Land and Environment Court New South Wales

• Medium Neutral Citation: Parramatta Business Freedom Association Inc v Parramatta City Council (No 2) [2012] NSWLEC 176
• Hearing dates: 26 July 2012
• Decision date: 27 July 2012
• Jurisdiction: Class 4
• Before: Biscoe J

Decision

The respondent is to pay 75 per cent of the applicants' costs in both proceedings.

• Catchwords: COSTS - Class 4 proceedings - applicants successful - whether there should be departure from usual rule that costs follow the event by way of apportionment of costs.
• Legislation Cited: Civil Procedure Act 2005 s 98; Land and Environment Court Rules 2007 r 4.2; Uniform Civil Procedure Rules 2005 r 42.1; Smoking in Public Places Policy December 2011
• Cases Cited: Brown v Randwick City Council (No 2) [2012] NSWLEC 28; Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59, 173 LGERA 280; James v Surf Road Nominees Pty Ltd [No 2] [2005] NSWCA 296; Oshlack v Richmond River Council [1998] HCA 11, 193 CLR 72; Oshlack v Rous Water (No 3) [2012] NSWLEC 132; Parramatta Business Freedom Association Inc v Parramatta City Council [2012] NSWLEC 139
• Category: Costs
• Parties: 40385/12; Parramatta Business Freedom Association Inc (First Applicant); Armani at Parramatta Pty Ltd (Second Applicant); Parramatta City Council (Respondent); 40536/12; Armani at Parramatta Pty Ltd (Applicant); Parramatta City Council (Respondent)
• Representation: COUNSEL: Mr M Baird (Applicants); Ms K Richardson (Respondent); SOLICITORS: Barrak Lawyers (Applicants); Ashurst (Respondent)
• File Number(s): 40385/12, 40536/12

Judgment

1 In these two judicial review proceedings heard together, Parramatta Business Freedom Association Inc v Parramatta City Council [2012] NSWLEC 139, the applicants were successful in obtaining declarations that:

...conditions 3(b) and 7(e) of the Activity Approvals issued under the Local Government Act 1993 s 68 Part E in April 2012 for the period 1 May to 30 June 2012 to the businesses listed in the Amended Schedule A to the Further Amended Summons are invalid.

...

...condition 15 in the Notice of Approval to Use Footway for Restaurant Purposes issued under the Roads Act 1993 ss 125 and 126 in April 2012 for the period 1 May to 30 June 2012 to Armani Restaurant is invalid.

2 I am now dealing with costs.

3 The usual costs order in Class 4 proceedings such as these is that costs follow the event, such that a successful litigant receives its costs unless it appears to the court that some other order should be made: s 98 Civil Procedure Act 2005, r 42.1 Uniform Civil Procedure Rules 2005.

4 The applicants contend that, as they succeeded, the usual costs order should be made. Invoking apportionment of costs principles and other considerations, the Council contends that:

 

(a) there should be no costs order; or

(b) the Council should be ordered to pay not more than 25 per cent of the applicants' costs (excluding any costs in relation to eight affidavits served in the applicants' case); or

(c) each party should pay their own costs up to 30 May 2012 and thereafter the Council should pay the applicants' costs.

5 Something out of the ordinary in the case is required to justify departure from the general rule that costs follow the event. There may be something out of the ordinary under apportionment of costs principles where there are multiple issues and a successful party fails on an issue or group of issues that are discrete from those upon which it has succeeded. The apportionment principles are addressed in the leading NSW appellate case of James v Surf Road Nominees Pty Ltd [No 2] [2005] NSWCA 296 at [32] - [36] and in a number of decisions in this Court which were recently collected in Oshlack v Rous Water (No 3) [2012] NSWLEC 132 at [61] - [64] per Pepper J, to which I will add a reference to Brown v Randwick City Council (No 2) [2012] NSWLEC 28 at [10] - [11] per Preston CJ. Justice may require that litigants not be dissuaded from canvassing all material issues for fear of an adverse costs order. On the other hand, litigants should not be rewarded for the pursuit of issues without real merit. The mere fact that a successful applicant does not succeed on all issues is insufficient to depart from the usual rule. To justify departure, the issues on which the applicant failed need to be dominant, separate or discrete. In determining discreteness, it is relevant to consider whether the time taken on the issue can be identified or realistically estimated. It may also be relevant to consider whether the issues on which the applicant failed lacked real merit. Mathematical precision is illusory and the exercise of discretion will often depend on matters of impression and evaluation.

6 In my view, a departure from the usual order by way of some reduction in the costs awarded to the applicants is justified for the following reasons.

7 First, the applicants failed on four out of six distinct grounds of challenge, collectively these four comprised substantial issues in contest, and they were separable and discrete from the matters on which the applicants succeeded. Some did not take much time but Ground 1 in the Association proceedings loomed large. The applicants submit that the grounds of challenge were not discrete in that all the factual circumstances had to be put before the Court in order for the Court to consider all the issues. I agree that it was reasonable to put all the factual circumstances before the Court and I take that into account in determining the level of apportionment. Nonetheless, substantial time and costs were incurred in addressing unsuccessful discrete challenges arising from the facts. I take into account, as the applicants submit, that they did not act unreasonably in pursuing the challenges that failed.

8 The applicants submit that apportionment principles should not result in any departure from the usual costs order because the proceedings were brought in the public interest. In that regard, as the applicants submit, (a) some of the public engage in smoking; (b) the proceedings involved the first challenges of their type to a council's outdoor smoking ban; (c) the Association's representation is broader than being restricted to restaurants that have smoking; (d) there was a petition signed by 750 businesses in the Parramatta area and press coverage of the issue; (e) part of the Association's challenge was to the Smoking in Public Places Policy December 2011 which had been represented, contrary to the fact, as having been adopted by the Council; and (f) there were 75 restaurants with outdoor dining approvals that could be affected by the Association proceedings. On the other hand, the notorious health hazards of smoking make proceedings to overturn a ban on smoking in outdoor dining areas a weak candidate for characterisation as being in the public interest. Further, a strong reason for bringing the proceedings was to protect the commercial interests of the applicants or the Association's members as outdoor restaurateurs.

9 The applicants' public interest submission is novel and without authority. It proposes that the public interest purpose of litigation may be used as a sword by a successful applicant to obtain costs to which it otherwise would not be entitled under apportionment of costs principles or for other reasons. Environmental proceedings brought in the public interest may, and often do, provide a shield against costs if a public interest litigant is unsuccessful, although usually more has to be demonstrated than just the public interest aspect: Oshlack v Richmond River Council [1998] HCA 11, 193 CLR 72; r 4.2 of the Land and Environment Court Rules 2007; Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59, 173 LGERA 280. Given this costs shield regime, it is reasonable for a litigant to adduce evidence to show that the proceedings are brought in the public interest. The reasonable costs of such evidence should not be disallowed on costs awarded to a successful applicant. It may be that r 4.2 of this Court's rules does not necessarily spell out the metes and bounds of all the circumstances to which the Court may have regard when exercising its costs discretion under s 98 of the Civil Procedure Act and r 42.1 of the Uniform Civil Procedure Rules. However, in my opinion, public interest considerations should not result in an award of costs to a successful public interest litigant to which it is disentitled under apportionment principles or for other reasons, at least in the circumstances of this case. Accordingly, I do not accept the applicants' public interest submission.

10 The second reason why I think there should be a departure from the usual costs order is that the applicants failed to plead the central ground upon which they were successful (the sub-delegation ground), failed to raise that ground until 30 May 2012 (over a month after commencement of proceedings and five business days from commencement of the hearing), did not fully raise that ground until the first day of the hearing in a written opening handed to the Council at the hearing, and were not granted any of the relief expressly sought in their summonses although they otherwise pressed for the relief that was granted. Therefore, up until at least 30 May 2012, the proceedings as put forward by the applicants were ultimately unsuccessful. Had the points on which the applicants succeeded been squarely pleaded or raised in a more timely way, the Council would have had a fuller opportunity to consider them, the course of the proceedings thereafter may have been different, and the proceedings may have been shortened.

11 Thirdly, the eight affidavits prepared by the applicants were either not read, or partly or mostly rejected. To the extent that they were accepted, much of their contents went to background matters or undisputed facts or to Ground 1 of the Association's challenge on which the applicants failed. Nevertheless, much of what was accepted was relevant to the grounds on which the applicants succeeded.

12 I take into account in the applicants' favour when determining the measure of apportionment that costs may have been substantially reduced if the Council had conceded in a timely way that the Smoking in Public Places Policy December 2011 had not been adopted by the Council.

13 I have considered whether, as the applicants suggest, the Association proceedings and the Armani proceedings should be differentiated when considering the level of apportionment. On reflection, I think that they were so intertwined that they should be dealt with together for apportionment purposes.

14 In my opinion, for these reasons there should be an apportionment. Apportionment should not be assessed mathematically according to the number of grounds lost but in a broader, evaluative way.

15 The order of the Court is that the respondent is to pay 75 per cent of the applicants' costs in both proceedings. The exhibit may be returned.

Decision last updated: 30 July 2012