Tasmanian Conservation Trust inc. v Minister for Resources

[1995] FCA 50

FEDERAL COURT OF AUSTRALIA)
NEW SOUTH WALES REGISTRY     )        No NG 536 of 1994
GENERAL DIVISION         )

BETWEEN:

TASMANIAN CONSERVATION TRUST
  INCORPORATED
  Applicant

AND:

MINISTER FOR RESOURCES
  First Respondent

AND:
  GUNNS LIMITED
  Second Respondent

CORAM:    SACKVILLE J.
PLACE:    SYDNEY
DATE:        17 FEBRUARY 1995

REASONS FOR JUDGMENT
In my reasons for judgment, delivered on 10 January 1995, I expressed the tentative view that the applicant ("the Trust") should receive half its costs, to be shared equally between the first respondent ("the Minister") and the second respondent ("Gunns").  Although I did not give detailed reasons for this view, I pointed out that the applicant had only partly succeeded in its claim.  It succeeded in obtaining an order setting aside the Minister's decision to grant a licence to Gunns to export woodchips during the period from 10 June 1994 to 31 December 1994.  However, it failed in its claim to set aside the Minister's "in-principle" decision to approve the export of woodchips by Gunns until the end of 1999.

The matter was relisted at the request of the applicant.  Mr Basten QC, who appeared with Mr Williams for the applicant, submitted that it should receive the whole of its costs (on a party and party basis).  In the alternative, he submitted that the applicant should receive no less than 90 per cent of its costs, reflecting the relatively small amount of hearing time spent on the in-principle decision.

Mr Comans for the Minister argued that my tentative view should be confirmed.  He contended that the amended application challenged two separate decisions.  Of the two, the in-principle decision was, if anything, the more important because it related to the future, while the decision to grant the export licence had effect for only a short time.  In his submission, it was not appropriate to apportion costs on a time basis since, although the two issues were distinct, a number of specific questions were common to each.  In the alternative, Mr Comans submitted that if the time spent on the issues were to be taken into account to a greater extent than his primary submission accepted, the respondents should be held responsible for no more than 75 per cent of the applicant's costs.

Mr Hale, for Gunns, supported Mr Coman's submissions in relation to the Trust's costs.  However, he submitted that, as between the Minister and Gunns, the former should bear the whole burden of any costs order made in favour of the Trust.  He put this on the basis that Gunns was the "innocent victim" of the Minister's actions, determined by the Court to have been in error.  Furthermore, he pointed out that Gunns had only been joined at
a relatively late stage in the proceedings, after Beaumont J., at a directions hearing on 2 September 1994, had drawn attention to the absence of Gunns and directed that it be joined as a party.  It was joined by the filing of an amended application on 6 September 1994.  Consequently, Gunns had not been involved in disputes relating to the production of documents that I was informed had occurred between the Minister and the Trust prior to Gunns' involvement in the proceedings.

There was no disagreement among the parties that the Court has a general discretion under s.43(2) of the Federal Court of Australia Act 1976 to award costs, and that discretion must be exercised judicially: Inn Leisure Industries Pty Ltd (Provisional liquidator appointed) v D.F. McCloy Pty Ltd (No.2) (1991) 28 FCR 172 (FCA/French J.) at 173. Nor did the parties disagree with the summary of the authorities put forward by Toohey J. in Hughes v Western Australian Cricket Association [1986] ATPR 40-748 (FCA), at 48,136:

"1.Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order.  Ritter v Godfrey [1920] 2 KB 47.

1. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed.  Forster v Farquhar [1893] 1 QB 564.

1. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them.  In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law. Cretazzo v Lombardi (1975) 13 SASR 4 at 12."

Mr Basten relied on cases in which caution has been expressed about apportioning costs according to the success or failure of one party on the various issues arising in the course of a trial.  Thus in Cretazzo v Lombardi (1975) 13 SASR 4 (S Ct SA/In Banco), at 16, Jacobs J. made the following observations:

"But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law.  The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case.  There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike.  I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues."

See also Mok v Minister for Immigration, Local Government and Ethnic Affairs (No.2) (1993) 47 FCR 81 (FCA/Keely J.), at 84-88. Mr Basten contended that it had not been unreasonable for the Trust to raise the validity of the in-principle approval; nor had the raising of that issue unduly prolonged the trial. Accordingly, the Trust should not be deprived of its costs simply because it failed on that particular issue.

In my opinion, a distinction can be drawn between a case where a party fails on a particular issue in the course of substantially achieving the orders it seeks, and one where it fails on an issue which is severable from the issue on which it succeeds.  The passage from Jacobs J., which was cited with
approval in Hughes, at 48,136 and in Mok at 85 and 88, recognises this distinction, although his Honour made the point that no two cases are alike.

In the present case the amended application and the amended points of claim clearly distinguished between the decision of the Minister to grant an export licence and the decision to grant in-principle approval for the export of woodchips until the end of 1999.  The rejection of the Trust's claim in relation to the in-principle approval was not a step in the reasoning ultimately resulting in the setting aside of the decision to grant the export licence.  Indeed, Mr Basten acknowledged in the argument on costs that the two issues were severable, although pointing out (correctly) that some questions, such as standing, required consideration on each issue.

In my view, some allowance should be made in the costs order for the failure of the Trust on the severable in-principle issue.  In making this allowance I think it is appropriate to take into account the fact that, as Mr Basten pointed out, the additional hearing and preparation time specifically attributable to the in-principle issue was relatively modest.  (The argument on the point of law on which the Trust ultimately failed on this issue took only a short time.  The great bulk of the evidence in the case concerned the standing of the Trust to claim relief and whether the proposed action by Gunns affected the environment to a significant extent.)

On the other hand, I do not think the allowance should be based solely on a calculation of the time specifically attributable to the in-principle issue.  As Mr Basten acknowledged, some of the questions dealt with on the claim to set aside the decision to grant the licence to export woodchips necessarily arose in relation to the validity of the in-principle approval.  A precise apportionment of the time attributable to each issue is neither feasible nor sensible.  I also think it is appropriate for the apportionment to recognise that the in-principle approval was treated by the parties, including the Trust, as having practical significance in the case.  The orders sought by the Trust in relation to that approval were the only ones that would have directly affected the parties once the export licence expired on 31 December 1994.

I think that my tentative order did not sufficiently recognise that the ground on which the Trust failed, in its claim for relief concerning on the in-principle approval, required relatively little additional court time or preparation.   As I have said, this is not the only matter to be considered.  Taking all the relevant factors into account, I think that the respondents should be required to pay two-thirds of the Trust's costs.

In determining how the costs should be borne as between the Minister and Gunns, I am not persuaded by Mr Hale's primary argument.  Once Gunns was joined in the proceedings, it had a choice.  After familiarising itself with the issues, it could have submitted to any order of the Court, save as to costs and left the conduct of the case to the Minister.  In this way it would not have been exposed to the risk of an adverse costs order.  In fact it chose, as of course it was entitled to do, to participate in the proceedings.  The stance adopted by Gunns in the proceedings was substantially the same as the Minister's, although, as I noted in the judgment, Mr Hale helpfully elaborated on some issues in the course of argument.  By adopting this approach, in my view, Gunns took the risk that if it was unsuccessful it would be required to bear some portion of the Trust's costs.

I do not think it appropriate, at least in the circumstances of this case, to relieve Gunns from a costs order because it was (as it claims) an "innocent victim" of the Minister's errors.  Even if it were such a victim, Gunns was not deprived of the forensic choice to which I have referred.  In any event, I think it is difficult to make a judgment about relative "innocence" or "guilt" on a costs application.  This was not an issue litigated at the trial and thus it was not a matter upon which I was invited to make findings.  For all I know, had the matter been litigated the Minister may have wished to adduce further evidence about the role of Gunns in the decision-making process or the knowledge (if any) of its officers about possible flaws in the procedures adopted.  I should record that Mr Hale referred me to Sperling v Cave and Gosford City Council (1988) 65 LGRA 1 (NSW L & E Ct), but I have not found that case helpful in the present context.
Nor do I think any allowance should be made for the fact that Gunns' involvement did not add substantially to the hearing time.  As I have said, Gunns elected to challenge the Trust's entitlement to relief and the economy of its forensic approach (no doubt, in part, reflecting the order of presentation of evidence and argument) does not alter its status as a party that failed on the issue of the validity of the licence granted to it by the Minister.  Again, I do not think that any allowance should be made for the fact that, prior to Gunns' joinder, there was apparently some disputation between the Trust and the Minister concerning documents to be produced by the Minister.  No evidence was adduced that enables me to make the adjustment (if any) that might be appropriate and I do not think it appropriate to speculate.

In the result, I make the following orders as to costs:

1. The respondents are to pay two-thirds of the applicant's costs.

1. The first and second respondents, as between themselves, are to share the costs to be paid to the applicant equally.

I certify that this and the preceding 7 pages are a true copy of the Reasons for Judgment of the Honourable Justice Sackville.

Associate:

Dated:17 February, 1995

Heard:14 February, 1995

Place:            Sydney

Decision:17 February, 1995

Appearances:      Mr Basten QC and Mr Williams, instructed by the Environmental Defender's Office, appeared for the applicant.

Mr Comans, instructed by the Australian Government Solicitor, appeared for the first respondent.

Mr Hale, instructed by Dunhill, Madden, Butler, Solicitors, appeared for the second respondent.