Reported Decision: 156 LGERA 150 New South Wales Court of Appeal CITATION: Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council [2007] NSWCA 300 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): 7 August 2007 JUDGMENT DATE: 25 October 2007 JUDGMENT OF: Spigelman CJ at 1; Mason P at 145; Beazley JA at 146; Giles JA at 149; Ipp JA at 155 DECISION: 1 Leave to appeal granted; 2 Direct the Claimant to file a Notice of Appeal within 14 days; 3 Upon the Notice being filed, appeal allowed; 4 Order that the Respondent pay the Appellant's costs in the Land and Environment Court before both Commissioner Brown and Justice Preston and in this Court. CATCHWORDS: ENVIRONMENT AND PLANNING – Courts and tribunals with environment jurisdiction – New South Wales – Land and Environment Court and its predecessors – Costs – Land and Environment Court Act, s69 – regard must be given to legislative regime under which proceeding brought – Protection of the Environment Operations Act - ENVIRONMENT AND PLANNING – Courts and tribunals with environment jurisdiction – New South Wales – Land and Environment Court and its predecessors – Costs – Land and Environment Court Rules Pt 16, r 4 – Discretionary nature of award of costs – Role of principles or guidelines in exercise of a judicial discretion - ENVIRONMENT AND PLANNING – Courts and tribunals with environment jurisdiction – New South Wales – Land and Environment Court and its predecessors – Costs – Land and Environment Court Rules Pt 16, r 4 – Discretionary nature of award of costs – "no discouragement" principle impermissible constraint on exercise of discretion - ENVIRONMENT AND PLANNING – Courts and tribunals with environment jurisdiction – New South Wales – Land and Environment Court and its predecessors – Costs – Land and Environment Court Rules Pt 16, r 4 – Appropriate weight to be accorded to nature of proceedings – Characterisation of proceedings as "Class 1 proceedings" or "merits review proceedings" too broad – relevance of citizen resisting imposition of a liability - APPEAL – Practice and Procedure – New South Wales – Powers of court – Costs – Land and Environment Court Act, s57 – Supreme Court Act, s75A – Power of court to exercise costs discretion where no new findings of fact are required - STATUTES – Bylaws and regulations – Construction – Retrospective operation – Land and Environment Court Rules, Pt 16 r4 – Relevant issue is intended effect by enacting body – Whether the amendment is "procedural" or "substantive" not decisive - STATUTES – Bylaws and regulations – Construction – Retrospective operation – Land and Environment Court Rules, Pt 16 r4 – A power to award costs should be interpreted to ensure no injustice is done – Degree of injustice relevant – Where appeal on costs commenced the rules as they existed at the time apply Compensation Court Act 1984, s32 Dust Diseases Tribunal Act 1989, s32 LEGISLATION CITED: Land and Environment Court Act 1979, s39, 57, 69 Protection of the Environment Operations Act 1997, s96, 289, 292 Pt 9.2 Supreme Court Act 1970, s23, 75A Land and Environment Court Rules: Pt 16, r 4 Arnett v Holloway [1960] VR 22 Attorney General of New South Wales v World Best Holdings Limited (2005) 63 NSWLR 557 Attorney-General (Qld) v Australian Industrial Relations Commission (2002) 213 CLR 485 Bell v Shellharbour Municipal Council (1993) 78 LGERA 429 Camperdown City Council v Vegan (2006) 67 NSWLR 372 Chang v Laidley Shire Council (2007) 81 ALJR 1598 Continental Liqueurs Pty Limited v G F Heublein & Bro Inc (1960) 103 CLR 422 Donald Campbell & Co Limited v Pollak [1927] AC 732 Gee v Port Stephens Council (2003) 131 LGERA 325 Guaranty Trust Co of New York v York, 326 US 99 (1945) Hamilton v Merck & Co Inc (2006) 66 NSWLR 48 Hunter Development Brokerage Pty Limited v Cessnock City Council (No 2) (2006) 151 LGERA 46 Hutchinson v Jauncey [1950] 1 KB 574 ICM Agriculture Pty Limited v Perry [2002] NSWCA 257 John Pfeiffer Pty Limited v Rogerson (2000) 203 CLR 503 Kimbray v Draper (1868) LR 3 QB 160 Knight v F P Special Assets Pty Limited (1992) 174 CLR 178 Latoudis v Casey (1991) 170 CLR 534 Lauri v Renad (1892) 3 Ch 402 Lodhi v R (2006) 199 FLR 303 L'Office Cherifien des Phosphates v Yamashita-Shinnihon Steamship Co Ltd [1994] 1 AC 496 Maclean Shire Council v Nungera Co-Operative Society Limited (1994) 84 LGERA 139 Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673 Maurici v Chief Commissioner of State Revenue (No 8) (2007) 65 ATR 719 CASES CITED: Maxwell v Murphy (1957) 96 CLR 261 McKain v R W Miller & Co (SA) Pty Limited (1991) 174 CLR 1 Murray v Commissioner of Police [2004] NSWCA 365 Norbis v Norbis (1986) 161 CLR 513 North Broken Hill Ltd v Tumes (1999) 18 NSWLR 412; [1999] NSWCA 309 Ohn v Walton (1995) 36 NSWLR 77 Oshlack v Richmond River Council (1998) 193 CLR 72 Patrick Operations Pty Limited v Comcare [2006] NSWCA 142 Port Stephens Council v Sansom [2007] NSWCA 299 R v Henry (1999) 46 NSWLR 346 R v Whyte (2002) 55 NSWLR 252 Re Joseph Suche & Co Limited (1875) 1 Ch D 48 RTA v Perry (2001) 52 NSWLR 222 Reid v Reid (1886) 31 Ch D 402 Republic of Costa Rica v Erlanger (1876) 3 Ch D 62 Residents Against Improper Development Inc v Chase Property Investments Pty Limited (2006) 149 LGERA 360 Rodway v The Queen (1990) 169 CLR 515 State of Victoria v Robertson [2000] 1 VR 465 Stevens v Head (1993) 176 CLR 433 Thorpes Limited v Water Conservation and Irrigation Commission (1952) 36 LVR 62 Wilson v First County Trust Ltd (No 2) [2004] 1 AC 816 Wong v The Queen (2001) 207 CLR 584 Wright v Hale (1860) 30 LJ Ex 40 Vetter v Lake Macquarie City Council (2001) 202 CLR 439 Zainal bin Hashim v Government of Malaysia [1980] AC 734 PARTIES: Thaina Town (On Goulburn) Pty Ltd (Appellant) City of Sydney (Respondent) FILE NUMBER(S): CA 40808/2006 COUNSEL: T Robertson SC; J Johnson (Appellant) J Griffiths SC; P Larkin (Respondent) SOLICITORS: C P White & Hetherington Solicitors (Appellant) Maddocks Lawyers (Respondent) LOWER COURT JURISDICTION: Land & Environment Court LOWER COURT FILE NUMBER(S): 10497 of 2006 LOWER COURT JUDICIAL OFFICER: Preston CJ LOWER COURT DATE OF DECISION: 5 December 2006 LOWER COURT MEDIUM NEUTRAL CITATION: [2006] NSWLEC 782 - 7 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40808/2006 SPIGELMAN CJ MASON P BEAZLEY JA GILES JA IPP JA Thursday 25 October 2007 THAINA TOWN (ON GOULBURN) PTY LTD v CITY OF SYDNEY COUNCIL The Claimant operated a restaurant with an exhaust ventilation system that extracted cooking fumes and odours, grease and oil. That system was, in part, within the section of the strata titled building which the Claimant leased. The fumes discharged into an exhaust ventilation system external to that section in a part of the common property owned by the Owners Corporation. The Respondent issued the Claimant with a prevention notice under s96 of the Protection of the Environment Operations Act 1997 ("the POEO Act "). This notice required the Claimant to have the exhaust system, including that portion of it on common property, cleaned within 14 days and to submit to Council a Compliance Assessment Report prepared by a suitably qualified engineer within 28 days. The Claimant appealed to the Land and Environment Court. By the time the matter came before Commissioner Brown the exhaust system had been cleaned and the only issue was whether the Claimant was liable to pay for the Compliance Report. The Commissioner revoked the prevention notice, determining that the Claimant did not have the management or control of the premises and, accordingly, was not the occupier of the premises for the purposes of the relevant provisions. The Claimant's application for costs of the hearing before Commissioner Brown came before Chief Judge Preston. His Honour held that each party should pay their own costs. The Claimant appealed from the decision on costs to the Court of Appeal. HELD (granting leave to appeal and upholding the appeal) A The Statutory Framework (1) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing Where there is no particular rule applicable to the exercise of a costs discretion, so that the general power in s69 of the Land and Environment Court Act applies in an unfettered way, it is necessary to have regard to the particular legislative regime that is applicable, relevantly the POEO Act . [6], [11], [16], [145], [146], [149], [155] (2) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing The appeal provision under consideration differs from other appeals in Class 1 of the Land and Environment Court's jurisdiction. [8], [13]-[16], [145], [146], [149], [155] B Land and Environment Court Practice (1) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing Principles or guidelines for the exercise of a discretion may be developed by courts to promote consistency of decision-making, but they are indicative only. Full weight must still be given to the circumstances of a particular case. [33], [35], [145], [146], [149], [155] Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673; Hunter Development Brokerage Pty Limited v Cessnock City Council (No 2) (2006) 151 LGERA 46; Residents Against Improper Development Inc v Chase Property Investments Pty Limited (2006) 149 LGERA 360; Gee v Port Stephens Council (2003) 131 LGERA 325 considered. Latoudis v Casey (1991) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72 cited. Norbis v Norbis (1986) 161 CLR 513; Wong v The Queen (2001) 207 CLR 584; R v Henry (1999) 46 NSWLR 346; R v Whyte (2002) 55 NSWLR 252 referred to. (2) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing Principles or guidelines become an impermissible fetter when they are given determinative, or even presumptive, weight. It is not an answer to say that the fetter is based on principle. [45], [145], [146], [149], [155] Residents Against Improper Development Inc v Chase Property Investments Pty Limited (2006) 149 LGERA 360 doubted in part. Donald Campbell & Co Limited v Pollak [1927] AC 732 cited. C Error of Law (1) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing The alleged error that his Honour failed to take into account a relevant consideration, namely that the Appellant was wholly successful in substantive proceedings, is not made out. His Honour did take that consideration into account. The weight he accorded to it is not a matter for this Court. [54], [145], [146], [149], [155] (2) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing An error of law arose when his Honour applied a presumptive rule that the Court did not ordinarily order costs in Class 1 proceedings. This went beyond taking into consideration the character of the proceedings. [66], [69], [71], [145], [146], [149], [155] Latoudis v Casey (1991) 170 CLR 534 cited. Hunter Development Brokerage Pty Limited v Cessnock City Council (No 2) (2006) 151 LGERA 46; Residents Against Improper Development Inc v Chase Property Investments Pty Limited (2006) 149 LGERA 360 referred to. (3) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing Alternatively, an error of law arose when his Honour identified the relevant principles as "merits review proceedings" or "Class 1 proceedings", a characterisation which is too broad. Not all Class 1 proceedings can be equated. Employing such a wide ranging concept overlooks relevant differences in the kinds of matters classified as Class 1 proceedings. [73], [75], [145], [146], [149], [155] His Honour failed to take into account a relevant factor, namely that these proceedings involved a citizen resisting the imposition of a liability. Such a decision is distinct from merits review of a decision which seeks a consent or a licence. [73], [76], [80], [145], [146], [149], [155] Thorpes Limited v Water Conservation and Irrigation Commission (1952) 36 LVR 62 cited. (4) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing The position of the Court under the POEO Act differs from other Class 1 proceedings because the Court does not stand in the shoes of the decision-maker. There is therefore less reason to adopt the administrative tribunal practice of not awarding costs. [16], [79], [145], [146], [149], [155] D The Powers of this Court (1) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing This Court should grant leave to the Claimant to submit that Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673 was not correctly decided to the extent that the decision stands for the proposition that this Court does not have the power to exercise the discretion as to costs where that involves the formation of a judgment on the basis of agreed facts. [89], [145], [146], [150], [155] Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673 explained. North Broken Hill Ltd v Tumes (1999) 18 NSWLR 412; [1999] NSWCA 309; ICM Agriculture Pty Limited v Perry [2002] NSWCA 257; Murray v Commissioner of Police [2004] NSWCA 365; Camperdown City Council v Vegan (2006) 67 NSWLR 372; Patrick Operations Pty Limited v Comcare [2006] NSWCA 142; RTA v Perry (2001) 52 NSWLR 222 referred to. (2) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing Maurici should not be followed insofar as it extended the restriction on this Court's power under s57(2)(b) of the Land and Environment Court Act beyond the making of findings of primary fact. [92], [104], [110], [145], [146], [150]-[151], [155]-[148] Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673 overruled in part. Patrick Operations Pty LTd v Comcare [2006] NSWCA 142 discussed. North Broken Hill Ltd v Tumes 918880 NSWCA 39 referred to. Note the reservations of Beazley JA and Giles JA at [148] and [151]. (3) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing Nothing in s57 of the L&E Court Act or s75 of the Supreme Court Act requires this Court to refuse to make an order that should have been made where no new findings of fact are required. This Court can exercise the costs discretion in this case. [92], [94], [97], [104], [109], [110], [145], [147], [150]-[151], [155] Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673; Patrick Operations Pty Limited v Comcare [2006] NSWCA 142 doubted in part. Vetter v Lake Macquarie City Council (2001) 202 CLR 439 distinguished. E Determining the Relevant Costs Rule (1) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing In determining whether an amending rule should be given retrospective operation the relevant issue is what the enacting body intended to be the effect of the provision upon the matter that has arisen. Whether the appropriate label for the amendment is "procedural" or "substantive" is not the issue. [129], [145], [146], [153], [155] Maurici v Chief Commissioner of State Revenue (No 8) (2007) 65 ATR 719; Arnett v Holloway [1960] VR 22; Kimbray v Draper (1868) LR 3 QB 160; McKain v R W Miller & Co (SA) Pty Limited (1991) 174 CLR 1; Stevens v Head (1993) 176 CLR 433; Hamilton v Merck & Co Inc (2006) 66 NSWLR 48; Rodway v The Queen (1990) 169 CLR 515; Attorney-General (Qld) v Australian Industrial Relations Commission (2002) 213 CLR 485; Guaranty Trust Co of New York v York, 326 US 99 (1945); Reid v Reid (1886) 31 Ch D 402; Lauri v Renad (1892) 3 Ch 402; Attorney General of New South Wales v World Best Holdings Limited (2005) 63 NSWLR 557referred to. Wright v Hale (1860) 30 LJ Ex 40 doubted. John Pfeiffer Pty Limited v Rogerson (2000) 203 CLR 503; Republic of Costa Rica v Erlanger (1876) 3 Ch D 62; Maxwell v Murphy (1957) 96 CLR 261 cited. (2) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing When interpreting a power to award costs the Court should adopt an interpretation whereby no injustice is done to the parties. [129], [145], [146], [153], [155] Republic of Costa Rica v Erlanger (1876) 3 Ch D 62 applied. Lodhi v R (2006) 199 FLR 303 referred to. (3) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing Where proceedings are pending, particularly where an appeal has already been instituted, the principle that no injustice should be done may require the Court, when interpreting a statutory provision, to consider the degree of injustice that arises. [131], [145], [146], [153], [155] Chang v Laidley Shire Council (2007) 81 ALJR 1598; Republic of Costa Rica v Erlanger (1876) 3 Ch D 62 cited. Zainal bin Hashim v Government of Malaysia [1980] AC 734 referred to. (4) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing Where an appeal on the question of costs has been commenced before the rule change, as here, the relevant provision should be interpreted to refer to the rules as they existed at the time of the appeal. [134], [135], [145], [146], [153], [155] F The Exercise of Discretion (1) per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing This is an appropriate case where costs ought to have been awarded in the proceedings before the Commissioner and before Preston CJ of the Land and Environment Court. [136], [137], [141], [143], [145], [146], [153], [155] IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 40808/2006 SPIGELMAN CJ MASON P BEAZLEY JA GILES JA IPP JA Thursday 25 October 2007 THAINA TOWN (ON GOULBURN) PTY LTD v CITY OF SYDNEY COUNCIL Judgment 1 SPIGELMAN CJ: This is an application pursuant to s57(4)(f) of the Land and Environment Court Act 1979 ("the L&E Court Act") for leave to appeal from the decision of Preston CJ of the Land and Environment Court with respect to costs. Pursuant to s57(1) of the L&E Court Act appeals to this Court lie only on a question of law. 2 Commissioner Brown of the Land and Environment Court revoked a prevention notice under s96 of the Protection of the Environment Operations Act 1997 ("the POEO Act") issued to the Claimant by the Respondent Council. By reason of the restriction on the delegation of powers to a Commissioner, the question of costs had to be determined by a judge (s69(8) of the L&E Court Act). Justice Preston determined that application by ordering that each party pay its own costs. The Claimant seeks leave to appeal from that decision. 3 At the time of the judgment by Preston CJ of the Land and Environment Court there was no rule of the Land and Environment Court applicable to the determination of costs in proceedings under the POEO Act. Accordingly the general discretion in s69 of the L&E Court Act was applicable. It provides, in the traditional terms: "69(2) Subject to the rules and subject to any other Act: (a) costs are in the discretion of the Court, (b) the Court may determine by whom and to what extent costs are to be paid …" The Statutory Framework 4 Section 96 of the POEO Act provided, relevantly: "96(1) This section applies when the appropriate regulatory authority reasonably suspects that an activity has been or is being carried on in an environmentally unsatisfactory manner at any premises or by any person (otherwise than at premises). (2) The appropriate regulatory authority may, by notice in writing, do either or both of the following: (a) direct the occupier of the premises, (b) direct the person carrying on the activity (whether or not at premises), to take such action, as is specified in the notice and within such period (if any) as is specified in the notice, to ensure that the activity is carried on in future in an environmentally satisfactory manner. (3) The action to be taken may (without limitation) include any of the following: (a) installing, repairing, altering, replacing, maintaining or operating control equipment or other plant, (b) modifying, or carrying out any work on, plant, (c) ceasing to use plant or altering the way plant is used, (d) ceasing to carry on or not commencing to carry on an activity, (e) carrying on an activity in a particular manner, (f) carrying on an activity only during particular times, (g) monitoring, sampling or analysing any pollution or otherwise ascertaining the nature and extent of pollution or the risk of pollution, (h) action with respect to the transportation, collection, reception, re-use, recovery, recycling, processing, storage or disposal of any waste or other substance, (i) preparing and carrying out a plan of action to control, prevent or minimise pollution or waste, (j) reviewing the carrying out of an activity. … (5) A prevention notice may require the person to whom the notice is given to furnish reports to the appropriate regulatory authority regarding progress on carrying out the action required to be taken by the notice." 5 The critical words which underpin the 'suspicion' in s96(1) and the object of the action required by a notice in s96(2), are "environmentally unsatisfactory manner", which are broadly defined in s95: "95 For the purposes of this Part an activity is carried on in an environmentally unsatisfactory manner if: (a) it is carried on in contravention of, or in a manner that is likely to lead to a contravention of, this Act, the regulations or a condition attached to an environment protection licence (including a condition of a surrender of a licence) or an exemption given under this Act or the regulations, or' (b) it causes, or is likely to cause, a pollution incident, or (c) it is not carried on by such practicable means as may be necessary to prevent, control or minimise pollution, the emission of any noise or the generation of waste, or (d) it is not carried on in accordance with good environmental practice." 6 The specific legislative framework within which this particular case arises is a matter of significance for the determination of the issues before the Court. Where, as here, there is no particular rule applicable to the exercise of the power to award costs, so that the general power in s69 of the L&E Court Act applies in an unfettered way, it is necessary to have regard to the particular legislative regime that is applicable. Much of the case law and the submissions to this Court have treated the appeal under the POEO Act as a particular example of a broader category: "merits review" or "Class 1 proceedings". Useful as such general categories may be for some purposes, adopting either carries the risk of determining the matter irrespective of the specific legislative regime within which the exercise of the power falls for consideration. 7 It is the case that the particular right of appeal of which the Claimant successfully availed itself can be described as a "merits review" process, but that terminology finds no reflection in the legislative regime. An appeal under Pt 9.2 of the POEO Act does fall within Class 1 of the jurisdiction of the Land and Environment Court pursuant to s17(a) of the L&E Court Act. 8 Identifying the purpose or purposes of the differentiation amongst the respective Classes of the Court's jurisdiction requires an analysis of the L&E Court Act which, relevantly, provides: · For the assignment of proceedings to a particular Division of the Court into which the Court is divided "for the more convenient dispatch of business" (s26 and s28); · For the Chief Judge to allocate a particular judge or commissioner to exercise the Court's jurisdiction in a particular class of matter (s30(1)(a)); · To permit commissioners to exercise the jurisdiction of the Court in Classes 1, 2 and 3 (s33(1)); · For requiring pre-trial settlement conferences before a commissioner in Classes 1, 2 and 3 (s34); · For making special procedural provisions in the case of Class 1 proceedings under s97 of the EP&A Act (s34A to s34D); · For authorising the Chief Judge to direct that proceedings in Class 1, 2 or 3 are to be heard and disposed of by a commissioner (s36); · For proceedings in Class 1, 2 or 3 to be conducted without formality and technicality, with expedition and without being bound by the rules of evidence (s38); · For providing that, in appeals to the Court in Class 1, 2 or 3, the Court has all of the functions and discretions of the person from whose decision the appeal is brought and that such an appeal is by way of rehearing on fresh evidence, if permitted, and any decision is deemed to be the final decision of the person from whose decision the appeal has been brought (s39). 9 As appears from the aforementioned list, the statutory regime generally makes provisions for Classes 1, 2 and 3 in a similar way. However, the matters which arise under Classes 1, 2 and 3, set out in ss17, 18 and 19 of the L&E Court Act, are diverse. They encompass a wide range of quite distinct decision-making processes, for which the general description of "merits review" may generally be apt. However, doing so raises the possibility of over simplification as the classes encompass matters extending from applications for the creation of new rights, to claims for compensation, to objections to the imposition of liabilities or restrictions on conduct. 10 The extent to which the issues that arise on appeals in Class 1, 2 and 3 matters involve unconfined discretions or broad evaluative judgments will vary from one case to another. There may well be other relevant differentiating features. 11 The appeal in the present case arises under s289 of the POEO Act, found in Pt 9.2 of that Act. That Part makes provision for appeals from decisions about the grant of licences (s287), appeals with respect to notices relating to work at premises (s288) and appeals with respect to noise control notices or noise abatement orders (s290). Section 96 of the POEO Act, set out above, is found in Ch 4 of the Act entitled "Environment Protection Notices". That Chapter makes provision for clean-up notices in Pt 4.2, prevention notices in Pt 4.3, prohibition notices in Pt 4.4 and compliance cost notices in Pt 4.5. However, Pt 9.2 creates an express right of appeal only with respect to a prevention notice. 12 Only appeals under Pt 9.2 of the POEO Act fall within Class 1 of the Land and Environment Court's jurisdiction. Proceedings under Pt 8.4 and under s247 and s307 of the POEO Act are listed in Class 4 of the Court's jurisdiction. With respect to the other notices for which Ch 4 of the POEO Act makes provision, the jurisdiction of the Land and Environment Court is a supervisory jurisdiction, pursuant to the provisions of s20(2) of the L&E Court Act, by reason of s20(3)(iii)(a) of that Act. Such proceedings would also fall within Class 4. 13 The POEO Act contains one provision which distinguished appeals under Pt 9.2 from other appeals in Class 1 of the Land and Environment Court's jurisdiction. 14 Section 292(2) provides that: "The decision of the court on appeal under this Act is final and binding on the appellant and the person or body whose decision or notice is the subject of the appeal." 15 There appears to me to be a tension between s292(2) and s39(5) of the L&E Court Act. It is, at the least, unnecessary to provide both that the Court's decision is "binding" on the primary decision-maker and that the Court's decision is "deemed … to be the final decision" of the primary decision-maker. By way of comparison, there is no such provision with respect to appeals relating to development applications under s97 and s98 of the EPA Act, in which case the Court does stand in the shoes of the decision-maker. 16 It does not seem accurate to characterise the position of the Court, in an appeal under the POEO Act, as standing in the shoes of the decision-maker. This is a significant respect in which the POEO Act differs from other merits review or Class 1 proceedings in the Land and Environment Court. Insofar as the practice in that Court of not awarding costs is based on the fact that, on a merits review, the tribunal is equated with the original administrative decision-maker, this does not apply to Pt 9.2 of the POEO Act. Background Facts 17 The Claimant operated a restaurant in a building which has an exhaust ventilation system that extracts cooking fumes and odours, grease and oil. That system was, in part, within the section of the building which it leases. The fumes etc. discharge into an exhaust ventilation system external to that section, culminating in a plant room on top of the building. The building was strata titled. The Applicant was the lessee of the strata lot on the ground floor. The plant room was on level 15 of the building, which was part of the common property and, accordingly, was owned by the Owners Corporation for the building. 18 The Prevention Notice was as follows: "Activity Suspected of Being Carried on in An Environmentally Unsatisfactory Manner The City of Sydney Council, being the appropriate regulatory authority for the purposes of Part 4.3 of the Protection of the Environment Operations Act 1997, ('Council') suspects that an activity, namely your use of the mechanical ventilation kitchen system ('the exhaust system'), has been or is being carried on in an environmentally unsatisfactory manner at 85-91 Goulburn St. Sydney, ('the premises'), insofar as; (a) odours, cooking grease and oil are discharging from the exhaust system into the plant room level of the premises; (b) odours, cooking grease and oil are discharging from the roof level of the premises (c) odours smelling of grease and cooking oil are discharging from the exhaust system throughout the premises in concentrations that are discernable by other occupants of the premises as an 'offensive odour' within the meaning of the Protection of the Environment Operations Act 1997; (d) installation of the exhaust system does not comply with either or both the Building Code of Australia , ('the BCA'), or the Australian standard AS1668.2-1991, ('the AS'). Direction to take preventative action: To ensure that the above activity is carried out in future in an environmentally satisfactory manner, Council directs you to take the following preventative action; 1. Have the exhaust system, plant room level and roof level cleaned, including removal of all grease, oil and other substances, by a suitably qualified kitchen exhaust contractor within 14 days from the date on which this Prevention Notice is given to you; and (a) submit to Council, within 28 days from the date on which this Prevention Notice is given to you, a Compliance Assessment Report prepared by a suitably qualified mechanical ventilation engineer identifying all remedial works, repairs, alterations and/or replacement of plant, (including all plans and specifications), necessary to have the exhaust system comply with the BCA and the AS." 19 By the time of the hearing before the Commissioner the Claimant had conducted the cleaning works required by this Notice, including at the plant room level. Accordingly, the issue was whether the Claimant, rather than the Owner's Corporation, was responsible for the preparation of the Compliance Assessment Reports. 20 The Commissioner made the following relevant findings: "[15] The mechanical ventilation system in question is a dedicated system for the restaurant. The applicant has sole use of this dedicated system. Other independent ventilation systems have been constructed within the building for other parts of the building including the basement car park and residential uses. [16] The mechanical ventilation system for the restaurant can, in practical terms, be divided into two distinct sections i.e., external to the restaurant and within the restaurant even though the two sections are used exclusively by the applicant. [17] The ventilation system external to the restaurant was constructed as part of the building and in anticipation of the use of Lot 48 as restaurant or a similar use. The opportunity to connect to this ventilation system is provided through the rear wall of Lot 48. The ducting for the ventilation system rises 16 floors to the rooftop plant room. This part of the ventilation system is included within the common area of Strata Plan 70938. [18] The ventilation system within the restaurant provides for a ventilated hood over the cooking area and its connection to the ventilation system external to the restaurant. The applicant is responsible for this part of the ventilation system through conditions of the lease and any requirements of the council. [19] There was no evidence to suggest that the ventilation system within the restaurant was operating in an environmentally unsatisfactory manner or not in compliance with the Building Code of Australia or Australian Standards AS1668.2 …" 21 The Commissioner concluded: "[22] In this case, I am satisfied that the environmentally unsatisfactory impacts, i.e., odours, cooking grease and oil discharging from the exhaust system into the plant room, are not from the installation or operation of the restaurant hood filtration system, so by exclusion, are likely the result of deficiencies in the external mechanical ventilation system." 22 The Commissioner determined that, pursuant to s62 of the Strata Schemes Management Act 1996, the Claimant did not have the management or control of the premises and, accordingly, was not the occupier of the premises. 23 The Commissioner also determined that the Claimant was not the person carrying on the "activity" within the meaning of the POEO Act, the dictionary of which defines the word as: "Activity means an industrial, agricultural or commercial activity or an activity of any other nature whatever (including the keeping of a substance or animal)". 24 The Commissioner said: "[27] I accept that the 'activity' is the external mechanical ventilation system. In my view, the definition is sufficiently broad to allow this interpretation rather than the interpretation suggested by the council and intervenor where the activity is the total operation of the restaurant and all resultant impacts caused by its operation, including issues with the mechanical ventilation exhaust system. Consequently, I find the applicant is not the person carrying on the activity." 25 The Commissioner's ultimate conclusion was: "[28] As the applicant does not have the management or control of the external mechanical ventilation system it is manifestly unreasonable that he should be burdened with costs associated with the further investigation of its adequacy. Considering those matters set out in s96(2) of the POEO Act, I find that the applicant is not the appropriate occupier or person for the issue of a Prevention Notice relating to the odours, cooking grease and oil discharging from the exhaust system into the plant room." The Judgment on Costs 26 The application for costs on the part of the Claimant came before Chief Judge Preston. His Honour identified the nature of his jurisdiction as follows: "[8] An applicant who is dissatisfied with a prevention notice has a right to appeal to the Land and Environment Court under s289(1) of the Protection of the Environment Operations Act . The appeal is a hearing de novo. The Court engages in merits review of the decision to issue the prevention notice. The Court can decide afresh on the evidence before it whether and in what terms a prevention notice should be issued. The appeal is assigned to Class 1 of the Court's jurisdiction: s17 of the Land and Environment Court Act 1979." 27 His Honour set out the findings of fact by Commissioner Brown and referred to the judgment of Basten JA in Hunter Development Brokerage Pty Limited v Cessnock City Council (No 2) [2006] NSWCA 292; 151 LGERA 46. 28 His Honour said: "[15] In Hunter Development Brokerage Pty Limited v Cessnock City Council [2006] NSWCA 292 (1 November 2006), Basten JA held: '[16] Statutory powers to award costs may be found in one of three forms. The first is an unconstrained conferral of power without direction or limitation. Absent the relevant rule, the power conferred by s 69(2) is such a power. As was explained by Gaudron and Gummow JJ in Oshlack , adapting the words of Dixon J in Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505, the power is "unconfined except insofar as 'the subject matter and the scope and purpose' of the legislation may enable an appellate court to pronounce the reasons given by the primary judge to be 'definitely extraneous to any objects the legislature could have found in view'": 193 CLR 72 at [22]. [17] As identified in Latoudis v Casey , the primary and generally the only relevant consideration is that the power is conferred "to compensate the successful party against the expense to which that party has been put by reason of the legal proceedings": Oshlack at [25]; see also Ruddock v Vadarlis [2001] FCA 1865; (2001) 188 ALR 143 at [12] (Black CJ and French J).' [16] As I have noted, the appeal under s289 involves merits review in Class 1 of the Court's jurisdiction. The long-standing practice of the Court in merits review proceedings in Class 1 has been that there should be no order for costs unless the circumstances of the case merit an order for costs. This practice is the basis of the discussion by Basten JA in Hunter Developments Brokerage Pty Limited v Cessnock City Council of the different lines of authority in this court exemplified by Outdoor Australia Pty Limited v Auburn Council (1996) 89 LGERA 365 and Gee v Port Stephens Council (2003) 131 LGERA 325: see at [32]-[42]. The practice of the Court not to order costs in merits review proceedings in Class 1 of the Court's jurisdiction is also referred to by the Court of Appeal in Residents Against Improper Development Inc v Chase Property Investments Pty Limited [2006] NSWCA 323 (23 November 2006), particularly in the judgment of McClellan CJ and CL at [219], [225], [226], [227], [231], [238], [241], [248], [250], and [252] and Tobias JA at [199], [202], [208], [209]. [17] In Hunter Development v Brokerage, Basten JA does not hold that such an approach was in error. At [39] Basten JA states: '[39] Applying the principles articulated in Latoudis v Casey to the unfettered discretion granted by s 69(2), prior to the promulgation of the rule … the proper approach to questions of cost must have required that costs follow the event unless there were circumstances which justified a different rule. Whether the nature of the merits review jurisdiction provided such a justification need not be determined in this case, because the rule now governs'." 29 Preston CJ of the Land and Environment Court then referred again to the Commissioner's findings with respect to the two issues he decided i.e. whether the Claimant was the occupier of the premises and whether the Claimant had responsibility for the activity. With respect to the second matter his Honour found: "[24] Similarly, the Commissioner made a finding of fact that the activity that was being carried out in environmentally unsatisfactory manner was the activity of passing the cooking odours, grease and oil through that part of the exhaust system that was in the common property rather than the activity of the applicant in extracting from its kitchen the cooking odours, grease and oil into an exhaust system in the common property which was known to be deficient. Again, on the basis of this factual finding the Commissioner determined that the prevention notice should be issued to the Owner's Corporation rather than to the applicant. [25] The factual findings, particularly in relation to the second matter, could equally have been made differently. If that had occurred the consequence would be that the order could properly have been made against the applicant under s96(2)(b). The consequence of such a contrary factual finding would have meant that the applicant would have failed in its appeal. Yet the question of fact that lay in dispute between the parties was fairly open." 30 With respect to the question of law said to arise in the present case, Preston CJ of the Land and Environment Court concluded: "[26] An applicant who is dissatisfied with a particular factual finding and wished to contest it on an appeal on the merits to the Court could be dissuaded from bringing such an appeal if the consequence of a loss on questions of merit would always result in costs following the event, that is, that the applicant would have to pay the costs of the Council. Such policy considerations have underpinned the practice of the Court in not making an order for costs in merits review proceedings in Class 1. This is evident in the decision of Pearlman CJ in Outdoor Australia Pty Limited v Auburn Council (1996) 89 LGERA 365 at 369. It is evident in the discussion by McClellan CJ at CL in Residents Against Improper Development Inc v Chase Property Investments Pty Limited [2006] NSWCA 323 at the paragraphs earlier referred to. [27] It is also evident in the discussion by Basten JA in Hunter Development Brokerage Pty Limited v Cessnock City Council [2006] NSWCA 292 (1 November 2006). Indeed, Basten JA's reasoning for concluding that the decision in Gee v Port Stephens Council (2003) 131 LGERA 325 may have unduly fettered the Court's discretion - namely that, in merits review proceedings, the nature of an issue as one of legal capacity or power rather than the merits was not determinative and did not mandate that the Court should make an order that costs follow the event rather than adopt the usual practice in merits review proceedings in Class 1 that there be no order as to costs - accepted the practice that in merits review proceedings an appropriate order can be that there be no order as to costs. [28] As I have said, the particular circumstances of this case make it appropriate that there be no order as to costs. There is an undoubted problem with escape of cooking odours, grease and oil into the building. The problem would not exist but for the actions of the applicant's restaurant in venting its cooking odours, grease and oil from the kitchen into the exhaust system that is in the common property and that is deficient. As a result of the Court's decision the Council will need to and, as I understand it, is intending to issue a prevention notice against the owner of the common property to remedy that situation. [29] I find that it was reasonably open to the Council to determine that an appropriate solution was to issue a prevention notice in the form that it did against the source of the cooking odours, grease and oil and that is the applicant's premises. It is to be remembered that the nature of the work required by the prevention notice was to prepare a compliance assessment report which identified the problems. The order in terms did not require the carrying out of works that might be identified in that compliance assessment report. [30] For these reasons, I consider that each party should pay their own costs. That is sufficient to dispose of the applicant's motion which sought that there be an order for costs in its favour." 31 His Honour then dealt with certain other aspects of costs which are not the subject of any appeal or cross appeal before this Court. Land and Environment Court Practice 32 This Court is reluctant to intervene with the practice and procedure of a specialist jurisdiction. This reluctance is, of course, reinforced by the longevity of any practice. Nevertheless, it must intervene if satisfied that a practice has developed which is not in accordance with law. 33 It is well established that principles or guidelines for the exercise of a discretion may be developed by courts, particularly in order to promote consistency of decision-making. 34 As Mason CJ put in Latoudis v Casey (1991) 170 CLR 534 at 541: " … it does not follow that any attempt to formulate a principle or a guideline according to which the discretion should be exercised would constitute a fetter upon the discretion not intended by the legislature. Indeed, a refusal to formulate a principle or guideline can only lead to exercises of discretion which are seen to be inconsistent, a result which would not have been contemplated by the legislature with any degree of equanimity." 35 However, such principles or guidelines are not to be treated as rules and must be applied as indicative only, so that full weight is given to the circumstances of a particular case. (See generally Norbis v Norbis (1986) 161 CLR 513 esp at 519-520, 537-538; Wong v The Queen (2001) 207 CLR 584 at [45], [56], [58], [65], [83], [137], [139]; R v Henry (1999) 46 NSWLR 346 at [12]-[29]; R v Whyte (2002) 55 NSWLR 252 at [68]-[87].) 36 With respect to s69 of the L&E Court Act, presently under consideration, Gaudron and Gummow JJ said in Oshlack v Richmond River Council (1998) 193 CLR 72 at [21]: "[21] The provisions of section 69 of the Court Act which confer upon the Court the discretion exercised by the primary judge attract the application of the general proposition that it is inappropriate to read a provision conferring jurisdiction or granting powers to a court by making conditions or imposing limitations which are not found in the words used … [22] The terms of section 69(2) contain no positive indication of the considerations upon which the Court is to determine by whom and to what extent costs are to be paid. The power conferred by this section is to be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent. However, subject to such considerations the discretion conferred is, to adapt the words of Dixon J, unconfined except insofar as 'the subject matter and the scope and purpose' of the legislation may enable an appellate court to pronounce the reasons given by the primary judge to be 'definitely extraneous to any objects the legislature should have had in view' ( Water Conservation & Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505)." (See also at [31].) 37 Their Honours referred to the process of confining or fettering a statutory discretion of this character as "arterial hardening" at [38]. 38 The prior practice of the Land and Environment Court with respect to planning appeals in Class 1 of the Court's jurisdiction was reflected in a Practice Direction of the Court, rather than any Rule, that purported to provide that costs would not be awarded in such cases save in "exceptional circumstances". 39 In Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673 this Court rejected that Practice Direction as imposing "a rigid fetter on the judicial discretion as to costs conferred by s69(2)" at [44]. The Court referred to a number of cases including Norbis supra, Latoudis v Casey supra and Oshlack. It was by reference to this line of authority that Basten JA said in Hunter Development supra at [35] that the previous practice of the Land and Environment Court to only order costs in Class 1 proceedings where there were special circumstances was "untenable". Similarly, Bryson JA said in Hunter Development supra that the previous practice of the Court "inappropriately limited the discretion conferred on the Court by s69(2)" (at [3]). 40 As noted by Justice Preston, in Residents Against Improper Development Inc v Chase Property Investments Pty Limited [2006] NSWCA 323; 149 LGERA 360 ("the RAID case") McClellan CJ at CL referred to the analysis of Basten JA in Hunter Development and supported the prior practice of not ordering costs in such proceedings on the basis that it was derived from appropriate principles. His Honour indicated that even if the Practice Direction constituted a rigid fetter those principles remained applicable (see at [247]). 41 McClellan CJ at CL had regard to the administrative review functions relevantly performed and identified what has been called the non-discouragement principle (see at [231], [241], [242] and [243]). His Honour was concerned to establish in his judgment in the RAID case, as he had been when he set out a detailed analysis of the history of the practice in the Land in Environment Court in Gee v Port Stephens Council (2003) 131 LGERA 325 at [21]-[56], that where a legal issue of prohibition or capacity or permissibility was involved, (to which I will refer as "capacity") the nature of the proceedings changed. Accordingly, the practice applicable to a merits review may not be appropriate and the normal practice in adversarial litigation may be appropriate. 42 In RAID McClellan CJ at CL acknowledged the criticism of the Practice Direction by this Court in Maurici and accepted that it was "probably invalid" because it imposed an impermissible fetter on the discretion of the Court. Nevertheless, he said "it reflected an appropriate policy" (at [226]). Indeed, his Honour said that that Practice Direction and the general practice of the Court, of which it was a specific manifestation, "reflected the intention of the legislature that proceedings in Classes 1 and 2 should eschew adversarial processes" [226]. 43 His Honour did not identify the manner in which the legislature manifested that intention. Presumably, his Honour was relying on s38 of the L&E Court Act which states that proceedings should be conducted without formality and technicality and that the Court is not bound by the rules of evidence but may inform itself in such manner as it thinks appropriate, in each case subject to what "proper consideration of the matters before the Court permit." 44 In the judgment under appeal, Preston CJ of the Land and Environment Court referred to the analysis by McClellan CJ at CL in RAID and also emphasised the non-discouragement principle as the basis of the prior practice of the Court. 45 It is not, however, an answer to the proposition that a statutory discretion has been impermissibly fettered to say that the fetter is based on a principle. Giving any such principle determinative, or even presumptive, operation is what constitutes the impermissible fetter. 46 One aspect of the longstanding practice in the Land and Environment Court in this respect is the fact that litigants will, by reason of the practice, have an expectation that no award for costs will be made in such proceedings. The significance of expectations has long been emphasised in this context. As Viscount Cave LC said in a frequently cited passage in Donald Campbell & Co Limited v Pollak [1927] AC 732 at 811-812: "A successful defendant in a non-jury case has no doubt, in the absence of special circumstances, a reasonable expectation of obtaining an order for the payment of his costs by the plaintiff; but he has no right to costs unless and until the court award them to him, and the Court has an absolute and unfettered discretion to award or not to award them. This discretion, like any other discretion, must of course be exercised judicially, and the judge ought not to exercise it against the successful party except for some reason connected with the case." 47 Notwithstanding the longevity of the practice in the Land and Environment Court, at least until it was questioned, if not overturned, by the judgment of this Court in Maurici, the position subsequently changed. 48 The Honourable Jerrold Cripps QC, a former Chief Judge of the Land and Environment Court and a former Justice of this Court, conducted an inquiry into the operation of the Land and Environment Court with respect to planning appeals. One of the matters which he considered was the powers of the Court with respect to making orders for costs under s69(2) of the L&E Court Act and the implications of the judgment of this Court in Maurici. He recommended that, in planning appeals, a rule be adopted that the court should generally make no order as to costs unless it is of the view that such an order is fair and reasonable. (See Report of the Land and Environment Court Working Party September 2001 at pp76-79.) I note that the terms of reference of the Working Party were confined to decisions with respect to development applications. The proposed rule would invoke the introductory words of s69(2) of the L&E Court Act i.e. "Subject to the rules …". 49 As a result of the Cripps Report a new Pt 16 r 4 was adopted as part of the Land and Environment Court Rules which identified a list of specific matters in Classes 1, 2 and 3 of the Court's jurisdiction and applied the rule recommended by the Working Party to those matters. Going beyond the scope of the Cripps Report, the new rule was not limited to planning appeals. It included proceedings under the Local Government Act, the Valuation of Land Act, the Land Tax Management Act and the Taxation Administration Act. It is clear that the author of the rules did not confine attention to the subject matter of the Working Party Report. 50 Subsequent to the decision in this case the new Pt 16 r 4 has been extended to the full range of Class 1, 2 and 3 appeals including appeals under the POEO Act. However, originally the drafter of the rule directed attention to the full scope of the Court's jurisdiction in Classes 1, 2 and 3 and determined that some, but not all, of those matters should be the subject of a rule which expressly qualifies the width of the discretion under s69 of the L&E Court Act, designed to overcome the criticism of the general policy of the Court with respect to costs made in Maurici. 51 The implementation of the Cripps Report by the adoption of Pt 16 r 4 in the Land and Environment Court Rules constituted a new beginning. Thereafter, expectations based on the prior practice of the Court could no longer be determinative. 52 It is in this respect that the form of the rule as it existed at the time of these proceedings is of significance. As I have said, that rule identified a certain range of decisions in Class 1, 2 and 3 of the Court's jurisdiction to which it applied. Decisions under the POEO Act were not included. If anything, the basis for any expectation in this respect is the opposite of the continuation of the longstanding practice. The history of that practice, the Cripps Report and the adoption of the rule could have given rise to an expectation that the unfettered discretion in s69 in the particular context relevant to this case would not be subject to any form of presumptive rule or restraint. Submissions on Appeal 53 The primary contention of the Claimant is that his Honour erred in determining the application for costs on the basis that the Court had a longstanding policy not to award costs in Class 1 proceedings and that policy determined the outcome of the application. Within the limitations on the jurisdiction of this Court, to hear appeals only on questions of law, in its written submissions the Appellant put this contention in three different ways: (i) That his Honour acted upon a wrong principle of law, specifically by misdirecting himself as to the authority of this Court in the Hunter Brokerage and RAID cases. (ii) That his Honour took into account an irrelevant consideration namely the longstanding practice of the Court in merit review proceedings that there be no order as to costs. (iii) That his Honour erred in failing to take into account a relevant consideration, namely that the Appellant was wholly successful in the substantive proceedings. 54 The third proposition advanced by the Claimant can be readily disposed of. There is no doubt his Honour was well aware of the outcome of the proceedings and referred to it on several occasions. It is not, in my opinion, the case that his Honour failed to have regard to the matter as a relevant consideration. His Honour determined that in view of the practice of the Court with respect to merits review proceedings and circumstances of the case to which his Honour referred, this consideration was not entitled to significant weight. Matters of weight were for his Honour. It was not the case that his Honour failed to take into account the Claimant's success in the proceedings before the Commissioner. 55 In oral submissions, Mr T Robertson SC, who appeared for the Claimant, reformulated the question of law identified at [53] (i) above. He submitted that it was wrong in principle for the Court, in the exercise of an unconfined power to order costs, to confine its discretion by adopting a practice of not making costs orders in merits review cases, subject to exceptions. The Claimant accepted that it was appropriate for a Court to develop guidelines or principles for the exercise of a discretion, so long as they do not confine the discretion. 56 The Claimant also submitted, consistently with the proposition reflected in [53](ii) above that, rather than concentrating on a characterisation of proceedings as "merits review", it was necessary to identify the principle underlying the practice. It submitted that whatever may be appropriate in a context when an applicant seeks some dispensation or indulgence, as in planning appeals, the position is quite different in a context where the exercise of a right of appeal seeks to remove a liability that has been imposed upon a person pursuant to a statutory power. 57 In this regard the Claimant relied on the observations of Sugerman J in Thorpes Limited v Water Conservation and Irrigation Commission (1957) 36 LVR 62 where his Honour was concerned with the power to award costs in the context of an appeal from an administrative refusal of a licence. In explaining why, in matters of that character, the general rule should be that there would be no order as to costs Sugerman J said: "They are, furthermore, proceedings not involving the enforcement of rights or the resisting of the imposition of liabilities but, entirely concerned with the exercise of an administrative discretion conferred upon the body." 58 The Claimant submitted that, in the present case, the effect of the Prevention Notice was precisely to 'impose liabilities' which the Claimant was resisting by the appeal to the Court. 59 In his oral submissions to this Court, Mr Robertson put the proposition that Preston CJ of the Land and Environment Court had failed to adopt a principled approach to the exercise of the unfettered cost discretion under s69(2) of the L&E Court Act in two ways which turned on the interpretation of his Honour's actual reasoning. The first was whether the Chief Judge applied a rule that there would be no costs in merits review proceedings if a matter was reasonably arguable. The second was whether he adopted a rule that there would be no costs in merits review proceedings unless it was reasonable to order them. Either way, the Claimant submitted, the approach so propounded is inconsistent with the statute by confining the exercise of the discretion. 60 Mr Robertson submitted that Preston CJ of the Land and Environment Court confined the exercise of the discretion by reference to the old practice of the Court, namely that there would be no costs in Class 1 appeals unless there were present special circumstances, unreasonable conduct or some other such factor. 61 Dr J Griffiths SC, who appeared for the Opponent, did not contest that the starting point for the analysis was the fact that, in the absence of any rule, the discretion in s69 was unconfined and that it would be an error, falling within the concept of a question of law, if Preston CJ of the Land and Environment Court had approached the exercise of the discretion by applying a general rule. He denied, however, that that is what Justice Preston had done. He submitted that his Honour had weighed a broad range of considerations, one of which related to the matter complained of by the Claimant, but that matter was not determinative. 62 Dr Griffiths submitted that although his Honour made references to the longstanding practice of the Land and Environment Court in Class 1 appeals, what he in fact invoked was the principle underlying that practice – sometimes referred to as the non-discouragement principle. He submitted that this principle was applicable to the circumstances of the present case and accordingly was a relevant consideration. He further submitted that the weight to be given to that element, in the exercise of the discretion, was entirely a matter for his Honour, and does not raise a question of law. 63 The principal thrust of Dr Griffiths' submission was that the character of the proceedings, which his Honour took into account, could not be said to be "definitely extraneous" to the exercise of the costs of discretion, to use the terminology of Dixon J applied in the joint judgment in Oshlack supra at [31] and [49]. He submitted that his Honour did not give the characterisation determinative weight but took into account all the other relevant circumstances of the case. Dr Griffiths directed the Court's attention to his Honour's reference to "the particular circumstances of the case" in par [28] of his judgment, set out at [30] above. 64 Dr Griffiths did rely on the non-discouragement principle. He also relied on other aspects of a merits review jurisdiction to justify as pertinent to the exercise of the discretion under s69. He referred to the objective of the legislation that proceedings in the Court be conducted expeditiously and without formality. He submitted that a practice of awarding costs could tend to make proceedings more adversarial and, accordingly, increase the formality and technicality with which parties approach them. 65 Furthermore, Dr Griffiths drew attention to the public interest dimension of the decision-making processes, relevantly to protect, restore and enhance the quality of the environment under the POEO Act. He submitted that the regulatory authority should not be discouraged from acting in the way that they consider responsible and reasonable by exposing them to the possibility of orders as to costs. This is not, however, the non-discouragement principle referred to in the authorities. It is quite a distinct matter applicable to any proceedings in which a public authority is involved. Nevertheless, this is a matter of some relevance because one of the purposes served by exposing parties to litigation to costs orders is to encourage settlement between the parties in the spirit of compromise. Where public interest considerations are significant there are constraints on the possibility of compromise of a character which does not involve the financial interests of parties. Error of Law 66 In my opinion, the Claimant has identified error on a question of law by Preston CJ of the Land and Environment Court. His Honour did not merely treat the character of the proceedings as a relevant consideration. He applied a presumptive rule based on the practice of the Court not to award costs in Class I proceedings. 67 His Honour discussed many of the relevant legal issues and referred to a number of the relevant cases. Nevertheless, his Honour stated in par [16], to repeat: "The long-standing practice of the Court in merits review proceedings in Class 1 has been that there should be no order for costs unless the circumstances of the case merit an order for costs." 68 Reading his judgment as a whole, in my opinion, his Honour approached the matter on the basis that this practice should be applied unless there was a reason not to do so. This treated the practice as a presumptive rule which is an impermissible fetter on the discretion conferred by s69 of the L&E Court Act. 69 In my opinion, it is not appropriate to characterise his Honour's reasons as simply taking into account the character of the proceedings as one relevant consideration. Rather, his Honour proceeded on the basis that there was a presumptive rule in accordance with the longstanding practice of the Court. 70 I am reinforced in this conclusion by his Honour's reference to the analysis by Basten JA in Hunter Development Brokerage that he "does not hold that such an approach was in error". His Honour at [17] also referred to "the policy reasons underlying the Court's approach in merits review proceedings" which McClellan CJ at CL had set out in the RAID case at [19]. He reinforced this at [26] where he referred to the non-discouragement principle and said "such policy considerations have underpinned the practice of the Court in not making an order for costs in merits review proceedings in Class 1". As I have said above, the proposition that a rule is based on a principle does not prevent it being a fetter on the exercise of a discretion. It is its very quality as a determinative or presumptive rule that is the fetter. 71 His Honour's reasoning appears to me to proceed on the basis that the presumptive rule would not be displaced if the conduct of the Council was reasonable. His Honour concluded that that was so here because the "activity" issue, determined by the Commissioner could have gone the other way. When his Honour concluded that, on the facts, "it was reasonably open to the Council" to issue the prevention notice, he was not having regard to one amongst many relevant considerations. He was explaining why, in the circumstances, there was no conduct which could displace the presumptive rule. 72 Furthermore, as McHugh J said in Latoudis supra at 567: "The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory. Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings. It may, and usually will, be made even though the action has failed through no fault of the unsuccessful party." 73 In any event, and alternatively, identifying the relevant principle, as his Honour did, in terms of "merits review proceedings" or "Class 1 proceedings" is too broad. Not all "Class 1 proceedings" are equivalent. An appeal with respect to a refusal of a development application is not capable of being equated to an appeal from a decision to issue a prevention notice. Another way of expressing this conclusion is that the fact that the proceedings involved a citizen resisting the imposition of a liability, to use the formulation of Sugerman J in Thorpes Ltd supra, was a relevant consideration which his Honour failed to take into account. 74 Either basis raises a question of law which justifies allowing this appeal. 75 I accept that the character of litigation is a relevant question in the exercise of the costs discretion. However, it is not appropriate to identify that character in such general terminology as "merits review" or "Class 1, 2 and 3" of the Court's jurisdiction. The very breadth of the matters encompassed by so general and wide ranging a concept leads almost inevitably to a fetter on the discretion because relevant differences in the kinds of matters so classified are not taken into account. 76 Relevantly for present purposes, in my opinion, there is a significant distinction between merits review of a decision which seeks a consent or a licence in the exercise of an administrative discretion on the one hand, and merits review of a decision to impose a liability on a person by requiring conduct to occur and expense incurred under the threat of criminal sanctions. The same approach is not appropriate in both kinds of cases. 77 Furthermore, as I have indicated above there is an important statutory difference between an appeal under Pt 9.2 of the POEO Act and other appeals in Class 1. The primary decision-maker is said to be bound by the Court's decision, as distinct from the Court exercising the powers and performing the functions of the primary decision-maker. 78 The actual order made by the Commissioner was to revoke the Prevention Notice. This order is sufficient to prevent the enforcement provisions of the POEO Act, ss97, 98 and 100, from having effect. It is not clear what work is done by s292(2) when it provides that the decision of the Court is "final and binding" on the Council. Presumably, it would prevent the issue of a further notice in materially the same terms. 79 However, unlike many other Class 1 proceedings it cannot be said that the Court simply takes the place of the primary decision-maker in an appeal under Pt 9.2 of the POEO Act. In my opinion, the usual position on a merits review that an appeal tribunal stands in the shoes of the primary decision-maker is a significant element in the practice of such tribunals not to exercise such power, if any, to award costs as are conferred upon them. Administrative decision-makers do not award costs. Where a judicial or quasi-judicial function is expressly placed in the position of such a decision-maker then it is more appropriate that it adopt the same general approach. Part 9.2 of the POEO Act is different in this respect. 80 For this alternative reason his Honour impermissibly fettered the statutory discretion. 81 Finally, I do not accept Dr Griffiths' submission that there exists an equivalent of the 'no discouragement' principle for public authorities acting in the public interest. As McHugh J said in Latoudis at 569-570: "A successful defendant cannot be deprived of his or her costs, however, because the charge is brought in the public interest or by a public official, because the charge is serious or because the informant acted reasonably in instituting the proceedings or might be deterred from laying charges in the future if he or she was ordered to pay costs." 82 It is unnecessary to consider the other errors of law upon which the Claimant relied. The Powers of this Court 83 As I have noted above this Court is exercising a jurisdiction under s57 of the L&E Court Act, which relevantly provides: "57(1) A party to proceedings in Class 1, 2 or 3 of the Court's jurisdiction may appeal to the Supreme Court against an order or decision (including an interlocutory order or decision) of the Court on a question of law. (2) On the hearing of an appeal under subsection (1), the Supreme Court shall: (a) remit the matter to the Court for determination by the Court in accordance with the decision of the Supreme Court, or (b) make such other order in relation to the appeal as seems fit." 84 In Maurici supra this Court determined that it had no power under s57 to exercise the discretion as to costs. It did so on the basis of prior authority with respect to s32(2) of the Compensation Court Act 1984. At [54] Handley JA, with whom Beazley and Giles JJA agreed, said that s57(2) of the L&E Court Act was indistinguishable from that section. His Honour went on to say: "[55] In North Broken Hill Ltd v Tumes (1999) 18 NSWCCR 412, this Court held that s32 confined its jurisdiction to correcting errors of law. Where decisions of the Compensation Court which involved fact finding or the exercise of a discretion were set aside for error of law, this Court had no power to make its own findings of fact as on a re-hearing, nor could it re-exercise the discretion but was bound to remit the proceedings to the Compensation Court for re-determination according to law. [56] In Vetter v Lake Macquarie City Council (2001) 202 CLR 439 the majority did not find it necessary to consider this question but Kirby J, without referring to the decision of this Court in North Broken Hill Ltd v Tumes, came to the same conclusion." 85 Section 32 of the Compensation Court Act 1984 relevantly provided: "32(1) If a party to any proceedings before the Court constituted by a Judge is aggrieved by an award of the Judge in point of law or on a question as to the admission or rejection of evidence, that party may appeal to the Court of Appeal. (2) The Court of Appeal may, on the hearing of any appeal under this section, remit the matter to the Compensation Court for determination by the Compensation Court in accordance with any decision of the Court of Appeal and may make such other order in relation to the appeal as the Court of Appeal sees fit." 86 The relevant passage from North Broken Hill Ltd v Tumes (1999) 18 NSWCCR 412; [1999] NSWCA 309 in the judgment of Beazley JA, with whom Giles JA and Davies AJA agreed, was: "[24] … The jurisdiction of this Court is limited by s32 of the Compensation Court Act to the determination of whether the trial judge erred in law or wrongly admitted or rejected evidence. Section 32(2) provides that this Court may on the appeal 'remit the matter to the Compensation Court for determination … in accordance with the decision of the Court of Appeal and may make such other order in relation to the appeal as the Court of Appeal sees fit'. [25] That latter provision does not, however, invest the Court of Appeal with jurisdiction to make findings of fact. There remains outstanding, in this case, a crucial factual issue – namely the amount the respondent could earn in some suitable employment … " 87 The judgment in Tumes has subsequently been applied on a number of occasions, particularly in the context of workers compensation and in the identical provision found in s32 of the Dust Diseases Tribunal Act 1989. (See ICM Agriculture Pty Limited v Perry [2002] NSWCA 257 at [19]; Murray v Commissioner of Police [2004] NSWCA 365 at [3], [56]-[58]; Campbelltown City Council v Vegan (2006) 67 NSWLR 372 at [136]; Patrick Operations Pty Limited v Comcare [2006] NSWCA 142 at [41].) In each such case the focus of attention was on the proposition that s32 of the Compensation Court Act does not invest the Court of Appeal with jurisdiction to make a finding of fact. Similarly in RTA v Perry (2001) 52 NSWLR 222 at [63], Maurici was applied where further findings of fact were required in a valuation case (as identified at [62] and [64].) 88 In par [55] in Maurici as quoted above, this Court extended the line of authority based on Tumes from the making of findings of fact to the exercise of a discretion. It is, so far as I am aware, the only authority to that effect. 89 In the present case no question of making any findings of fact arises. What is involved is the formulation of a judgment on the basis of agreed facts. Furthermore, both parties urged the Court to exercise the discretion, in view of the desirability of avoiding any further costs in this matter, which costs are already disproportionate to the issues in dispute. This raises an issue of some significance. This Court should grant leave to submit that Maurici was not, in this respect, correctly decided. 90 In proceedings heard immediately before the present proceedings, and the judgment in which will be delivered simultaneously (see Port Stephens Council v Sansom [2007] NSWCA 299) Mr M Craig QC made submissions with respect to this Court's decision in Maurici which were adopted by Mr T Roberson SC in the present proceedings. Mr Robertson also made additional submissions. 91 In Mr Craig's submissions, he emphasised the existence of the conjunctive "and" in s32 of both the Compensation Court Act and the Dust Diseases Tribunal Act, as set out above, appearing between the power to "remit" and the power to make other orders. Section 57(2) of the L&E Court Act splits the two powers into distinct paragraphs and links them with the disjunctive "or", rather than the conjunctive "and". 92 In my opinion, this is a relevant distinction. With respect, I do not agree with Handley JA's observation at [54] of Maurici that s57 of the L&E Court Act is indistinguishable from s32(2) of the Compensation Court Act. The latter formulation, both in its structure and by reason of the use of the conjunctive, suggests that the power to make further orders "as the Court of Appeal sees fit" is consequential upon an order of remitter. The formulation in s57 of the L&E Court Act suggests that the power to make such orders is, at least in part, an alternative to the power to make an order to remit. That does not mean that the Court does not have power to make orders ancillary to a remitter. The word "or" in s57(2) of the L&E Court Act should be understood as meaning "and/or". For present purposes it is sufficient to conclude that this Court can exercise the cost discretion. 93 In this regard, it is pertinent to note that the structure and wording of s57(1) and (2) is identical to s56A(1) and (2) with respect to an appeal from the decision of a Commissioner to a judge of the Land and Environment Court. Parliament would not have intended to restrict the ability of that Court to ensure that its internal arrangements can readily adapt to the exigencies of what justice may require in a particular case. 94 Mr Craig also invoked s75A of the Supreme Court Act which applies to appeals to the Court of Appeal of the character now before the Court. Save in one immaterial respect, Mr Robertson adopted Mr Craig's submissions on s75A. 95 In Vetter v Lake Macquarie City Council (2001) 202 CLR 439 the majority joint judgment at [38] expressly left open "the correctness or otherwise of the limited construction" of s32 of the Compensation Court Act in the judgment of this Court in Tumes and whether or not s75A of the Supreme Court Act 1970 had a relevant application. 96 Section 75A relevantly provides: "75A … (4) This section has effect subject to any Act … (6) The Court shall have the powers and duties of the court, body or other person from whom the appeal is brought, including powers and duties concerning: … (b) the drawing of inferences and the making of findings of fact … … (10) The Court may make any finding or assessment, give any judgment, make any order or give any direction which ought to have been given or made or which the nature of the case requires." 97 Such a jurisdiction conferred on a court which has "all jurisdiction which may be necessary for the administration of justice in New South Wales" (s23 Supreme Court Act 1970) should not be narrowly construed. Nor can the words "subject to any Act" be found to be satisfied save by clear statutory provision to that effect. 98 As Kirby J said in Vetter supra at [64]: " … Support for treating the Court's powers expansively would derive from the nature, function and general powers of the Court of Appeal itself and the regular functions of that Court, as part of the Supreme Court of a State, exercising its own jurisdiction and powers, to review fact-finding by trial courts. Generally speaking, in default of restrictive legislation, where by statute jurisdiction is conferred, and functions are imposed, on a superior court, a broad view is taken of the powers which that court then enjoys." 99 It is not appropriate to restrict s75A by implication from a statute, unless the implication is necessary. 100 As Gaudron J said in Knight v F P Special Assets Pty Limited (1992) 174 CLR 178 at 205: "It is contrary to long-established principle and wholly inappropriate that the grant of power to a court (including the conferral of jurisdiction) should be construed as subject to as limitation not appearing in the words of that grant. (See Hyman v Rose [1912] AC 623 at p 631; FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 at p290.) Save for a qualification which I shall later mention, a grant of power should be construed in accordance with ordinary principles and, thus, the words used should be given their full meaning unless there is something to indicate to the contrary. Powers conferred on a court are powers which must be exercised judicially and in accordance with legal principle. This consideration leads to the qualification to which I earlier referred. The necessity for the power to be exercised judicially tends in favour of the most liberal construction, for it denies the validity of considerations which might limit a grant of power to some different body, including, for example, that the power might be exercised arbitrarily or capriciously or to work oppression or abuse." 101 Although it is arguable that the approach in Tumes does not satisfy that test, it is unnecessary to decide that question. 102 It is not necessary for this Court to reconsider the earlier line of authority with respect to the power of the Court to make findings of fact. Plainly it is generally undesirable for this Court to exercise such a power, if any. The position is not, however, the same with respect to the exercise of a discretion which would fall within the word "assessment" in s75A(10) of the Supreme Court Act or within s57(2)(b) of the L&E Court Act. 103 This Court must be concerned that the course of administration of justice in this State does not impose unnecessary cost burdens on parties by adopting a narrow interpretation of statutory powers conferred upon the Court to ensure the just and efficient administration of justice. Where no new findings of primary fact are required to be made, this Court should exercise a power conferred upon it in wide terms so as to ensure that the costs of legal disputation is minimised and thereby apply the guiding principle in s56 of the Civil Procedure Act 2005 to the exercise of powers conferred by an Act other than that Act or by Rules of Court, so as to facilitate the just, quick and cheap resolution of the issues in dispute in civil proceedings. 104 Nothing in the text of s57 of the L&E Court Act or s75A of the Supreme Court Act requires this Court to refuse to make an order that should have been made where no new findings of fact are required. The reasoning in Tumes adopted in Maurici is based on implication as to what Parliament's intention was by confining the Court's jurisdiction to a question of law. However, confining a power conferred as ancillary or consequential upon the hearing of an appeal, involves a further step that does not ineluctably flow from the fact that the jurisdiction is identified in such terms. 105 An analogous matter was considered by this Court in Patrick Operations where this Court refused to make a fresh apportionment between tortfeasors. Giles JA adopted observations by Kirby J in Vetter supra at [70] to the effect that s32(2) of the Dust Diseases Tribunal Act confined the Court's powers to "correcting decisions on a point of law". His Honour also relied on Maurici. For the reasons I have set out above, in my opinion, the two statutory provisions are distinguishable. The legislative history of workers compensation legislation, on which Kirby J relied in Vetter at [67]-[68] is not applicable to the L&E Court Act. 106 In Patrick Operations, Giles JA also said: "[59] … The legislature's commission to the specialist Tribunal of proceedings in relation to dust-related conditions or deaths, including claims between defendants responsible in law for the conditions or deaths, pointed to primacy of the Tribunal not only in finding the primary facts but also in making decisions such as upon assessment of damages, negligence and determination of just and equitable contribution. By the body of experience built up in the Tribunal those decisions were to be informed and consistent, and supervision through appeal for error in point of law was not intended to extend to replacement by this Court or the Tribunal's decisions in those respects." 107 His Honour went on to refer to the "primacy of" the Tribunal's "position as fact-finder" [60] and concluded that the "evaluative or normative exercises are fact-finding left to the Tribunal" (see [60]-[66]). In my opinion, a power to make an order for costs has a different quality to the power under consideration in Patrick Operations. In this respect, I cannot identify anything to suggest that what is involved is an evaluative judgment which Parliament intended to be determined by the specialist tribunal. 108 The nature of the issue before the Court, once it is properly seized of jurisdiction on a question of law, must determine the extent to which this Court will exercise a general power conferred upon it. This is not a Court which should, save in exceptional circumstances, exercise a discretion to grant a consent to a development application or to a licence or some other such matter calling for the formulation of an evaluative judgment or the exercise of a discretion. It has, however, done so by consent. (Bell v Shellharbour Municipal Council (1993) 78 LGERA 429 at 433.) 109 The position with respect to orders as to costs is quite different. This is a matter upon which this Court is usually in as good a position as a first instance judge, even in a specialist tribunal, to make the relevant judgment, where there is no gap in the factual findings. It is also an area in which, in the experience of this Court, a disproportionate amount of time, effort, energy and, therefore, costs, is often expended. It will often be desirable, in the interests of the administration of justice, for this Court to exercise the costs discretion and avoid the parties incurring further costs. (This Court did so in Maclean Shire Council v Nungera Co-Operative Society Limited (1994) 84 LGERA 139 at 144-145, where counsel for the unsuccessful party did not suggest any reason why his opponent should not receive costs.) 110 In my opinion, Maurici should not be followed insofar as it extended the restriction on this Court's power under s57(2)(b) beyond making findings of primary fact. It is unnecessary to determine the scope of s75A(6)(b) and (10). Identifying the Relevant Costs Rule 111 The Applicant contends that if the Court exercises the costs discretion it should apply the rule as it existed prior to the amendment which had the effect of extending Pt 16 r 4(2) to proceedings under the POEO Act. The Opponent contends that the new rule should apply. 112 In my opinion, this issue falls to be determined on the basis of the interpretation of the opening words of s69(2): "Subject to the rules …". The question is: Which rule? 113 Authority in the Land and Environment Court supports the Opponent's contention. In Maurici v Chief Commissioner of State Revenue (No 8) (2007) 65 ATR 719; [2007] NSWLEC 37, Biscoe J said: "[67] The applicant acknowledged that the rule against retrospective operation of a statute does not apply to statutes that are concerned with procedure only and that costs matters are procedural: Arnett v Holloway [1960] VR 22. However reference was made to the dictum of Dixon CJ in the leading case of Maxwell v Murphy (1957) 96 CLR 261 at 267 quoting Mellish LJ in Republic of Costa Rica v Erlanger (1876) 3 Ch D 62 that: ' No suitor has any vested interest in the course of procedure, nor any right to complain, if during the litigation the procedure is changed, provided, of course, that no injustice is done' . The applicant placed emphasis on the concluding words and submitted that it was ' unjust and unfair' " to apply the rule in circumstances where he had successfully challenged the Practice Note regime by appealing to the Court of Appeal, where up to the commencement of the rule the unfettered discretion of the Court pursuant to s 69(2)(a) of the Act applied, and where the rule was introduced by a need which arose, according to the Explanatory Note to the rule, by reason of the applicant's successful appeal to the Court of Appeal on costs. [68] In my opinion, the ' injustice' which raises a presumption against a procedural statute operating retrospectively is where an alteration of a matter of procedure affects a vested right adversely. This is illustrated by Yrttiaho v Public Curator (Qld) (1971) 125 CLR 228, where it was held that a procedural statute will not be regarded as having retrospective operation if to do so would have the effect of depriving a party of a right of action. If existing rights are merely varied, a procedural statute will operate retrospectively. In the present case I do not see an injustice in applying rule 4(2) retrospectively. In Arnett v Holloway [1960] VR 22, at 33, Adam J quoted Craies on Statute Law , 5th ed., at p 370: ' there is no vested right in procedure or costs. Enactments dealing with these subjects apply to pending actions, unless a contrary intention is expressed or clearly implied .' AMP Henderson is analogous, for there the rule was applied retrospectively when it was introduced after trial but before judgment. Statutes or rules introduced while a case was part heard were applied retrospectively in Galvin v Forests Commission of Victoria [1939] VLR 284 and Jackman v Dandenong Sewerage Authority (No 2) (1967) 20 LGRA 413." 114 As Biscoe J concluded, there is a long line of authority which classifies changes to costs rules as procedural, of which Arnett v Holloway [1960] VR 22 is perhaps the most frequently cited. 115 The English authority that classified costs matters as procedural was Wright v Hale (1860) 30 LJ Ex 40 which, as the Full Court noted in Arnett v Holloway supra at 31-32, was directly in point. Wright v Hale has frequently been relied upon. 116 This line of authority appears to have overlooked the criticism of Wright v Hale shortly after it was delivered. In Kimbray v Draper (1868) LR 3 QB 160. Blackburn J said of Wright v Hale at 163: " … Whether the Court of Exchequer applied that test properly, in holding it was matter of procedure where a statute enabled a judge to deprive a plaintiff of costs in a case where but for the statute he would have been absolutely entitled to them, may be questionable; but for the decision in that case I certainly should have been inclined to think this was taking away a right. The present case, however, is far more clearly matter of procedure, as the statute only imposes on the plaintiff the alternative of giving security for costs or proceeding in the county court. That is certainly much more matter of mere procedure than was the case in Wright v Hale [6 H & N 227; 30 LJ (Ex) 40], and we are bound by the principle of that case, and the rule must therefore be absolute." 117 It may be appropriate, on another occasion after full submissions, to consider the continuing authority of Wright v Hale. The approach which the High Court adopted in a cognate context in John Pfeiffer Pty Limited v Rogerson (2000) 203 CLR 503 esp at [99], suggests a different approach to that reflected in the line of authority presently under consideration. In particular the favourable reference in John Pfeiffer to the observations of Mason CJ in McKain v R W Miller & Co (SA) Pty Limited (1991) 174 CLR 1 as explained by his Honour in Stevens v Head (1993) 176 CLR 433 at 445 which referred to matters "directed to governing or regulating the mode or conduct of court proceedings" and to "the mechanism or machinery of litigation" may suggest a different view. (See Hamilton v Merck & Co Inc (2006) 66 NSWLR 48 at [8]-[11].) 118 In the present case the Claimant relied on the observations of Mellish LJ in Republic of Costa Rica v Erlanger (1876) 3 Ch D 62 at 69: "No suitor has any vested interest in the course of procedure, nor any right to complain, if during the litigation the procedure is changed, provided, of course, that no injustice is done ." This passage was referred to with approval in Maxwell v Murphy (1957) 96 CLR 261 at 267, the origin of Australian doctrine on determining the application of the presumption against retrospectivity. The Claimant relies on the italicised words and submits that, in the present case, there would be an injustice if the new costs rule applied. 119 The fact that the new Pt 16 r 4 contains a presumption against an order for costs is a significant difference, although many of the submissions upon which the Claimant relies could also support an argument that it is "fair and reasonable" to award costs in the circumstances of this case. 120 In a frequently cited passage, Dixon J in Maxwell v Murphy referred to the common law presumption against retrospectivity and said at 267: " … [G]iven rights and liabilities fixed by reference to past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption. Changes made in practice and procedure are applied to proceedings to enforce rights and liabilities, or for that matter to vindicate an immunity or privilege, notwithstanding that before the change in the law was made the accrual or establishment of the rights, liabilities, immunity or privilege was complete and rested on events or transactions that were otherwise past and closed …" 121 It is appropriate to classify a discretionary power to award costs as falling within the concept of "the manner" in which the "enjoyment" of a legal right "is to be secured". 122 What Dixon J described as a "presumption" should now be understood in the way it was explained in the joint judgment in Rodway v The Queen (1990) 169 CLR 515 at 518: "The rule at common law is that a statute ought not be given a retrospective operation where to do so would affect an existing right or obligation unless the language of the statute expressly or by necessary implication requires such construction. It is said that statutes dealing with procedure are an exception to the rule and that they should be given a retrospective operation. It would, we think, be more accurate to say that there is no presumption against retrospectivity in the case of statutes which affect mere matters of procedure. Indeed, strictly speaking, where procedure alone is involved, a statute will invariably operate prospectively and there is no room for the application of such a presumption. It will operate prospectively because it will prescribe the manner in which something may or must be done in the future, even if what is to be done relates to, or is based upon, past events. A statute which prescribes the manner in which the trial of a past offence is to be conducted is one instance. But the difference between substantive law and procedure is often difficult to draw and statutes which are commonly classified as procedural - statutes of limitation, for example - may operate in such a way as to affect existing rights or obligations. When they operate in that way they are not merely procedural and they fall within the presumption against retrospective operation. But when they deal only with procedure they are apt to be regarded as an exception to the rule and, if their application is related to or based upon past events, they are said to be given a retrospective operation provided that they do not affect existing rights or obligations." 123 This passage emphasises that the issue is always one of statutory interpretation. To classify an Act as relating to a matter of "procedure" and, therefore, to conclude that it operates retrospectively, turns what Rodway characterises as the inapplicability of a presumption, into a presumption to the contrary. 124 As Gleeson CJ has said in Attorney-General (Qld) v Australian Industrial Relations Commission (2002) 213 CLR 485 at [6]: "When a statute changes the law, the effect of the change upon existing rights, liabilities, claims, or proceedings is determined by the meaning of the statute. The common law developed rules of statutory construction as an aid to discovering that meaning. Such rules involved presumptions; but, being rules of construction, they were subject to any contrary intention evinced with sufficient clarity in the statute [ Maxwell v Murphy (1957) 96 CLR 261 at 267, 270, per Dixon CJ]. When expressed in summary form, those rules distinguished between retrospective and prospective effect, and between procedural provisions, and provisions affecting rights or liabilities. However, such distinctions are not always clear-cut. The terms retrospective and prospective may often be a convenient shorthand, but in a given case it may be necessary to identify more precisely the particular application of the alteration to the law in question. And, as the present case shows, there may be rights which, in their nature, are closely bound up with procedures and remedies." 125 Furthermore, to classify something as "procedural" is often the end result of a process of interpretation, rather than the starting point. Indeed, Julius Stone identified the distinction between substance and procedure as so indeterminate that it fell into his Legal Category of Meaningless Reference. (Julius Stone Legal Systems and Lawyers' Reasonings, Maitland, Sydney, 1964, pp340-341.) 126 As Frankfurter J said in Guaranty Trust Co of New York v York, 326 US 99 (1945) at 108: "Matters of 'substance' and matters of 'procedure' are much talked about in the books as though they defined a great divide cutting across the whole domain of law. But, of course, 'substance' and 'procedure' are the same key-words to very different problems. Neither 'substance' nor 'procedure' represents the same invariants. Each implies different variable depending upon the particular problem for which it is used." 127 All the normal rules of statutory interpretation apply when deciding how an amending Act operates upon past events. Even an Act which is clearly intended to operate retrospectively may only be given such an operation to the extent necessitated by text, context and purpose. (See Reid v Reid (1886) 31 Ch D 402 at 408-409; Lauri v Renad (1892) 3 Ch 402 at 421; Attorney General of New South Wales v World Best Holdings Limited (2005) 63 NSWLR 557 at [48]. 128 Where litigants have pursued their legal rights in a court, the extent to which that has occurred will have created expectations about matters that may transform an element from merely the manner in which the enjoyment of a right is to be secured (Maxwell v Murphy at 267) into a right which the Parliament would be expected to respect. 129 The qualification that "no injustice is done" in the terms of the judgment of Erlanger quoted above, should be given effect when interpreting a power to award costs. The manner in which such effect is given is to recognise that what is involved is a process of statutory interpretation. The issue is not whether it is appropriate to attach a label such as "procedural" or "substantive". The issue is what the relevant enacting body intended to be the effect of the provision upon the matter that has arisen. 130 I repeat my analysis in Lodhi v R (2006) 199 FLR 303; [2006] NSWCCA 121 at [23]. Although frequently expressed as a canon of construction or principle of the law of statutory interpretation, the reference to "retrospectivity" encompasses a range of distinct circumstances in which the general principle has fallen to be applied. In terms of the element of injustice or unfairness associated with retrospectivity, variation of rights and obligations after the pre-existing law has been invoked or otherwise relied upon does add an element of injustice or unfairness which does not exist before any such step is taken. Accordingly, there is a body of case law in which retrospectivity with respect to pending proceedings is treated as a distinct category. (See e.g. Re Joseph Suche & Co Limited (1875) 1 Ch D 48 at 50; Hutchinson v Jauncey [1950] 1 KB 574 at 579; Continental Liqueurs Pty Limited v G F Heublein & Bro Inc (1960) 103 CLR 422 at 427; Zainal bin Hashim v Government of Malaysia [1980] AC 734 at 742; L'Office Cherifien des Phosphates v Yamashita-Shinnihon Steamship Co Ltd [1994] 1 AC 496 at 495-495 and 524-525; Wilson v First County Trust Ltd (No 2) [2004] 1 AC 816 at [19], [153], [186], [193]-[198], [200]-[201] and [219]; State of Victoria v Robertson (2000) 1 VR 465 esp at [21]-[22], [25]; World Best Holdings Ltd supra at [49]-[63].) 131 Where proceedings are pending, particularly as in Zainal where an appeal had already been instituted, the formulation from Erlanger may require the Court, when interpreting a statutory provision, to consider the degree of injustice that arises. As Kirby J said in Chang v Laidley Shire Council (2007) 81 ALJR 1598 at [83]: "It is not simply a question of classifying an enactment as retrospective or not retrospective. Rather, it may well be a matter of degree – the greater the unfairness, the more it is to be expected that Parliament will make it clear if that is intended." 132 In the present case, the position may be quite different for proceedings instituted in the Land and Environment Court, but not determined until after the new rule came into force, than in a case like this, where a new provision has come into effect after an appeal is lodged but before it is heard. It is unnecessary to decide the former. 133 The relevant dates in the present case are that the judgment on costs was given by Preston CJ of the Land and Environment Court on 5 December 2006. The application for leave to appeal was filed in this Court on 14 March 2007. The new rule came into force on 5 April 2007. 134 The appeal to this Court was only on the issue of costs. In my opinion, the test of "injustice" identified in Erlanger should be applied to the words "subject to the rules" in s69(2). Those words should be understood, where an appeal on a question of costs has been commenced, to refer to the "rules" as they existed at the time the appeal was instituted. 135 Accordingly, this Court should exercise the costs discretion on the basis of the rule as it existed before 5 April 2007. The Exercise of the Discretion 136 In my opinion this is an appropriate case in which costs ought to have been awarded in the proceedings before the Commissioner and before Preston CJ of the Land and Environment Court. 137 I have set out above the findings of fact by the Commissioner to the effect that the Claimant was neither the occupier of the relevant premises nor the person conducting the relevant activity. As may be implicit in the reasoning of Justice Preston, the Claimant may be regarded as fortunate to have succeeded with respect to the second matter as a finding of fact. Nevertheless, he did succeed and was entitled to the benefit of the conclusion that no Prevention Notice should have been issued to him at all. 138 It is relevant to set out the chronology of the attempts by the Claimant to settle the matter. The relevant events were: · 29 May 2006: Prevention Notice issued by the Council to the Claimant. · 6 June 2006: Letter from the Claimant to the Council stating: "Please note that our client has no jurisdiction or responsibility in relation to the repair and maintenance of the exhaust system. The exhaust system which is common property must be repaired and maintained by the owners corporation … " · 8 June 2006: Reply from the Council stating: " … [T]he said Notice was served upon your client as the person who occupies the premises and who is carrying on the activity of operating the exhaust system in an environmentally unsatisfactory manner. I also note that the exhaust system is not entirely common property as its intake hood is within your client's lot. Even if the position is as stated in your letter, Council considers it is open to your client to seek the consent of the Owners Corporation to carry out the work necessary to comply with the Notice. If this consent is not forthcoming, your client can approach the Land and Environment Court for appropriate orders. Consequently your request to withdraw the Notice is refused and it is recommended that your client liaise with the Owners' Corporation in order to comply." · 24 July 2006: Claimant filed a Statement of Contentions asserting: "2 The Applicant is only responsible for the kitchen exhaust system within the confines of the restaurant subject to its lease with the owner of Lot 48; 3 The Applicant has complied with order 1 of the Prevention Notice, including the removal of grease, oil and other substances from the plant room and roof levels, without admission of any responsibility over the exhaust systems at the plant room and roof levels." And concluding: "10 Accordingly the order sought by the Respondent in paragraph 1(a) of the Prevention Notice imposes an unjustified and unfair expense on the Applicant who is only a tenant in the building with the Owners Corporation SP 70938 having the legal responsibility to comply with the Order and accordingly the Order sought against the Respondent is unreasonable in all the circumstances." · 9 August 2006: Council Reply to the Statement of Contentions asserting: "2 The Applicant is the occupier of the premises and the person carrying on the activity in an environmentally unsatisfactory manner and is responsible for the consequential impacts caused by its occupation and use of the ground floor restaurant, including its use of the mechanical ventilation exhaust system. 3 The Applicant remains responsible and liable for the discharge of any waste, odours or other pollutants, that are the result and consequence of occupation and use of the ground floor restaurant and the mechanical ventilation exhaust system." And: "8 The Applicant is the occupier of the ground floor restaurant where the kitchen exhaust system is located. The Applicant is also the person carrying on the activity in an environmentally unsatisfactory manner." Concluding: "10 The use and operation of the kitchen exhaust system, located within the restaurant, is within the control of the applicant, and therefore the applicant is responsible for any odours and other substances discharged as a consequence of the use and operation of the ground floor kitchen exhaust system." · 18 August 2006: Claimant letter to the Council saying inter alia: " … We request that the council state in writing its position as to whether as a matter of construction the prevention notice requires our client to do any work. If the answer is no and the council only requires the provision of a report and not the carrying out of works that may be recommended in that report our client may be amenable to discontinuing his appeal and providing such a report to council. … Our client is concerned to not incur unnecessary costs in respect to this matter and has at all times co-operated with council in regard to the operation of the restaurant. However he considers he is being unfairly targeted to remedy problems with the building that were not of his making and are not his responsibility legally." [Page 300806] · 31 August 2006: Notice of Motion in the Land and Environment Court, the Claimant sought to resolve the proceedings on the following basis: o "Within 14 days the council is to serve on the applicant the draft terms of an order requiring the applicant to provide a Compliance Assessment Report to the council in respect to the mechanical ventilation system located at the applicant's restaurant premises." o "Within 14 days of the receipt of the draft terms of the order the applicant to indicate in writing to the council whether it agrees with that order and if not, the suggested wording of any such order." o "Within 21 days of today's date the applicant is to submit to the council evidence of the cleaning of the exhaust system in the restaurant." · 4 September 2006: The Claimant asked the Applicant to: " … confirm urgently that it is in order for our client to provide a Compliance Assessment Report in accordance with terms of 1(a) of the Prevention Notice in respect of its own premises namely Lot 48 SP 70938." 139 As noted above the Council persisted in its contention that the Claimant was obliged to provide the relevant Compliance Report with respect to the whole of the ventilation system and not simply that component in the premises occupied by the Claimant. 140 Accordingly, the Claimant found itself in a position in which it was required to incur considerable expenditure in complying with the Notice or proceeding with its appeal. Failure to comply with the Notice would constitute an offence under s97 of the POEO Act with a maximum penalty of $1 million. Furthermore, pursuant to s98 of the POEO Act, if the Claimant did not comply then the Council was authorised to take the action to cause the Notice to be complied with. Finally, pursuant to s100 the Council was entitled to recover from the Claimant the administrative costs of preparing and giving the Prevention Notice unless the Claimant was successful in its appeal. 141 As I have indicated above, it is significant that the nature of the proceedings in the Land and Environment Court did not concern an application for a consent or a licence by the Claimant. Rather, the Claimant was resisting the imposition of a burden upon it by a Council demand that was found by the Court to be unjustified. 142 As the chronology of the discussions I have set out above show, the Claimant sought on a number of occasions to restrict the extent of its obligation to the particular area of its responsibility i.e. that part of the exhaust system which was part of the premises over which it had a lease. The Council, as the Commissioner eventually found, could never have asked for more. 143 In my opinion, in these circumstances, it is just and reasonable that the Council should compensate the Claimant for the costs it was forced to incur by reason of the Council's insistence upon maintaining its stance. (See Ohn v Walton (1995) 36 NSWLR 77 at 79 B-F.) Conclusion 144 The orders I propose are: 1 Leave to appeal granted. 2 Direct the Claimant to file a Notice of Appeal within 14 days. 3 Upon the Notice being filed, appeal allowed. 4 Order that the Respondent pay the Appellant's costs in the Land and Environment Court before both Commissioner Brown and Justice Preston and in this Court. 145 MASON P: I agree with Spigelman CJ. 146 BEAZLEY JA: I have had the advantage of reading in draft the judgment of the Chief Justice. I agree with his Honour's reasons and proposed orders and only make the following comments. 147 Having regard to the arguments advanced in this Court and his Honour's construction of s 57 of the Land and Environment Court Act 1979 (NSW) and s 32(2) of the Compensation Court Act 1984 (NSW) (the Compensation Court Act), I agree that this Court's decision in Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673, in which I agreed with the judgment of Handley JA, should not be followed and that this Court may exercise the cost discretion under s 57. 148 I also note the doubt that the Chief Justice has raised in respect of the construction given to s 32 of the Compensation Court Act by me (Giles JA and Davies AJA agreeing) in North Broken Hill Ltd v Tumes [1999] NSWCA 39; 18 NSWCCR 412. I would prefer to reserve any consideration of the correctness of that decision until it is raised directly as an issue in an appropriate case. 149 GILES JA: I agree that, for the reasons given by Spigelman CJ, there was error on a question of law whereby the Chief Judge's exercise of discretion miscarried. 150 I agree that this Court can re-exercise the discretion, but my reasons differ in part from those of his Honour. The Chief Justice addresses power to re-exercise the discretion with regard to s 57(2)(b) of the Land and Environment Court Act 1979 and s 75A(6)(b) and (10) of the Supreme Court Act 1970. 151 His Honour considers that s 57(2) is distinguishable from s 32(2) of the Compensation Court Act 1984. On his Honour's reasoning, it would provide a wide basis for orders in this Court. I respectfully adhere to the view that s 32(2) and s 57(2) are relevantly indistinguishable. In Patrick Operations Pty Ltd v Comcare [2006] NSWCA 142 at [56] I explained why "and" in the identical s 32(2) of the Dust Diseases Tribunal Act 1989 can be read as "or". In both provisions the joining word should be understood as "and/or", and the limitation lies in the jurisdictional basis of an appeal "on a question of law". However, upon reconsideration I agree that the extension from fact-finding to the exercise of a discretion in Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673 was too widely stated. The re-exercise of a discretion as to costs without new or further findings of fact is preferably equated with pronouncing the result in law correct on the facts, rather than with an evaluative assessment in the nature of a finding of fact, and there is insufficient reason in the nature of a specialised tribunal to restrict the exercise of the discretion to the tribunal. Accordingly, under either provision there can be re-exercise of a discretion as to costs. In the present case no new or further findings of fact are needed, and this Court can act under s 57(2)(b). 152 The Chief Justice finds it unnecessary to determine the scope of s 75A(6)(b) and (10). I prefer to leave reconsideration of that matter until it is necessary. 153 I agree with the re-exercise of the discretion proposed by the Chief Justice and with his Honour's reasons. 154 I agree with the orders proposed. 155 IPP JA: I agree with Spigelman CJ. ********** 30/10/2007 - (1952) change to (1957)NSWLR to NSWCCRCamperdown to Campbelltowns71A to s75A - Paragraph(s) [57], [84], [87] and 150 16/03/2009 - Lauri v Renad [1892] 3 Ch 402 at 421 - Paragraph(s) [127] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.