Oshlack v Richmond River Council

[1996] HCATrans 368

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S133 of 1996

B e t w e e n -

AL OSHLACK

Applicant

and

RICHMOND RIVER COUNCIL

Respondent

Application for special leave to appeal

BRENNAN CJ
TOOHEY J
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 2 DECEMBER 1996, AT 11.06 AM

Copyright in the High Court of Australia

MR J. BASTEN, QC:   If the Court pleases, I appear for the applicant. (instructed by Bartier Perry & Purcell)

MR B.R. McCLINTOCK, SC:   May it please the Court, I appear with my learned friend, MR G.O’L. REYNOLDS, for the respondent. (instructed by Hannigans)

BRENNAN CJ:   Thank you, Mr McClintock.  We would be advantaged to hear you first.

MR McCLINTOCK:   Thank you, your Honour.  Your Honours, there are four reasons, in my submission, why this Court should decline special leave in this matter.  In broad outline, they are these.  First, the decision of the Court of Appeal in proceedings below is not attended by any sufficient doubt and that proposition, in my respectful submission, divides itself into two sub-propositions.  The first is that the Court of Appeal’s decision was simply an application for binding an indistinguishable authority of this Court, that is Latoudis v Casey.  The second sub-proposition is that the decision of the Court of Appeal was an application of longstanding and uncontroversial principle, that is, the principles exemplified by what the Court said in Latoudis v Casey, that is, that the purpose of costs orders is to compensate the successful litigant, not to punish the unsuccessful one, and that therefore factors particular to the unsuccessful litigant are irrelevant in determining where the burden of costs should fall.

The second factor which we would say indicates special leave should not be granted, is that, at base, the issue involved is one merely of construction of a New South Wales statute, that is section 123 of the Environmental Planning and Assessment Act and concerning the practices of a subordinate New South Wales court, that is the Land and Environment Court, in relation to matters of costs.  The third reason is that this Court would necessarily be called upon to re-exercise a discretion exercised by the Court of Appeal.  What the Court of Appeal in fact did was find that Mr Justice Stein, of the Land and Environment Court, had incorrectly exercised a discretion by taking into account an irrelevant factor and then itself re-exercised that discretion, taking into account additional factors thought sufficient by their Honours.

The fourth and final point, by way of outline, your Honours, is that if it is felt that the decision of the Court of Appeal is wrong, it is a very easy matter for the legislature to amend the relevant section of the Act so as to vary the ordinary costs rules.

If I could turn, your Honours, to the first proposition I wish to advance, which is that Latoudis v Casey 170 CLR 534, was correctly applied by the Court of Appeal and is indistinguishable. Could I take your Honours to that authority. It was in Mr Basten’s list of authorities and will have been supplied by him. Your Honours, in my submission, will see that the Court decided that it was irrelevant to the exercise of a judicial discretion, in relation to costs, that the party bringing the proceedings believed that he was doing so in the public interest. I derive that, your Honours, from first the then Chief Justice Sir Anthony Mason, at page 544 of the report. Your Honours will see that at about point 6 there is a paragraph that commences:

However, I have come to the conclusion that the magistrate’s exercise of discretion in the present case was flawed.  In focussing on the reasonableness of the informant’s conduct in instituting the proceedings, the magistrate erred in principle.  In relying upon -

and then he goes on to deal with the facts of the matter.  In my submission “reasonableness” clearly comprehends matters such as the belief of the informant, in that case, that he was bringing the proceedings in the public interest.

TOOHEY J:   You can argue it that way perhaps, Mr McClintock, but it would be difficult, I think, to point to anything in Latoudis v Casey which, at least in express terms, would apply to litigation of the sort with which this application is concerned.

MR McCLINTOCK:   Your Honour, the case was dealing with criminal proceedings, obviously enough, but it took as its premise the accuracy of the rule as it had been stated in civil proceedings and there is, of course, nothing different between these civil proceedings and any other form of civil proceedings.

GUMMOW J:   But there is; it is a completely different rule as to standing.

MR McCLINTOCK:   Yes, your Honour, but that is not a sufficient basis to distinguish the ‑ ‑ ‑

GUMMOW J:   Well, maybe not, but it is not the same as an ordinary civil proceeding in aid of an individual right of contract or tort or whatever.

MR McCLINTOCK:   I am sorry, I did not hear your Honour.

GUMMOW J:   It is not the same as in respect of an ordinary civil proceedings which are brought by a plaintiff, protection of the plaintiff’s rights in contract or tort.  It is brought pursuant to a statutory right which is given the plaintiff, given in very wide terms, and that is the problem.  It will not go away by saying there is not a problem.

MR McCLINTOCK:   Certainly, your Honour.  Putting aside questions of standing, your Honour, there is no distinction between these proceedings and any other form of civil proceedings.

GUMMOW J:   But, yes, there is, because the problem arises and its context differs from that context in which the common law rule is involved.  That is your problem.  Now the problem may be resolved in the way you want it to be resolved.

MR McCLINTOCK:   What your Honour is putting to me is that the point of distinction between these civil proceedings and other civil proceedings is that there is a different provision as to standing here.  I accept that, but I would say, your Honour, that that is not a sufficient basis for distinguishing between these proceedings, brought pursuant to an open-standing provision, and any other form of civil proceedings.  One can see that, your Honour, from the section itself.  If the legislature had intended, when it had adopted the open-standing provision, to vary the cost rules, it could readily have done so by inserting a provision that dealt with the matter expressly.  They did, your Honours, deal with costs in section 123, when granting the open‑standing provision.  The provision is section 123(3) of that legislation.  The open-standing provision is subsection (1):

Any person may bring proceedings in the Court for an order to remedy or restrain a breach of this Act, whether or not any right of that person has been or may be infringed by or as a consequence of that breach.

GUMMOW J:   Well that is rather similar to section 80 of the Trade Practices Act.

MR McCLINTOCK:   Rather similar, your Honour, rather similar; it is not precisely so, but section 80 does grant a wide range range ‑ ‑ ‑

GUMMOW J:   When I say it is “rather similar”, it is similar in that the concluding words “whether or not any right” et cetera, are in section 80, and that is the point which differentiates it from the ordinary common law litigation in aid of private rights.

MR McCLINTOCK:   Your Honour, but it does not differentiate it in relation to the costs burden.

GUMMOW J:   You may be right.

MR McCLINTOCK:   Your Honour, when one thinks - and this is the second point in which I would say that what the Court of Appeal did was no more than an application of longstanding principle, is this:  be these proceedings brought under to vindicate a private right or be they brought simply because the person in question thinks it is a good idea to bring them or brought to preserve some aspect of the environment, as Mr Oshlack apparently did here, the purpose of a costs order is to compensate the successful party because he has been put to cost by the unsuccessful party.  Now, there is no distinction in relation to that body of doctrine and the situation here. 

Mr Oshlack caused my client costs by bringing unsuccessful proceedings against it in the Land and Environment Court, because the purpose of a costs order - and this is what the Court said in Latoudis v Casey ‑ is to compensate people in the position of my client.  The fact that Mr Oshlack was motivated by pure motives or motives of the highest, is irrelevant.  The authorities say, he caused my client costs and therefore, because he lost, because he brought proceedings that were unsuccessful, he should therefore compensate it.  That is the core of the ratio of Latoudis v Casey.

TOOHEY J:   When you put it that way you really highlight the point that might warrant special leave, namely that this is not the sort of litigation with which Latoudis v Casey was concerned, and you seek to translate, and you may well, if special leave were granted, demonstrate that compensation is at the heart of a costs order, but at least on the face of it there is some room for differentiating between litigation between parties and litigation of the sort that is envisaged by this type of legislation.

MR McCLINTOCK:   The difficulty lying behind that is when one analyses what is meant by the words “in the public interest” here, one actually comes down - and this is, in effect, made explicit by Mr Justice Stein - to a statement that “in the public interest” means that the litigant in fact has no financial interest in the proceedings.

GUMMOW J:   The words “in the public interest” are not in the Act.

MR McCLINTOCK:   They are not in the Act and in fact the words “the public interest” are in fact a chimera, which really distract attention from the true nature of the litigation.  But could I just step back, because I diverted myself, your Honours, from two points I wished to make in relation to Latoudis v Casey, and I can do them quite briefly. The first involves what your Honour Mr Justice Toohey said, which I would say was a point of general application in relation to civil litigation. The passage appears at pages 563 to 564 of the report. That is the point where your Honour rejected the reasonableness of the prosecution. If your Honours goes to page 563, your Honours will see that there, at the bottom of the page, your Honour Mr Justice Toohey quoted the reasons of the magistrate, saying:

It was reasonable for the Informant to have sworn the information, given that she had a reasonable suspicion -

and so on, and then over the page in the first paragraph:

The first of these considerations is, in the light of the authorities, irrelevant.

On page 569, Mr Justice McHugh dealt with the point at about point 5 and said this:

The fact that the informant has acted in good faith in the public interest or may have to meet the costs out of his or her own pocket is not a ground for depriving the defendant of his or her costs.

Now, your Honour, that case was involving criminal proceedings and, of course, the informant in criminal proceedings, in that case a policeman, has no interest whatsoever in the outcome of the proceedings and is manifestly bringing the proceedings in the public interest.

BRENNAN CJ:   That is where it seems to me, to an argument about how this is just about an ordinary civil proceeding, is misconceived, if you want to rely on Latoudis v Casey.  What you really want to say is, it makes no difference that the party that is to be mulcted in costs is proceeding out of the public interest.

MR McCLINTOCK:   Yes.

BRENNAN CJ:   Well now, that may be so, as a general proposition.  There would be another question though, would there not, having regard to the language of the Environmental Planning and Assessment Act, and that is that one of the purposes of that Act, that could be derived - I do not say should be - is that the enforcement of the Act should be left to individuals who can bring to book, as it were, those who might be minded to do damage to the environment and that being so, it must be contrary to the public interest to expose them to the risk to costs.

MR McCLINTOCK:   Your Honour, there are two answers to that, one of which I have put already, which is, if the legislature had intended that, it would have done so, particularly bearing in mind that it did deal with costs.  If it had wanted to have that in mind, if it wanted to do that, it could have done it.  The fact that it did not do it rather tends to indicate that while the legislature was thinking that it should extend the standing provisions, what it did not want to do was alter the costs rules and that, what it had in mind was making sure that people who did act pursuant to the open-standing provisions, thought carefully before they brought them and made sure that they had a case that had some reasonable prospect of success.

BRENNAN CJ:   What more do they need to do than to give a general discretion to the court to make such order as might be appropriate?

MR McCLINTOCK:   Yes, your Honour, but the general discussion ‑ ‑ ‑

BRENNAN CJ:   Having regard to the nature and purpose of the statute as a whole.

MR McCLINTOCK:   But, your Honour, the general discretion in fact is granted by section 20 of the Land and Environment Court Act and by adoption of the Supreme Court Rules, and it is the same for discretion that applies in relation to all civil proceedings.  The legislature did not draw a distinction, in either Act, between civil proceedings pursuant to open standing provisions and civil proceedings involving vindication of a right held by the plaintiff.

Your Honours, could I move on to the second of my provisions, which is that it really in a sense puts itself - and it either meets with your Honours’ favour or it does not - that is that this is a purely New South Wales question.  I appreciate what your Honour Mr Justice Gummow says about the similarity, but it is only a similarity, nothing more, with section 80 of the Trade Practices Act.  It is a matter in which I would submit that it is appropriate for the Court of Appeal to have the last word on this; it being, a New South Wales statute and the question involving a question of practice of a New South Wales court, the Land and Environment Court.

TOOHEY J:   But that cannot be right, can it, Mr McClintock?  It is right if Latoudis v Casey governs this situation.  If Latoudis v Casey does not govern the situation or does not necessarily govern the situation, then it can only be because there is some principle at stake.  It is not principle, as it were, just to be found in some general discretion as to costs; it is the principle that governs the exercise of that discretion.

MR McCLINTOCK:   I accept what your Honour says to me, but there are reasons, dehors Latoudis v Casey, why the principle is correct, and they are the ones identified, for example, by Mr Justice Cole.  That is, that it is the compensatory nature of costs orders, which no one has suggested is not a relevant factor in considering the costs question in this case.  If it was simply a matter of, “Did Latoudis v Casey, a High Court authority, apply?”, yes, I would accept the force of what your Honour put to me but, in my respectful submission, it is not merely that.  The decision below is supported and was supported on additional grounds other than Latoudis v Casey.

My next proposition, your Honours, is of course the discretionary one.  Could I take your Honours, for the first time, to the application book.  Your Honours will have realised that Mr Justice Stein did not refer at all to Latoudis v Casey in his judgment, nor did he refer to the compensatory nature of costs orders and he focused on what was, so the Court of Appeal found, an irrelevant matter.  But, moreover, we would say, he took into account the relevant matter, that is the motivation of the applicant. 

Now, I have taken your Honours to the passages where, in Latoudis v Casey, those matters are dealt with, but when it comes down to it, what actually happened here was the Court of Appeal actually exercised its own discretion here.  It is perhaps easiest to start at the back of the application book and, so to speak, work forward.  If your Honours look at page 53 of the application book at line 30, there, in dealing with this question of practice and procedure, Mr Justice Cole said:

Thus his Honour considered at least four matters as being relevant in the exercise of his discretion to deny the successful defendant its costs.  The first was that the proceedings can properly be characterised as public interest litigation.  I have dealt with that matter.  The second was that the basis of challenge was arguable.  This is an irrelevant consideration for similar reasons.  The third was that the proceedings raised serious and significant issues concerning environmental law.  This also is an irrelevant consideration having regard to the compensatory nature of costs.  The fourth was that the respondent was moved to litigate by worthy motives.  This also is an irrelevant consideration for similar reasons.

And, over the page, his Honour reversed the costs order.  His Honour was there, in distinguishing those matters and saying they were irrelevant, exercising his own discretion. 

A similar passage appears, your Honours, in Mr Justice Sheller’s judgment at page 49, although not in as extensive terms.  The difficulty, your Honours, is that Mr Justice Stein did not merely act upon the public interest matter; he acted upon matters such as the matter the case being arguable, which is truly irrelevant, and therefore the Court of Appeal was called upon to re-exercise the discretion.

TOOHEY J:   It may not be, in this context.  I perhaps wrongly detect in your argument an approach that seems to suggest that if Latoudis v Casey is not necessarily applicable, then no orders for costs would be made against anyone who brings proceedings under this Act, but that would not follow.

MR McCLINTOCK:   That is not, I hope, what I was putting.  What I was saying and what I am saying now is the Court of Appeal was dealing with a discretionary matter.  Mr Justice Stein did not merely act upon the public interest matters; he acted upon matters as that passage from Mr Justice Cole indicates, that the appeal was arguable.  That must be an irrelevant matter in relation to costs.  The fact that someone brings arguable proceedings that have never been thought to preclude a costs order against him.  Once it comes to be seen that ‑ ‑ ‑

TOOHEY J:   No, but the converse may be true, that some brake would be put, no doubt, on mischievous proceedings or vexatious proceedings or proceedings lacking any sort of foundation at all.

MR McCLINTOCK:   Yes, your Honour.  Your Honours, those are my submissions.  The only other reference I want to give was to the passages of Mr Justice Clarke, and they appear at page 31.  Thank you, your Honours.

BRENNAN CJ:   There will be a grant of special leave in this case.

AT 11.27 AM THE MATTER WAS CONCLUDED