Palace Gallery Pty Ltd v Liquor and Gambling Commissioner (No 2)

[2014] SASCFC 53

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

THE PALACE GALLERY PTY LTD v THE LIQUOR AND GAMBLING COMMISSIONER & ORS (NO 2)

[2014] SASCFC 53

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Blue and The Honourable Justice Stanley)

2 June 2014

CONSTITUTIONAL LAW - THE NON-JUDICIAL ORGANS OF GOVERNMENT - THE LEGISLATURE - LEGISLATION AND LEGISLATIVE POWERS - EXAMINATION OF VALIDITY OF LEGISLATION BY COURTS

PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF WHOLE ACTION

The plaintiff commenced an action in September 2013 seeking a determination of the proper construction of s 11A of the Liquor Licensing Act 1997 (SA), thereby challenging the validity of the Liquor Licensing (Late Night Trading) Code of Practice 2013. The plaintiff applied for an interlocutory order enjoining the defendants from enforcing the provisions of the Code of Practice.

A Bill to amend s 11A of the Liquor Licensing Act 1997 (SA), which became the Liquor Licensing (Miscellaneous Amendment) Act 2013 (SA), was expedited and received assent on 31 October 2013.

The parties agreed during the hearing on 26 November 2013 that if the Liquor Licensing (Miscellaneous Amendment) Act 2013 (SA) was valid then only questions 2(b), 2(c), 2(d), 2(e) and 5 of the referred questions arose for answer by the Full Court. The Full Court delivered its reasons for judgment on 4 April 2014; the Court upheld the validity of the Act and answered the relevant questions adversely to the plaintiff. The Court then invited written submissions on the question of costs. 

Held (the Court):  Litigants who act reasonably in bringing proceedings in the judicial review jurisdiction should not suffer a costs penalty for bringing an action which is subsequently denied any utility because the alleged deficiency is retrospectively remedied in anticipation of an adverse declaration by the Court (at [12]).  If that general rule fails to be applied, the threat of Parliamentary action would unduly inhibit the invocation of the jurisdiction of this Court to ensure that the executive does not act beyond the scope of its statutory authority (at [12]). 

Order that the plaintiff pay the defendants’ costs of and incidental to the interlocutory application for an injunction, and of the hearing and determination of the issues of the construction and validity of the Liquor Licensing (Miscellaneous) Amendment Act 2013 (SA) and of the questions answered by the Court on a party-party basis (at [13]).

Liquor Licensing Act 1997 (SA) s 11A; Liquor Licensing Act (Late Night Trading) Code of Practice  2013; Liquor Licensing (Miscellaneous) Amendment Act (SA) , referred to.
Tobin v Tobin (1977) 75 LSJS 9; Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194; Booth v Helensvale Golf Club Ltd [1997] 2 Qd R 141; Boscani Investments Pty Ltd v Corporation of the City of Kensington and Norwood [1999] SASC 327; Parap Hotel Pty Ltd v Northern Territory Planning Authority (1993) 112 FLR 336, considered.

THE PALACE GALLERY PTY LTD v THE LIQUOR AND GAMBLING COMMISSIONER & ORS (NO 2)
[2014] SASCFC 53

Full Court:  Kourakis CJ, Blue and Stanley JJ

1. THE COURT: In September 2013 the plaintiff commenced this action seeking a determination of the proper construction s 11A of the Liquor Licensing Act 1997 (SA) (the Act) and challenging the validity of the Liquor Licensing (Late Night Trading) Code of Practice 2013 (the Code of Practice) made thereunder.  The action came before a Judge of this Court, together with an application for an interlocutory order enjoining the defendants from enforcing the provisions of the Code of Practice.  The application for the interlocutory injunction was dismissed by the Judge.  The Judge referred to the Full Court questions of law concerning the construction of s 11A and the validity of the Code of Practice. 

2. The action was listed for hearing before the Full Court on 1 November 2013. In the days before that hearing, the passage of a Bill to amend s 11A of the Act, which became the Liquor Licensing (Miscellaneous) Amendment Act 2013 (SA) (the Amending Act), was expedited. It passed through both Houses of Parliament on 30 and 31 October 2013. The Bill received the assent of the Governor on 31 October 2013, and on the same day the Governor made and caused to be published in the Gazette a proclamation bringing into effect the provisions of the Amending Act.

3. The hearing listed for 1 November before the Full Court was vacated. The action came before Justice Stanley for directions. On 26 November 2013, further questions of law relating to the proper construction and constitutional validity of the Amending Act were formulated as questions 6 and 7 and referred to the Full Court, together with questions 1 to 5 concerning the validity of the Code of Practice under the amended s 11A of the Act or, alternatively, if the Amending Act were invalid, under the original wording of s 11. The parties agreed that, if the Amending Act was valid, only questions 2(b), 2(c), 2(d), 2(e) and 5 of the referred questions arose for answer by the Full Court (the relevant questions) and that answers to questions 1 to 5 should not be given under the original wording of s 11A.

4. On 4 April 2014, this Court heard the new questions formulated for its consideration on 26 November 2013. This Court upheld the validity of the Amending Act and answered the relevant questions adversely to the plaintiff under the amended s 11A of the Act.

5. The first defendant seeks orders that the plaintiff pay the defendant’s party and party costs of and incidental to the proceedings:

   1      on the plaintiff’s application for an interlocutory injunction; and

   2      before the Full Court on the case stated and reserved questions of law.

6. The plaintiff opposes that order. The plaintiff accepts that it should pay the defendants’ costs in relation to the construction and validity of the Amending Act and the relevant questions before the Full Court. The plaintiff contends that in relation to the other issues, each party should bear its own costs. In the alternative, the plaintiff contends that the Court should order that the plaintiff pay the defendants 40 per cent of their costs.

7. The costs of the application for an interlocutory injunction can be dealt with shortly.  The plaintiff did not succeed on its interlocutory application for an injunction and it should pay the defendants their costs of that application.

8. The remaining issue concerns the costs of that part of the action challenging the validity of certain provisions of the Code of Practice under the Act as it stood before the Amending Act was proclaimed.

9. This Court has not determined the merits of the plaintiff’s application with respect to the validity of the Code of Practice under the original s 11A of the Act. The parties expressly joined in submitting that this Court should not pass judgment on the validity of the Code of Practice under the Act as it stood before the Amending Act was proclaimed. The issues joined in the proceeding on the validity of the Code of Practice before and after the proclamation of the Amending Act are distinct enough and have been dealt with sufficiently in separate proceedings to warrant differential cost orders.

10. It is possible, therefore, to consider the question of costs by reference to the position as it would have been if the plaintiff had not challenged the validity of the Amending Act and of the Code of Practice under the amended s 11A of the Act (with respect to which it should suffer the adverse costs order), and had immediately discontinued the action on the proclamation of the Amending Act.

11. The Court will not usually try an action to determine the issue of costs if no other issue needs to be determined.[1]  The Court will, however, facilitate the conclusion of proceedings by exercising its costs discretion where the sole outstanding issue is that of costs.[2]  The relevant criteria are set out in Booth v Helensvale Golf Club Ltd.[3]Generally, no order will be made where it is impossible to predict what the outcome would have been.[4]  Moreover, where the subject matter of the litigation has ceased to exist through the actions of a non-party, it is usual that each party should bear its own costs.[5]  These considerations favour an order that each party bears its own costs of the remainder of the action.

    [1]    Tobin v Tobin (1977) 75 LSJS 9.

    [2]    Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194.

    [3] [1997] 2 Qd R 141.

    [4]    Boscani Investments Pty Ltd v Corporation of the City of Kensington and Norwood [1999] SASC 327.

    [5]    Parap Hotel Pty Ltd v Northern Territory Planning Authority (1993) 112 FLR 336.

12. There is a further consideration which supports that order. The defendants are manifestations of the executive government of the State who have had the benefit of legislation which was calculated, in the objective sense, to support their case in litigation before the Court. The ultimate question in issue in this action was the validity of the Code of Practice made by an executive agency in the purported exercise of a statutory power. In enacting the Amending Act, Parliament moved to remedy legislatively a perceived defect in the legislative foundation for that executive action. The rights of citizens to invoke the judicial review jurisdiction of this Court, to pass on the validity of executive acts made pursuant to a statutory power, is a fundamentally important constitutional right. As a general rule, litigants who act reasonably in bringing proceedings in that jurisdiction should not suffer a costs penalty for bringing an action which is subsequently denied any utility because the alleged deficiency in the statutory support for the impugned executive action is retrospectively remedied in anticipation of an adverse declaration by the Court. If that general rule is not applied, the threat of Parliamentary action would unduly inhibit the invocation of the jurisdiction of this Court to ensure that the executive does not act beyond the scope of its statutory authority.

13. We order that the plaintiff pay the defendants’ costs of and incidental to the interlocutory application for an injunction, and of the hearing and determination of the issues of the construction and validity of the Amending Act and of the questions determined adversely to the plaintiff on a party and party basis.