Oshlack v Rous Water (No 3)
[2012] NSWLEC 132
•07 June 2012
Land and Environment Court
New South Wales
Medium Neutral Citation: Oshlack v Rous Water (No 3) [2012] NSWLEC 132 Decision date: 07 June 2012 Before: Pepper J Decision: The applicant is to pay 75% of the first and second respondents' costs.
Catchwords: COSTS - whether proceedings brought in the public interest - whether the proceedings raised questions of public importance - whether the applicant engaged in disentitling conduct by reason of late abandonment of grounds of review - only part of the proceedings brought in the public interest - meaning of "costs in the cause" - effect of separate hearing of preliminary questions on costs determination - whether costs should be apportioned - costs apportioned. Legislation Cited: Civil Procedure Act 2005 ss 11, 98
Environmental Planning and Assessment Act 1979 ss 111, 112
Fluoridation of Public Water Supplies Act 1956 ss 6, 6A
Land and Environment Court Rules 2007 r 4.2
Uniform Civil Procedure Rules 2005 rr 1.7, 42.1, Sch 2Cases Cited: Australians for Sustainable Development Inc v Minister for Planning (No 2) [2011] NSWLEC 70
Caroona Coal Action Group Inc v Coal Mines Australia Pty Limited and Minister for Mineral Resources (No 3) [2010] NSWLEC 59; (2010) 173 LGERA 280
Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263; (2010) 176 LGERA 424
Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261
F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 5) [2008] NSWLEC 235
Friends of Turramurra Inc v Minister for Planning (No 2) [2011] NSWLEC 170
His Eminence Metropolitan Petar, Diocesan Bishop of The Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 142
Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA157
James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296
Kennedy v Stockland Developments Pty Ltd (No 3) [2011] NSWLEC 249
McCallum v Sandercock (No 2) [2011] NSWLEC 203
McGinn v Ashfield Council [2011] NSWLEC 105; (2011) 185 LGERA 230
Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Oshlack v Rous Water [2011] NSWLEC 73; (2011) 184 LGERA 365
Oshlack v Rous Water (No 2) [2012] NSWLEC 111
Shellharbour City Council v Minister for Planning (No 2) [2012] NSWLEC 96
Snowy River Alliance Inc v Water Administration Ministerial Corporation (No 2) [2011] NSWSC 1132
Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55Texts Cited: G E Dal Pont, Law of Costs, 2nd ed (2009) LexisNexis Butterworths, Australia Category: Costs Parties: Alan Oshlack (Applicant)
Rous Water (First Respondent)
Ballina Shire Council (Second Respondent)
Lismore City Council (Third Respondent)Representation: Mr J Johnson (Applicant)
Mr N J Williams SC with Ms V Bosnjak (First and Second Respondents)
N/A (Applicant)
Ashurst (First and Second Respondents)
File Number(s): 40570 of 2010
EX TEMPORE Judgment
The Applicant Contends that the Proceedings Have Been Brought in the Public Interest
As a consequence of the decision of the Court in Oshlack v Rous Water (No 2) [2012] NSWLEC 111 dismissing the applicant's, Mr Alan Oshlack, summons, the first and second respondents, Rous Water and Ballina Shire Council, seek an order that Mr Oshlack pay their costs of the proceedings.
Mr Oshlack contends that a different order is appropriate, namely, that there be no order as to costs because the proceedings have been brought in the public interest. Alternatively, if the Court is minded to make a costs order against him, then the order should only be for a portion of the costs of the litigation and should exclude the costs associated with the preparation of expert evidence in the proceedings.
Legal Principles Applicable in Determining Whether the Proceedings Have Been Brought in the Public Interest
Section 98 of the Civil Procedure Act 2005 ("the CPA") affords the Court a broad discretion to award costs, subject to the rules of the Court. Pursuant to r 42.1 of the Uniform Civil Procedure Rules 2005 ("the UCPR"), which apply to these proceedings, costs generally follow the event. However, the Land and Environment Court Rules 2007 ("the LECR") prevail over r 42.1 to the extent of any inconsistency (s 11 of the CPA and r 1.7 and Sch 2 of the UCPR).
Rule 4.2(1) of the LECR provides as follows:
4.2Proceedings 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.
The principles to be applied when exercising the costs discretion in litigation characterised as having been brought in the public interest have been stated by Preston CJ in Caroona Coal Action Group Inc v Coal Mines Australia Pty Limited and Minister for Mineral Resources (No 3) [2010] NSWLEC 59; (2010) 173 LGERA 280 and applied and endorsed subsequently by this and other courts (see, for example, Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263; (2010) 176 LGERA 424 at [202], McGinn v Ashfield Council [2011] NSWLEC 105; (2011) 185 LGERA 230 at [17], Friends of Turramurra Inc v Minister for Planning (No 2) [2011] NSWLEC 170 at [31], Snowy River Alliance Inc v Water Administration Ministerial Corporation (No 2) [2011] NSWSC 1132 at [6], McCallum v Sandercock (No 2) [2011] NSWLEC 203 at [24]-[30], Kennedy v Stockland Developments Pty Ltd (No 3) [2011] NSWLEC 249 at [89]-[95], and Shellharbour City Council v Minister for Planning(No 2) [2012] NSWLEC 96 at [20]).
In Caroona, Preston CJ formulated a three-step approach for determining when litigation may be properly said to have been brought in the public interest (at [13]).
Step one is the characterisation of the proceedings as "public interest" litigation. The following considerations are relevant in determining whether litigation can be properly characterised as having been brought in the public interest:
(a)whether the public interest is served by the litigation;
(b)whether the interest is confined to a relatively small number of members from the applicant group 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 concerned with a wider geographic area;
(c)whether the applicant is seeking 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 no pecuniary interest in the outcome of the proceedings.
These considerations are not exhaustive and it is not necessary to answer them in any particular way in order for litigation to be classified as having been brought in the public interest. Further, the answers given may be relevant to the second and third steps (Caroona at [6]).
Step two is to determine whether there are any additional circumstances that may render the proceedings public interest litigation. Merely because a litigant makes claim to some notion of public interest does not entitle him or her to be granted an indemnity from costs or a "free kick" in the litigation (Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [134] per Kirby J, quoted in McGinn at [20]). Thus the "something more" requirement (Caroona at [13] and [17]).
In the second step, once litigation has been characterised as having been brought in the public interest it is necessary to examine closely the nature, extent and other features of the public interest involved in the particular litigation to ascertain whether or not they provide justification in the circumstances of the case for departure from the usual rule that costs follow the event (Caroona at [15]-[16]).
This second step is often the most vexing. It is therefore worth revisiting the observations made in Caroona concerning the rationale behind why "something more" is required (at [47]-[49]):
47It is perhaps because of the nebulous and broad nature of the concept of public interest that courts have suggested that "something more" may be required than the mere characterisation of the litigation as being in the public interest: Oshlack v Richmond River Shire Council (1994) 82 LGERA 236 at 244 (Stein J) and noted in Oshlack v Richmond River Council (HCA) at [20], [49]; Anderson v NSW Minister for Planning (No 2) at [8]; Minister for Planning v Walker (No 2) at [9]; Hastings Point Progress Association Inc v Tweed Shire Council (No 3) at [27], [35], [47] and [54]. However, the statement that "something more" is required has been interpreted in different ways. One interpretation has been that the "something more", the additional circumstance or factor, must be unrelated to the nature, extent or other features of the public interest involved in the litigation. This interpretation is incorrect. The circumstance or factor can relate to the public interest in the litigation. A brief summary of the background to Stein J's statement that "something more" is required in Oshlack v Richmond River Shire Council may help explain why this is so.
48The search for "something more" may have originated from a concern of the court that a plaintiff may merely lay claim to representing the public interest but without proving the claim. Hence, in Campbell (on behalf of Lord Howe Island Preservation Movement) v Minister for Environment and Planning, (NSWLEC, Cripps CJ, 24 June 1988, unreported), Cripps CJ said at 3-4:
I accept that in an appropriate case the ordinary rule as to costs might not apply by reason of the fact that one of the parties can legitimately claim to represent the public interest ... But to be accorded public interest status, it is not sufficient merely to lay claim to representing the public interest for the proposition to be accepted.
49In other words, something more than merely laying claim that the proceedings are in the public interest is required; the claim must be established. In the facts of that case, the Court found the claim had not been established and therefore special circumstances justifying departure from this usual costs rule had not been established (at p 4).
The "something more" may, for example, be found in the magnitude of the public interest itself (Caroona at [59]). There are, in addition, at least five categories of circumstances that have been identified as constituting "something more" for the purpose of step two (Caroona at [60]):
(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 was brought to protect the environment, or some component of it, and the environment, or particular component of it, is of significant value and importance;
(d)the litigation affects a significant section of the public; and
(e)there was no financial gain to the applicant in bringing the proceedings.
Again, these considerations are neither determinative, exhaustive nor mutually exclusive.
Step three is to determine whether there are any countervailing circumstances that would prevent the proceedings being characterised as having been brought in the public interest (Caroona at [18]-[19]). These may include that the applicant (Caroona at [61]):
(a)is seeking to vindicate rights of a commercial character and stands to benefit from the litigation;
(b)is an incorporated association and the private interests of the members of the association will be affected, legally or financially, by the outcome of the proceedings, or the association is a vehicle for persons seeking to protect their own commercial interests;
(c)is supported financially by third persons or enitities who will benefit from, either legally or financially, the outcome of the litigation;
(d)raises a question of public interest that is narrow, involving only a discrete point of interpretation without wider significance or turning on the particular factual circumstances of the proceedings;
(e)has unreasonably pursued or persisted with points that had no merit or with issues that were not eminently arguable; and
(f)has engaged in disentitling conduct, such as impropriety or unreasonableness, in the conduct of the litigation.
Can the Proceedings be Characterised as "Public Interest" Litigation?
Mr Oshlack conceded that he brought the proceedings on behalf of himself and not a wider group of people.
While he submitted that his prime motivation in commencing the litigation was to uphold the public interest in the rule of law, I remain unconvinced that this is so. The inference that is more readily drawn is that the proceedings were commenced to prevent the uplift of flouride in the relevant public water supply affecting Mr Oshlack. As stated in the principal judgment, Mr Oshlack opposes the flouridation of public water.
Having said this, I accept that the public interest was served by the litigation insofar as the proceedings generally affected the public in the local government areas of Ballina Shire Council, Lismore City Council and Richmond Valley Council, and the litigation concerned the lawfulness of the activities of local government authorities, even if only indirectly. I further find that Mr Oshlack, in bringing the proceedings, sought, at least collaterally, to enforce public law obligations imposed by s 111 of the Environmental Planning and Assessment Act 1979 ("the EPAA"), and that he had no pecuniary interest in the outcome of his application.
On balance, I am prepared to give Mr Oshlack the benefit of the doubt and find that the proceedings may properly be characterised as public interest litigation.
Is there "Something More"?
Turning to step two, it was submitted by Mr Oshlack that the "something more" in the litigation was satisfied because the proceedings raised several novel issues of general importance. This was evident, Mr Oshlack submitted, from the decision of Biscoe J in Oshlack v Rous Water [2011] NSWLEC 73; (2011) 184 LGERA 365.
It is, in my view, necessary to distinguish between the decision of Biscoe J in Oshlack v Rous Water and my decision in Oshlack v Rous Water (No 2) for the purpose of determining whether step two has been completed. The two decisions, although ultimately dealing with the same subject-matter, are materially different for the purpose of determining any liability for the costs of the proceedings. This is apparent when regard is had to the general importance of the matters determined by the two decisions.
There is no doubt that Oshlack v Rous Water (No 2) and Oshlack v Rous Water are unique in the sense that they are the only decisions to date to examine the operation of the Fluoridation of Public Water Supplies Act 1956 ("the Fluoridation Act").
Mr Oshlack submits that Oshlack v Rous Water is particularly significant because Biscoe J determined that ss 111 and 112 of the EPAA applied to local councils adding fluoride to public water supplies.
I accept that the preliminary questions determined by Biscoe J in Oshlack v Rous Water raised novel issues of general importance, even if, as the first and second respondents noted, the resolution of those issues was directed only towards the activities of local government authorities and not to persons authorising the uplift of fluoride in public water supplies.
The same conclusion cannot, however, be arrived at in relation to the decision in Oshlack v Rous Water (No 2).
Ultimately the proceedings before me turned almost exclusively on a study of the particular factual circumstances giving rise to the decisions under review. This is demonstrated by an examination of the further amended points of claim filed in Court on 22 June 2011:
(a)ground 1, that the first and second respondents failed to comply with s 111 of the EPAA, turned on an examination of the conduct of those respondents and the specific information that they took into account in determining to construct and operate the flouridation plants in question;
(b)ground 3, that the first respondent, Rous Water, had regard to an irrelevant consideration, concerned whether or not the legal advice dated 16 April 2010 received from Lindsay Taylor Lawyers could be properly characterised as such, thereby vitiating the decision of Rous Water;
(c)ground 4, the alleged constructive failure by the first and second respondents to exercise jurisdiction, involved an examination of the factual circumstances informing the conduct of those two public authorities; and
(d)ground 5, that Rous Water had made an error of law, was also determined by reference to the specific facts surrounding Rous Water's resolution to construct and operate the proposed flouridation plants and its reliance on the Lindsay Taylor Lawyers advice.
The only issue in the proceedings before me that could conceivably have raised a matter of general importance was ground 2, that is, whether s 112 of the EPAA required the determination of a jurisdictional fact by the Court that the uplift in the fluoridation of the public water supplies would have a significant impact on the environment. Mr Oshlack, through his scientific expert evidence, initially contended that the fluoridation of public water had a detrimental impact on human health and the environment. The first and second respondents met these allegations with their own expert evidence. However, this ground was abandoned by Mr Oshlack on the second day of the hearing.
Accordingly, while I accept that the determination of the preliminary questions raised significant issues of general importance, the resolution of which contributed, in a material way, to the proper understanding and development of the law, and that therefore "something more" has been demonstrated by Mr Oshlack in relation to the proceedings before Biscoe J, I do not consider that the same characterisation can be made of the issues raised for determination in the hearing before me.
The abandonment of the second ground of review has also rendered the task of assessing whether the litigation was brought to protect the environment, or some component of it, and whether that environment was of significant value and importance, problematic. Again I am prepared to give Mr Oshlack the benefit of the doubt in accepting that he commenced the proceedings motivated by an altruistic desire to safeguard the environment from the perceived dangers imposed by the addition of fluoride to public water supplies. But beyond this generalised finding, it is not possible to identify what 'environment' Mr Oshlack was seeking to protect, or to determine its value and importance. For example, if the relevant environment is limited to the sites where the flouridation plants are to be constructed, as the judgment in Oshlack v Rous Water (No 2) demonstrates (at [77(e)]), these sites were generally degraded and were of limited environmental value. At its very highest, this factor is therefore neutral.
Thus, although I agree that, as found above, the litigation affects a significant section of the public insofar as the decision to uplift the fluoride levels in public waters affects the water supplies of persons located in Ballina Shire Council, Lismore City Council and Richmond Valley Council, and that there was no financial gain to Mr Oshlack in bringing the proceedings, I cannot find that "something more" has been demonstrated by Mr Oshlack with respect to the proceedings argued before me.
The implications of a finding that the second step has been satisfied with respect to Oshlack v Rous Water but not Oshlack v Rous Water (No 2) are discussed below.
Are there any Countervailing Circumstances?
In my opinion, there are countervailing circumstances that preclude Oshlack v Rous Water (No 2) from being characterised as having been brought in the public interest. There are no such circumstances, however, in Oshlack v Rous Water.
I make this finding notwithstanding that at no point was Mr Oshlack seeking to vindicate interests of a commercial character and, to reiterate, has never stood to benefit from the litigation. My reasons for this finding are as follows.
First, as stated above, in Oshlack v Rous Water (No 2) the matters of public interest raised in that part of the proceedings were narrow, concerned as they were with the particular factual circumstances of the proceedings. Even the matters of public interest inherent in the questions raised for separate determination before Biscoe J in Oshlack v Rous Water were circumscribed, involving only discrete points of interpretation of ss 6 and 6A of the Fluoridation Act. However, their scope was not so narrow that this amounted to a countervailing circumstance for the purpose of step three.
Second, I find that there was disentitling conduct by Mr Oshlack occasioned by his late abandonment of ground 2 (s 112 of the EPAA), and to a lesser extent ground 1A (manifest unreasonableness), of his grounds of review on the second day of the hearing. I make this finding mindful of the contrary submission by Mr Oshlack that if any party had engaged in disentitling conduct, it was the first and second respondents.
In order to understand this latter submission and the Court's rejection of it, it is necessary to briefly outline the chronology of events leading up to the abandonment by Mr Oshlack of the claim with respect to s 112 of the EPAA.
The points of claim filed by Mr Oshlack on 6 September 2010 pleaded in relation to ground 2 that:
44It is a jurisdictional fact that the proposal to fluoridate ought to have been accompanied by an Environmental Impact Statement pursuant to s112(1)(a)(i) of the EP&A Act.
The points of defence of both the first and second respondents filed on 17 September 2010 pleaded in answer to the allegation that (emphasis added):
In response to the first paragraph numbered 44 on page 8 of Points of Claim the First Respondent admits that the question of whether or not an Environmental Impact Statement is required pursuant to s 112 of the EP&A Act may raise a question of "jurisdictional fact" in an appropriate case, namely, whether or not an activity is likely to effect the environment, and otherwise denies the paragraph.
Amended points of claim were filed on 7 June 2011. The pleadings in respect of the allegation concerning s 112 of the EPAA did not change.
As a consequence, the amended points of defence of the first and second respondents filed on 1 March 2011 remained the same, save that a new paragraph 37A was inserted into the pleadings. It stated that neither respondent was "required to comply with the other provisions of Pt 5 of the EP&A Act in determining to add fluorine to those water supplies". Section 112 is included in Pt 5 of the EPAA.
On 14 March 2011, the proceedings came before Biscoe J for the determination of the following two preliminary questions (at [3]):
(a)Was the first respondent, Rous Water, required to comply with the provisions of ss 111 and 112 of the EPA Act with respect to the impacts on human health and the environment of adding fluorine to the water supply when determining to approve the construction and operation of the Clunes, Dorroughby, Corndale and Knockrow fluoridation plants?
(b)Was the second respondent, Ballina Shire Council, required to comply with the provisions of ss 111 and 112 of the EPA Act with respect to the impacts on human health and the environment of adding fluorine to the water supply when determining to approve the construction of the Marom Creek Fluoridation plant?
Transcript of the hearing before Biscoe J was not before the Court on this costs application. It appears, however, from paragraph [5] of his Honour's judgment that it was accepted for the purpose of the hearing before him, that if s 112 of the EPAA applied, the Court would be required to determine at the final hearing, as a matter of jurisdictional fact, whether the activity of adding fluoride to the water supply was likely to significantly affect the environment or threatened species, populations or ecological communities or their habitats. But if s 112 did not apply, as the first and second respondents contended, it would be unnecessary for the parties to call expert scientific evidence as to the jurisdictional fact contained in that provision (at [6]).
His Honour answered the preliminary questions as follows (at [58]):
(a)Was the first respondent, Rous Water, required to comply with the provisions of ss 111 and 112 of the EPA Act with respect to the impacts on human health and the environment of adding fluorine to the water supply when determining to approve the construction and operation of the Clunes, Dorroughby, Corndale and Knockrow fluoridation plants?
Yes, except that insofar as any of those plants was the subject of the direction of 12 December 2007 to add fluorine to the Richmond Valley Water Supply the first respondent was required to comply with s 111 but not s 112 of the EPA Act.
(b)Was the second respondent, Ballina Shire Council, required to comply with the provisions of ss 111 and 112 of the EPA Act with respect to the impacts on human health and the environment of adding fluorine to the water supply when determining to approve the construction of the Marom Creek Fluoridation plant?
Yes.
Accordingly, having held that s 112 of the EPAA was applicable to the activities of both the first and second respondents, the issue of whether or not it gave rise to a jurisdictional fact in the manner pleaded remained extant. On this basis the parties served and filed competing scientific expert evidence.
On 15 June 2011, however, the first and second respondents filed further amended points of defence. These defences pleaded a bare denial to the allegation contained in paragraph 44 of the amended points of claim. That is to say, the respondents' admission that the question of whether or not an environmental impact statement ("EIS") was required pursuant to s 112 of the EPAA may give rise to a question of jurisdictional fact in an appropriate case, was withdrawn. At no point did Mr Oshlack object to the filing of these further amended pleadings.
On 15 June 2011, the first and second respondents also filed and served their written submissions, which included argument on whether s 112 of the EPAA involved a jurisdictional fact. The first and second respondents relied on authorities preceding the decision in Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55 for the proposition that whether a particular activity is likely to affect the environment is not a jurisdictional fact for the purpose of s 112 of the EPAA. In the alternative, the first and second respondents contended that the evidence supported the conclusion that the proposed fluoridation was not likely to significantly affect the environment.
Upon receipt of these submissions, Mr Oshlack continued to prepare for hearing. On 17 June 2011, he notified the first and second respondents of the precise parts of his expert evidence upon which he intended to rely at the hearing.
On 21 June 2011, following argument on the first day of the hearing before me concerning the admissibility of the evidence of Mr Oshlack's principal scientific expert, Professor Connett, Mr Oshlack foreshadowed the possible abandonment of the s 112 claim. This in fact occurred the next day, 22 June 2011.
Mr Oshlack submitted that ultimately the s 112 claim was abandoned by him because of the late change by the first and second respondents to their points of defence, withdrawing the admission, and as a consequence of the respondents changing their position on whether the matters contained in s 112 were matters of jurisdictional fact. Mr Oshlack further submitted that, in any event, the expert evidence served and filed by the first and second respondents was required because it was relevant to the issue of discretion, which was ultimately not pressed, having been abandoned by the first and second respondents on the last day of the hearing.
I do not agree with either submisson. First, since the filing of their original points of defence, the first and second respondents continued to deny that it was a jurisdictional fact that the proposed fluoridation ought to have been accompanied by an EIS pursuant to s 112 of the EPAA. This position was never resiled from by them.
Whatever the understanding may have been before Biscoe J for the limited purpose of the determination of the separate questions, at no point did either respondent concede, for the purpose of the final hearing, that s 112 required the establishment of a jurisdictional fact. Rather, had the first and second respondents been successful before his Honour, then the issue of whether s 112 of the EPAA required the determination of a jurisdictional fact, and with it a concomitant evidentiary burden, would have been resolved and neither party would have been put to the trouble and expense of adducing scientific expert evidence to prove satisfaction of s 112.
The fact remains that at all times up to the second day of the final hearing, Mr Oshlack continued to maintain the allegations contained in paragraph 44 of his points of claim and, as a consequence, the first and second respondents, as public authorities, were entitled to rebut the claims made against them and their activities by way of expert evidence. The actions of the first and second respondents in this regard were entirely reasonable. The blame for the financial burden of the costs thrown away by the abandonment by Mr Oshlack of this ground of review cannot be laid at the feet of the first and second respondents. Having said this, Mr Oshlack should be commended for acting responsibly for not pursuing what would, in all likelihood, have been an untenable ground of review in light of the existing authorities.
Second, although the expert evidence of the first and second respondents served the dual purpose of refuting the claims made by Mr Oshlack with respect to the application of s 112 of the EPAA and resisting, as a matter of discretion, the relief claimed by him, it is unclear to what extent, if any, it would have been necessary for the first and second respondents to adduce this expert evidence in the absence of the s 112 claim.
I am unable to conclude that, even if Mr Oshlack had not abandoned his s 112 claim, the first and second respondents would have filed and served their expert evidence in any event. Moreover, I accept the submission of the first and second respondents that, upon the abandonment of the s 112 claim, the decision by them not to press matters going to discretion was both reasonable and responsible, resulting in a significant saving of Court time and parties' costs.
Summary of Findings on Public Interest
In summary, I find that whereas Oshlack v Rous Water was litigation that was conducted in the public interest for the purpose of r 4.2(1) of the LECR, Oshlack v Rous Water (No 2) was not.
It follows that, subject to the terms of the costs order made by Biscoe J in Oshlack v Rous Water, the appropriate costs order should be that Mr Oshlack pay the first and second respondents' costs of Oshlack v Rous Water (No 2), but that there be no order as to costs in respect of the costs of Oshlack v Rous Water.
Effect of an Order that Costs be "Costs in the Cause"
In Oshlack v Rous Water, however, Biscoe J ordered that the costs of the application before him be "costs in the cause" (at [59]).
In His Eminence Metropolitan Petar, Diocesan Bishop of The Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 142 the New South Wales Court of Appeal said in relation to an order that costs be "costs in the cause" (at [18]):
18An order that the costs be 'costs in the cause' or 'costs in the proceedings' (the terms are interchangeable) means that the costs of the interlocutory proceedings correspond with the final order for costs in the action. Thus if, in the final proceedings, the plaintiff is successful and an order for costs of the final hearing is made in the plaintiff's favour, the plaintiff gets the costs of the interlocutory proceedings as part of the costs of the action against the defendant, regardless of who was successful on the interlocutory application: see J T Stratford Ltd v Lindley [1969] 1 WLR 1547 at 1553 per Lord Denning MR.
This was endorsed in Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 (at [44]) and is consistent with authorities cited by the learned author G E Dal Pont in Law of Costs (2nd ed (2009) LexisNexis Butterworths, Australia) at [14.24]-[14.25].
In my opinion, therefore, the costs order proposed by me above would be inconsistent with Biscoe J's order in Oshlack v Rous Water and should not be made.
The Costs Should be Apportioned
More appropriate is an order apportioning the costs payable by Mr Oshlack so as to exclude the costs associated with Oshlack v Rous Water.
It has been held that something "out of the ordinary in the case" is required to justify departure from the general rule that costs follow the event (Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA157 at [18]).
As noted by Craig J in Friends of Turramurra (at [15]), one set of circumstances in which events out of the ordinary exist are where multiple issues are involved and a successful party fails on an issue, or group of issues, that are discrete from those upon which it has succeeded. In those circumstances, it may be appropriate that the successful party receives only a portion of the costs to which the party would have otherwise been entitled.
The principles by which it may be determined that only a portion of the costs should be paid to a successful party were summarised by Biscoe J in F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 5) [2008] NSWLEC 235 and Australians for Sustainable Development Inc v Minister for Planning (No 2) [2011] NSWLEC 70. They were endorsed and applied recently by Craig J in Friends of Turramurra and by myself in McCallum v Sandercock (No 2) [2011] NSWLEC 203 (at [48]-[49]). In all four cases, their Honours relied upon and applied the decision of the New South Wales Court of Appeal in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 (at [34]).
The principles are summarised relevantly as follows:
(a)unless a particular issue, or group of issues, is clearly dominant, separable or discrete, it will be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those issues on which it was successful and those upon which it failed (James at [32]-[34] and Australians for Sustainable Development at [13]);
(b)where a court exercises its discretion to apportion costs, any apportionment itself involves an exercise of discretion (Australians for Sustainable Development at [13]);
(c)mathematical precision is illusory and the exercise of discretion will often depend on matters of impression and evaluation (Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261 at [29], Australians for Sustainable Development at [13] and Friends of Turramurra at [21]);
(d)justice may not be served if parties are dissuaded from canvassing all material issues for fear of an adverse costs order (Australians for Sustainable Development and the authorities cited thereat at [14]-[16]); and
(e)equally, litigants should not be rewarded for the pursuit of issues without real merit (as above).
Applying these principles to the facts of the present case, the first and second respondents succeeded before me but, on any view, not before Biscoe J. The issues for determination before Biscoe J were dominant, discrete and wholly severable for the purpose of this costs application and a determination of whether the whole or any part of the proceedings were brought in the public interest. The costs associated with the two hearings are, in my opinon, amenable to apportionment and it is an appropriate exercise of the Court's discretion to apportion costs in such a manner that Mr Oshlack is ordered to pay only the costs associated with Oshlack v Rous Water (No 2).
Neither party elected to address me on what would be a suitable apportionment of the costs of the proceedings in this situation. Having regard to the length of time the preliminary hearing took, namely, one day, the complexity of the issues raised for determination and the likely preparation required for it, I estimate that approximately 25% of the proceedings overall were occupied by the separate determination of the preliminary questions. Therefore, and taking a broad brush approach, I determine that it is appropriate that Mr Oshlack pay 75% of the costs of the proceedings, that is to say, 75% of the costs of both Oshlack v Rous Water and Oshlack v Rous Water (No 2).
Orders
The formal order of the Court is that the applicant is to pay 75% of the first and second respondents' costs of the proceedings.
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Decision last updated: 21 November 2012
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