Land and Environment Court New South Wales

• Medium Neutral Citation: Friends of Turramurra Inc v Minister for Planning (No 2) [2011] NSWLEC 170
• Hearing dates: Written submissions (25 August 2011, 6 September 2011 and 14 September 2011)
• Decision date: 29 September 2011
• Jurisdiction: Class 4
• Before: Craig J

Decision

1. The first respondent is to pay 50 percent of the applicant's costs of the proceedings.

2. Each party should pay its own costs of the applicant's notice of motion filed on 4 August 2011.

• Catchwords: COSTS - discretion to award costs pursuant to r 42.1 of the Uniform Civil Procedure Rules - whether costs should be apportioned - applicant succeeded on two of the six grounds of challenge argued - foundation of unsuccessful grounds separable from those that founded the successful grounds - costs apportioned without applying "mathematical precision" - whether apportionment should be adjusted on the basis of "public interest" - proceeding did not satisfy the requisite tests for public interest - no public interest adjustment made
• Legislation Cited: Civil Procedure Act 2005; Environmental Planning and Assessment Act 1979; Ku-ring-gai Local Environmental Plan (Town Centres) 2010; Uniform Civil Procedure Rules 2005
• Cases Cited: Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59; (2010) 173 LGERA 280; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261; F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 5) [2008] NSWLEC 235; Friends of Turramurra Inc v Minister for Planning [2011] NSWLEC 128; Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA 157; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296; Minister for Planning v Walker (No 2) [2008] NSWCA 334; Wilderness Society Inc v Minister for Environment and Water Sources [2008] FCAFC 19; (2008) 157 LGERA 413
• Category: Costs
• Parties: Friends of Turramurra Inc (Applicant); Minister For Planning (First Respondent); Ku-ring-gai Planning Panel (Second Respondent)
• Representation: COUNSEL; Mr R White (Applicant); Mr J Hutton (Respondents); SOLICITORS; Environmental Defender's Office (Applicant); Department of Planning (Respondents)
• File Number(s): 40672 of 2010

Judgment

1 On 28 July last I made an order declaring that Ku-ring-gai Local Environmental Plan (Town Centres) 2010 ( the Centres LEP ) had been made contrary to the provisions of Div 4 of Pt 3 of the Environmental Planning and Assessment Act 1979 ( the EPA Act ) ( Friends of Turramurra Inc v Minister for Planning [2011] NSWLEC 128). At the time of delivering judgment and granting declaratory relief, I reserved the question of costs.

2 The successful applicant now applies by motion for an order that the respondent Minister pay its costs of the proceedings. The Minister opposes the making of that order. Each party has filed written submissions as to the order that should be made. Each of them has agreed that the question should be resolved by reference to those written submissions without the necessity for a further hearing.

Background

3 The Centres LEP was made by the Minister on 25 May 2010. It imposed new land use controls upon development in and surrounding six suburban centres within the Ku-ring-gai local government area. The preparation and processing of the Centres LEP as a draft had been undertaken pursuant to Pt 3 of the EPA Act by the second respondent to the proceedings, the Ku-ring-gai Planning Panel ( the Panel ), appointed by the Minister pursuant to s 118(1)(b) of the EPA Act.

4 The applicant challenged the validity of the Centres LEP on six grounds. It was successful on two of those grounds, identified in the principal judgment as grounds (iii) and (vi). In substance, those grounds had a common jurisprudential foundation. The instrument was not made conformably with the provisions of Div 4 of Pt 3 of the EPA Act by reason of the extensive amendments made first by the Panel and then by the Minister to the publicly notified form of the draft instrument. Those amendments were significant in their effect. It was the failure to publicly notify the amended draft that founded my determination in favour of the applicants.

5 The remaining four grounds of invalidity argued by the applicant and upon which it was unsuccessful were discrete from those grounds upon which it succeeded. Indeed, these four grounds were discrete from each other. They each had a separate statutory foundation within the EPA Act and each involved substantially different factual considerations.

6 The applicant's notice of motion for costs is supported by an affidavit sworn by Mr Alan Parr, the president of the applicant. No objection was taken to this evidence by the Minister. The applicant is an incorporated association. On its behalf, the evidence of Mr Parr is to the following effect:

(i) the association was initially formed by residents in response to community concerns for land rezoning proposals then being contemplated by Ku-ring-gai Council ( the Council );

(ii) the objects of the association are to raise awareness of issues affecting residents and businesses arising from planning decisions pertaining to the area;

(iii) all members of the association are volunteers;

(iv) most of the association's active members reside outside the areas that were the subject of the Centres LEP;

(v) the association was closely involved in the process leading to the making of the Centres LEP, including the preparation of submissions both to the Council and to the Panel, addressing meetings of the Panel and dissemination of information to the Ku-ring-gai community concerning the preparation of the draft instrument;

(vi) it brought the proceedings to ensure that the process of plan making, particularly public participation in that process, accorded with the requirements of the EPA Act;

(vii) the members of the association derived no personal gain from the litigation; and

(viii) the association has incurred legal fees for the conduct of this litigation pursuant to costs agreements it had signed with the legal representatives acting for it and therefore it seeks to recover those fees.

The submissions of the parties

7 For its part, the applicant submits that it was wholly successful in obtaining the order that it sought in the summons commencing these proceedings. While acknowledging the broad discretion afforded to the Court by s 98(1) of the Civil Procedure Act 2005, it relies upon the provisions of Pt 42, r 42.1 of the Uniform Civil Procedure Rules ( UCPR ) as supporting the proposition that costs should follow the event of its success in obtaining the relief sought.

8 Recognising that it had not succeeded on a number of the grounds relied upon to support its claim for invalidity of the Centres LEP, the applicant addressed the question as to whether some apportionment of costs should be made. In essence, its submissions were:

(i) there were no separate claims for different relief from that upon which it succeeded;

(ii) the grounds upon which it succeeded were those that occupied "the majority" of time both in pleadings and in the hearing of the case;

(iii) a party should not be dissuaded by the risk of costs from canvassing all issues that might be material to the decision made;

(iv) there was some overlap between or among grounds of challenge with the result that if any apportionment is to be made, it should not be undertaken on a grounds won and lost basis;

(v) in determining whether to apportion costs, it is relevant to notice that the present proceedings were brought in the public interest; and

(vi) any apportionment "is a matter of judgment or impression; it is not susceptible to precise calculation" ( Wilderness Society Inc v Minister for Environment and Water Sources [2008] FCAFC 19; (2008) 157 LGERA 413 at [13]).

While contending for its primary position that an unqualified order for costs should be made in its favour, the applicant submitted, in the alternative, that an appropriate apportionment would be an order requiring the Minister to pay 75 percent of the applicant's costs.

9 For his part, the Minister submits that the appropriate order to be made is that each party bear its own costs. He submits that this is a case where it is appropriate to deprive a successful party of the costs to which it would, in other circumstances, be entitled. Acknowledging the success of the applicant in the result that it obtained, emphasis is placed upon the Minister's success in four of the six issues that were argued.

10 In relation to those issues upon which the applicants were unsuccessful, the Minister contends that they were the "most time-consuming and resource-intensive issues" debated. Appropriate recognition ought be given to that fact when exercising the costs discretions. In particular, the Minister points to the fact that all of the affidavit evidence filed in the proceedings was directed to issues upon which the applicant did not succeed while the detailed written submissions prepared by the parties also involved extensive consideration of the issues upon which the Minister's submissions succeeded. It is also pointed out that a further ground of challenge was pleaded; that ground was the subject of written submissions filed with the Court in accordance with directions given in that regard but was abandoned shortly before the hearing commenced.

11 Further, the Minister takes issue with the applicant's submission that the claimed public interest in bringing the proceedings is a factor bearing upon the appropriate order for costs. He relies upon observations made by members of the Court of Appeal in Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA 157. The Minister submits that while "there may have been an element of the public interest in the applicant's challenge," looking beyond the applicant's name and professed aims, it was truly a local interest group whose real aim was to preserve local amenity that would otherwise be lost by higher density development ( Hastings Point Progress Association Inc v Tweed Shire Council at [7] and [33]). Moreover, even accepting that members of the applicant association did not gain personally from the proceedings, the litigation was directed to "local concerns" rather than issues of "public interest" for the broader community.

12 Finally, the Minister submitted that if costs to be paid by the Minister are apportioned, then it should be done by fixing a percentage rather than by reference to particular issues. In this respect, both parties are in agreement.

Costs should be apportioned

13 The applicant correctly identified the provisions of s 98(1) of the Civil Procedure Act and UCPR 42.1 as the focus for consideration of the order that it seeks. The provisions of the rule need to be noticed:

" 42.1 General rule that costs follow the event

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs."

14 The fact that the applicant was successful in obtaining the relief that it sought is significant in determining the order that should be made. It is the essential premise of the rule. However, the qualification expressed in the rule itself allows for the displacement of its "prima facie effect". It has been said that something "out of the ordinary in the case" is required to justify departure from the general rule that costs follow the event (per Young JA, McColl JA agreeing in Hastings Point Progress Association v Tweed Shire Council at [18]).

15 One set of circumstances in which events "out of the ordinary" may be found to exist are those where multiple issues are involved and the successful party fails on an issue or group of issues that are separable from those upon which it succeeded. Such a consequence may lead to the successful party receiving only a proportion of the costs to which it would otherwise be entitled.

16 The principles by which it may be determined that a proportion only of costs should be paid to a successful party in circumstances where it has been unsuccessful on an issue or issues were, with respect, helpfully summarised by Biscoe J in F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 5) [2008] NSWLEC 235. I do not repeat all that his Honour there said but respectfully adopt his Honour's summary.

17 In formulating the relevant principles, substantial reliance was placed by Biscoe J upon the decision of the Court of Appeal in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296. In that case, after identifying the discretion to make an apportionment order in cases where the successful party has not succeeded on a number of issues raised by it, the Court said, (at [34]):

"Where a matter involves multiple issues and the question before the court is whether it should make some other order as to costs other than the order that costs follow the event, a distinction is commonly drawn between cases which involve clearly discrete issues for determination, and those in which all issues are inseparable, or at least sufficiently linked, with respect to the overall disposition of a particular matter. In Permanent Trustee Aust Ltd v FAI General Insurance Co Ltd (unreported, NSWSC, 3 June 1998), Hodgson CJ in Eq noted that the obvious examples of a matter involving discrete issues is one where a plaintiff makes separate claims for different relief, or a claim by a plaintiff and a cross-claim by a defendant. Another example is where a respondent is successful in having an appeal against an earlier decision dismissed, but for reasons other than those raised in the respondent's Notice of Contention. This is not to say that so-called 'discrete issues', for the purposes of apportioning costs, only exist in cases where there are separate claims made within a single matter. As Toohey J stated in the passage quoted at [33] above, it can relate to ' any disputed question of fact or law ' before a Court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter."

18 The present case was not one in which all issues were inseparable. Those issues upon which the applicant did not succeed were directed to different aspects of the statutory process leading to the making of the Centres LEP from those aspects upon which the applicant succeeded. The issues upon which it did not succeed raised for specific consideration the provisions of ss 65, 66 and 69 of the EPA Act. As I have already indicated, the factual material founding those claimed breaches, particularly those directed to ss 65 and 66, had no direct bearing upon the successful basis of claim founded in ss 68 and 70. Nonetheless, those issues upon which the applicant did not succeed were the subject of substantial debate between the parties.

19 The hearing of the proceedings extended over five days. The documentary evidence tendered was voluminous. A significant proportion of it was directed to issues upon which the applicant did not succeed. Equally, both the written and oral submissions of the parties reflected considerable effort in addressing both the facts and law referable to all issues. It certainly could not be said that the two issues upon which the applicant succeeded were, in any sense, the predominant focus of either the evidence or submissions made by the parties.

20 In these circumstances, it seems to me that the appropriate exercise of discretion requires an apportionment of the costs to which the applicant would otherwise be entitled. In so concluding, it is apparent that I do not accept the Minister's submission that each party should pay its own costs. Having succeeded upon two of the issues that it agitated, it would not be appropriate to deny the applicant an order for payment of some part of its costs. The qualification to the "general rule" expressed in UCPR 42.1 would not, in the circumstances of this case, extend to denying the applicant an entitlement to recoup some part of the costs it has incurred in successfully prosecuting its proceedings.

21 As was observed by Gummow, French and Hill JJ in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261, where the outcome of proceedings is mixed, "the question of apportionment is very much a matter of discretion for the trial judge." Their Honours also said at [29]:

"Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation."

That dictum informs the exercise of discretion in the present case.

22 As the applicant acknowledged, observations to similar effect were expressed by the Full Court of the Federal Court of Australia in Wilderness Society Inc v Minister for Environment and Water Resources . I have earlier recorded at [8] the relevant observations of their Honours in that case.

23 I have considered the respective submissions of the parties as to the extent to which the evidence and submissions directed to issues upon which the applicant did not succeed should influence any apportionment of costs that I make. While I do not place great store on a numerical comparison between issues upon which the applicant succeeded and those upon which it did not, I think the significance of issues falling into the latter category are important.

24 My judgment in the principal proceedings reflects the fact that two of the issues upon which the applicant did not succeed, namely invalidity based on ss 65 and 66 of the EPA Act, were significant in the extent of both evidence and argument directed to them. In particular, the claimed breach of s 66 involved the tender and consideration of a considerable volume of documentary evidence, including some in electronic form, as well as consideration of four of the five affidavits that were read in the proceedings. Breach of s 66 was alleged on a number of bases, all of which were required to be addressed.

25 My impression is that the Minister is correct in submitting that these issues were time-consuming and resource-intensive in the context of the hearing before me, and, no doubt, in the preparation for it. Whether, as the Minister submitted, they were "the most" time-consuming and resource-intensive issues agitated in the proceedings need not be determined on a time-count basis. However, it is fair to observe that the time occupied in addressing the evidence and alternative arguments directed to them accounted for a significant portion of the overall hearing time.

26 It is also correct to observe, as the Minister submitted, that submissions provided to the Court in advance of the hearing indicated a deployment of resources on both sides to an issue that was ultimately abandoned very shortly prior to the commencement of hearing. The Minister ought not be burdened by paying costs of the applicant in respect of that abandoned issue.

27 I accept the submissions of the parties that in determining an apportionment of costs, it is inappropriate, in the circumstance of this case, to attempt that exercise on the basis of issues won or lost. Rather, it is appropriate to determine an overall proportion.

28 Applying the principles that I have discussed and without pretence of mathematical precision, I consider an appropriate apportionment would be to require the Minister to pay 50 percent of the applicant's costs. However, in light of the applicant's submission that its position as a "public interest" litigant is relevant to the determination, it is necessary to consider whether any adjustment should be made to my apportionment on that account.

A "public interest" adjustment?

29 The usual circumstance in which particular consideration is given to a public interest litigant in the context of a costs order is where that litigant is unsuccessful in the proceedings that he, she or it has instituted. The discretion open to this Court in that circumstance is given recognition by Land and Environment Court Rule Pt 4, r 4.2. That rule applies, in terms, to the situation where an applicant has unsuccessfully pursued proceedings said to have been brought in the "public interest".

30 No case was cited before me to support the proposition that a successful litigant who has brought proceedings in the public interest should be entitled to receive special consideration on that account where it would otherwise be appropriate to order that only a proportion of costs be payable. My researches have not revealed the existence of such a case. The logic of such an approach to the exercise of the discretion is not apparent to me. However, I will assume, without deciding, that the "reverse logic" sought to be applied by the applicant is appropriate to determination of the present question.

31 The principles to be applied when exercising the costs discretion in public interest litigation have been summarised by Preston CJ in Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59; (2010) 173 LGERA 280. There, his Honour formulated a three step approach. At [13] his Honour determined that the first step was to determine whether the litigation could properly be categorised as having been brought in the public interest. Assuming the first step is concluded in favour of the litigant, the second step is to determine whether "something more" than characterisation of the litigation as being brought in the public interest is present. The third step is to consider whether there are any countervailing circumstances that speak against departure from the usual costs rule.

32 It may be accepted that the applicant, as an incorporated association, has no particular commercial or financial interest in the outcome of the proceedings and, in a sense, sought to bring the proceedings to agitate the importance of public participation in the making of local environmental plans under Pt 3 of the EPA Act. While it was said that a majority of members of the applicant association resided outside the areas that were the subject of controls imposed by the Centres LEP, the evidence leaves open the inference that at least some may have had less than an altruistic interest in preserving the status quo (cf Hastings Point Progress Association v Tweed Shire Council at [33]). Nonetheless, it would appear that the public interest was served by the litigation; enforcement of public law obligations was its purpose and no pecuniary interest in the outcome of the proceedings has been demonstrated ( Minister for Planning v Walker (No 2) [2008] NSWCA 334 at [6]). I will therefore assume that this litigation can be characterised as having been brought in the public interest.

33 The problem for the applicant, so it seems to me, is to demonstrate "something more", as the authorities require, in order to apply the special discretionary considerations in favour of a public interest litigant. While the evidence was, as I have already said, voluminous and the issues factually complex, no novel issue of law arose for determination. The legal principles applicable to the determination of each of the issues raised by the applicant were well settled. It was the application of those principles to the particular factual circumstances that gave rise to some complexity.

34 However, this circumstance does not, to my mind, identify the "something more" that is required. While the litigation was undoubtedly important to a section of the community residing in the Ku-ring-gai local government area (the total membership of the applicant not being disclosed in the applicant's evidence), no novel issues of general importance were agitated. As a consequence, even if the discretion being exercised was analogous to that applicable to consideration of LECR 4.2 or that applicable to the exercise of discretion generally, the present circumstances would not provide a sound basis upon which to deviate from the general rule.

35 In summary, there is no sound basis upon which to alter the initial decision that I reached as to the appropriate proportion of costs to which the applicant is entitled.

36 Neither party has been successful in obtaining the order for costs for which they respectively contended. In those circumstances, it is appropriate that there be no order for costs in respect of the present notice of motion.

Orders

37 For the reasons given, I make the following orders:

1. The first respondent is to pay 50 percent of the applicant's costs of the proceedings.

2. Each party should pay its own costs of the applicant's notice of motion filed on 4 August 2011.

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Decision last updated: 29 September 2011