hearing concluded. As it turned out, I was able to decide each of the grounds of review without the need to determine the relevance of Dr Sackett’s evidence. But the fact that this is what happened, does not make MGPA’s adducing of Dr Sackett’s evidence unreasonable.

62. Accordingly, I find that MGPA’s conduct in seeking to rely on, and relying on, Dr Sackett’s expert evidence did not amount to unreasonable conduct of the proceedings, and it is not a reason not to exercise the discretion in r 4.2(1) to decide not to make an order for the costs against MGPA.

No costs order should be made

63. As I am satisfied that the proceedings have been brought in the public interest, and there are no countervailing considerations regarding MGPA’s conduct of the proceedings, I consider it is appropriate not to make an order for the payment of costs against MGPA, even though it was unsuccessful in the proceedings.

64. There should also be no order for costs in relation to this question of the appropriate costs order to be made. MGPA sought for the Court to exercise the discretionary power in r 4.2(1) of the LEC Rules not to make the usual costs order that costs follow the event. It has been successful in obtaining this dispensation from the usual costs order. Santos should not be ordered to pay MGPA’s costs of obtaining this dispensation.

65. To ensure that there is no doubt as to the outcome of the costs question, I will make an order that there be no order as to costs, although recognising the incongruity in doing so.

66. The Court orders:

1. There be no order as to the costs of the proceedings, including the application for costs of the proceedings, with the intention that each party pay their own costs of the proceedings.

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Decision last updated: 16 December 2021