Scevola v Minister Administering National Parks and Wildlife (No 2)

[2017] NSWLEC 139

Land and Environment Court

New South Wales

Medium Neutral Citation:	Scevola v Minister Administering National Parks and Wildlife (No 2) [2017] NSWLEC 139
Hearing dates:	15 September 2017 (written submissions)
Date of orders:	23 October 2017
Decision date:	23 October 2017
Jurisdiction:	Class 4
Before:	Pain J
Decision:	See par 43
Catchwords:	COSTS – summary dismissal of Class 4 proceedings – usual rule that costs follow the event applied – proceedings not in public interest – costs awarded
Legislation Cited:	Civil Procedure Act 2005 s 98 Land Acquisition (Just Terms Compensation) Act 1991 Land and Environment Court Rules 2007 rr 3.7, 4.2 Shoalhaven Local Environmental Plan 2014 Uniform Civil Procedure Rules 2005 rr 42.1, 42.5
Cases Cited:	Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 Caroona Coal Action Group Inc v Coal Mines Australia Pty Limited and Minister for Mineral Resources (No 3) (2010) 173 LGERA 280; [2010] NSWLEC 59 Engadine Area Traffic Action Group Inc v Sutherland Shire Council & Anor (No 2) (2004) 136 LGERA 365; [2004] NSWLEC 434 Fountain Select Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; [1988] FCA 202 Friends of Malua Bay Inc v Perkins (No 2) [2014] NSWLEC 172 J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers – WA Branch (No 2) (1993) 46 IR 301; [1993] FCA 42 Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 Ocean Shores Community Association Inc v Byron Shire Council (No 3) [2015] NSWLEC 171 Ocean Shores Community Association Inc v Byron Shire Council (No 5) [2016] NSWLEC 8 Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 Ritter v Godfrey [1920] 2 KB 47 Rose v Richards [2005] NSWSC 758 Roy Kennedy v Director-General of the Department of Environment and Conservation and Anor (No 2) [2007] NSWLEC 271 Scevola v Minister Administering National Parks and Wildlife [2017] NSWLEC 106
Category:	Costs
Parties:	Salvatore Scevola (Applicant) Minister Administering National Parks and Wildlife (First Respondent) Foundation for National Parks and Wildlife (Second Respondent) Shoalhaven City Council (Third Respondent) Minister for Planning (Fourth Respondent)
Representation:	COUNSEL: S Scevola, in person (Applicant) C Lenehan (First & Fourth Respondents) S Duggan (Second Respondent) H El-Hage (Third Respondent)   SOLICITORS: Crown Solicitor’s Office (First & Fourth Respondents) Bartier Perry (Second Respondent) Bradley Allen Love (Third Respondent)
File Number(s):	17/104195

Judgment

Costs

1. In Scevola v Minister Administering National Parks and Wildlife [2017] NSWLEC 106 (the Principal Judgment) at [106] I summarily dismissed the Applicant Mr Scevola’s summons on the application by notices of motion of the First, Second and Third Respondents. Mr Scevola had alleged inter alia that his land and that of hundreds of other landowners in the Heritage Estates at Jervis Bay on the NSW south coast was procured or acquired by the Respondents acting in concert other than in accordance with the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act). I held that the Court had no jurisdiction to make the orders sought concerning compulsory acquisition as no compulsory acquisition had in fact occurred, at [76], [81], [87]-[88] and [93]. The Court also had no jurisdiction to make an order sought preventing an amendment to the Shoalhaven Local Environmental Plan 2014 as that amendment had already come into force, at [94]. A final order sought by Mr Scevola relating to the roads within the Heritage Estates failed to disclose a reasonable cause of action, at [98]. The proceedings were commenced in Class 4.

2. The Respondents, the Minister Administering National Parks and Wildlife (the Minister), the Foundation for National Parks and Wildlife (Foundation) and the Shoalhaven City Council (Council), seek their costs of the proceedings. The Minister and Foundation seek an order that Mr Scevola pay their costs on an indemnity basis. Mr Scevola submits that there should be no order as to costs so that each party pays their own costs.

Legislation

3. The Court has discretion as to the award of costs pursuant to s 98(1) of the Civil Procedure Act 2005 (CP Act):

Part 7 Judgments and orders

...

Division 2 Costs in proceedings

98 Courts powers as to costs

(1)   Subject to rules of court and to this or any other Act:

(a)   costs are in the discretion of the court, and

(b)   the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c)   the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

...

4. The general rule as to costs is codified in r 42.1 of the Uniform Civil Procedure Rules 2005 (UCPR). Rule 42.5 is relevant to indemnity costs:

Part 42 Costs

Division 1 Entitlement to costs

42.1 General rule that costs follow the event

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.

...

42.5 Indemnity costs

If the court determines that costs are to be paid on an indemnity basis:

(a)        in the case of costs payable out of property held or controlled by a person who is a party to the proceedings:

(i)   in the capacity of trustee, executor, administrator or legal representative of a deceased estate, or

(ii)   in any other fiduciary capacity,

all costs (other than those that have been incurred in breach of the person’s duty in that capacity) are to be allowed, and

(b)   in any other case, all costs (other than those that appear to have been unreasonably incurred or appear to be of an unreasonable amount) are to be allowed.

5. Mr Scevola asserts that these proceedings were brought in the public interest so that r 4.2 of the Land and Environment Court Rules 2007 (Court Rules) applies:

Part 4 Proceedings in Class 4 of the Court’s jurisdiction

...

4.2 Proceedings 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.

…

6. Principles governing the application of r 4.2 of the Court Rules were identified by Preston CJ in Caroona Coal Action Group Inc v Coal Mines Australia Pty Limited and Minister for Mineral Resources (No 3) (2010) 173 LGERA 280; [2010] NSWLEC 59. His Honour reviewed relevant decisions on costs and identified a three-step approach in determining whether to depart from the usual costs rule at [13]:

... first, can the litigation be characterised as having been brought in the public interest?; secondly, if so, is there “something more” than the mere characterisation of the litigation as being brought in the public interest?; and thirdly, are there any countervailing circumstances, including relating to the conduct of the applicant, which speak against departure from the usual costs rule?

7. Preston CJ also identified five categories of circumstances that have been held to satisfy the requirement of “something more” at [60] (citations omitted):

(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)   where the litigation is brought to protect the environment or some component of it, the environment or component is of significant value and importance;

(d)   the litigation affects a significant section of the public;

(e)   there was no financial gain for the applicant in bringing the proceedings.

8. Countervailing considerations set out at [61] included (citations omitted):

(a)   the applicant is seeking to vindicate rights of a commercial character and stands to benefit from the litigation;

…

(e)   the applicant “unreasonably pursues or persists with points which have no merit” or issues that were not “eminently arguable”;

...

9. The categories identified in Caroona are not closed, Friends of Malua Bay Inc v Perkins (No 2) [2014] NSWLEC 172 at [28].

Mr Scevola’s interest

10. The original applicant in these proceedings was the Shoalhaven Landowners Association (SLA), an unincorporated group (at the time of the hearing for summary dismissal) of landowners in the Heritage Estates. Mr Scevola who purported to be the public officer of the SLA applied to and replaced the SLA as the sole applicant at the outset of the hearing, see the Principal Judgment at [4]. In the Principal Judgment I set out Mr Scevola’s interests within the Heritage Estates at [5]-[6] as follows:

Mr Scevola is a landowner in the Heritage Estates. He informed the Court that he became the owner of Lot 62 DP 8770 in April 2017, a recent acquisition in the context of events concerning the Heritage Estates referred to during the hearing. He also submits that he has had an equitable interest in Lot 71 DP 8772 since 2006 under a deed of agreement with the owner of that lot. As the sole Applicant, only the land in which Mr Scevola has an interest is strictly before the Court. As will become clear the issues Mr Scevola seeks to raise relate to the Heritage Estates more generally and his submissions were largely presented as if on behalf of members of the SLA. Dealing with the legal basis for Mr Scevola’s claims is problematic in that whether any of the relief sought concerns his land in particular is unknown to the Court.

The essential concern underpinning Mr Scevola’s claim must be that the land in which he has an equitable interest, Lot 71, has lost value since 2006 because of attempts to have land in the Heritage Estates transferred to national park reserve and that loss should be recoverable. Given his very recent acquisition of Lot 62 this year it is unclear that any of the relief sought in the summons is justified in relation to Lot 62. For example, I do not know if Mr Scevola has received an offer to buy land from the Foundation since he became the owner of Lot 62. Of necessity therefore the legal arguments will occur in something of an evidentiary vacuum in terms of Mr Scevola’s situation.

Evidence

11. The Minister filed an affidavit of Ms Nguyen solicitor affirmed on 14 September 2017 in support of her application for indemnity costs. Attached to Ms Nguyen’s affidavit was a letter from her colleague Mr Dalla-Pozza to Mr Scevola dated 8 May 2017 which outlined difficulties with the case articulated in the summons filed in the Court on 5 April 2017. Mr Dalla-Pozza stated that in his opinion the Court would inevitably dismiss the proceedings and offered to Mr Scevola that if discontinued against the Minister no order as to costs was agreeable. A return letter of Mr Scevola rejecting that offer dated 10 May 2017 was also attached to the affidavit.

12. The Foundation referred to the affidavit of Ms Botsikas solicitor sworn 11 May 2017 which was read during the application for summary dismissal. Attached to Ms Botsikas’ affidavit was a letter from the solicitors for the Foundation to Mr Scevola dated 1 May 2017 raising issues with the claim articulated in the summons which it said was “liable to be summarily dismissed”. That offer was rejected by Mr Scevola in a letter dated 10 May 2017.

13. Attached to the written submissions on costs of the Council was a letter from Mr Bradbury solicitor to Mr Scevola dated 9 May 2017. The letter stated that “the claims for relief against the Council are hopeless and cannot succeed” and offered that if the proceedings were discontinued no order as to costs would be acceptable.

Submissions

Mr Scevola’s submissions

14. The central tenet of Mr Scevola’s submissions is that these proceedings were brought in the public interest therefore each party should bear their own costs. Mr Scevola submitted that the fact that the proceedings were originally brought by the SLA illustrates that this was a public interest matter. This was also a test case for the Just Terms Act which goes to fundamental rights to property and affects every Australian. The case was arguable having been decided on the basis of statutory construction.

15. Mr Scevola relied on Ocean Shores Community Association Inc v Byron Shire Council (No 3) [2015] NSWLEC 171 and Caroona. Mr Scevola submitted that categories (a) (novel issue), (b) (contribution to proper understanding of law) and (d) (affects section of public) in [60] in Caroona were engaged by the determination of issues in contention in the Principal Judgment. As to category (c) (protection of component of environment) Mr Scevola submitted that people and their habitation of private land is an element of the natural environment.

16. In response to category (e) (no financial gain) Mr Scevola denied that he would derive financial gain from a favourable outcome in these proceedings. He said that he had indicated in email correspondence to the Court that his purchase of Lot 62 DP 8770 within the Heritage Estates in April 2017 was not an “arm’s length transaction” and that any benefit flowing from these Court proceedings would have benefitted the previous landowner and not himself. Mr Scevola also submitted that he lent money to his cousin in 2006 which gave him an equitable interest over his cousin’s lot in the Heritage Estates. A favourable outcome in this Court may allow him to recoup that money but this would be “[t]he most [he] stood to receive”.

17. Mr Scevola submitted that it would be unreasonable to order him to pay the costs of the Respondents as it was their actions and decisions that caused the impasse leading to the proceedings in this Court, citing Ritter v Godfrey [1920] 2 KB 47. Costs ought not to be used to “punish” a weaker party against a stronger one.

18. Mr Scevola submitted that as these proceedings were intended to resolve issues of land tenure the Court should consider the principles applicable to costs in Class 3 matters under r 3.7 of the Court Rules.

19. Mr Scevola submitted that he had not been malicious, fraudulent or dishonest in bringing the proceedings. An adverse costs order will create hardship as a full-time law student who performs very little paid work. It was stated in the Principal Judgment at [102] that Mr Scevola “is no doubt doing the best he can in a complex matter”.

Minister’s submissions

20. The Minister seeks an order that Mr Scevola pay her costs on an indemnity basis. The ordinary rule as to costs under r 42.1 of the UCPR should apply.

21. Rule 4.2(1) of the Court Rules does not apply. Mr Scevola brought these proceedings primarily to vindicate his private rights not the public interest. He had a financial interest in the resolution of these proceedings. None of the relevant matters in assessing whether proceedings are brought in the public interest listed in Engadine Area Traffic Action Group Inc v Sutherland Shire Council & Anor (No 2) (2004) 136 LGERA 365; [2004] NSWLEC 434 at [15] apply. Even if the proceedings were deemed to be in the public interest this should be accorded little weight as they were held to have no basis and were summarily dismissed. The intended addition of the Heritage Estates land to the national reserve is a legitimate public interest that should be balanced against any public interest asserted by Mr Scevola.

22. There is no relevant “something more” per the categories in Caroona at [60]. The proceedings did not resolve any novel issue of general importance as they were summarily dismissed, nor did they make any real contribution to the understanding or development of the law. Mr Scevola has not identified any component of the environment of “significant value and importance”, Caroona at [60(c)].

23. Even if the Court was satisfied that the proceedings were brought in the public interest there are several countervailing factors, identified in Caroona at [61], which weigh against a departure from the usual costs rule. Mr Scevola pursued arguments that had no merit. Mr Scevola’s pursuit of the proceedings was unreasonable in the context of the letter sent to him on 8 May 2017 referred to in par 11 above.

24. Mr Scevola should pay the Minister’s costs on the ordinary basis for the period to 8 May 2017 and on an indemnity basis thereafter. He ought to have been aware that he had no prospects of success having received the letter which accurately identified the deficiencies in his claim. Mr Scevola’s rejection of the offer contained within that letter to discontinue the proceedings with no order as to costs was unreasonable. The circumstances of this case in which an unsuccessful self-represented litigant rejected an offer to discontinue proceedings after the deficiencies of his case were explained to him by the Respondents are similar to those in Rose v Richards [2005] NSWSC 758 in which an indemnity costs order was made.

Foundation’s submissions

25. The Foundation submitted that r 3.7 of the Court Rules does not apply.

26. It was never a proper party to the proceedings. It is a not-for-profit entity not a consent authority exercising statutory powers reviewable by the Court.

27. The proceedings were not brought in the public interest. Mr Scevola had a financial interest in the outcome of the proceedings, the case was unreasonably pursued with “points which have no merit” and were not “eminently arguable”, Caroona at [61(a), (e)].

28. Indemnity costs should be awarded on the basis that Mr Scevola had been “properly advised” that the proceedings had no chance of success, particularly as against the Foundation, and should not have been commenced or continued with, J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers – WA Branch (No 2) (1993) 46 IR 301; [1993] FCA 42 at 303. The letter dated 1 May 2017 attached to the affidavit of Ms Botsikas referred to in par 12 above warned Mr Scevola that the proceedings were “manifestly hopeless”.

Council’s submissions

29. The Council submitted that the principles in Caroona relied on by Mr Scevola do not apply in this case. Mr Scevola stood to gain privately in the event of a favourable outcome in the proceedings and there was no relevant “something more” to justify a departure from the usual rule as to costs. The Council drew Mr Scevola’s attention to the fundamental problems with the proceedings in a letter dated 9 May 2017, see par 13 above. The proceedings lacked merit and should not have been pursued.

30. Mr Scevola’s resort to hardship should be rejected. The Court forewarned Mr Scevola about the possibility of an adverse costs order prior to his joinder as a party.

Consideration

31. I am considering costs in relation to Class 4 proceedings. Costs are compensatory not punitive per Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59. The usual rule in Class 4 is that costs follow the event, as reflected in r 42.1(1) of the UCPR subject to the wide discretion a court has to determine costs under s 98 of the CP Act. As the unsuccessful party Mr Scevola would ordinarily be liable for costs.

32. Mr Scevola’s submission that these proceedings involved the resolution of a Class 3 land tenure matter such that r 3.7 of the Court Rules applies is incorrect. Rule 3.7 permits the Court to make a costs order in Classes 1, 2 and certain types of Class 3 matters only where it would be fair and reasonable in the circumstances. These proceedings were brought in Class 4 of the Court’s jurisdiction as was appropriate given the nature of the relief sought. I rejected Mr Scevola’s assertion that his or other land in the Heritage Estates had been compulsorily acquired thereby engaging provisions of the Just Terms Act in the Principal Judgment at [76] and [81]. Even if the proceedings could be characterised as in Class 3 of the Court’s jurisdiction, r 3.7 only applies to appeals under certain provisions of acts specified in r 3.7(1)(c). None of those provisions would have been relevant in this matter.

33. Mr Scevola submitted that as the proceedings were brought in the public interest no order for costs is warranted. The legal interest of Mr Scevola in the proceedings derives from his ownership of or equitable interest in land in the Heritage Estates as the Respondents submitted. The essential issues he sought to raise concerned the program of voluntary acquisition of private land using Commonwealth Government funding administered by the Foundation for the purpose of incorporating land in the Heritage Estates into Jervis Bay National Park. He was unsuccessful in arguing this was a process of compulsory acquisition to which the Just Terms Act applied inter alia. The public interest is a broad concept and draws meaning from its context. Engadine (No 2) at [15] and subsequent cases have identified some relevant factors. None of these apply to Mr Scevola’s circumstances. The public interest nature of proceedings in this Court is generally directed to protection of the environment widely defined to include natural or cultural heritage by way of example. Whether the compulsory acquisition of land has occurred is strictly a matter of personal interest to any landowner or person with an interest in land such as Mr Scevola or members of the SLA. No public policy question of land tenure on the operation of the Just Terms Act arises from the circumstances in this case.

31. That Mr Scevola would not benefit financially to any great extent from the outcome of the proceedings if successful, as he essentially submitted as summarised in par 16 above, does not render them in the public interest. I am not sure what Mr Scevola means in submitting that his purchase of Lot 62 was not “arms length”. His email to the Court advised that he bought Lot 62 from a friend in some financial difficulty.

32. I do not consider the proceedings can be characterised as public interest, the first step identified in Caroona. Consequently I need not consider the other steps identified in that decision. This case is distinguishable from Ocean Shores (No 3) relied upon by Mr Scevola (or, more correctly, Ocean Shores Community Association Inc v Byron Shire Council (No 5) [2016] NSWLEC 8).

33. Mr Scevola’s submission on hardship, unsupported by any evidence such as an affidavit as to his means and assets, summarised at par 19 above is not a relevant factor in my consideration of whether a costs order should be made. As Jagot J said in Roy Kennedy v Director-General of the Department of Environment and Conservation and Anor (No 2) [2007] NSWLEC 271 at [19], “the applicant’s capacity to satisfy any costs order is immaterial. To deprive a successful party of an otherwise appropriate order for costs by reason of the other party’s impecuniosity would be inconsistent with the compensatory objective”.

34. Mr Scevola should be liable for the costs of the Respondents.

35. Two of the Respondents, the Minister and the Foundation, seek indemnity costs. Costs may be ordered on an indemnity basis under s 98(1)(c) of the CP Act. “Indemnity basis” means the basis set out in r 42.5 of the UCPR. An order for indemnity costs will only be made if there has been a “special or unusual feature” (Fountain Select Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; [1988] FCA 202 at [21]) or “relevant delinquency” (Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [44]) in connection with the proceedings by the person against whom the order is made.

36. Tensions inherent in considering an application for indemnity costs in relation to a litigant in person were identified in Bhagatv Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159. Where indemnity costs are sought against a litigant in person a court should make allowances “to try to ensure that such a litigant does not lose out because of lack of expertise”, Bhagat at [13]. Conduct which might justify an order for indemnity costs against a legally represented litigant may be viewed differently by a court considering whether to make an order against an unrepresented litigant. It is equally important to recognise that “litigants in person can cause great hardship and expense to other parties, through making allegations and claims that lawyers would recognise as allegations and claims that could not reasonably or even properly be made”, Bhagat at [13].

37. Indemnity costs have been awarded against litigants in person where the proceedings were obviously doomed to fail and the litigant maintained the proceedings after having been informed of that fact, see Rose v Richards, relied upon by the Minister in these proceedings. Each of the Minister, Foundation and Council wrote to Mr Scevola in his capacity as public officer of the SLA prior to the first directions hearing before the Court warning of difficulties with the application and the unlikelihood that it would succeed, see pars 11-13 above. The letters were comprehensive and detailed in responding to the summons. Two of the Respondents indicated to Mr Scevola that they would seek an order for costs in some cases on an indemnity basis if the summons was not withdrawn or substantially amended. Many of the issues raised in the letters were consistent with my reasoning in the Principal Judgment.

38. While I agree with the Respondents that the case lacked merit and accept that Mr Scevola was appropriately warned of this, nevertheless the matters raised were complex. Mr Scevola, a sole applicant, was essentially representing the concerns and interests of a wider group of people. There was no relevant delinquency in his behaviour and the notices of motion were dealt with in the time allocated of one day so that there was not excessive hearing time taken.

39. Exercising the broad discretion I have to determine costs, I consider all the Respondents should have their costs on the ordinary basis.

Orders

43. The following orders are made:

1. The Applicant is to pay the costs of and incidental to the notice of motion filed by the First Respondent on 2 June 2017.

2. The Applicant is to pay the costs of and incidental to the notice of motion filed by the Second Respondent on 2 June 2017

3. The Applicant is to pay the costs of and incidental to the notice of motion filed by the Third Respondent on 2 June 2017.

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Decision last updated: 25 October 2017