The State of Western Australia v Collard
[2015] WASCA 86
•8 MAY 2015
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: THE STATE OF WESTERN AUSTRALIA -v- COLLARD [2015] WASCA 86
CORAM: BUSS JA
NEWNES JA
MURPHY JA
HEARD: 20 NOVEMBER 2014
DELIVERED : 8 MAY 2015
FILE NO/S: CACV 45 of 2014
BETWEEN: THE STATE OF WESTERN AUSTRALIA
First Appellant
COMMUNITY DEVELOPMENT MINISTERIAL BODY
Second AppellantAND
DONALD COLLARD
First RespondentSYLVIA RACHEL COLLARD
Second First RespondentGLENYS DALE COLLARD
Second RespondentELLEN THOMAS
Third RespondentEVA JETTA
Fourth RespondentWESLEY ROHAN COLLARD
Fifth RespondentBEVERLEY ANNE HUMPHRIES
Sixth RespondentDARRYL FREDERICK COLLARD
Seventh RespondentBONNIE COLLARD MILLER
Eighth Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :PRITCHARD J
Citation :COLLARD -v- THE STATE OF WESTERN AUSTRALIA [No 4] [2013] WASC 455 (S)
File No :CIV 1772 of 2010
Catchwords:
Practice and procedure - Costs - Claim for damages against State for breach of fiduciary duty in wardship of Aboriginal children - Novel claim - Claim potentially relevant to other former wards of State - Claim dismissed - No order as to costs made - Whether 'test case' - Consideration of principles applicable to costs in 'test case' and 'public interest litigation'
Legislation:
Rules of the Supreme Court Act 1971 (WA), O 66 r 1
Supreme Court Act 1935 (WA), s 37, s 60(1)(e)
Result:
Appeal allowed
Respondents to pay appellants' costs of the action to be taxed
Category: B
Representation:
Counsel:
First Appellant : Mr T C Russell
Second Appellant : Ms R Young
First Respondent : Mr I Freeman
Second First Respondent : Mr I Freeman
Second Respondent : Mr I Freeman
Third Respondent : Mr I Freeman
Fourth Respondent : Mr I Freeman
Fifth Respondent : Mr I Freeman
Sixth Respondent : Mr I Freeman
Seventh Respondent : Mr I Freeman
Eighth Respondent : Mr I Freeman
Solicitors:
First Appellant : State Solicitor for Western Australia
Second Appellant : State Solicitor for Western Australia
First Respondent : Aboriginal Legal Service (WA)
Second First Respondent : Aboriginal Legal Service (WA)
Second Respondent : Aboriginal Legal Service (WA)
Third Respondent : Aboriginal Legal Service (WA)
Fourth Respondent : Aboriginal Legal Service (WA)
Fifth Respondent : Aboriginal Legal Service (WA)
Sixth Respondent : Aboriginal Legal Service (WA)
Seventh Respondent : Aboriginal Legal Service (WA)
Eighth Respondent : Aboriginal Legal Service (WA)
Case(s) referred to in judgment(s):
A Goninan and Co Ltd v Gill [2001] NSWCA 77; (2001) 51 NSWLR 441
Attrill v Richmond River Shire Council (1995) 38 NSWLR 545
Blue Wedges Inc v Minister for the Environment, Heritage and the Arts [2008] FCA 8; (2008) 165 FCR 211
Buddhist Society of Western Australia (Inc) v Shire of Serpentine - Jarrahdale [1999] WASCA 55
Collard v The State of Western Australia [No 4] [2013] WASC 455
Collard v The State of Western Australia [No 4] [2013] WASC 455 (S)
Commissioner for Equal Opportunity v ADI Ltd [2007] WASCA 261(S)
Commissioner of Taxation v B and G Plant Hire Pty Ltd (1994) 52 FCR 257
Darlington Resident's Association v Elarosa Investments Pty Ltd (No 3) (1992) 75 LGRA 214
De Silva v Ruddock [1998] FCA 311
Geeveekay v Director of Consumer Affairs Victoria (No2) [2008] VSC 152
Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11
Qantas Airways Ltd v Cameron (No 3) (1996) 68 FCR 387
Roe v The Director General, Department of Environment and Conservation for the State of Western Australia [2011] WASCA 57(S)
Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229
Securities Commissioner v Kiwi Co‑operative Dairies Ltd [1995] 3 NZLR 26
South‑West Forests Defence Foundation (Inc) v The Lands and Forests Commission (No 2) (1995) 86 LGERA 382
Water Administration Ministerial Corporation v Mills [2000] NSWCA 194; (2009) 49 NSWLR 249
William Hollier v Australian Maritime Safety Authority (No 2) [1998] FCA 975
JUDGMENT OF THE COURT: This is an appeal against orders as to costs made by Pritchard J in an action brought by the respondents against the appellants for equitable compensation and damages. The respondents' action was dismissed and her Honour ordered that there be no order as to the costs of the action, on the basis, in substance, that the action was in the nature of a 'test case'.
The appellants have appealed against the primary judge's decision, contending that as they were successful in the action her Honour should have ordered the respondents to pay their costs.
As the appeal is as to costs alone, the appellants require leave to appeal: Supreme Court Act 1935 (WA), s 60(1)(e). On 22 May 2014, it was ordered that the question of leave be referred to the hearing of the appeal. As a result of difficulties in service of the appeal notice on some of the respondents, the appellants also require an extension of time within which to appeal and that question was also referred to the hearing of the appeal.
Background
The first respondents are the parents of the second to eighth respondents (the children). The first respondents were also the parents of Glen, Donald and William (all now deceased).
The primary judge found that, on 13 March 1958, by an order made by the Children's Court at Brookton, the third respondent, then six months of age, was committed to the care of the Child Welfare Department. On 3 December 1961, the second, the fourth to eighth respondents, and William and Donald were committed to the care of the Child Welfare Department, pursuant to an order of the Children's Court at Brookton. At the time, those children ranged in age from eight months to 10 years.
All remained subject to an order committing them to the care of the Child Welfare Department until they reached 18 years of age (the wardships).
After they were made wards and until their teens or early adulthood, most of the children spent little (if any) time with the first respondents. The primary judge concluded there was no doubt that all have been deeply scarred by their separation, by the fracturing of their family relationships, and by their disconnection from their aboriginal culture, which occurred as a result of the children being made wards [4].
The respondents commenced proceedings against the appellants by a writ of summons issued on 10 May 2010. In the action, the respondents claimed that upon the acquisition of British sovereignty the Crown assumed duties and powers in relation to the aboriginal inhabitants of Western Australia which gave rise to a fiduciary duty to the inhabitants with respect to their welfare, that assumption of duty being manifested in the enactment of a series of statutes commencing with the Aborigines Protection Act 1886 (WA) and at the time of trial being the Children and Community Services Act 2004 (WA).
The respondents alleged that, during the wardships, the appellants owed various fiduciary duties to the first respondents in their dealings with the children and to the children in exercising the powers of a guardian of the children. The respondents claimed, in substance, that the fiduciary duties to which the appellants were subject were duties not to fail to act in the best interests of the children with respect to their custody, maintenance and education, and not to disregard their interest in being raised in their natural family unit. It was alleged that the appellants breached those duties in various ways during the wardships. In her reasons, her Honour referred to these fiduciary duties as the primary fiduciary duties.
The respondents further alleged that the appellants were, and remained, under a fiduciary duty to provide them with independent legal advice or representation in relation to their possible liability to them for a breach of their fiduciary duties during the wardships, and that they failed to do so. In addition, the respondents alleged that after the termination of the wardships, the appellants continued to owe the children a duty to take all reasonable steps (through the provision of education, counselling, psychiatric treatment and access to independent legal advice) to avoid the occurrence of further loss and damage to the respondents as a result of their breaches of their duties as fiduciaries, and that they failed to do so. In her reasons, her Honour referred to these fiduciary duties as the secondary fiduciary duties.
The respondents sought a declaration that the appellants breached their duties to them, and equitable compensation or damages, including exemplary damages and aggravated damages, for the injuries, loss and damage they claim to have suffered as a result. (In closing submissions at trial, counsel for the respondents submitted that an appropriate amount by way of general damages would be $675,000 for each of the second and sixth respondents and $450,000 for each of the other respondents, a total amount of $4,500,000).
We should note that the primary judge observed in her judgment that quite apart from the legal remedies they sought, the respondents clearly hoped that the litigation would provide answers to many questions they had about why the children were removed [10].
The appellants denied they were subject to the alleged duties and denied any breach of those duties. They also contended that the respondents had no right of action because they had failed to comply with the requirements of the Crown Suits Act 1947 (WA), and that the respondents were precluded from obtaining any relief by the application, by analogy, of the limitation periods in the Limitation Act 1935 (WA) or the Crown Suits Act. The appellants also contended that the respondents were precluded from seeking the relief sought or any relief by reason of the equitable defence of laches.
The respondents' claims against the second appellant were dismissed on the first day of trial, senior counsel for the respondents conceding that those claims could not succeed.
The trial of the respondents' claims against the first appellant proceeded to a trial which occupied 22 hearing days. Each of the respondents gave oral evidence but the respondents did not adduce any other oral evidence. Of the first appellant's 31 lay witnesses, only two were required for cross‑examination, the witness statements of the others being tendered by consent.
On 20 December 2013, the primary judge dismissed the respondents' claims against the first appellant: Collard v The State of Western Australia [No 4] [2013] WASC 455. Her Honour concluded that:
1.the respondents had failed to make out their case for the existence of a fiduciary duty between the first appellant and all aboriginal people in Western Australia, so as to found a fiduciary duty on the first appellant to act in the best interests of all aboriginal people, and thus the respondents [1180];
2.the first appellant was not in a fiduciary relationship with the respondents by virtue of the wardship of the second to eighth respondents [1243];
3.even if the first appellant was in such a fiduciary relationship, the duties alleged by the respondents were not fiduciary duties [1243];
4.even if the alleged duties were fiduciary duties, the respondents had not established any breach of the primary duties alleged ([1304] ‑ [1487]), apart from in relation to a decision in November 1959 not to return the third respondent to the first respondents' care [1355];
5.in respect of the alleged secondary fiduciary duties to obtain independent legal advice for the respondents and to take reasonable steps to avoid further loss to the second to eighth respondents by the provision of adequate education, counselling or psychiatric treatment, no duty to obtain legal advice arose in the circumstances ([1504]) and there was no evidence that the first appellant had failed to provide the second to eighth respondents with education, counselling or psychiatric treatment [1521] ‑ [1522]; and
6.the respondents had no right of action against the first appellant because they had failed to comply with the requirements of s 6(1) of the Crown Suits Act [1523].
As mentioned earlier, the appellants sought an order that the respondents pay their costs of the action but the primary judge declined to make such an order, instead deciding that there should be no order as to costs: Collard v The State of Western Australia [No 4] [2013] WASC 455 (S).
The reasons of the primary judge on costs
The primary judge noted that the usual order as to costs was that the successful party was entitled to an order for costs against the unsuccessful party and that the court would depart from that rule only in 'special circumstances' [9], [11]. Her Honour observed that there were cases where no order as to costs had been made in circumstances where the case has been characterised as a 'test case' or as 'public interest litigation', but pointed out that, for the reasons she gave, caution had to be exercised in approaching the exercise of the costs discretion by reference to such characterisations [14] ‑ [20].
Against that background, the primary judge turned to consider the factors commonly arising in a 'test case' or as 'public interest litigation' which have been relied upon to justify a departure from the usual order as to costs. Her Honour observed that the factors characteristic of 'public interest litigation' include those where the subject‑matter involves a matter of public interest (as opposed to merely of interest to the public) and the proceedings have been brought to advance the public interest, although more than that is required [21].
Other factors commonly relied upon identified by her Honour were whether the applicant had an arguable case, whether the proceedings involved private gain, whether the proceedings have contributed to the clarification and understanding of the law, or raised novel questions of general importance, and whether the proceedings will have implications for persons other than the individual litigants or will benefit the public or a large section of the public [22].
The primary judge observed that it is not enough to justify a departure from the usual order as to costs on the basis of 'public interest litigation' that the litigation was brought against the State or a State agency, or that the litigant was of a particular nature [23]. Nor is it sufficient that a case raised the meaning or operation of a legislative provision for the first time or its application in a novel factual situation [24]. Something more is required. Her Honour said:
As in the case of public interest litigation, something more is required before the fact that a case is described as a test case will justify a departure from the usual order. Most often, that something extra will be the fact that the case involves a wider legal importance, or significance, than that which it has to the individual litigants. That importance or significance will ordinarily derive from the likely application of the principles established in the case to other similar cases, or from the fact that the case involves a question of construction of a statutory provision with a wide significance, or about which there have been differing views, or that the case has been brought to ascertain the correctness of a particular line of authority. The range of factors which justify a departure from the usual rule as to costs in the case of public interest litigation may also be relevant in the 'test case' context [25]. (footnotes omitted)
The primary judge found there were four reasons why there should be a departure from the usual costs rule in this case [27]. They were:
1.the case sought to establish for the first time in this State the existence of fiduciary duties arising from the relationship between the State and aboriginal people who were made wards of the State, and their parents. It raised novel issues of general importance, albeit it was not a case of removal of aboriginal people pursuant to the policy of assimilation referred to as 'the Stolen Generation' [28] ‑ [29];
2.on the evidence, the case was brought, with the assistance of the Aboriginal Legal Service, on the basis that the questions it resolved would have significance for possible claims by other aboriginal people who were made wards in similar circumstances, and the different experiences of the nine respondents permitted the exploration of the legal principles in a range of different factual contexts, giving it a wider legal significance or importance than it had to the individual litigants [30], [32];
3.while some aspects of the respondents' claims were contrary to established authority, in other respects their claims were novel and it could not be said that the respondents' case was so lacking in merit as to undermine the contention that a just outcome would be a departure from the usual order as to costs [33];
4.the respondents sought both declaratory relief and damages. The fact that the damages claim was significant did not mean the case was not brought primarily to establish a point or principle of law [34].
The appellants have appealed from her Honour's judgment.
The grounds of appeal
The grounds of appeal were:
1.The Court erred in law in finding that the following issues raised by the case were novel issues which went well beyond the application of established principles:
(a)the characterisation of various duties said to be owed by the State to the second to eighth respondents (in essence to act in the best interest of the second to eighth respondents) as fiduciary duties;
(b)the claim that the State owed fiduciary duties to the first respondents by virtue of the second to eighth respondents being made wards; and
(c)whether the Crown Suits Act applied to the respondents' claims of breach of fiduciary duties said to be owed by the State.
2.The Court erred in fact and law in finding, and in exercising its discretion by reference to whether, the respondents' case 'was so lacking in merit as to undermine the claim that the just outcome would be a departure from the usual order as to costs'.
3.The Court erred in fact and law by failing to give any, or alternatively any significant, weight to the fact that the action sought to enforce private rights asserted by the respondents, and did not involve the assertion of public rights without prospect of personal gain or advantage.
4.The Court erred in fact and law by failing to consider the different circumstances relating to the claim against [the second appellant], which was dismissed at the beginning of the trial.
5.The Court's decision to make no further order as to costs stands outside the limits of a sound discretionary judgment in circumstances where:
(a)The respondents were wholly unsuccessful;
(b)The action was brought to assert personal rights and included a claim for substantial damages;
(c)The respondents' success on critical aspects of their claim required the Court to depart from existing binding, or highly persuasive, authority;
(d)The Court concluded that the evidence did not establish any breach of any asserted fiduciary duty; and
(e)The appellants incurred substantial costs in defending the action, so that an error in principle is to be inferred from the result of the exercise of the Court's discretion.
The disposition of the appeal
The jurisdiction of the court to award costs is conferred by s 37 of the Supreme Court Act, which gives the court a broad discretion as to costs, albeit it is a discretion that must be exercised judicially. The general rule, however, is that the successful party will be entitled to an order for its costs: O 66 r 1 of the Rules of theSupreme Court 1971 (WA). As McHugh J explained in Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11:
The principle [that a successful party is generally entitled to an order for costs] is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation [67].
Consistently with that, a departure from the usual rule as to costs has ordinarily occurred where there has been some conduct of the successful party which disentitles it to an order for its costs, such as when the successful party by its lax conduct effectively invites the litigation; or unnecessarily protracts the proceedings; or succeeds on a point not argued before a lower court; or prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute: Oshlack [69], and see O 66 r 1(2), (3).
To depart from the general rule as to costs on the basis that the litigation is what is commonly described as 'public interest litigation' or as a 'test case' (which is a form of public interest litigation) raises the immediate difficulty, as the primary judge noted at [17] ‑ [18], that those concepts defy precise definition and of themselves provide an inadequate description of the circumstances in which the general rule as to costs may be ousted.
In Oshlack, McHugh J (with whom Brennan CJ agreed) said there is 'inherent imprecision in the suggested concept of "public interest litigation"' [71]. Gaudron and Gummow JJ described it as 'a "nebulous concept" unless given ... further content of a legally normative nature' [30]. In Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229, Black CJ and French J (as his Honour then was) observed that:
To say of a proceeding that it is brought 'in the public interest' does not of itself expose the basis upon which the discretion to award or not award costs should be exercised [19].
In Ruddock, Black CJ and French J suggested that the concept of 'public interest litigation' may best be seen as an envelope or class description for a range of circumstances which, upon examination, may be found to be relevant to the question whether there should be a departure from the ordinary rule that costs follow the event [14]. They pointed out, however, that the fact a proceeding was brought otherwise than for the personal or financial gain of the applicant, and in that sense in the public interest, does not detract from the general proposition that ordinarily costs follow the event and that the primary factor in deciding on the award of costs is the outcome of the litigation [18].
As the Full Court of the Supreme Court of Western Australia observed in Buddhist Society of Western Australia (Inc) v Shire of Serpentine - Jarrahdale [1999] WASCA 55:
[g]reat care must be taken with the concept of public interest litigation that it does not become an umbrella for the exercise of discretion with respect to costs in an unprincipled, haphazard and unjudicial manner … In our view, the denial of costs to successful litigants upon the ground that the litigation bears a public interest character should continue to be the rarity which this Court supposed it would be in the South West Forests Defence Foundation case [11].
It is the position, as her Honour observed, that the fact a case raises for the first time the meaning or operation of a legislative provision, or the application of the legal principles applicable to a novel fact situation, cannot be sufficient to characterise that case as a 'test case', such circumstances being by no means unusual [24]. Her Honour considered that most often the distinguishing feature of a 'test case' justifying departure from the general rule as to costs is that the case involves a wider legal importance, or significance, than that which it has to the individual litigants, that importance or significance ordinarily deriving from the likely application of the principles established in the case to other similar cases, or from the fact that the case involves a question of construction of a statutory provision with a wide significance, or about which there have been differing views, or that the case has been brought to ascertain the correctness of a particular line of authority. Her Honour considered that the range of factors which justify a departure from the usual rule as to costs in the case of 'public interest litigation' may also be relevant in the 'test case' context.
We do not, however, understand her Honour to have intended to suggest, and it is not the position, that a departure from the usual order as to costs will be justified whenever a case involves a wider legal importance, or significance, than that which it has to the individual litigants. Often, the decision in a particular case will have application to other similar prospective cases, or will involve the proper construction of a statute of wide significance, or the resolution of a conflicting line of authorities, or will otherwise have wider legal significance or public importance. As the Full Court of the Federal Court pointed out in William Hollier v Australian Maritime Safety Authority (No 2) [1998] FCA 975:
In common law jurisdictions decisions of the courts, in private as well as public law, often clarify the law or lay down new law for the benefit of its citizens, taxpayers, traders, patentees, insurers and insureds, landlords and tenants, etc etc. To that extent, much litigation has a public interest going beyond the interests of the parties. But this feature is inherent in common law litigation and provides no ground for departure from the usual rule as to costs.
Nor do the cases to which her Honour referred indicate any such general rule. Thus in A Goninan and Co Ltd v Gill [2001] NSWCA 77; (2001) 51 NSWLR 441, 459 ‑ 460, one of the cases to which her Honour referred, a costs order had been made in the respondent's favour in the Compensation Court. On the assessment of the respondent's costs, the appellant had been ordered to pay to the court an amount of $542.50 as the assessor's costs of the assessment. On appeal, the Court of Appeal overturned that order. However, the appellant was ordered to pay the respondent's costs of the appeal as leave to appeal had been granted, and the appeal considered, as a test case in relation to the correctness of a line of authority in relation to certain statutory provisions relevant to costs in the Compensation Court. The court noted that the appeal was of general importance to the insurer behind the company, and to other insurers behind employers in the position of the company, but of no significance whatever to the worker. It noted that the costs of the appeal far exceeded the $542.50 in dispute.
In Commissioner of Taxation v B and G Plant Hire Pty Ltd (1994) 52 FCR 257, another case referred to by her Honour, the Commissioner had applied to set aside a deed of arrangement which purported to bind all the creditors of the respondent to accepting 40 cents in the dollar. The Commissioner contended that the debt owing in respect of tax was granted priority by s 221P of the Income Tax Assessment Act 1936 (Cth) and thus stood out of the arrangement. The Commissioner was successful but no order as to costs was made, the court saying simply that the case was 'in the nature of a test case. Important questions arose concerning both the Corporate Law Reform Act and the Tax Amendment Act.'
In Securities Commissioner v Kiwi Co‑operative Dairies Ltd [1995] 3 NZLR 26, also referred to by her Honour, a question arose as to whether an invitation by the respondent to its shareholders to deposit funds with it at interest was a breach of s 33 of the Securities Act 1978 (NZ). The matter proceeded by way of a case stated pursuant to the Securities Act. At first instance it was held the respondent's invitation was not a breach and the appellant appealed. The appeal was upheld but no order as to costs was made on the ground that it was 'a test case'. The basis of that conclusion was not explained.
Finally, in Attrill v Richmond River Shire Council (1995) 38 NSWLR 545, the appellants had brought a claim against the respondent for damage caused by flooding. A separate trial was ordered on whether s 582A of the Local GovernmentAct1919 (NSW) (which provided that a Council was not liable for any act or omission in good faith in relation to the likelihood or extent of flooding of any land) was a complete defence to the claim for damages. There was a conflict of authority on the proper construction of s 582A. The respondent was successful at first instance but that decision was reversed on appeal. On costs, by a majority (Kirby P and Clarke JA, Powell JA dissenting) the court concluded that there should be no order as to costs, the issue being one of importance to local government, there having been a conflict of authority on it and its determination being in the public interest (556).
It is notable that in each of those cases the successful party denied an order for costs derived a benefit from the litigation in the clarification of a statutory provision of importance to its regulatory or other functions. It has been suggested that that will usually be a feature of a 'test case': Law of Costs, G E Dal Pont, 3rd ed, LexisNexis Butterworths, 2013, [9.36].
There are cases where the court has departed from the usual order as to costs in litigation which has involved the proper construction of statutory provisions of significant public import, particularly (but not exclusively) in relation to the protection of the environment, on the basis that the proceedings were 'public interest' litigation. A number of those cases were referred to by the primary judge, including Oshlack; Ruddock v Vadarlis (No 2); BlueWedges Inc v Minister for the Environment, Heritage and the Arts [2008] FCA 8; (2008) 165 FCR 211; and Roe v The Director General, Department of Environment and Conservation for the State of Western Australia [2011] WASCA 57(S). But the cases in which the court has done so have been rare and the exceptional nature of such an outcome has been repeatedly emphasised.
The decision in Oshlack is of no real assistance in the present case, being concerned with a rather different point, namely, whether the subject matter, scope and purpose of the statute conferring power to award costs - the Land and Environment Court Act, 1979 (NSW) - was such that the considerations to which the trial judge had regard were extraneous to any object the legislature had in mind in enacting it, one of those considerations being the relaxation in the statute of the standing of those entitled to bring proceedings of the nature concerned in that case.
In Ruddock v Vadarlis (No 2), the Victorian Council for Civil Liberties (VCCL) and Vadarlis had commenced proceedings against the Minister for Immigration and Multicultural Affairs, the Commonwealth and others, seeking habeus corpus and mandamus to compel the release and delivery into Australia of a group of non‑citizens said to be detained on a vessel, MV Tampa, off the coast of Christmas Island. The primary judge made the orders sought but was reversed on appeal. The Full Federal Court, by a majority (Black CJ and French J, Beaumont J dissenting), concluded that there should be no order as to costs at first instance or on the appeal. The majority described it as 'a most unusual case', involving 'matters of high public importance and rais[ing] questions concerning the liberty of individuals who were unable to take action on their own behalf to determine their rights' [29]. On the question of costs, they took into account that the case raised novel and important questions of law concerning the alleged deprivation of liberty of the individual, the executive power of the Commonwealth, the operation of the Migration Act 1958 (Cth), and Australia's obligations under international law (matters on which they noted that judicial opinion was divided), and that there had been no financial gain for the VCCL or Vadarlis in bringing the proceedings [28].
In BlueWedges, the appellant challenged the validity of a decision of the Federal Minister to approve dredging of Port Phillip Bay and the Yarra River in Victoria, contending that the environmental assessment did not adequately assess the relevant impacts of the project or provide enough information for the Federal Minister to make an informed decision. The challenge failed. The appellant represented the interests of over 65 community and environment groups and qualified for the express conferral of standing under s 487(3) of the Protection and Biodiversity Conservation Act 1999 (Cth) to bring such proceedings. Heerey J made no order as to costs, on the basis that the matter was of high public concern, the application raised novel questions of general importance as to the approval process under the legislation, and there was a public interest in the approval decision and whether it had been reached according to law. His Honour observed that the fact the appellant's solicitor also acted for a number of businesses who feared they would be commercially damaged by the project did not deprive the action of its public interest character.
In this jurisdiction, in South‑West Forests Defence Foundation (Inc) v The Lands and Forests Commission (No 2) (1995) 86 LGERA 382, the appellant, in reliance upon the Environmental Protection Act 1986 (WA) and the Conservation and Land Management Act 1989 (WA), had sought orders nisi for writs of certiorari and prohibition to quash decisions of the first respondent relating to an amendment to a regional forest management plan. The application failed at first instance and an appeal against that decision was dismissed. On costs, the court rejected a submission by the appellant that the court was justified in departing from the usual order as to costs on the ground that important legal questions were raised for determination in the public interest. It held there were no special circumstances which justified any departure from the usual order as to costs, adding:
It is likely to be a very rare case in which an unsuccessful appellant from an adverse decision below will escape an order for costs. This is not such a case (384).
A similar approach was taken in Buddhist Society of Western Australia, where the applicant had applied for an order nisi for a writ of prohibition in respect of what was said to be a decision which it anticipated the first respondent would make to grant an extractive industries licence to the second respondent. The application was dismissed by the Full Court. The applicant opposed a costs order being made against it on the ground that the proceedings were 'public interest litigation'. That submission was rejected. The court observed that:
[t]he denial of costs to a successful litigant upon the ground that the litigation bears a public interest character should continue to be the rarity which this court supposed it would be in the South-West Forests Defence Foundation case [11].
In Commissioner for Equal Opportunity v ADI Ltd [2007] WASCA 261(S), the court dismissed an appeal by the Commissioner for Equal Opportunity, the Trades and Labour Council of Western Australia and Western Australians for Racial Equality Inc from a decision of the State Administrative Tribunal granting exemptions to the first respondent and others pursuant to s 135 of the Equal Opportunity Act 1984 (WA). The appellants submitted that the appeal was 'public interest litigation' and the usual order as to costs should not be made. The court ordered the appellants to pay the respondents' costs of the appeal. The court said:
Although the primary issue ventilated in the appeal, being the construction of the Equal Opportunity Act, has a facet which could be characterised as giving rise to an issue which impacts upon the public interest, the proper interpretation of legislation of general application could almost always be characterised in the same way. In our opinion, the issue of statutory interpretation which was raised by the appellants was not special or out of the ordinary, nor unusually complex, difficult or important, nor did it have any characteristic which differentiates it from similar issues of statutory interpretation which are commonly raised in appeals [11].
In Roe, this court, by a majority (Martin CJ, Murphy JA; Buss JA dissenting), concluded that the court should depart from the usual order as to costs. In that case, the court dismissed two applications by the applicant challenging decisions by the Director General of the Department of Environment and Conservation to grant permits to Woodside Energy Ltd and to the Commissioner of Main Roads to clear native vegetation in the Kimberley region. The majority considered that, in combination, the following circumstances in those proceedings justified a departure from the usual order as to costs, namely: the protection of the environment was a matter of public interest; the proceedings assisted to clarify issues of importance under the Environmental Protection Act; the applicant had an arguable case; the applicant was asserting a public interest without prospect of personal gain or advantage; and there was a special relationship between Aboriginal people (of whom the applicant was one) and their land. No order as to costs was made.
It has been a usual, if not almost invariable, factor in cases where no order as to costs has been made against an unsuccessful plaintiff that the plaintiff did not seek to derive a private benefit from the action. It is not, however, the case that the absence of any private benefit will necessarily justify departing from the usual order as to costs. Nor, on the other hand, is it the case that the existence of some private benefit will necessarily preclude a finding that the court should depart from the usual order as to costs: see, for example, Darlington Resident's Association v Elarosa Investments Pty Ltd (No 3) (1992) 75 LGRA 214; and Qantas Airways Ltd v Cameron (No 3) (1996) 68 FCR 387. But the extent to which the public interest predominates over the private benefit, or vice versa, will inform the exercise of the discretion as to costs. Where the unsuccessful plaintiff stood to gain significant private benefit from the litigation, that will ordinarily weigh heavily against departing from the usual rule as to costs.
Thus, in Water Administration Ministerial Corporation v Mills [2000] NSWCA 194; (2009) 49 NSWLR 249, a landowner had applied to the Water Resources Commission under s 167 of the Water Act 1912 (NSW) for approval of a levee bank on the river abutting its property. Some adjacent owners objected to the levee bank on the ground that it would adversely affect their properties. Approval was given but the objectors successfully appealed to the Land and Environment Court against the approval. An appeal to the New South Wales Court of Appeal against the decision of the Land and Environment Court was upheld. In rejecting the objectors' submission that there should be no order as to the costs of the appeal, Mason P (with whom Meagher and Powell JJA agreed) said:
It is clear that this is a test case because we were told that several others await this decision. However, that factor is not determinative. … the proceedings … were brought by the objectors in their own interests and could not be characterised as public interest litigation. I think the costs should follow the event …
And in De Silva v Ruddock [1998] FCA 311, the unsuccessful plaintiff's contention there should be no order as to costs was rejected on the ground that, while an important legal question was involved, the action could not be characterized as being wholly or principally of a public interest character as it was brought for the individual benefit of the applicants, to enable them to remain in Australia, not for the benefit of the public or to enforce a public duty.
Similarly, in Geeveekay v Director of Consumer Affairs Victoria (No2) [2008] VSC 152, a submission by the unsuccessful applicant that there should be no order as to costs was rejected, the court concluding that while the appeal involved an important question of law - whether a terms contract for the sale of land was a credit contract regulated by the Consumer Credit (Victoria) Act 1995 (Vic) - the resolution of which was in the public interest, the appeal was brought by the applicant in pursuit of its own commercial interests. See also Hollier.
Against that background, we turn to the issues which arise on the appeal.
It is convenient to deal first with ground 4 of the grounds of appeal, relating to the second appellant. As mentioned earlier, the claim against the second appellant was dismissed by consent on the first day of trial, senior counsel for the respondents having informed the court, in substance, that the claim appeared to be based on a misunderstanding of the law and he did not consider it could succeed (ts 33 ‑ 34). The costs were reserved.
In the subsequent determination of the costs of the action it appears, however, that the position of the second appellant was overlooked. In her reasons for judgment on costs, the primary judge did not refer to the circumstances in which the claim against the second appellant was dismissed, her reasons dealing only with the respondents' claim against the first appellant. Nevertheless, the effect of her Honour's order was to deny the second appellant an order for costs against the respondents.
On the appeal, the respondents submitted that in light of the primary judge's wide discretion as to costs, this court should not interfere with her Honour's order so far as it related to the second appellant. That submission must be rejected. In circumstances where the claim against the second appellant was dismissed because the respondents conceded it could not succeed, there was no basis upon which it could be found that the usual order as to costs should not be made. Her Honour's order in relation to the costs of the claims against the second appellant was, with respect, unreasonable and plainly unjust.
It follows that ground 4 should be upheld and the order of the primary judge, so far as it relates to the second appellant, set aside. There should instead be an order that the respondents pay the second appellant's costs of the action, including any reserved costs, to be taxed.
Turning to the position of the first appellant, the primary judge found that the respondents' claim was brought primarily to establish a point or principle of law, rather than to obtain a private benefit [34]. In our respectful opinion, her Honour erred in so finding.
The motivation of the party bringing the litigation is to be assessed, not by reference to the party's subjective motivation, but by an objective assessment of the character of the proceedings: Oshlack [140]. On an objective assessment, the claim brought by the respondents was not, or at least was not primarily, brought to establish a point or principle of law but to obtain a private benefit by way of damages. To the extent that the claim had a public interest element as a 'test case', in our view that was well and truly outweighed by the respondents' private interests.
It is the case, as the primary judge pointed out, that the respondents sought declaratory relief. The declaration they sought, however, was simply that 'the [first appellant] was in breach of its obligations to the [respondents]'. That is, it was concerned only with the respondents' private rights. It was upon the basis of a finding of the alleged breaches of obligation that the respondents sought very substantial damages, including aggravated and exemplary damages. As mentioned earlier, the total amount claimed by the respondents by way of general damages was put by their counsel at a figure of $4,500,000. That, by any reasonable measure, was a very considerable private financial benefit. It was also clearly not a case in which the respondents were undertaking a burden of costs which was disproportionate to the relief sought.
Nor, in our respectful opinion, could the case properly be characterised as a 'test case', justifying a departure from the usual order as to costs, on the basis that some of the issues it raised were novel and the outcome of the case would (or may) clarify whether any fiduciary duties of the nature alleged were owed to other Aboriginal people who had been made wards of the State in similar circumstances and might therefore be of significance to such people contemplating a claim against the State.
As we have said, the fact that a point is novel and the decision will clarify the law for the benefit of others in the community is not, of itself, sufficient to establish circumstances that justify a departure from the usual order. It is not an unusual outcome of litigation in a common law system that others will benefit from any clarification of the law that a decision provides. In this case, the clarification of the law was a consequence of the outcome of litigation brought substantially to obtain a private benefit for the respondents. While the litigation did, as the primary judge noted, permit the exploration of the legal principles sought to be invoked in a wide range of different factual circumstances, that was simply an inevitable consequence of the substantial claims brought by the individual respondents. The consequential benefit of the litigation to others who may have undergone similar experiences does not, in our respectful opinion, provide an adequate reason to depart from the usual order as to costs.
We consider, with respect, that in exercising her discretion to make no order as to costs the primary judge erred. In our view, the circumstances of this case could not be considered to be of the 'rare and exceptional character' that might justify a departure from the usual order as to costs: Roe [13], and the cases there cited. The claim was brought primarily to advance the respondents' private interests. It raised some novel issues of importance to those Aboriginal people who had been made wards of the State in similar circumstances and their parents, but that did not sufficiently distinguish it from other litigation commonly before the courts that clarifies the law for the benefit of third parties. Moreover, as the primary judge pointed out, in other respects the claim sought to raise issues which were contrary to established authority - and, indeed, it ultimately failed on issues which were found to be contrary to established authority (see, for example, [1091], [1233]). So far as the first appellant was concerned, there was no suggestion that the litigation was of any benefit to it in the discharge of its functions. Plainly, however, it put the first appellant to considerable cost.
There were, in the circumstances, no proper grounds upon which it could be concluded that the usual order as to costs should not be made and her Honour's refusal to make an order for costs in favour of the first appellant was, with respect, unreasonable and plainly unjust. Her Honour should have ordered the respondents to pay the first appellant's costs of the action, including any reserved costs, to be taxed. We would uphold grounds 1, 3 and 5 of the grounds of appeal.
That leaves the questions of an extension of time within which to appeal, and leave to appeal pursuant to s 60(1)(e) of the Supreme Court Act.
We would grant an extension of time. The only delay was in respect of service of the appeal notice on some of the respondents, whom the appellants were unable to locate. Ultimately the appellants applied for and obtained an order for substituted service by publication of a notice in The West Australian newspaper. Service was effected by that means some three weeks after the expiry of the time for the filing and service of the appeal notice. There is no suggestion of any prejudice to the respondents by reason of the delay.
We would also grant leave to appeal. The appellants were, in our respectful view, entitled to an order for their costs of the trial and substantial injustice would be occasioned if they were to be deprived of it.
Conclusion
We would:
1.grant an extension of time within which to appeal;
2.grant leave to appeal;
3.allow the appeal;
4.set aside the orders of the primary judge; and
5.order that the respondents pay the appellants' costs of the action, including reserved costs, to be taxed.
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