Land and Environment Court New South Wales Medium Neutral Citation: Hume Coal Pty Limited v Alexander (No 4) [2013] NSWLEC 106 Hearing dates: 10 July 2013 Decision date: 17 July 2013 Jurisdiction: Class 8 Before: Sheahan J Decision: (1) The first and second defendants are ordered to pay the plaintiff's costs of these proceedings. (2) The first and second defendants are ordered to pay the plaintiff's costs of its motion for costs. Catchwords: COSTS: Successful plaintiff in Class 8 injunction proceedings seeking costs orders - defendants contend "public interest litigation" - principles to apply - costs of motion Legislation Cited: Civil Procedure Act 2005 Mining Act 1992 Land and Environment Court Rules 2007 Uniform Civil Procedure Rules 2005 Cases Cited: Anderson v Minister for Planning (No 2) [2008] NSWLEC 272; 163 LGERA 132 Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd [2009] NSWLEC 165; 170 LGERA 22 Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No 2) [2004] NSWLEC 434; 136 LGERA 365 Geeveekay v Director of Consumer Affairs Victoria (No2) [2008] VSC 152 Hastings Point Progress Association Inc v Tweed Shire Council (No 3)[2010] NSWCA39; 172 LGERA 157 Hollier v Australian Maritime Safety Authority (No2) [1998] FCA 975 Hume Coal Pty Ltd v Alexander [2012] NSWLEC 267 Hume Coal Pty Ltd v Alexander (No 2) [2012] NSWLEC 278 Hume Coal Pty Ltd v Alexander (No 3) [2013] NSWLEC 58 John Williams Neighbourhood Group Inc v Minister for Planning [2011] NSWLEC 100; 183 LGERA 327 Minister for Planning v Walker (No 2) [2008] NSWCA 334 Noone v Mericka (No 2) [2012] VSC 2 Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 Westpoint Finance Pty Ltd v Chocolate Factory Apartments Ltd [2002] NSWCA 287 Category: Costs Parties: Hume Coal Pty Limited (Plaintiff) Ross Alexander (First Defendant) Margaret Anne Alexander (Second Defendant) Representation: Mr R C Beasley SC (Plaintiff) Mr S Chapple, barrister (Defendants) Minter Ellison (Plaintiff) Environmental Defender's Office (Defendants) File Number(s): 81128 of 2012 Judgment Introduction 1The plaintiff company ("Hume") seeks, by Notice of Motion ("NOM") filed on 30 May 2013, an order that the defendants pay its costs of both these proceedings, and this NOM, on a party/party basis. 2The court earlier reserved the questions of costs of interlocutory proceedings, an application for expedition, and the substantive hearing. (See [2012] NSWLEC 267 ("No 1"), judgment (No 2) [2012] NSWLEC 278, and judgment (No 3) [2013] NSWLEC 58, respectively). 3The plaintiff contends, and I accept, that, having failed to obtain interlocutory relief, its costs of that first hearing should be regarded as its "costs in the cause", and should abide the determination of the costs of the substantive proceedings: Westpoint Finance Pty Ltd v Chocolate Factory Apartments Ltd [2002] NSWCA 287, at [66]-[68]. Hume also submits that the costs of the expedition application would ordinarily be regarded as part of each party's costs in the proceedings as a whole. 4The power of the court to order costs is in s 98 of the Civil Procedure Act 2005. Section 98(1) provides: (1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. 5The relevant "rules of court" are in Pt 42 of the Uniform Civil Procedure Rules 2005 ("UCPR"). Part 42 r 42.1 provides: Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. 6The Land and Environment Court has adopted specific court rules, including in relation to costs of proceedings in certain classes of its jurisdiction, which can prevail over r 42.1 of the UCPR to the extent only of any inconsistency between them: Civil Procedure Act, s 11 and UCPR, r 1.7 and Schedule 2. Part 4 r 4.2 of the Land and Environment Court Rules 2007 is an illustration. Rule 4.2(1) provides: (1) The Court may decide not to make an order for the payment of costs against an unsuccessful applicant in any proceedings if it is satisfied that the proceedings have been brought in the public interest. 7However, this rule is applicable only to proceedings in Class 4 of the court's jurisdiction. The present proceedings are in Class 8 of the court's jurisdiction, and there is no specific rule in the Land and Environment Court Rules dealing with costs of proceedings in Class 8. Hence, UCPR r 42.1 applies. 8The outcome of this costs NOM, therefore, depends on the proper characterisation of the substantive (Class 8) proceedings, which the defendants claim should be regarded as "public interest litigation". What The Case Involved 9The factual background to the proceedings was set out, in detail, in my two earlier judgments, Nos 1 and 3 (No 2 being Craig J's decision on the plaintiff's application for expedition, which the defendants neither consented to, or opposed), and that detailed history need not be repeated here. 10The plaintiff's complaint concerned a "blockade" erected to prevent its use of a right-of-way ("ROW"), known as Carter's Lane, which crossed the defendants' land, and provided the primary means of access to a neighbouring property (owned by Koltai). 11The plaintiff company proposed to explore for coal on the Koltai land (but not yet mine it), pursuant to an exploration licence, and an access agreement with Koltai, but Hume had no access agreement with the Alexanders in respect of their land. 12By letter dated 28 September 2012, Mr Alexander denied Hume access to their land, and, on 1 October 2012, he and others erected a blockade on Carter's Lane. 13On 12 October 2012, he sent to Hume a letter received from Mrs Karen Spiegel-Keighley, asserting that any access agreement made by owners of the nine lots created by a subdivision done by her late husband, Hon W G Keighley (see No 1, at [46]), put them in breach of a covenant imposed on the purchase, and potentially exposed them to legal action. 14Later in October, Hume's solicitors told the Alexanders that "prospecting", and driving over Carter's Lane, were not covered or prevented by the covenant, as "industrial or commercial" activity, so the covenant had no relevance to Hume's use of the ROW. 15On 31 October, the solicitors sought an undertaking from Alexanders to dismantle the blockade, and indicated that action would be commenced to enforce the right of way. On 23 October, Mr Alexander had told a Hume official at the blockade that "the impasse would need to be resolved by a court" (No 1 at [66]). On 8 November, these proceedings were commenced. 16I heard Hume's application for an interlocutory injunction on 16 and 29 November, and declined it on 7 December 2012, basically on "balance of convenience" grounds, having found several "serious issues to be tried" - I noted that interlocutory relief (directing the removal of the blockade) would disturb, rather than preserve, the "status quo", and so end the whole proceedings. (See also Craig J, in No 2, at [2]). 17After expedition was granted, the final hearing took place before me on 18 February 2013. 18The plaintiff was seeking an injunction pursuant to s 295 of the Mining Act 1992, along with other orders and damages, but, at the final hearing, its claim for damages (largely involving expenses incurred for security measures) was not pressed. In this respect it is to be noted that the summons was not amended, and that, prior to the commencement of the final hearing, the defendants were given no advance notice of the decision not to press the damages claim (Higginson affidavit 5 July 2013). 19The ambit of the issues raised by the defendants reduced significantly between the interlocutory and final hearings to the following three matters (No 3, at [95]): (a) the so-called "covenant issue" - did the Keighley covenant prohibit prospecting on the Koltai land, and/or prohibit Koltai from allowing prospecting on his land, and/or from making what purported to be a legal and valid access agreement with Hume? (b) the so-called "access agreement issue" - did Hume need to have in place an access agreement with the Alexanders, because driving relevant personnel, materials, and equipment to and from any borehole site is a "prospecting operation" under the Act? (c) questions of discretion, arising largely from the availability to Hume of alternative access routes to the Koltai sites, and the defendants' contention that Hume has no standing to bring proceedings against the Alexanders. 20Essentially, I accepted the plaintiff's case on each of those three issues, and made the following final substantive orders on 3 May 2013 (at [119]): 1. The Court declares that the Plaintiff has a right to use the Carriageway to access the Land to carry out prospecting pursuant to the access arrangement between it and Robert Koltai, Exploration Licence 349, and the Mining Act 1992. 2. The Court grants an injunction, pursuant to section 295 of the Mining Act 1992, restraining the Defendants from: (a) preventing the Plaintiff using the Carriageway to access the Land to carry out prospecting from the date of the order; and (b) restraining the Defendants from inviting or allowing third parties on to the Carriageway for the purposes of preventing the Plaintiff from using the Carriageway to access the Land to carry out prospecting from the date of the order. 3. The Court orders that the Defendants prevent, or take reasonable steps to prevent, third parties on the Defendants' land from preventing the Plaintiff from using the Carriageway to access the Land to carry out prospecting for a period of two months from the date of the order. ... 21As I commented (at [118], in making those orders), Hume was "entirely successful" in respect of all the prayers of relief for which it pressed, save the question of costs, upon which it was, "entitled to expect an order" in its favour. As the costs of the earlier stages of the matter had been reserved, I again reserved the question. 22The plaintiff now submits that the "event" of its success entitles it to the usual order for its costs, on a party/party basis, it being guilty of no disentitling conduct. It refutes the defendants' response that the litigation was "public interest litigation", such that the general costs rule, that "costs follow the event", is excluded. "Public Interest" Cases 23What constitutes "public interest litigation" is "difficult to define with precision" (per Kirby J in Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 ("Oshlack"), at [136]). 24It is unusual, at least in this court, for the public interest character of proceedings to be argued by an unsuccessful defendant, rather than by an unsuccessful plaintiff or applicant, but it has happened elsewhere. No submission was put to me that the argument should not be entertained, and I can see no reason to so restrict it. See, eg, Noone v Mericka (No 2) [2012] VSC 2 ("Noone"). When the authorities speak of proceedings "brought" in the public interest, they, therefore, should be read as applying to proceedings "brought or defended". 25It is common ground that in applying the "public interest" test, the court will generally look at three factors, articulated by the Chief Judge in Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd [2009] NSWLEC 165; 170 LGERA 22 ("Caroona"), also Class 8 proceedings, at [13]. 26These principles, which are more guidelines than fixed criteria, have guided the exercise of the costs discretion in this court on many occasions since (including by me, for example, in John Williams Neighbourhood Group Inc v Minister for Planning [2011] NSWLEC 100; 183 LGERA 327 at [31]-[50]), and are: (a) whether the litigation can be characterised as having been brought in the public interest; (b) whether there is "something more" than the mere characterisation of the litigation as being brought in the public interest; and (c) whether there are any counterveiling circumstances, including those relating to the conduct of the applicant, which speak against a departure from the usual costs rule in respect of public interest litigation. 27In Noone, Sifris J applied the Caroona principle that "something more is required", beyond "the fact that litigation may be of interest or relevance to the general community and to the government or any statutory body". 28In Caroona (at [38]), Preston J also adopted Lloyd J's "five considerations" for characterisation of proceedings as having a "public interest" character (see Engadine Area Traffic Action Group Inc v Sutherland Shire Council (No 2) [2004] NSWLEC 434; 136 LGERA 365 ("Engadine"), at [15]): (a) The public interest served by the litigation... (b) Whether that interest is confined to a relatively small number of members from the group or association in the immediate vicinity of the development, concerned with their own private amenity; or whether the interest is wider, involving a significant number of members of the public and concern for a wider and significant geographic area.... (c) Whether the applicant sought to enforce public law obligations.... (d) Whether the prime motivation of the litigation is to uphold the public interest and the rule of law.... (e) Whether the applicant has no pecuniary interest in the outcome of the proceedings.... 29The Court of Appeal endorsed the Engadine considerations in Minister for Planning v Walker (No 2) [2008] NSWCA 334. 30Biscoe J opined, in Anderson v Minister for Planning (No 2) [2008] NSWLEC 272; 163 LGERA 132 ("Anderson"), that the public interest aspect of a matter may be of such magnitude that it would be, of itself, sufficient, his Honour said (at [10]-[11], emphasis mine): 10 Yet even the general principle that there has to be something more than the public interest is not rigid; for the nature of the public interest, of itself, may be of such moment or magnitude as to be sufficient to depart from the usual order as to costs. As noted in Oshlack (1998) 193 CLR 72 at [42], Liversidge v Anderson [1942] AC 206 at 283 is a celebrated example of "a matter of very general importance" - the liberty of the subject in time of war - in which it was inappropriate for the successful defendant (the Secretary of State) to seek costs against the incarcerated, unsuccessful plaintiff. There was no suggestion that any additional factor was necessary. 11 The new LECR r 4.2(1) does not prescribe that, in addition to the public interest, there must be a factor leading to the conclusion that there are special circumstances justifying departure from the usual costs rule. Hence, such special circumstances are not a mandatory prerequisite to the exercise of the discretion to depart from the usual order as to costs in public interest cases. However, in my opinion, the discretion under the new rule is only enlivened if departure from the usual costs order is justified. The public interest consideration alone may be of such moment or magnitude as to ground that justification ... 31On the "something more" and "countervailing circumstances" tests, Preston J opined, in Caroona, at [60]-[61] (many citations omitted): Circumstances in addition to mere characterisation ... 60 ... The circumstances identified fall into at least five categories: (a) the litigation raises one or more novel issues of general importance: ... Oshlack at [49], [144] ... ; (b) the litigation has contributed, in a material way, to the proper understanding, development or administration of the law: ... Oshlack at [136] ... ; (c) where the litigation is brought to protect the environment or some component of it, the environment or component is of significant value and importance: ... Oshlack at [20], [49] ... ; (d) the litigation affects a significant section of the public: Oshlack at [20], [49]; Engadine at [15], [17]; ... Anderson at [14] ... ; and (e) there was no financial gain for the applicant in bringing the proceedings: Oshlack at [136]; ... Engadine at [15] ... . Countervailing considerations 61 Even where courts have found or assumed that the litigation could be characterised as public interest litigation, they may decline to depart from the usual costs rule because of countervailing considerations. Some of these can be seen to be the converse of the public interest considerations earlier referred to, but others are independent. Countervailing considerations identified in the cases include: (a) the applicant is seeking to vindicate rights of a commercial character and stands to benefit from the litigation: ... Anderson at [16] ...; (b) where the applicant is an incorporated association, the private interests of members of the association would be affected, legally or financially, by the outcome of the litigation: Hastings Point Progress Association Inc v Tweed Shire Council (No 3)[2010] 172 LGERA 157 ("Hastings") at [11]; or the group is a "façade" or vehicle for persons wishing to protect their own commercial interests: Hastings at [33], [34]; (c) the applicant is supported financially by persons or bodies who would benefit from, or would have their legal or financial interests affected by, the outcome of the litigation ... ; (d) the narrowness of the question of public interest raised, such as only involving a discrete point of interpretation without broad ramifications: ... Anderson at [30]; Hastings at [11], [54] ... ; (e) the applicant "unreasonably pursues or persists with points which have no merit" (Oshlack at [134] per Kirby J) or issues that were not "eminently arguable", to use Stein J's phrase: ... Anderson at [30]; and (f) there is disentitling conduct of the applicant, such as impropriety or unreasonableness in the conduct of the litigation ... 32In applying these principles to the circumstances in Caroona, Preston J found (at [81]-[93]): 81 In summary, I find that, first, the proceedings might be able to be characterised as being brought in the public interest; secondly, the nature, extent and other features of the public interest involved in the litigation are limited and there are no other special circumstances which would justify departure from the usual costs rule; and thirdly, there are countervailing factors that also speak against departure from the usual costs rule. 82 In relation to the first step, the applicant sought by the litigation to uphold and enforce public law obligations under natural resources legislation, the Mining Act. The applicant claimed that decisions had been made to renew a mining authority and to partially transfer it in breach of certain statutory obligations. ... If the breaches had been established, the regulatory scheme would have been impaired to some degree. 83 As Basten JA suggested in Hastings ... at [7], the applicant's attempt through the litigation to ensure that the natural resources legislation of the Mining Act was not breached with impunity constitutes a public interest of a sufficient kind to characterise the litigation as being brought in the public interest. 84 I do not find, however, that the litigation directly sought to uphold the public interest of environmental protection, notwithstanding the applicant's submission that this was the public interest served by the litigation. ... The litigation concerned only the validity or otherwise of the renewal and partial transfer of exploration licences. None of the statutory provisions claimed to have been breached directly concerned environmental protection. ... 85 In relation to the second step, a closer examination of the nature, extent and other features the public interest involved in the litigation reveals that there is no circumstance or factor other than the mere characterisation of the litigation as having been brought in the public interest. 86 The litigation did not raise any novel issue of general importance. As the Minister submits, the case turned on the application of well-known and undisputed principles of statutory construction and on fact finding in the particular circumstances. ... ... 88 The litigation affected the holder of the exploration licence, CMA, and the landowners whose land was within the area of the exploration licence. ... However, the litigation did not affect the broader community as submitted by the applicant for the reason that the litigation did not directly concern the protection of the environment of the Liverpool Plains. 89 Finally, whilst it may be correct to say that the applicant, as an incorporated association, did not stand to gain financially from bringing the proceedings, the applicant was merely the vehicle used by its members to bring the proceedings. The majority of the members of the applicant are landowners whose properties are within the area of the exploration licence challenged. The private interests of these landowner members, both legal and financial, did stand to be affected materially by the litigation. 90 In relation to the third step, there are countervailing factors that support application of the usual costs rule. As I have noted, the litigation was of considerable consequence for the private interests of a majority of the members of the applicant. Basten JA in Hastings ... noted that where the applicant is an incorporated association, in exercising the costs discretion, a court "is entitled to look behind the legal structure of the applicant to identify whose interests, both legal and financial, may be affected in a practical sense" (at [11]). Here, the landowners' properties are of high agricultural productivity and high value. The landowners have a significant financial interest in the litigation. 91 The existence of this significant financial interest of the landowners who are members of the applicant is relevant to the issue of ensuring access to justice, which is a rationale for departure from the usual costs rule. ... [C]osts are not a barrier to this applicant achieving access to justice. 92 I have also noted that the issues raised by the litigation were narrow, involving discrete points of statutory interpretation and fact finding. They do not have broader ramifications. 93 In conclusion, the particular circumstances relating to the public interest involved in this litigation as well as other circumstances relating to the applicant and its litigation, do not provide justification for departure from the usual costs rule. Application of those Principles to this Case 33The plaintiff contends that not only the principles in Caroona, but also their application to the facts of that case, should determine the question of costs in this matter. 34The defendants claim that they defended the proceedings for more than purely private reasons, and that the public interest arises at three levels in the present case (see Higginson affidavit 14 June and the defendants' submissions): (a)the local level, as it relates directly to lands in the Keighley/Golden Vale subdivision (nine landholdings); (b)the community level, in terms of the amenity of the Southern Highlands being protected from the environmental effects of coal mining activity; and (c)the State-wide level, in terms of the proper interaction between the Mining Act and the private property rights of citizens. 35The Full Federal Court said, in Hollier v Australian Maritime Safety Authority (No2) ("Hollier") [1998] FCA 975, at p5: In a common law jurisdiction decisions of the courts, in private as well as public law, often clarify the law or lay down new law for the benefit of citizens, taxpayers, traders, patentees, insurers ... etc etc. To that extent, much litigation has a public interest going beyond the interests of the parties. But this feature is inherent in common law litigation and provides no ground for departure from the usual rule as to costs. And, as has been pointed out in another context, what interests the public is not necessarily in the public interest... . 36In Hastings, Basten JA pointed out (at [8]) that, in many instances, there is "no bright line to be drawn between public and private interests". (See also Caroona at [24]-[25]). 37Bell J noted in Geeveekay v Director of Consumer Affairs Victoria (No2) [2008] VSC 152 ("Geeveekay" - p6, at [6]), that cases in which the usual costs order is not made typically involve factors such as the losing party having no financial or other personal or private interest in the litigation, but being "uniquely placed ... to bring the proceeding in the public interest". 38As objecting neighbouring landholders, whose land is to be crossed by a coal explorer, despite their refusal to make an access agreement with the plaintiff, the Alexanders would appear to fit Bell J's description. Noone and the present case were run/defended for public and private reasons. Here the defendants wished to vindicate their own position of opposition to mining activity in the area, and certainly on the property adjacent to theirs, and so had "a very real personal and private interest in the matters the subject of the litigation" (Noone, at [34]). 39In Noone (at [33]), Sifris J said: Where proceedings are brought for a private benefit, and not necessarily the benefit of the public or to enforce a public duty, the mere fact that they also resolved an important legal question is insufficient to justify departure from the usual orders as to costs". 40However, as noted in Hollier ([35] above), and stated by Sifris J in Noone (at [34]): The fact that the court's decision on the relevant legislation has implications beyond the immediate parties is ... a consequence of the role of the court in interpreting legislation. As such it does not mean the litigation was public interest litigation as referred to in the cases .... 41I give little weight to all the media attention flagged in the evidence. The interest of the public, local, regional or general, in the subject matter of proceedings, does not give them the necessary "public interest" character. 42The plaintiff acknowledges (subs, par 15) that its right to enter Koltai's land via Carter's Lane "might be of private interest to the defendants and some owners of nearby properties", but enforcement of that right in these proceedings is of "no wider public interest". It is set out in the Mining Act 1992 (ss 138-158). 43The plaintiff submits (par 16) that, in the proceedings, the defendants neither sought to "uphold public law obligations", nor to claim that the plaintiff's exploration licence is invalid. Hume sought a statutory injunction to uphold its rights under the validly granted licence and an access agreement it had made with the landowner, by consent. 44The plaintiff also says (par 17) that, even if it is wrong in submitting that the proceedings are not "public interest litigation", there is no "something more" to justify a special costs order. The drilling is not on the defendants' land, the use of the ROW raises no environmental protection issues (c.f. Caroona), the covenant is in a private deed, and the question of whether Hume needs a separate access agreement with the Alexanders is hardly "novel". As the plaintiff submits (par 18), the legal questions in this case routinely "required the Court to engage with the statutory language, and the language and meaning of [words in] a deed of covenant", albeit that my decision clarifies for other owners in the subdivision (which is all within the licence area), and beyond, the limitations on the scope of the covenant (defendants' subs par 11(b) and (d)). 45On the basis of a letter from the defendants' solicitors dated 4 June (not before the court), the plaintiff expected the defendant to resist a costs order not only on the "public interest" ground and the "novel question" claim, but also on the grounds of their success at the interlocutory stage, the late dropping of the plaintiff's damages claim, and their co-operation on expedition and the conduct of the hearing, but the defendants' submissions concentrated almost entirely on the "public interest" question. 46I accept the plaintiff's submissions on "public interest", "novel question", "interlocutory success", and "cooperation", and I note, for completeness, that, while the plaintiff certainly dropped, quite late, one aspect of its original claim, the defendants also dropped several issues which they raised at the interlocutory stage, and for which the plaintiff had prepared. Conclusions & Orders 47These are not "public interest" proceedings, in the sense that the usual costs regime should not apply to them. The plaintiff should have a costs order in its favour, without discounts. 48In so concluding, I add nothing new to the well-established principles upon which costs have been determined in the past, so the plaintiff should also have its costs on the NOM. 49The orders of the court on the plaintiff's Notice of Motion will, therefore, be: (1)The first and second defendants are ordered to pay the plaintiff's costs of these proceedings. (2)The first and second defendants are ordered to pay the plaintiff's costs of its motion for costs. ********** 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. Decision last updated: 17 July 2013