The general rule in class 4 proceedings in the Land and Environment Court is that costs follow the event or, more colloquially, the losing party pays the winning party’s costs of the proceedings.   In limited circumstances the Court has power to order otherwise.  One of those circumstances relates to proceedings brought in the ‘public interest’.  In the recent decision of Millers Point Fund Incorporated v Lendlease (Millers Point) Pty Ltd (No 2) [2017] NSWLEC 29 the Court upheld a motion by the Applicant that, notwithstanding the Applicant lost on all grounds, the appropriate order was for each party to pay their own costs of the proceedings.  The judgment confirms the unique circumstances which must exist before such an order might be entertained by the Court.

Millers Point Fund Incorporated v Lendlease (Millers Point) Pty Ltd [2016] NSWLEC 166

The case related to an action brought by a non-profit organisation, known as the Millers Point Fund Incorporated, against the approval of the Crown Casino Hotel Resort in Barangaroo, Sydney, granted by the NSW Planning Assessment Commission (PAC) on 28 June 2016.

The Applicant sought declarations that the approval was invalid and of no effect, as the PAC had misconstrued its powers, duties and functions under the Environment Planning and Assessment Act 1979 (NSW) (EPA Act), and the effect of the Casino Control Act 1992 (NSW) on those powers, duties and functions.

The Court ultimately ruled that the Applicant had not made out any grounds of its challenge and, on that basis, dismissed the proceedings.  Following the delivery of the principal judgment, the Court invited the parties to make submissions on the issue of costs.

Millers Point Fund Incorporated v Lendlease (Millers Point) Pty Ltd (No 2) [2017] NSWLEC 29

The Applicant, by way of notice of motion, argued that the appropriate order should be that each party pay its own costs of the proceedings on the basis that its claim was properly characterised as public interest litigation.

The Court first reviewed the powers open to the Court make costs orders, including costs associated with public interest litigation, as generally set out in s98(1) of the Civil Procedure Act 2005 (NSW) and rule 42.1 of the Uniform Civil Procedures Rules 2005 (NSW) (UCPR). The Court then referred to rule 4.2(1) of the Land and Environment Court Rules (LEC Rules), which applies to proceedings in class 4 of the Court’s jurisdiction, which provides:

The Court may decide not to make an order for the payment of costs against an unsuccessful applicant in any proceedings if it is satisfied that the proceedings have been brought in the public interest.

The Court observed that the LEC Rules prevail over the UCPR.

In reviewing the Applicant’s claim, Justice Robson relied upon the three step approach formulated by Preston CJ in Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59, which may be summarised as follows:

  • whether the litigation can be characterised as having been brought in the public interest;
  • whether there is “something more” than a mere characterisation of the litigation as having been brought in the public interest; and
  • whether there are “countervailing circumstances” that speak against departure from the usual rule on costs.

What is public interest litigation?

The Court noted that, consistent with a consistent long line of authority, it is “in the interests of justice that members of the public have access to the courts to remedy or restrain breaches of public law”: Oshlack v Richmond River Shire Council (1994) 82 LGERA 236 at 238.

[22] … It is important, particularly for environmental matters, that cost is not a barrier in pursuing environmental justice and that important questions of law are able to be resolved by the Court. Rule 4.2(1) of the LEC Rules is reflective of this principle, and allows for applicants to bring significant issues of public interest to the Court.

The Court went on to acknowledge that the term ‘public interest’ is “a nebulous concept that is susceptible to competing interpretations. This is particularly apparent in the context of environmental law – where a development that requires clearing of land might be construed as being against the public interest on one hand because of the destruction of the natural environment, but in favour of the public interest on the other hand because of the jobs created by the development …”

Justice Robson thereafter applied the three step approach set out in Caroona Cole, to the case at hand.

Characterisation as public interest litigation

The Court found that there was clearly a public interest in preserving park area for recreation and enjoyment, as contrasted against a privately owned casino.  Moreover, while the Applicant was formed by representatives from the Millers Point area, the public park area – had it been preserved – would have been accessible to the general public.   In the circumstances the Court found that the proceedings concerned “a broad sector of community beyond local residents – extending to those working in and visiting what is envisaged to be a major Sydney landmark”.

The Court was also satisfied that:

  • the proceedings involved public law obligations, as “the primary issue in contention was whether the PAC, a statutory body, had properly exercised its powers under statute.”
  • the Applicant had no pecuniary interest in the outcome of the proceedings.

The Court concluded that the case was properly characterised as public interest litigation.

Circumstances in addition to mere characterisation

The Court then considered whether there was “something more” than a mere characterisation of the litigation as having been brought in the public interest. The Court was satisfied that there was “something more”.  The Court agreed with the Applicant’s submissions on the point.  Namely, the Applicant’s case involved a range of novel points:

  • the extent to which the Director-General (or Secretary’s) requirements are mandatory considerations;
  • the interpretation of the Casino Control Act 1992 (NSW);
  • contemporary interpretation as to the interplay between gaming/licensing and planning laws; and
  • the scope of s 75W of the EPA Act.

The Court summarised the Applicant’s case:

[31] The applicant raised four separate grounds in the Proceedings, which were each complex and involved sophisticated legal argument. The claim concerned complicated questions of statutory construction and required detailed consideration regarding the nature of statutory powers and administrative decision-making. The evidence relied upon was extensive, and reflective of the complexity of the claim…

The Court concluded that the claims made by the Applicant in the proceedings were established, arguable, and involved “novel legal issues which contributed to the proper understanding of the law”.

The Court further noted that the application “generated significant controversy and public interest”, being a matter that may be taken into account in identifying the “something more”: Justice Stein in Oshlack v Richmond River Shire Council (1994) 82 LGERA 236 at 245-246.

Countervailing considerations

The Court then considered the third step in the assessment process – whether there were “countervailing circumstances” that speak against departure from the usual rule on costs.

The Court succinctly noted that there was no evidence before the Court of any “countervailing circumstances which speak against departing from the usual rule on costs.”

The Court was satisfied that the Applicant had conducted the proceedings reasonably and with propriety, and that none of the members of the Applicant had sought to vindicate rights of a commercial character.

Findings

Having satisfied himself that the Applicant had satisfied the three step approach formulated by Chief Justice Preston in Caroona Coal, Justice Robson held that it was appropriate to exercise the discretion provided for under rule 4.2(1) of the LEC Rules to not make an order for the payment of costs against the Applicant, the effect of which was that each party was required to pay its own costs of the proceedings.

Comment

Public interest litigation is not for the feint hearted.  Passionate motives and strongly held beliefs are often involved.  The agitating party is typically an individual or non-profit incorporated community action group, with limited financial resources, dedicated to preserving some environmental feature. However, whatever the well intentioned motives of the individual or action group in commencing proceedings in the Land and Environment Court, proper regard must be had to the criteria established by the Court in connection with what may constitute public interest litigation and, importantly, whether “something more” is being put before the Court.

It is also instructive to note that, in the case of Millers Point Fund Incorporated, the well-heeled Respondent organisation made no submission or otherwise led evidence in response to the Applicant’s motion regarding costs.  It was a circumstance that the Court took “into account”.  The passive response on the part of the Respondent on the point may well have been tacit acknowledgement by the Respondent that the Applicant’s motion was supportable or, possibly, inevitable.  Alternatively, having successfully defended the highly publicised challenge, and cleared the Casino’s approval, the Respondent may simply have chosen a low key exit from the proceedings, not wanting to be seen as bullying the Applicant in pursuit of its costs.  Irrespective, one thing is certain, individuals and action groups considering commencing public interest litigation should not assume that their opponents will passively submit to an application by that party – to an unsuccessful public interest claim – that there be no order as to costs.