People for the Plains Incorporated v Santos NSW (Eastern) Pty Ltd (No 2)

[2017] NSWCA 157

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	People for the Plains Incorporated v Santos NSW (Eastern) Pty Ltd (No 2) [2017] NSWCA 157
Hearing dates:	On the papers
Decision date:	28 June 2017
Before:	Meagher JA; Ward JA; Payne JA
Decision:	1. Motion dismissed with costs.
Catchwords:	PRACTICE AND PROCEDURE – costs – whether court should depart from general rule that costs follow the event – whether proceedings should be characterised as public interest litigation and, if so, whether there is something more that warrants departure from general rule
Legislation Cited:	Associations Incorporation Regulation 2010 (NSW) Civil Procedure Act 2005 (NSW), s 98 Environmental Planning and Assessment Act 1979 (NSW) Petroleum (Onshore) Act 1991 (NSW) State Environmental Planning Policy (Infrastructure) 2007 (NSW), cl 121(1) State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (NSW), cl 18 Uniform Civil Procedure Rules 2005 (NSW), rr 36.16(3A), 42.1, 51.58
Cases Cited:	Barrington-Gloucester-Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure [2012] NSWLEC 197 Bat Advocacy NSW Inc v Minister for Environmental Protection, Heritage and the Arts (No 2) [2011] 280 ALR 91; [2011] FCAFC 84 Botany Bay City Council v Minister for Local Government (No 2) [2016] NSWCA 127 Caroona Coal Action Group Ltd v Coal Mines Australia Pty Ltd (No 3) [2010] 173 LGERA 280; [2010] NSWLEC 59 Corcoran v Virgin Blue Airlines Pty Ltd [2008] FCA 864 Cranky Rock Road Action Group Inc v Cowra Shire Council [2006] NSWLEC 159 Fullerton Cove Residents Action Group Inc v Dart Energy Ltd (No 2) (2013) 195 LGERA 229; [2013] NSWLEC 38 Harvey v Minister Administering the Water Management Act 2000 (No 2) [2008] NSWLEC 213 Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] 172 LGERA 157; [2010] NSWCA 39 Hunter Development Corporation v Save Our Rail NSW Incorporated (2016) 220 LGERA 73; [2016] NSWCA 375 Jacob v Save Beeliar Wetlands (Inc) [2016] WASCA 126 Oshlack v Richmond River Shire Council (1998) 193 CLR 72; [1998] HCA 11 People for the Plains Incorporated v Santos NSW (Eastern) Pty Ltd [2017] NSWCA 46 R (on the application of Corner House Research) v Secretary of State for Trade and Industry [2005] 1 WLR 2600; [2005] EWCA Civ 192 The State of Western Australia v Collard [2015] WASCA 86
Category:	Costs
Parties:	People for the Plains Incorporated (ACN 130 14 43) (Appellant) Santos NSW (Eastern) Pty Ltd (ACN 009 321 662) (First Respondent) Santos NSW Pty Ltd (ACN 094 269 780) (Second Respondent) Secretary, NSW Department of Industry (Third Respondent) EnergyAustralia Narrabri Gas Pty Ltd (ACN 147 609 729) (Fourth Respondent)
Representation:	Counsel: J Johnson (Appellant) M Astill with M Ellicott (1st, 2nd and 4th Respondents) R Lancaster SC with P Herzfeld (3rd Respondent)   Solicitors: Environmental Defender’s Office Ltd (Appellant) Ashurst Australia (1st, 2nd and 4th Respondents) Crown Solicitor’s Office (Third Respondent)
File Number(s):	2016/00259819
Publication restriction:	Nil
Decision under appeal	Court or tribunal: Land and Environment Court of NSW Jurisdiction: Class 4 Citation: [2016] NSWLEC 93 Date of Decision: 01 August 2016 Before: Moore J File Number(s): 2016/165360 and 2016/165660

Judgment

1. THE COURT: On 14 March 2017, this Court dismissed an appeal by People for the Plains Incorporated (the appellant) from a decision of the New South Wales Land and Environment Court relating to the validity of approvals that had been granted under the Petroleum (Onshore) Act 1991 (NSW) (the Act) by delegates of the Secretary of the New South Wales Department of Industry in respect of the second stage of a project (the Leewood Project) relating to the management of water produced as a necessary or inevitable consequence of petroleum exploration operations carried out by the first, second and fourth respondents (the Santos parties) in the Narrabri area (see People for the Plains Incorporated v Santos NSW (Eastern) Pty Ltd [2017] NSWCA 46).

2. The appellant was ordered to pay the costs of the Santos parties, on the basis of the general rule that costs ordinarily follow the event (see [200]). There was no order in respect of the costs of the third respondent (the Secretary of the NSW Department of Industry), it not having sought any such order.

3. By Notice of Motion filed 28 March 2017, the appellant now seeks orders, pursuant to rr 36.16(3A) and 51.58 of the Uniform Civil Procedure Rules 2005 (NSW) (the UCPR), setting aside the costs order made on 14 March 2017 and, in lieu, that there be no order as to costs.

4. The parties were directed that the matter would be dealt with on the papers. Both the appellant and the Santos parties have filed written submissions in relation to the application.

5. It is accepted by the appellant and the Santos parties that costs are in the discretion of the Court and that the general rule is that ordinarily costs follow the event (see Civil Procedure Act 2005 (NSW), s 98; UCPR, r 42.1). Furthermore, they accept that the characterisation of litigation as “public interest litigation” may be taken into account in considering whether there should be a departure from the general rule, though of itself this is not necessarily determinative. Where they depart is as to whether the present litigation is properly to be characterised as “public interest litigation”; whether, if it is, there is “something more” than such a characterisation to warrant departure from the general rule; and whether there are (as the Santos parties contend) any relevant countervailing circumstances.

6. For the reasons set out below, even on the assumption that the proceedings should be characterised as “public interest litigation”, the appellant has not established that this is an appropriate case for departure from the general rule as to costs and, accordingly, the appellant’s motion should be dismissed with costs.

The appellant

7. Filed in support of the application were two affidavits affirmed (on 23 March 2017 and 27 April 2017, respectively) by Ms Sally Hunter, the volunteer secretary of the appellant since approximately 1 December 2016 and its former president; and an affidavit affirmed on 28 March 2017 by Ms Elaine Johnston, the appellant’s solicitor. Objection was raised by the Santos parties to the filing of the second of Ms Hunter’s affidavits, on the basis that that evidence (which broadly went to whether there was an inference available that the litigation was potentially for the benefit of the private interests of one or more of the appellant’s members) could have been served in chief, in which case the Santos parties could have addressed it in submissions (which, it should be noted, they have done in their supplementary submissions) and given consideration to serving evidence in response; and in any event as to the hearsay evidence and opinion evidence contained in the affidavit at [5], [6] and [7]. For the reasons set out later, taking into account this material does not alter the decision the Court would otherwise have reached in any event.

8. By way of background to the present application, Ms Hunter gives evidence that the appellant was established on 30 October 2013 as an incorporated association, that it has adopted the model constitution for which provision is made in the Associations Incorporation Regulation 2010 (NSW) and that it currently has up to approximately 30 financial members and up to 180 active volunteers (see Ms Hunter’s first affidavit at [12]-[16]).

9. The objects of the appellant (recorded in the appellant’s strategic plan 2013-2016) include, among other things: to encourage the sustainable use of the landscape; to act as a community interface with the Narrabri Shire Community; to protect the natural physical and human resources from potential and actual threats; and to undertake a gas-field-free community strategy (see Ms Hunter’s first affidavit at [19]). Ms Hunter has given evidence (at [20]-[22]) as to certain of the appellant’s activities and (at [23]-[24]) as to written submissions made on behalf of the appellant in relation both to the Leewood Project and to other issues affecting both the local community and the broader public.

10. Ms Hunter has deposed to having an awareness (obtained in the course of her role in the respective positions she formerly occupied and now occupies with the appellant) that decisions relating to the approval and environmental assessment processes applying to the Leewood Project and other coal seam gas development carried on by the Santos parties within the Pilliga region of New South Wales “are of significant interest to the local community and the broader population because of the potential environmental and social impacts related to such developments” (see [6] of her first affidavit) and to her understanding that the prime motivation of the appellant in bringing the proceedings in relation to the Leewood Project as being “to enforce public law obligations regarding the proper environmental planning and assessment process applying to the Project, a significant new infrastructure project related to [coal seam gas] exploration and mining” (at [10]). She gives evidence that she has no financial interest in the outcome of the proceedings and that she is not aware of any other member of the appellant having a financial interest in the outcome of the proceedings (see [9]).

11. Ms Hunter has also deposed (see [11]) to an awareness (based it would seem on her review of submissions made in respect of the Leewood Project) that, in addition to the local Narrabri community, the broader north-west New South Wales community (including users of the Great Artesian Basin and Upper Namoi River aquifers) and the wider public generally had an interest in the relevant proceedings in relation to the Leewood Project. In particular, Ms Hunter has deposed that in many cases those submissions raised concerns about the potential environmental impacts of the Leewood Project and the adequacy of the environmental assessment carried out in relation thereto.

12. In Ms Hunter’s second affidavit (filed following receipt of, and presumably seeking to address matters raised in, the submissions from the Santos parties), she summarises the proximity of the various members of the association to the Leewood Project at relevant times and says that her understanding is that, apart from one couple (who no longer live in New South Wales), at all relevant times none of the members of the appellant held land or any interest in land within 10km of the Leewood Project (see [5] of her second affidavit). Ms Hunter deposes (at [6]) that it is her understanding that the relevant proceedings were not motivated by concerns relating to the general amenity of landholders neighbouring the Leewood Project nor by concerns relating to the viability of land in the vicinity of the Leewood Project for agricultural or other related economic purposes. She has also deposed to the receipt by the appellant, at the time the respective proceedings were initiated, of messages of support from other individuals and groups including the Lock the Gate Alliance and The Wilderness Society (see [7]-[9]).

13. Pausing there, the Santos parties submit that neither the distinction sought to be drawn by Ms Hunter regarding the location of the appellant’s members’ various landholdings nor the “speculative” evidence regarding those members’ states of mind is of great import. They note that there is nothing said as to the proximity of members to the petroleum tenements on which the coal seam gas exploration activities are occurring (as opposed to the specific area of the Leewood Project) but in any event they submit that insofar as Ms Hunter deposes that all members of the appellant (with the exception of three) lived between 10 km and 100 km of the Leewood Project this strengthens the inference open on the objective facts that there was at least some element of private amenity potentially motivating the proceedings.

The appellant’s submissions

14. The appellant submits that the proceedings may be characterised as public interest litigation for the reasons that: neither the appellant nor any member of the appellant had a pecuniary interest in the outcome of the proceedings; the proceedings were brought “to clarify the proper application of the environmental planning and assessment process applying to the Project” (with the appellant’s prime motivation, according to Ms Hunter, being to ensure that any legal requirements relating to environmental assessment and public participation were administered according to the law); and that the lawfulness of government decision-making and assessing and approving major infrastructure projects relating to “environmentally harmful” industries, such as coal seam gas mining, is a matter of broad public interest (not confined to the amenity of the appellant’s members or local residents of Narrabri).

15. The appellant argues that the proceedings are of import for any area in New South Wales where coal seam gas exploration may be proposed and points to the contention it made in the course of the appeal before this Court to the effect that the primary judge’s characterisation of the Leewood Project as “prospecting” might result in projects of the same nature and scale, or potentially larger, being permitted to be carried out on private land throughout New South Wales without land owner’s consent (see appellant’s written submissions in reply at [2]; [5]).

16. Insofar as the authorities refer to the need for there to be “something more” than the mere fact of the litigation having the character of “public interest litigation”, for there to be a departure from the general rule as to costs, the appellant raises six matters (a number of which in effect repeat the submissions as to why the matter has a public interest character).

17. First, the appellant says that it was reasonable for it to bring the appeal and that it pursued only issues that were “eminently arguable and which had good prospects of success”, noting that it was successful on ground 1(a) of its grounds of appeal (see People for the Plains at [142]-[144]; [156]); and that the primary judge had failed to address significant arguments of the appellant which this Court determined were necessary to consider in the judgment (see People for the Plains at [18]; [186]-[187]). The appellant also points in this regard to the fact that all respondents filed notices of contention in relation to the reasoning of the primary judge and that the third respondent in its notice of contention had sought clarification as to the interpretation of relevant provisions of the Act, the interaction of the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (NSW) (the Mining SEPP) and the State Environmental Planning Policy (Infrastructure) 2007 (NSW) (the Infrastructure SEPP), the interpretation of cl 18 of the Mining SEPP and the interpretation of cl 121(1) of the Infrastructure SEPP.

18. Second (harking back to the submission referred to at [15] above), the appellant argues that the questions of law raised in the proceedings were novel, of much general importance and some difficulty; and hence that the clarification of the law by this Court was of general importance and has important precedential value for future decisions (again citing the matters raised by the third respondent’s notice of contention as support for such a conclusion).

19. Third, it is submitted that the nature of the appellant (as a community association formed for the “public interest purposes” of protecting and serving the environment in the Pilliga region, specifically in relation to the potential risks imposed by coal seam gas development in the local environment and community) is a relevant consideration (referring in that context to what was said in Hastings PointProgress Association Inc v Tweed Shire Council (No 3) [2010] 172 LGERA 157; [2010] NSWCA 39 at [41]).

20. The appellant’s fourth and fifth arguments again repeat those made in relation to whether this is public interest litigation, namely that there was no financial gain to the appellant or its members in bringing the proceedings and that the outcome of the proceedings had potentially broad ramifications for the community at large.

21. Sixth, the appellant says that the proceedings in the Land and Environment Court were in part brought under the open standing provisions of the Environmental Planning and Assessment Act1979 (NSW). It is submitted that the removal of the common law barrier to standing, by legislation that allows members of the public to bring appeals on environmental grounds, would amount to an “empty gesture” if the public character of the litigation could not be taken into account in departing from the usual order (referring to what was said in Oshlack v Richmond River Shire Council (1998) 193 CLR 72 at 113-14; [1998] HCA 11 (Kirby J)).

22. The appellant submits that the above matters, taken into account cumulatively, justify the exercise of the Court’s discretion to depart from the usual order and instead to decline to make an order for costs.

The respondents’ submissions

23. The Santos parties oppose any variation of the existing costs order, pointing out (correctly) that the appellant made no submissions to the Court at any stage as to whether any costs order should be made in the event that it were to be successful in the proceeding based on the public interest.

24. They submit that the appellant has not established that the proceedings are properly characterised as having been brought in the public interest, noting that the proceeding did not directly raise any issue relating to the environmental impacts of the Leewood Project and that those potential impacts formed no part of the substantive issues in dispute. Reference is made to what was said (at [84]) by Preston CJ at LEC in Caroona Coal Action Group Ltd v Coal Mines Australia Pty Ltd (No 3) (2010) 173 LGERA 280; [2010] NSWLEC 59, when declining to find that the litigation in that case directly sought to uphold the public interest of environmental protection, namely that:

… the litigation did not raise any issue relating to the protection of the environment of the Liverpool Plains. The litigation concerned only the validity or otherwise of the renewal and partial transfer of exploration licences. None of the statutory provisions claimed to have been breached directly concerned environmental protection. Moreover, the applicant adduced no evidence that prospecting activities authorised by the exploration licences in the past have caused, or in the future pose a risk of causing, harm to the environment of the Liverpool Plains.

25. The Santos parties argue that the public interest character of litigation is not determined by the degree of interest shown in it by members of the public but, rather, is to be determined objectively by the extent to which it serves the public interest (referring to what was said in Jacob v Save Beeliar Wetlands (Inc) [2016] WASCA 126 at [39]) and that the merits, or otherwise, of the use of coal seam gas mining (and the level of interest displayed by the public in that issue) are matters that are irrelevant to the issues that were raised for determination by the proceedings (referring to similar conclusions reached by Pepper J in Barrington-Gloucester-Stroud Preservation Alliance Inc v Minister for Planning and Infrastructure [2012] NSWLEC 197 and in Fullerton Cove Residents Action Group Inc v Dart Energy Ltd (No 2) (2013) 195 LGERA 229; [2013] NSWLEC 38). Hence it is said that much of the material relied upon by the appellant (in the affidavits of Ms Hunter and Ms Johnston), and the asserted motivation for the bringing of the proceedings, is irrelevant (other than insofar as it suggests that there may be an element of private benefit involved by reference to the effect of the Leewood Project on commercial rights or interests of landowners in the vicinity).

25. The Santos parties accept that the appellant had no interest in the outcome of the proceedings but point to authorities where it has been said that the Court is entitled to look behind the legal structure of the applicant to identify whose interest, both legal and financial, may be affected in a particular sense (referring to Hastings Point at [11] (Basten JA) and [42] (Young JA); Caroona at [89] (Preston CJ at LEC); and Cranky Rock Road Action Group Inc v Cowra Shire Council [2006] NSWLEC 159 at [37] (Pain J)). They point to parts of the material exhibited to Ms Hunter’s affidavit which they submit suggests that the nature of the interests motivating the proceedings potentially included concerns relating to the general amenity of neighbouring land and the viability of land in the vicinity for agricultural and related economic purposes (see submissions at [16]) but argue that in any event the absence of a personal financial benefit is not a matter of great weight and insufficient to justify departure from the general rule (referring to The State of Western Australia v Collard [2015] WASCA 86 at [46]).

26. In response to the appellant’s submission as to the import of the proceedings for the development of the law, the Santos parties maintain that this case turned heavily on its own facts and related primarily to the application of well settled principles of statutory construction and the proper characterisation of the Leewood Project as petroleum exploration. The Santos parties thus contend that the import of the proceedings is confined to the particular factual and legal circumstances surrounding the Leewood Project. They submit that it does not follow, merely because coal seam gas exploration may occur across various parts of the state, that the proceedings related to any area where coal seam gas mining may be proposed; and therefore it is submitted that it cannot be said that the proceedings involved a significant number of members of the public or wider geographic area.

27. Hence the Santos parties argue that the proceedings should not be characterised as public interest litigation. They go further and submit that, even if the proceedings were so to be so characterised, the “something more” element is lacking.

28. The Santos parties argue that the proceedings did not raise any novel issue of general importance but rather, concerned the interpretation of a number of clauses of state environmental planning instruments according to orthodox principles of statutory interpretation. They say that the fact that notices of contention were filed by the respondents does not detract from that submission, noting by way of example that in Harvey v Minister Administering the Water Management Act 2000 (No 2) [2008] NSWLEC 213 Jagot J accepted (at [7]) that there had been important and difficult questions of law affecting many people there involved but said that they were “not novel and did not involve any fundamental category of rights”.

29. Reference is also made to the observation of this Court in Botany Bay City Council v Minister for Local Government (No 2) [2016] NSWCA 127 at [17] that:

[B]y the very nature of the adversarial common law tradition, the success of one party in proceedings will often, if not inevitably, entail a clarification of the law to some extent or in some respect. In that light, it is hard to see how clarification of the law could amount to a factor tending strongly in favour of a departure from the usual rule as to costs.

31. The Santos parties argue that the relative narrowness of the issues that were before the Court means that the ramifications of the proceedings beyond the facts of the case are limited.

32. Again, the Santos parties submit that the proceedings did not directly raise any issue relating to environmental protection and should not be taken to have been brought to protect the environment or some component of it; that the proceedings did not affect a significant section of the public; and that it would be open to infer that there was at least some element of private benefit involved.

33. The Santos parties note that disentitling conduct on the part of the appellant may also be relevant (see Caroona at [61]) and in this context they point to the fact that the appellant adopted different positions, at first instance and on appeal, in relation to the submission as to the purpose of the Leewood Project: at first instance, submitting that the Project had a second independent purpose, in that the treated water would be used for commercial irrigation; but on appeal contending that Moore J had impermissibly split the Leewood Project into two elements for the purposes of characterisation – an error found to have been made, but on which, as they point out, nothing turned (see People for the Plains at [143]-[144]).

34. Finally, the Santos parties argue that the question of costs in the context of public interest litigation will be treated with a greater degree of circumspection than in first instance proceedings (referring to what was said by Beazley P in Hunter Development Corporation v Save Our Rail NSW Incorporated (2016) 220 LGERA 73 [2016] NSWCA 375 at [70]; and Botany Bay at [19], where the court referred to Bat Advocacy NSW Inc v Minister for Environmental Protection, Heritage and the Arts (No 2) [2011] 280 ALR 91; [2011] FCAFC 84 at [23]).

Determination

35. The respondents are correct to emphasise that the proceedings related to the validity of approvals given in relation to the treatment and beneficial reuse of water produced from the Santos parties’ petroleum exploration activities; not to the merits or environmental ramifications of the coal seam mining operations. Nevertheless, the fact that proceedings relate to the validity of statutory approvals and do not directly raise an issue relating to the environmental impacts of those approvals being granted and exercised does not necessarily preclude proceedings from being characterised as “public interest litigation”. The process of characterisation should favour substance over form (though it must proceed in a principled manner; see Oshlack v Richmond at [72] (McHugh J); Caroona at [10]-[12]; Hastings Point at [48]).

36. In Caroona, it was accepted (at [82]) that the statutory obligations there in issue were “technical”, but it was said that they nevertheless formed part of a regulatory scheme “for ensuring the wise use of the mineral resources of the State” such that breaches of those obligation would have impaired that statutory scheme to some degree. Preston CJ at LEC went on to hold (at [84]) that none of the statutory provisions claimed to have been breached directly concerned environmental protection.

37. The present case may arguably be in a different category, relating as it did to the proper characterisation of the Leewood Project, which concerned the treatment and beneficial reuse of water produced in the course of petroleum exploration operations, but this is only one consideration in the characterisation process. On any view, the litigation itself was not directly concerned with environmental protection issues as such.

38. The fact that there may be a high level of interest shown by members of the public in the environmental impacts of coal seam mining does not of itself warrant the conclusion that this was “public interest litigation”, nor does the fact that the appellant was incorporated as an association with objects that include the protection of the environment.

39. Whether or not the appellant’s members had a pecuniary interest in the outcome of the litigation or were motivated by such an interest in bringing the proceedings is a relevant factor but not determinative of the issue whether the litigation should be characterised as public interest litigation. Similarly, whether or not it might be inferred that members of the appellant in the vicinity of the Leewood Project (or in the vicinity of the particular petroleum tenements across which the Santos parties are carrying out petroleum exploration operations) had a personal interest in preserving the amenity of their land or otherwise in preserving any commercial rights or interests in their own land, would be a relevant factor but not determinative of the issue.

40. Even assuming the proceedings were properly to be characterised as amounting to “public interest litigation” (and there is scope for debate about this), as already noted that does not of itself warrant a departure from the general rule. As Bennett J observed (at [45]) in Corcoran v Virgin Blue Airlines Pty Ltd [2008] FCA 864, “public interest and an arguable case are not necessarily decisive and not, of themselves, sufficient to prevent the usual costs order being made”. The appellant has not demonstrated that this appeal involved “something more” than the mere fact of the litigation having the character of “public interest litigation”.

41. The filing of notices of contention by the third respondent does not greatly assist the appellant in this regard. While it is true that the third respondent advanced submissions as to the proper construction of the relevant legislation and planning instruments, the issues for determination were, as the Santos parties point out, issues of statutory construction and, importantly, dependent on the particular facts of the case. The appeal was concerned with the proper characterisation of the Leewood Project in the context of the operative regulatory regimes. While there is a “public interest in the elucidation of public law by the higher courts” (R (on the application of Corner House Research) v Secretary of State for Trade and Industry [2005] 1 WLR 2600; [2005] EWCA Civ 192 at [70], referred to in Caroona at [60]), the remarks of Basten JA in Botany Bay (referred to above) should be borne in mind. In such circumstances, it is not apparent why any perceived precedential value of the appeal, or the decision by the third respondent to advance submissions in relation to issues in dispute (as well as to matters ultimately extraneous to the resolution of the precise characterisation problem raised by the appeal), should be decisive. Nor has it been established that the appeal will necessarily have an effect, let alone a determinative effect on other applications in relation to coal seam gas mining elsewhere in the State.

42. Accepting that there was a reasonable basis for the appellant to bring the appeal from the first instance decision (and noting that the appellant did establish error on one ground), this Court is nevertheless not persuaded that there should be a departure from the usual costs order. The appellant was unsuccessful in its appeal and should pay the Santos parties’ costs as ordered.

43. The appellant’s motion is therefore dismissed with costs.

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Decision last updated: 28 June 2017