Yarra City Council v Metropolitan Fire and Emergency Services Board and Ors (according to the attached Schedule) [No 2]
[2017] VSCA 255
•20 September 2017
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2016 0025
| YARRA CITY COUNCIL | Appellant |
| v | |
| METROPOLITAN FIRE & EMERGENCY SERVICES BOARD & Ors (according to the attached Schedule) [No 2] | Respondents |
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| JUDGES: | WARREN CJ, TATE and OSBORN JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | Determined ‘on the papers’ |
| DATE OF JUDGMENT: | 20 September 2017 |
| MEDIUM NEUTRAL CITATION: | [2017] VSCA 255 |
| JUDGMENT APPEALED FROM: | [2015] VSC 773 (Riordan J) |
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COSTS – Multiple issues raised on appeal – Partial success on appeal – Whether successful party entitled to issues-based costs order – Marriner v Australian Super Developments Pty Ltd [2016] VSCA 141, discussed.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Written submissions | Lander & Rogers |
| For the First Respondent | Written submissions | Thomson Geer |
| For the Second Respondent | No appearance | Terrill & Holmes |
| For the Third Respondent | No appearance | Victorian Government Solicitor |
| For the Fourth Respondent | No appearance | HWL Ebsworth |
WARREN CJ
TATE JA
OSBORN JA:
On 26 July 2017, this Court granted Yarra City Council (‘Yarra’) leave to appeal from a decision of the trial judge that Yarra was liable to the Metropolitan Fire and Emergency Services Board (‘the MFESB’) for the costs it incurred with respect to compliance with clean up notices issued by the Environment Protection Authority (‘the EPA’).[1] This Court also allowed the appeal on a limited number of grounds but rejected many grounds, including a ground challenging liability.[2] The remaining question is what order for costs in the appeal should be made given the mixed disposition.
[1]Metropolitan Fire & Emergency Services Board v Yarra City Council [2015] VSC 773.
[2]Yarra City Council v Metropolitan Fire & Emergency Services Board [2017] VSCA 194 (‘appeal reasons’). This judgment assumes a familiarity with the appeal reasons.
The Environment Protection Act 1970 (‘the Act’) provides that a person who is obliged to comply with a clean up notice issued by the EPA can recover compensation for the costs of compliance from the person who caused the pollution. Compensation can also be sought from a person who appears to have abandoned industrial waste on the site identified in the clean up notice. This proceeding arose from a claim by the MFESB for compensation and damages for losses arising from the remediation of contamination of land situated at 450 Burnley Street, Richmond, Victoria. The compensation was sought against Yarra in its own right and as the successor in title to the City of Richmond (‘Richmond’).
The trial judge found that Yarra was liable to the MFESB under the Act in that Yarra was a person who caused or permitted the pollution to occur (s 62A(1)(b) of the Act) or, in the alternative, was a person who appears to have abandoned or dumped any industrial waste or potentially hazardous substance (s 62A(1)(c) of the Act). He declared, pursuant to s 62A(2) of the Act, that Yarra was liable to compensate the MFESB for any costs incurred by it that are reasonable and were incurred in good faith in complying with clean up notices issued to the MFESB by the EPA.
The grounds of appeal were various.[3]
[3]See appeal reasons [87].
Grounds 1–3 challenged the judge’s finding that the overriding effect of cl 18(b) of the Order in Council dated 22 June 1994 was that, in relation to the pollution caused by Richmond, Yarra was ‘the person described in subsection (1)(b)’ as referred to in s 62A(2) of the Act (‘the liability grounds’). On the appeal, Yarra failed on grounds 1–3 and the finding of the judge on liability was upheld.
Ground 4 challenged the judge’s finding that s 62A(2) of the Act did not apply retrospectively (‘the retrospectivity ground’). Yarra failed on ground 4 and this Court upheld the finding of the judge that s 62A(2) was not impermissibly retrospective.
Grounds 5–8 challenged the finding that Yarra appeared to have abandoned waste in accordance with s 62A(1)(c) of the Act (‘the abandonment grounds’). This Court allowed Yarra’s appeal in respect of those grounds.
Grounds 9–10 complained that the declaration of liability made by the judge was premature and inappropriate because it was made without the judge having first considered issues relevant to the exercise of his discretion as mandated by s 62A(2) of the Act (‘the discretion grounds’). The discretion grounds were upheld by this Court.[4]
[4]There were an additional three grounds, grounds 11–13 but it was accepted by the parties that these were umbrella grounds which did not need to be addressed separately.
This Court ultimately remitted the proceeding to the judge for the determination of remaining issues and, if appropriate, for the making of any consequential declaration or order informed by the Court’s reasons.
Yarra submits that the primary rule is that costs follow the event even where multiple issues have been raised and the successful party failed in establishing all its claims. It relies upon the observations of this Court in Marriner v Australian Super Developments Pty Ltd:[5]
It is a well-established principle that costs follow the event, that is, that the unsuccessful party is usually ordered to pay the successful party’s costs. This is so even if the successful party failed in establishing all its claims. However, where the successful party made multiple claims and failed in respect of some of them or pursued distinct issues upon which it achieved mixed success, in an appropriate case, the court can award that party only part of its costs or make an order that reflects the measure of success achieved by each party on the issues in dispute.[6]
[5][2016] VSCA 141 (‘Marriner’).
[6]Ibid [228] (citations omitted).
Yarra also relies on the remarks of this Court in Victoria v Master Builders’ Association of Victoria[7] about the ‘undesirability of a successful litigant being deprived of portion of its costs merely because it did not succeed on all of the grounds or issues which are canvassed in the hearing before the Court’.[8]
[7]Unreported, Supreme Court of Victoria, Appeal Division, Tadgell, Ormiston and Eames JJ, 15 December 1994.
[8]Ibid 7 (Eames J referring with approval to remarks of Jacobs J in Cretazzo v Lombardi (1975) 13 SASR 4, 16).
Yarra submits that it was ultimately the successful party on the appeal and that it should be awarded its costs of the application for leave to appeal and the appeal. It claims that it was the successful party because it has averted the judge’s finding of liability against it by having the declaration set aside and its success on the abandonment grounds is likely to be an important factor in the exercise of discretion by the judge on the remitter. It submits that its success on the appeal is demonstrated because the effect of this Court’s decision on the appeal is that:
(1) Yarra is not liable to MFESB in its own right, either at common law or on the basis that it was a person who ‘appears to have abandoned’ the waste pursuant to s 62A(1)(c) of the Act;
(2) The fact that Yarra is not liable to the MFESB in respect of Yarra’s own conduct is a factor to be taken into account when the judge exercises his discretion in making any declaration of liability;
(3) Yarra’s only remaining risk of liability to the MFESB is for the lawful conduct of Richmond between about 1916 and 1960 on the basis that it was a person ‘who has caused or permitted the pollution to occur’ pursuant to s 62A(1)(b) of the Act;
(4) The question of whether Yarra is liable to pay compensation to the MFESB by reason of Richmond’s conduct is yet to be determined;
(5) The judge must exercise his discretion mandated by s 62A(2) of the Act before making a determination on whether Yarra is to be held liable to the MFESB.
In response, the MFESB submits that the primary rule that costs follow the event should apply in its favour because Yarra, although partly successful on the appeal, was not successful in disturbing the judge’s primary finding that the MFESB is liable for the costs of compliance with the EPA’s clean up notices pursuant to s 62A(2) by reason of s 62A(1)(b). It submits that there is no suggestion that the costs have increased to a significant extent because of any of the issues upon which the MFESB failed. Moreover, it submits that the setting aside of the declaration made by the judge will have no material impact upon the balance of the proceeding as it was always envisaged that the parties would proceed to a subsequent hearing before the judge.
We agree. There is no doubt in our mind that the primary contention at contest in the appeal was the issue we have described as the liability grounds. This was the issue to which the bulk of the argument on the appeal was directed. The judge’s finding that Yarra is liable for the pollution caused by Richmond was critical for the determination in the proceeding below and on the appeal. Furthermore, Yarra failed completely on the retrospectivity grounds which, had they been successful, would have precluded Yarra being held liable for compensation to the MFESB.
We consider that the significance Yarra seeks to place upon the discretion grounds is misplaced. The declaration of liability was set aside because, in the circumstances, it was made prematurely. The proceeding at first instance was a limited one; both parties were aware that, if Yarra’s liability was established, there would be a need for the proceeding to return to the judge. It will now return to the judge for his Honour to consider all the relevant factors guiding his discretion before he determines whether a declaration is appropriate. A declaration of liability may still be made against Yarra’s interests; nothing that this Court has said would preclude that. In those circumstances, the setting aside of the declaration was not an unqualified success for Yarra. Moreover, the declaration was made in a context in which the judge initially sought to refrain from making an order and Yarra appeared to be acquiescing, or even consenting, to the order being made.[9]
[9]Appeal reasons [305].
The only substantial issue on which Yarra was successful was with respect to the abandonment grounds. The abandonment issue was no more than an alternative path towards establishing Yarra’s liability. Success on the abandonment grounds, although important enough to be taken into account on an award of costs, does not establish that Yarra was ‘the successful party’ in the sense described in Marriner, nor to attract the propositions endorsed in Marriner, given that the abandonment grounds were no more than an optional, and arguably subsidiary, basis upon which the liability of Yarra was sought to be made out.
We do not see either Yarra or the MFESB as the unqualified ‘successful party’ on the appeal. In our view, given the mixed success of the parties on the appeal, as well as the primacy of the liability grounds, we consider that an appropriate award is for Yarra to pay 60 per cent of the MFESB’s costs of the appeal. As the application for leave to appeal was heard at the same time as the appeal, and the duration of that hearing was a single day, we see no reason to distinguish between them for the purposes of an award of costs.
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SCHEDULE
YARRA CITY COUNCIL
Appellant
and
METROPOLITAN FIRE & EMERGENCY SERVICES BOARD
First Respondent
CONNOLLY ENVIRONMENTAL (AUST) PTY LTD (ACN 085 671 236)
Second Respondent
THE STATE OF VICTORIA
Third Respondent
GHD PTY LTD (ACN 008 488 373)
Fourth Respondent
0
3
0