PAVEMENTS AND EXCAVATIONS PTY LIMITED v TONES AND BALLINA SHIRE COUNCIL v TONES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SAMUELS, MAHONEY and HANDLEY JJA 28 March 1991, 28 March 1991 [1991] NSWCA 221 Handley JA The proceedings before this Court comprise an appeal as of right from orders of Mr Justice Bignold refusing to award costs in a Class 4 case in the Land and Environment Court in favour of respondents to those proceedings, who were wholly successful, and an application for leave to appeal from an interlocutory order of Mr Justice Bignold in the same proceedings. The interlocutory order was made in proceedings related to interrogatories administered by the applicants for the examination of the first respondent in those proceedings the Ballina Shire Council. I shall deal firstly with the application for leave to appeal. By s58(3) of the Land and Environment Court Act an appeal against an interlocutory order or decision of the Court only lies to this Court by leave. The proceedings in relation to the interrogatories were interlocutory proceedings and the order for costs in these proceedings was clearly interlocutory. In my opinion no grounds exist for interfering with Mr Justice Bignold's order dealing with the costs of the proceedings relating to interrogatories. His Honour's reasons are expressly briefly, and he merely said that in his opinion the applicants were entitled to their costs of the motion in relation to the interrogatories. Counsel appearing for the Council did not attempt to identify any error of principle which vitiated that order, nor did he attempt to demonstrate that the order was such as to be productive of some substantial injustice. In my opinion, the application for leave to appeal should be refused, and with costs. So far as the appeal as of right is concerned, counsel for the appellant submits that Mr Justice Bignold exercised his discretion in relation to the costs of the principal proceedings on a wrong principle, and that in relation to, and in the light of the findings of fact by his Honour, the only proper result was that the Council was entitled, as a wholly successful party, to an order that the applicants pay its costs of the proceedings. There has been no dispute before this Court as to the applicable legal principles. They are set out in the judgment of McHugh JA, while a judge of this Court, in Hedley v The National Commercial Banking Corporation (unreported, 31 October 1986) at 5-6, and also in the recent judgment of the High Court in Latoudis v Casey (1991) 65 ALJR 151; especially at 154 per Mason CJ and at 164-5 per McHugh J. Indeed the same principles are referred to by Mr Justice Bignold at 6-8 and 19 of his judgment in this matter, which appear on pages 437-439 and 450 of the appeal book. However, when his Honour came to apply those principles to the facts of this particular case, he appears, with respect, to have misapplied them, and indeed to have applied different principles altogether. At 11 (442) he expresses the conclusion that the applicants: 2 UNREPORTED JUDGMENTS "\..cannot fairly be adjuged to be guilty of some misconduct in the pre-trial procedure of this litigation." At 12 (443) he says: "\.. the applicants cannot be regarded as guilty of misconduct, or neglect in these proceedings...". and at 14 (445) he again says: "The applicants have not been guilty of any misconduct in the brief and hectic lead up to the hearing of this litigation." In accordance with established principles which guide the exercise by a Court of its discretion to award costs to a successful litigant, the fact that the unsuccessful litigant has not been guilty of any misconduct in the proceedings is a wholly irrelevant consideration. The established principles require attention to be directed exclusively to the conduct of the successful party. If the successful party has been guilty of some relevant misconduct connected with the proceedings, the Court may be justified in withholding an order for costs in favour of that party, either wholly or in part. The conduct of the unsuccessful party is not, as I have said, a relevant consideration; except, I should add, in so far as it may have been brought about by, or may have contributed to misconduct on the part of the successful party. Mr Justice Bignold did not make any findings that the Council, or indeed, the private respondents were guilty of any misconduct in the proceedings of a kind that might arguably fall within the established principles to which I have referred. It is true, as Mr Kinsella has pointed out, that the applicants may have had a good case when the proceedings were commenced in the Land and Environment Court, which entitled them to orders preventing the Minister making a local environmental plan in accordance with the plan submitted to him by the Council. However, no attempt was made to support any such case before Mr Justice Bignold when special orders dealing with costs were sought. Moreover this Court has not been invited to form its own view as to whether these applicants had a good cause of action against the Minister, the Council and the other private respondents when these Class 4 proceedings were commenced. In these circumstances it seems to me that this Court should not attempt to form its own view as to the applicants' prospects of success when the litigation was commenced. I would add it is by no means clear that the fact that the applicants had a good case at the time the proceedings were first commenced in the Land and Environment Court, would have been a relevant consideration on costs in view of the fact that they were wholly unsuccessful in the result. For these reasons I am of the view that the exercise of the Court's discretionary power as to costs by Mr Justice Bignold miscarried. His Honour has acted on incorrect principles in declining to make orders in favour of the Council, and the private respondents to the proceedings before him, and accordingly it becomes necessary to set aside his Honour's orders. This Court is, therefore, called upon to consider what order it should now make in the matter. In my opinion the Court is entitled to exercise the discretion as to costs afresh in the light of the material before it. It is clear that the Council and the various private respondents had a prima facie expectation of receiving orders for costs in view of the fact that they had wholly succeeded in the proceedings. No adverse findings which were capable of disentitling them to such an order were made by Mr Justice Bignold, as I have said, and this Court has not been invited to make its own adverse findings on matters which would disentitle the successful parties to orders for costs in their favour. In these circumstances the WAYEMENTS AND EXCAVATIONS PTY LIMITED v TONES AND BALLINA SHIRB COUNCIL v TONES (Mahoney JA) Court is in the position where nothing has been found or suggested that would be capable of depriving the appellants of their ordinary entitlement to the costs of the proceedings below. In my opinion, the appropriate order for this Court to make is that the respondents Gary William Harold Tones and others, the first respondents, pay the appellant Council its costs of the proceedings before the Land and Environment Court; and that the same respondents pay the appellants in the second appeal, Pavements and Excavations Pty. Limited and others, their costs of the proceedings in the Land and Environment Court. I would propose, therefore, that the following orders be made: 1. Appeals in Matters 225 and 231 of 1987 allowed with costs. 2. O.1 made by Mr Justice Bignold on 9 April 1987 dismissing the applications by the respondents for costs set aside. 3. In lieu thereof substitute orders that the applicants in the Land and Environment Court pay the costs of the Ballina Shire Council, and of the third, fourth and fifth respondents, of those proceedings, except in so far as those costs were the subject of special orders by Mr Justice Bignold. I would further propose that the respondents have a certificate under the Suitors Fund Act. Samuels JA I agree. Mahoney JA I also agree. I agree that the discretion miscarried for the reasonsto which Mr Justice Handley has referred. In relation to the exercise of powers by this Court under s58 of the Land and Environment Court Act 1979 in the circumstances to which his Honour has referred I think this is a special case. I think the order made is an appropriate one, and one which the Court can make under that section. I agree with the orders proposed. 1. Appeals in Matters 225 and 231 of 1987 allowed with costs. 2. O.1 made by Mr Justice Bignold on 9 April 1987 dismissing the applications by the respondents for costs set aside. 3. In lieu thereof substitute orders that the applicants in the Land and Environment Court pay the costs of the Ballina Shire Council, and of the third, fourth and fifth respondents, of those proceedings, except in so far as those costs were the subject of special orders by Mr Justice Bignold. I would further propose that the respondents have a certificate under the Suitors Fund Act. Counsel for the Appellant: WR Davison and G Beveridge (No. 225), G Underwood (No. 231) Counsel for the Respondent: B Kinsella - 1st Respondent, (Nos 225 and 231), W Davison and G Beveridge - 3-5th, Respondents (No. 231) Solicitors for the Appellant: Carmonts (No. 225), Somerville Laundry Lomax and Co, (No. 231) Solicitors for the Respondent: David W Johnston - Ist Respondent, (Nos 225 and 231), Carmonts - 3-5th Respondents (No. 231)