BROWN v ENVIRONMENT PROTECTION AUTHORITY (FORMERLY STATE POLLUTION CONTROL COMMISSION) SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL PRIESTLEY JA 22, 23 March, 1 April 1993 [1993] NSWCA 39 APPLICATION FOR SECURITY FOR COSTS under Pt 51 r 11 of Supreme Court Rules — various factors relevant to exercise of discretion — community interest in proceedings — Lall vy 53-55 Hall Street Pty Limited [1978] 1 NSWLR 310 at 312 and Kennedy v McGeechan (1974) [1978] 1 NSWLR 315 at 315 referred to — application refused. APPLICATION FOR EXPEDITION — Category B expedition granted. Priestley JA. The Australian Conservation Foundation ('the ACF') began proceedings in the Land and Environment Court against the Environment Protection Authority ('the EPA') and North Broken Hill Limited trading as Associated Pulp and Paper Mills ('APPM') in May 1992. The ACF began the proceedings when it appeared that the Legal Aid Commission had granted legal aid for the conduct of the proceedings. The object of the proceedings was to test the lawfulness of the decision by the EPA to grant licences under the Pollution Control Act to APPM on certain conditions. The ACF's claim was that the conditions attached to the licence permitted the discharge into the Shoalhaven River of pollutant material pursuant to a policy adopted by the EPA under the name 'prosecutable reality'; that the conditions imposed under this policy permitted an increase in the amount of pollutants released into the river in comparison to what could be done under licences granted before the adoption of the policy; and that the decision to issue the licence on such conditions was an impermissible use of the EPA's statutory powers. Soon after the ACF had begun the proceedings the Legal Aid Commission withdrew its grant of aid. The ACF did not wish to run the risk of having a costs order made against it if it lost the proceedings, and announced that it would withdraw. Mr A.J. Brown then, in June 1992, began identical proceedings. He had no assets to speak of, and if he suffered a costs order against him in the proceedings he would not be able to pay it immediately. Mr J. Johnson, solicitor of the Environmental Defender's Office Ltd ('the EDO') acted as his solicitor. The EDO conducted the proceedings for Mr Brown, and is conducting the appeal, on the basis that its costs and disbursements will be paid only if a costs order is obtained in Mr Brown's favour. No application that Mr Brown should provide security for costs of his proceedings was made at first instance. The proceedings were heard by Pearlman J the Chief Judge of the Land and Environment Court over nine days in September and October 1992. She delivered judgment on 12 November 1992, dismissing Mr Brown's application. She reserved the question of costs. A considerable amount of material was before 2 UNREPORTED JUDGMENTS the court concerning the effect upon the river of APPM's discharges into it, under the licences granted before and after the alleged adoption of the prosecutable reality policy. Also, the process of decision to issue the impugned licences was the subject of detailed evidence. Mr Brown appealed to this court against the judgment dismissing his application. APPM then applied, under Pt 51 r 11 of the Supreme Court Rules, for security for costs of the appeal and that the appeal be stayed until security was given. The primary provision of r 11 is that no security for the costs of an appeal to the Court of Appeal shall be required. However the Court of Appeal may order such security, in special circumstances. The amount sought by APPM in the argument before me as that for which security should be given was $15,000. It is established that if special circumstances are shown, the Court had a discretion either to order security, or to refuse to do so: Lall v 53-55 Hall Street Pty Limited [1978] 1 NSWLR 310 at 312; Kennedy v McGeechan (1974) [1978] 1 NSWLR 315 at 315. It is also established that (i) impecuniosity may be a special circumstance; but, (ii) establishment by a respondent of the appellant's impecuniosity does not of itself automatically attract an order for security; and (iii) the Court must consider the circumstances of the particular case, including the nature of the appeal: Lall at 312, Kennedy at 315. In the present case the matters canvassed in argument as being the principal questions for the court to consider have been: (1) is the appeal arguable; (2) is the subject matter of the appeal of importance (i) to Mr Brown, (ii) to the community generally; (3) is Mr Brown in reality acting on behalf of others (eg the ACF) who are really promoting the litigation in such a way that they run no risk as to costs; (4) if the answer to (2) is yes, is the subject matter of the appeal of such importance as to warrant refusing to grant security in circumstances where if the appeal is dismissed the EPA and APPM will be unlikely to recover any costs order they obtain, either in the short term, or perhaps ever;(5) the possible effects on the parties of the making or refusal of an order for security. As to (1), it was submitted for APPM that although it could not be said the appeal was unarguable, the chances of its being upheld were slight. My own view of this is not so precise as that advocated by APPM. I have grasped enough of what I think is the principal point in the appeal — there are said to be two, but the one I have mentioned earlier seems to me to be the one to which the community importance argument was principally directed — to be satisfied that it is arguable that it has a possibility of success. For present purposes I need say no more than that. (I note that at one stage of the argument APPM submitted the appeal was academic and futile because it concerned a licence since expired. However it seems to me that Pearlman J dealt with the principal questions in such a way as to cover present and future licences, with the result that it is strongly arguable that the questions Mr Brown wants to argue on appeal would be properly open for decision in the appeal.) JOBNAME: No Job Name PAGE: 3 SESS: 1 OUTPUT: Mon Feb 25 18:10:45 2008 /reports/caseml]/case/urj/9305344 URRDWN v ENVIRONMENT PROTECTION AUTHORITY (FORMERLY STATE POLLUTION CONTROL COMMISSION) (Priestley JA) As to (2), I have no doubt that it is of importance to Mr Brown that the appeal should go forward. Likewise I have no doubt that a great many people in the community regard the general subject matter of the appeal as important. It was factor (3) upon which APPM principally based its submissions. It was contended that, upon the fairly full evidence before me, I should conclude that Mr Brown was not really bringing these proceedings in his own right but at the behest, and for the purposes, of others. If the evidence satisfied me of that, I would order the security as asked. However, to my mind, the evidence falls far short of establishing APPM's contention; indeed, it tends to show the contrary, that Mr Brown is rather rashly exposing himself to the possibility of suffering a costs order which could keep him poor for years to come, for the sake of carrying on an appeal for a cause in whichhe believes. I need not however make any finding about this, as it is for APPM to show that in reality Mr Brown was not bringing the proceedings for himself, or at least was being partly promoted by others to bring them, and the evidence does not, in my opinion, justify any such conclusion.. As to (4), in my assessment, the subject matter of the appeal is of sufficient significance to outweigh the prejudice APPM will suffer if it succeeds in having the appeal dismissed and thereafter can either not recover at all the proceeds of any costs order made in its favour, or can only recover them over an extended period. My view as to (4) is affected also by my view on (5). It may be that the doctrine of judicial notice does not extend to allowing me to take into account the fact that North Broken Hill Limited is one of Australia's thirty-five largest public companies, with a market capitalisation exceeding 1.5 billion dollars (Sydney Morning Herald, 29 March 1993, p 22), but I think I am at least entitled to take judicial notice from my own general knowledge that North Broken Hill Limited is a large public company to which the sum of $15,000 is comparatively insignificant. To the company and its shareholders the financial effect of failure to obtain an order for security for costs in the amount of $15,000 will not be of great importance. There are further factors which seem to me to be relevant in the present case. One is that the cost to APPM of conducting the appeal is likely to be very considerably less than that it incurred at the first instance hearing. Another is that the provisions of the Environmental Offences and Penalties Act under which Mr Brown began his proceedings appear, as does related legislation, to be deliberately aimed at giving access to the Land and Environment Court, in matters of the present type, of a wider than ordinary kind. Another factor is that Mr Brown has a right of appeal to this Court. It seems to me that upon balancing the various factors I have mentioned, I should exercise discretion by refusing to make the order sought. An application for expedition of the appeal is also before the Court. I think this should be granted in category B. The EPA supported expedition, but took no part in the security argument. 4 UNREPORTED JUDGMENTS I therefore dismiss the application for security for costs, with costs. I make no order for the costs of the EPA. I order expedition, in category B, the costs of the application for expedition to be costs in the appeal. 1. Application for security for costs dismissed with costs. 2. No order for costs of the EPA. 3. Application for expedition granted in category B. 4. Costs of the application for expedition to be costs in the appeal. Counsel for the claimant: PW LARKIN Solicitors for the claimant: JAMES JOHNSON - ENVIRONMENTAL DEFENDER'S OFFICE LTD 15 Counsel for the opponent 1: D PINCH Solicitors for the opponent 1: D PINCH: ENVIRONMENT PROTECTION AUTHORITY Counsel for the opponent 2: WR DAVISON Solicitors for the opponent 2: CONWAY McCALLUM