Wood v Adelaide Resource Recovery Pty Ltd (No 2) - [2017] SASCFC 38

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
WOOD v ADELAIDE RESOURCE RECOVERY PTY LTD (No 2)
[2017] SASCFC 38
Judgment of The Full Court
(The Honourable Justice Blue, The Honourable Justice Lovell and The Honourable Justice Hinton)
1 May 2017
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - PARTIAL SUCCESS
Costs in appeal against a decision of a Judge of the Environment, Resources and Development Court.
The respondent was acquitted of two counts of contravening a condition of an environmental authorisation. On appeal, the appellant was partially successful. The acquittal on the first count was set aside and a finding of guilt was entered. The appeal against the acquittal on the second count was dismissed.
The appellant sought his costs of the appeal. The respondent submitted that the appellant was only partly successful on appeal and in consequence the Court should order that each party bear their own costs.
Held per the Court:
1. There is no reason to depart from the general rule that costs follow the event.
2. Costs should be reduced considering the count two acquittal was upheld and the appellant was unsuccessful on the second limb of the definition of waste.
3. The respondent to pay 85% of the appellant's costs of the appeal.
Environment Protection Act 1993 (SA) ss 3, 45; Supreme Court Act 1935 (SA) s 40; Supreme Court Civil Rules 2006 (SA) r 263, referred to.
Norbis v Norbis (1986) 161 CLR 513; Oshlack v Richmond River Council (1998) 193 CLR 72; Cretazzo v Lombardi (1975) 13 SASR 4; A, DC v Prince Alfred College Inc (No 2) [2016] SASCFC 27; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261; Latoudis v Casey (1990) 170 CLR 534; Mericka v Raathbone (2016) 125 SASR 563; Rasch Nominees Pty Ltd v Bartholomaeus [2013] SASCFC 105, considered.

WOOD v ADELAIDE RESOURCE RECOVERY PTY LTD (No 2)
[2017] SASCFC 38
Full Court: Blue, Lovell and Hinton JJ
THE COURT:

This is an application for costs made by the appellant consequent upon his having succeeded partially on an appeal against acquittals by the Environment, Resources and Development (ERD) Court of two counts of contravening a condition of an environmental authorisation contrary to s 45(5) of the Environment Protection Act 1993 (SA) (EPA).[1]
[1] Wood v Adelaide Resource Recovery Pty Ltd [2017] SASCFC 13.
In the principal judgment, the decisional history of the matter was summarised as follows:[2]
The environmental authorisation was a licence granted in June 2013 by the Authority to ARR to conduct a waste or recycling depot (the Licence). The Licence was subject to conditions that ARR only receive, process or store waste in the categories Construction and Demolition Waste (Mixed) and Commercial and Industrial Waste (General) within the enclosed undercover picking station or storage shed. The material the subject of both counts was contained in stockpiles outside those buildings.
The respondent pleaded not guilty. There were two issues at trial. First, was it proved beyond reasonable doubt that the material in the stockpiles had been derived from Construction and Demolition Waste (Mixed) (count 1) and Commercial and Industrial Waste (General) (count 2)? Secondly, had the material the subject of each count ceased to be waste fuel?
A Judge of the Environment Court concluded that the material in the stockpiles ceased to be waste because it had been subjected to processing and was now a product being refuse derived fuel. The Judge concluded that in any event the meaning of the terms “Construction and Demolition Waste (Mixed)” and “Commercial and Industrial Waste (General)” in the Licence was uncertain such that it could not be concluded that the material in the stockpile comprised either category of waste. The Judge refused an application by the prosecution to amend count 1 to allege that the material comprised “Construction and Demolition Waste (Mixed) or Commercial and Industrial Waste (General)” on the ground of duplicity.
[2] Wood v Adelaide Resource Recovery Pty Ltd [2017] SASCFC 13 at [3]-[5].
This Court allowed the appeal. It was ordered that the acquittal on count 1 be set aside and in its place there be substituted a finding of guilt. The acquittal on count 2 was not disturbed. The matter was remitted to the Environment Court for sentencing, including whether a conviction should be entered[3] and to deal with the question of the costs in the Environment Court.
[3] The respondent indicating that it wished to make submissions in support for the exercise of the powers conferred by sections 15 and 16 of the Criminal Law (Sentencing) Act 1988 (SA).
The power vested in this Court to award costs is contained in section 40 of the Supreme Court Act 1935 (SA) (the Act). Section 40(1) provides:
40—Power of court with regard to costs
(1)Subject to the express provisions of this Act, and to the rules of court, and to the express provisions of any other Act whenever passed, the costs of and incidental to all proceedings in the court, including the administration of estates and trusts, shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid.
Nothing express in the Act cuts down the breadth of the discretionary power contained in section 40 as it applies to these proceedings. With respect to the rules of court, rule 263 of the Supreme Court Civil Rules 2006 (SA) (the Rules) is applicable. That rule has been construed as identifying the general approach to awarding costs and specific exceptions to that approach.[4] It has not been construed as fettering the discretion invested by section 40 of the Act. Thus this Court possesses a broad discretion to award costs.
[4] Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors [2013] SASCFC 105 at [57] per Stanley J (with whom Gray and Sulan JJ agreed).
The breadth of the discretionary power to award costs was commented upon in Norbis v Norbis[5] by Mason and Deane JJ in relation to the analogous section 79 of the Family Law Act 1975 (Cth). Their Honours said:[6]
The point of preserving the width of the discretion which Parliament has created is that it maximizes the possibility of doing justice in every case. But the need for consistency in judicial adjudication, which is the antithesis of arbitrary and capricious decision-making, provides an important countervailing consideration supporting the giving of guidance by appellate courts, whether in the form of principles or guidelines.
[5] (1986) 161 CLR 513.
[6] Norbis v Norbis (1986) 161 CLR 513 at 519; see also Latoudis v Casey (1990) 170 CLR 534 at 541-2 per Mason CJ and 558 (Dawson J.
Consistency in approach is in no small part contributed to by the application of the rules of court. SCR 263(1) provides that as a general rule costs follow the event (the general rule). This reflects the fact that costs are compensatory in nature, awarded to indemnify the successful party against the expense to which it has been put by reason of the legal proceedings. It follows that the general rule is necessarily “a relevant consideration in any exercise of the discretion in relation to costs”.[7]
[7] Mericka v Rathbone (2016) 125 SASR 563 at [172] per Doyle J.
The general rule is underpinned in part by the notion of fairness.[8] Fairness, however, may provide reason to depart from the general rule in whole or in part. In Oshlack v Richmond River Council McHugh J provided examples of circumstances where a successful party engages in conduct that may disentitle it to the benefit of the general rule.[9] Fairness may also result in the successful party being disentitled to a portion of their costs in reflection of that party having failed in relation to a particular cause of action or discrete issue despite succeeding overall. This sort of situation was the subject of comment in Cretazzo v Lombardi where Bray CJ said:[10]
A successful party who has failed on certain issues may well not only be deprived of his own costs of those issues, but ordered in addition to pay his opponent's costs of them, and in this context "issue" does not mean a precise issue in the technical pleading sense, but any disputed question of fact or, in my view, of law: Foster v Farquhar, per Bowen L.J., as he then was, at p. 570. In fact in that case the plaintiff, who succeeded to a substantial extent, was deprived of his costs and ordered to pay the defendant's costs in relation to certain specific disputed items of special damage on which he failed. Moreover it has been held by the House of Lords that the support of an extravagant claim by fraudulent acts or evidence may be good cause for depriving a successful plaintiff of his costs: Huxley v West London Extension Railway Company.
(citations omitted).
[8] Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] per McHugh J.
[9] (1998) 193 CLR 72 at [69].
[10] (1975) 13 SASR 4 at 12; see also A, DC v Prince Alfred College Inc (No 2) [2016] SASCFC 27 at [5]-[12] per Kourakis CJ, Gray and Peek J; Jackson & Anor v Abram & Anor(No 2) [2016] SASCFC 36 at [3] per Peek, Stanley and Lovell JJ.
In such cases costs may be apportioned between the parties. Such apportionment is itself a matter of discretion where “[m]athematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation.”[11]
[11] Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272 per Gummow, French and Hill JJ.
The respondent submits that the appellant was only partly successful on appeal and in consequence this Court should order that each party bear its own costs of the appeal. In response the appellant submits that there is no reason that the general rule should not apply.
We reject the respondent’s contention that each party should bear its own costs. It does not reflect the reality of the forensic contest.
The appellant concedes that where a successful party makes arguments that are ultimately unsuccessful and which cause a significant increase in the length or cost of the proceedings, that party may be disentitled to all or part of its costs. However, he contends that in this case his failure with respect to count 2 did not cause a significant increase to the length or cost of the proceedings.
To succeed on appeal the appellant had to establish that the content of the stockpiles was waste within the meaning of subsection 3(1) of the Environment Protection Act 1993 (SA) (the EPA Act) and that the stockpiles contained Construction & Demolition Waste (Mixed) (count 1) and Commercial and Industrial Waste (General) (count 2). As to the first issue the appellant argued that the content of the stockpile was waste within the meaning of either limb of the definition of waste. He succeeded in relation to the first limb, but failed in his argument that the second limb of the definition picked up the definition of waste contained in the Environment Protection (Waste to Resources) Policy 2010.
The content of the stockpiles being waste, the next step was for the appellant to establish that such waste was Construction & Demolition Waste (Mixed) and Commercial and Industrial Waste (General). That involved a construction question as to what was Construction & Demolition Waste (Mixed) and Commercial and Industrial Waste (General) for the purpose of the respondent’s environmental authorisation and, in the light of the determination of that question, analysis of the evidence to determine whether it had been proved beyond reasonable doubt that the stockpiles did in fact contain Construction & Demolition Waste (Mixed) and Commercial and Industrial Waste (General).
We consider that the appellant’s failure on his contentions that the waste contained in the stockpiles was waste within the meaning of the second limb and that it had been proved beyond reasonable doubt that it contained Commercial and Industrial Waste (General) as alleged in count 2, warrants some adjustment to reflect the increase in the cost of conducting the appeal that it occasioned.
In the circumstances, we order that the respondent pay 85% of the appellant’s costs of the appeal.