FEDERAL COURT OF AUSTRALIA Muldoon v Melbourne City Council [2014] FCA 63 Citation: Muldoon v Melbourne City Council [2014] FCA 63 Parties: JAMES MULDOON and SARA LOUISE KERRISON v MELBOURNE CITY COUNCIL, KEN LAY CHIEF COMMISSIONER OF POLICE and STATE OF VICTORIA File number: VID 1224 of 2011 Judge: NORTH J Date of judgment: 12 February 2014 Catchwords: COSTS – court's discretion to award costs – whether special circumstances exist to justify departure from normal course that successful party awarded costs – reasonableness of pursuing of the action after the decisions in Wotton v Queensland (2012) 246 CLR and Attorney-General (SA) v Corporation of the City of Adelaide (2013) 295 ALR 197 – whether applicants' reasonableness in pursuing action in light of current authorities relevant to the question of costs – no clear support for applicants' case prior to the decision in Attorney-General (SA) v Corporation of the City of Adelaide (2013) 295 ALR 197 – applicants to pay 80 per cent of the first respondent's costs – whether challenge to local laws and regulations was in public interest – public interest in the litigation ceased at the time of the decision in Attorney-General (SA) v Corporation of the City of Adelaide (2013) 295 ALR 197 – not in the public interest to join the second respondent to the proceedings – applicants to pay costs of the second respondent Cases cited: Attorney-General (SA) v Corporation of the City of Adelaide (2013) 295 ALR 197; [2013] HCA 3 Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334 Wotton v Queensland (2012) 246 CLR 1 Date of hearing: Orders made on the papers Date of last submissions: 19 November 2013 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 21 Counsel for the Applicants: Mr R Merkel QC with Mr E Nekvapil and Mr N Wood Solicitor for the Applicants: Fitzroy Legal Service Inc Counsel for the First Respondent: Mr R Niall with Mr R Attiwill Solicitor for the First Respondent: Hunt & Hunt Lawyers Counsel for the Second and Third Respondents: Mr O P Holdenson QC with Mr R I Gipp Solicitor for the Second and Third Respondents: Victorian Government Solicitor IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 1224 of 2011 BETWEEN: JAMES MULDOON First Applicant SARA LOUISE KERRISON Second Applicant AND: MELBOURNE CITY COUNCIL First Respondent KEN LAY CHIEF COMMISSIONER OF POLICE Second Respondent STATE OF VICTORIA Third Respondent JUDGE: NORTH J DATE OF ORDER: 12 february 2014 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The applicants pay 80 per cent of the costs of the first respondent. 2. The applicants pay the costs of the second respondent. 3. There be no order as to costs as between the applicants and the third respondents and the intervener, the Attorney-General for the State of Victoria. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 1224 of 2011 BETWEEN: JAMES MULDOON First Applicant SARA LOUISE KERRISON Second Applicant AND: MELBOURNE CITY COUNCIL First Respondent KEN LAY CHIEF COMMISSIONER OF POLICE Second Respondent STATE OF VICTORIA Third Respondent JUDGE: NORTH J DATE: 12 february 2014 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 On 1 October 2013, judgment was delivered in this proceeding and the question of costs was reserved. Pursuant to directions made by the Court the parties filed written submissions on the question of costs, and agreed that the issue should be determined on the basis of those submissions without any further oral argument. 2 These reasons for judgment address the issues of costs raised in those submissions. The definitions used in the judgment delivered on 1 October 2013 are also used in these reasons. No claims for costs are made by or against the third respondent, the State of Victoria, or the intervener, the Attorney-General for the State of Victoria. 3 There is no dispute about the principles to be applied. The Court has a wide discretion in ordering the payment of costs. Normally costs follow the event so that the successful party receives its costs in the absence of special circumstances justifying a departure from that approach. It may be reasonable in some cases that a successful party bear its own costs for issues on which it failed, and even pay the costs of the party which was successful on those issues. The contention between the applicants and the Council and the Chief Commissioner arises from the operation of these well accepted principles. costs as between the applicants and the council The Submissions 4 The Council seeks an order that the applicants pay 90 per cent of its costs. It contended that the central claim of the applicants was that the regulations and the local law were invalid because they infringed the Constitutional freedom of political communication and the Charter. The applicants were not successful on these grounds. The second applicant succeeded only in relation to three notices to comply issued to her under reg 4.6. Her success was on a narrow judicial review ground which did not involve any construction or validity argument. The Council was successful in defending the central arguments about validity of the notices to comply. The Council contented that a reduction of 10 per cent of the Council's costs payable by the applicants is the fairest way of reflecting the outcome of the case. 5 The applicants contend that the Council should pay their costs, perhaps reduced by 20 per cent to reflect the fact that their case in respect of the regulations and the enforcement at the Flagstaff Gardens protest failed. The applicants claimed that, overall, they were the successful parties. Their claim was that the Council acted unlawfully. That claim was vindicated by the declarations invalidating the three notices to comply issued against the second applicant. The applicants argued that the notices were as invalid on the grounds established as they would have been if the other challenges had succeeded. They also submitted that the judgment had the practical, although not legal, effect of invalidating the other notices to comply challenged in the proceeding. Further, they said that there was a significant overlap between the issues on which they succeeded and those on which they did not. The applicants also observed that they succeeded on the issue of jurisdiction, and on establishing that the first limb of the Lange test had been satisfied. 6 A more unusual issue arose from the timing of the judgment of the High Court in Attorney-General (SA) v Corporation of the City of Adelaide (2013) 295 ALR 197; [2013] HCA 3 (Adelaide Corporation). At the time of the trial of the action, the judgment of the Supreme Court of South Australia in Corporation of the City of Adelaide v Corneloup (2011) 110 SASR 334; [2011] SASCFC 84 (Corneloup) had been delivered. It provided some support for the applicants' case. That support was removed when the High Court allowed the appeal brought against the successful party in those proceedings. Further written submissions were filed in this proceeding, and further oral submissions made, to address the reasoning in Adelaide Corporation. Consideration 7 Both the applicants and the Council emphasised the extent of their success. The submission of the Council that the primary attack made by the applicants on the regulations and local law failed should be accepted. The success of the second applicant in relation to the three notices to comply was a very minor victory in the scheme of the litigation. It has no real significance for the regulation of political protests generally, that being the issue which the applicants primarily sought to agitate in the action. The construction of reg 4.6, under which the notices were issued, was determined in favour of the Council. The basis on which the three notices to comply were invalidated was limited and arose from the cross-examination of Mr Schwarz. The cross examination revealed that he, and, as a result, his officers, had not acted on the construction which the Council advocated in the proceeding. The successful point was not a ground pleaded by the applicants or, one might conclude, anticipated before the evidence was given. 8 At the same time, the Council's submission cannot be wholly accepted as it does not give sufficient emphasis to its failure on the jurisdiction argument. This argument took a significant amount of time to argue in the oral submissions. 9 A more difficult issue is the significance of the timing of the High Court judgment in Adelaide Corporation. The Council submitted that whether the applicants acted reasonably in pursing the litigation in light of the authorities at the time when they commenced the action is not relevant to the issue of costs. Even if it were relevant, the Council argued, Wotton v Queensland (2002) 246 CLR 1;[2012] HCA 2 (Wotton) had been decided before the trial commenced, and that judgment stood in the way of the applicants' success even before Adelaide Corporation was decided. 10 If, immediately before the trial of the proceeding, there was High Court authority which assured the applicant of success and the High Court reversed that authority in the course of the trial, there might be a basis for awarding costs to an unsuccessful applicant. But, the situation prior to the trial in this case was not so clear cut. The judgment in Wotton meant that the applicants were at significant risk even before Adelaide Corporation was decided. 11 The Council should be regarded as the successful party, save for some allowance for the applicants' success on the jurisdictional argument and the second applicant's minor victory in respect of the three notices to comply. 12 In the end, the Council should receive most of its costs. The reduction of only 10 per cent proposed by the Council to reflect the limited success of the applicants is somewhat too low. A more accurate reflection of the relative success of the parties would be to reduce the Council's costs payable by the applicants by 20 per cent. costs as between the applicants and the chief commissioner The Submissions 13 The applicants argued that there should be no order for costs in favour of the Chief Commissioner. They relied on the same issue of the timing of the High Court judgment in Adelaide Corporation as they had submitted in the argument for costs against the Council. 14 In addition, they contended that the challenge to the local law and the regulations was public interest litigation. The applicants stood to gain no personal benefit from the litigation, but took action to vindicate the right to protest in public places in Melbourne. The applicants then submitted that if they should be ordered to pay any costs to the Chief Commissioner then those costs should be limited to 20 per cent of his costs. 15 The Chief Commissioner argued that the initial claims made against the Victorian Police assumed that they were involved in enforcing the local law and regulations which, the applicants contended, were invalid. This claim was abandoned by the applicants at the start of the trial and replaced with a challenge to the exercise of the power of the arrest. However, the challenge to the exercise of that power depended on the applicants succeeding in the challenges to the validity of the regulations and the local law. It was sufficient in the public interest to agitate that issue without joining the Chief Commissioner. 16 Further, the Chief Commissioner argued, to the extent that the applicants abandoned their original case against the Chief Commissioner at the start of the trial, they should pay the costs of the Chief Commissioner. Consideration 17 The original claim against the Chief Commissioner was misconceived. Consequently, the applicants should pay the Chief Commissioner's costs until the start of the trial when the claim was amended. 18 The applicants' claim against the Chief Commissioner at the trial rested on the validity of the regulations and the local law. There was at that point – prior to the High Court's judgment in Adelaide Corporation – some public interest in bringing litigation to determine the effect of the judgment in Corneloup on the reasoning in Wotton. However, the point of public interest would be determined in the claims against the Council and the State of Victoria. It was not necessary for the public interest purpose to proceed against the Chief Commissioner. Thus, the applicants should also pay the costs of the Chief Commissioner from the start of the trial until Adelaide Corporation was decided. 19 Any public interest in the proceedings ceased when judgment in Adelaide Corporation was delivered. Consequently, the applicants should pay the Chief Commissioner's costs after that date. 20 It follows that the applicants must pay all of the costs of the Chief Commissioner. conclusion 21 In the result, the applicants must pay 80 per cent of the costs of the Council and all of the costs of the Chief Commissioner. There will be no order as to costs between the applicants and the State of Victoria or the Attorney-General for the State of Victoria. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North. Associate: Dated: 12 February 2014