Starkey v State of South Australia (No 2) - [2011] SASC 64

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
STARKEY & ANOR v STATE OF SOUTH AUSTRALIA & ORS (No 2)
[2011] SASC 64
Judgment of The Honourable Justice Sulan
19 April 2011
PROCEDURE - COSTS - GENERAL RULE - COSTS FOLLOW THE EVENT - COSTS OF WHOLE ACTION - GENERALLY
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - NATURE OF PROCEEDINGS - PUBLIC DUTY INVOLVED
The first and second plaintiffs sought judicial review of a decision of the Minister of Aboriginal Affairs and Reconciliation to grant an authority pursuant to section 23 of the Aboriginal Heritage Act 1988 - the plaintiffs failed in the substantial relief sought and the defendants applied for an order for costs - the plaintiffs contend the litigation was pursued in the public interest and the plaintiffs did not bring the action for personal gain - further, that the third defendant, whilst properly joined to the action, could have relied on the first and second defendants to argue the case.
Held: The litigation cannot be categorised as public interest ligitation - the third defendant was properly joined and should not be denied its costs - plaintiffs to pay 75 per cent of the costs of the first and second defendants and the costs of the third defendant.
Aboriginal Heritage Act 2988 s 23; Supreme Court Rules 2006 r 263; Land and Environment Court Act 1979 (NSW) s 69, referred to.
Kingscote District Council v Kangaroo Island Eco Action Inc (No 2) (1996) 67 SASR 422, applied.
Starkey & Anor v State of South Australia & Ors [2011] SASC 34; Oshlack v Richmond River Council (1998) 193 CLR 72, discussed.
Latoudis v Casey (1990) 170 CLR 534, considered.

STARKEY & ANOR v STATE OF SOUTH AUSTRALIA & ORS (No 2)
[2011] SASC 64
Civil

SULAN J: The first and second plaintiffs sought judicial review of a decision of the Minister of Aboriginal Affairs and Reconciliation to grant an authority pursuant to section 23 of the Aboriginal Heritage Act 1988. The plaintiffs sought certain declarations and orders. The application related to a site referred to as Lake Torrens. The third defendant, Straits Exploration (Australia) Pty Ltd, had applied for an authorisation pursuant to section 23 of the Act to carry out activities which may damage, disturb or interfere with a site or objects on the site. The plaintiffs sought a declaration that the authorisation was made contrary to law and sought an order quashing the authorisation. They also sought further declarations and orders, the details of which are unnecessary to enumerate in this judgment but which have been fully dealt with in the primary judgment.
The plaintiffs failed in the substantial relief that they sought. They partially succeeded on the ground that the Minister did not afford the traditional owners procedural fairness in respect of a request made by a group of Kokatha and Adnyamathanha people that, pursuant to section 6 of the Act, the Minister delegate her powers under section 23 to the traditional owners.[1]
[1] Starkey & Anor v State of South Australia & Ors [2011] SASC 34.
The defendants now apply for an order for costs. The Solicitor General, on behalf of the State of South Australia and the Minister, indicated that the first and second defendants’ application is that the plaintiffs pay 75 per cent of their costs. Mr Hoffmann QC, counsel for Straits, seeks an order for costs.
Mr Hayes QC, counsel for the first plaintiff, supported by Mr Llewellyn-Jones, counsel for the second plaintiff oppose the applications. Mr Hayes submits that this was litigation pursued in the public interest. Further, it was one of the first cases dealing with the interpretation of the Act. He submits that the plaintiffs did not bring the action for personal gain. The plaintiffs do not stand to gain financially from the litigation. Although the action was not a representative action, the plaintiffs are senior members of the Kokatha and Adnyamathanha people. The decision affects the wider Aboriginal community and, in particular, it deals with Aboriginal heritage and cultural matters. The decision deals with certain provisions of the Act and how they are to be interpreted. It has relevance to future claims under the Act. Mr Hayes submits that the decision has wider ramifications than just the Lake Torrens site. It also has significance to the human rights of Aboriginal people in protecting and preserving their cultural heritage. Mr Hayes submits that, taken together, these matters amount to good reason for the Court to exercise its discretion not to order costs against the plaintiffs.
As to the position of Straits, Mr Hayes concedes that its position is somewhat different from that of the State and the Minister. He accepts that Straits was properly joined in the proceedings and had a commercial interest in the outcome of the litigation. However, he contends that Straits should be given only part of its costs, as its case did not differ substantially to that of the Minister. The Minister and Straits had a common interest and, although Straits was properly joined, Straits could have relied upon the Minister as the case that was presented was not dissimilar.
The Solicitor General submits that the plaintiffs have not demonstrated why the usual order, that costs follow the event, should not be made. He concedes that the plaintiffs were successful in one aspect of the argument, and the State and the Minister therefore only seek that the plaintiffs pay 75 per cent of their costs. In my view, the concession is generous and appropriate.
The Solicitor General submits that the case is not one of general public interest. Both plaintiffs and the Kokatha and Adnyamathanha people have an interest. That interest, however, cannot be characterised as the public interest, as it remains limited to those people and to designated sites on Lake Torrens, and not the Aboriginal community at large or the environment at large. He accepts that the plaintiffs individually did not stand to gain privately from the litigation. He submits, however, that is not a determining factor. He submits it is not litigation which was in the public interest generally as, for example, litigation to protect the environment.
Mr Hoffmann adopts the submissions of the Solicitor General. He submits that this was not a test case. He submits that Straits did not participate in the proceedings to determine an abstract point of law with regard to interpretation of the Act. Its participation was to avoid having a commercially valuable authorisation set aside. He submits the proceedings were not representative proceedings, that Straits was a necessary party and its interests were affected and potentially prejudiced. He submits that the plaintiffs have not demonstrated that this is a case in which the usual order that costs follow the event should not be made. Moreover, there were matters raised in the litigation by Straits which had not been pursued by the State and the Minister, and he points to a number of arguments put on behalf of Straits which were not part of the case for the Minister and the State.[2]
[2] Starkey & Anor v State of South Australia & Ors [2011] SASC 34, [39], [41], [48] and [82].
Discussion
The usual rule is that costs of proceedings follow the event.[3] The Court has an unfettered discretion to make whatever order it considers to be just in the circumstances. Costs are awarded by way of compensation to indemnify the successful party against the expense to which that party has been put by reason of the proceedings.[4]
[3] Supreme Court Rules 2006 r 263.
[4] Kingscote District Council v Kangaroo Island Echo Action Inc(No 2) (1996) 67 SASR 422, 425.
In Oshlack v Richmond River Council,[5] an individual brought proceedings in the Environment Court of New South Wales against a local council and land developer seeking to impugn the consent granted by the council to a proposed development. The plaintiff had no personal interest in the outcome of the proceeding. He was solely concerned with preserving the habitat of endangered fauna on and around the development site. He was unsuccessful. The Judge held that there should be no order as to costs. The Judge concluded that there was a public interest in the outcome of the proceedings, and that the action raised and resolved significant issues about the interpretation and future provision and future administration of provisions relating to the protection of endangered fauna. The New South Wales Court of Appeal reversed the decision, and the plaintiff appealed to the High Court. The High Court reversed the decision of the Court of Appeal and reinstated the trial Judge’s order.
[5] (1998) 193 CLR 72.
Section 69 of the Land and Environment Court Act 1979 (NSW) provided that costs of and incidental to proceedings in that Court were in the discretion of the Court and that the Court may determine by whom and to what extent costs were to be paid. In other words, the Court had an unfettered discretion. Gaudron and Gummow JJ, who were part of the majority, confirmed that, in a general sense, costs are awarded to adequately compensate the successful party to the disadvantage of what otherwise would have been the position of the unsuccessful party. If there be a particular case involving some relevant delinquency on the part of the unsuccessful party, an order is made not for party and party costs but for costs on a solicitor client basis.[6] They referred to the reasons of the trial Judge in having characterised the nature of the litigation as concerned with public rather than private rights. The Court considered the factors referred to by the trial Judge, including the motivation of the appellant being to ensure obedience to environmental law and to preserve the habitat of endangered species. The Judge found that the appellant had a worthy motive to uphold environmental law. They observed that a significant number of members of the public shared the stance of the appellant. The basis of the challenge was arguable and had raised and resolved significant issues as to the interpretation of statutory provisions relating to the protection of endangered fauna. Gaudron and Gummow JJ said that the trial Judge had not taken into account considerations which were extraneous to the objects of the legislation. They concluded that the Court of Appeal was in error in disturbing the discretion exercised by the trial Judge.
[6] Ibid 89 [44].
Kirby J, who agreed with Gaudron and Gummow JJ, observed that the compensatory principle cannot be treated as an absolute rule. He considered that the Court should not ignore the functions, powers and peculiar procedural provisions governing the Land and Environment Court. The Act encouraged individuals and groups to exercise functions in the enforcement of environmental law before the Environment Court. Kirby J said:
It is because the general purpose of an order for costs in favour of a successful party is to provide compensation in the form of a partial indemnity for the costs incurred that the ordinary principle observed in civil litigation under the “English rule” (as contrasted to the “American rule”) is that legal costs will usually be ordered in favour of the successful party. Absent special statutory provisions, Australian law has followed this English rule. But the compensatory principle cannot be treated as an absolute rule. Otherwise, the discretion conferred in unqualified terms would indeed be shackled and confined. To permit this would be incompatible with statutory language expressed in such terms. Therefore, although there are “rules” or ordinary principles which will guide the donee of power in the exercise of the discretion, they cannot extinguish the element of discretion. They must not be allowed to harden into rigid or inflexible requirements.[7] (Citations omitted)
[7] Ibid 121-2 [134].
Brennan CJ and McHugh J expressed contrary views. McHugh J, with whom Brennan CJ agreed, was of the opinion that the public interest litigation principle is not a relevant factor in determining that costs should not be awarded against an unsuccessful plaintiff. He considered that there is inherent imprecision in the concept of public interest litigation. He observed that much litigation concerns the public interest. For example, prosecutions and most constitutional and administrative law matters almost invariably affect or involve public interest. Many ordinary civil actions concern private rights and duties.
A successful litigant can, in most cases, expect to be compensated in costs. It does not follow that, in circumstances in which the justice of the case requires it, an order inconsistent with the usual order will not be made. There are instances in which substantial hardship will be caused to a losing party. Nevertheless, a successful party who is not compensated will also suffer detriment. The fact that the successful party is the State or another government institution, or a large corporation, is not a reason not to award that party costs.
The plaintiffs’ contention that, because this was litigation in the public interests, costs should not be awarded against them must be rejected. I doubt that the litigation can characterised as public interest litigation. The case involved two groups of Aboriginal people, each which has a very specific interest in the land. It can hardly be the case that their particular interest equates to the public interest. Even if the litigation were to be characterised as public interest litigation, that alone is not a reason to depart from the usual costs order. In District Council of Kingscote v Kangaroo Island Eco Action Inc (No 2),[8] Doyle CJ, referring to a decision of the High Court in Latoudis v Casey,[9] said:
In that case the majority judgments establish a number of principles. The first is that in ordinary circumstances an order for costs will be made in favour of a successful defendant. The second is that in exercising the discretion in relation to costs, the court should look at the matter primarily from the perspective of the successful defendant. The third is that costs are not awarded by way of punishment of the unsuccessful party, but by way of compensation to indemnify the successful party against the expense to which that party has been put by reason of the proceedings. The point was made that the award of costs is in no sense related to misconduct or default on the part of the prosecutor, but is intended to compensate the successful defendant for the expense incurred. A further point made was that the fact that a prosecutor has acted in good faith in the public interest and may have to meet the costs out of the prosecutor’s own pocket is not a ground for depriving a successful defendant of costs.
In the face of that authority it is difficult to see how the matters advanced by the respondent in this case lead to a decision not to award costs to the successful appellant.
The fact that the proceedings were brought in the public interest was a matter specifically adverted to by the majority in Latoudis v Casey, and identified as not being a ground for depriving a successful defendant of its costs. The fact that the case raised significant legal issues relevant to the protection of the environment is not something addressed by the High Court. However, when one bears in mind the principle that costs are compensatory, intended to indemnify the successful party against the expense to which that party has been put, it is not easy to see how the nature of the issues raised can be used to support an argument to deny the successful defendant that compensation. …[10] (Citations omitted)
[8] (1996) 67 SASR 422.
[9] (1990) 170 CLR 534.
[10] District Council of Kingscote v Kangaroo Island Eco Action Inc (No 2) (1996) 67 SASR 422, 425-26.
Although the comments of Doyle CJ were made in the context of a prosecution in which a successful defendant claimed costs, the comments are equally relevant and applicable in an action brought by individuals seeking to set aside the Minister’s exercise of her powers. Further, the other factors referred to by Mr Hayes do not amount to sufficient reasons for this Court to exercise its discretion not to award costs to the successful parties.
The orders that I propose are, therefore:
1.That the plaintiffs pay 75 per cent of the costs of the first and second defendant, to be agreed or taxed.
2.That the plaintiffs pay the costs of the third defendant, to be agreed or taxed.