Botany Bay City Council v Minister for Local Government (No 2)

THE COURT: On 15 April 2016, the Court gave judgment in this appeal, dismissing the appeal with costs: Botany Bay City Council v Minister for Local Government [2016] NSWCA 74 (the principal judgment). However, upon the application of the appellant Council, the order as to costs was made subject to reconsideration upon the receipt of further written submissions by the parties.

The appellant submitted that there should be no order as to costs and identified a number of factors in support of that submission. Broadly categorised, those factors can be distilled into the following contentions:

The respondents contended that the appellant had not advanced reasons sufficient to justify the Court departing from the usual rule as to costs. In support of this view, the respondents advanced the following contentions:

Subject to the rules and to any other Act, costs are in the discretion of the Court: the Civil Procedure Act 2005 (NSW), s 98. Relevantly, the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.1 provides that:

Although there is a broad discretion in determining whether some “other order” should be made, that discretion “must be exercised judicially in accordance with established principle and factors directly connected with the litigation”: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [65]. With that in mind, the various contentions of the parties fall for consideration.

It is uncontroversial that there is no blanket exception from the usual rule as to costs for so-called “public interest litigation”. As Gaudron and Gummow JJ noted in Oshlack at [30]:

That said, since the decision in Oshlack, it has been recognised that “the fact that litigation can properly be classed as ‘public interest litigation’ may be a proper reason for making no order for costs”: per Young JA in Hastings Point Progress Association Inc v Tweed Shire Council (No 3) [2010] NSWCA 39 at [24]. However, something more than the mere fact of an element of “public interest” will be required: Minister for Planning v Walker (No 2) [2008] NSWCA 334 per Hodgson JA at [9]; Hastings Point (No 3) at [27].

There is no doubt that the proposed amalgamation of local government areas in New South Wales is a matter of broad public interest. However, for the reasons we give below, we consider that costs should follow the event and there is no reason to make some other order.

In the principal judgment, at [7], the Court identified the central issue in the appeal as being whether the Council’s submission (including the addendum) and its later formal proposal to the Delegate were mandatory relevant considerations in the Delegate’s recommendation to the Minister. This in turn raised the question of the construction of the Local Government Act, s 263(1). The appellant raised a related natural justice issue.

The appellant asserts that, in bringing the proceedings, it sought to enforce public law “obligations to consider relevant factors as part of the amalgamation reporting process”. Although that is not an inaccurate statement, this contention is framed at a high level of generality. The relief sought by the appellant was directed to requiring that the appellant’s own amalgamation proposal be taken into account as part of the consideration of the Minister’s amalgamation proposal. That relief was sought in the context where the appellant had in fact made submissions to the Delegate in which it advanced the substance of the formal proposal which it made a few weeks later, and had been informed that those submissions would be taken into account.

The appellant’s contention that its own amalgamation proposal was a mandatory relevant consideration essentially turned upon the proper construction of the Local Government Act, s 263(1) and, in particular, the construction of the word “matter” in that section. However, it was not suggested that s 263 had been the subject of particular controversy in relation to Local Government boundaries, or that there were any other cases awaiting the outcome of the appeal.

When it is understood that the focus of the appellant’s claim was that its proposal be taken into account, and that the appeal raised a point of statutory construction that was not previously or presently said to be contentious, it is difficult to see that these proceedings were of such public interest as to disentitle the successful respondents from their costs. Fundamentally, the appellant’s contention was that its formal proposal be considered. However, as we have stated, the Delegate had informed the appellant that its submission, which contained the substance of its formal proposal, would be considered.

The appellant also contended that it was apparent from the results of a plebiscite that many of its electors and residents opposed the proposed amalgamation and that, by bringing the proceedings, the appellant “represented” those interests. However, in bringing the proceedings, the appellant was advocating for the consideration of its formal proposal, and whilst it was acting as a body politic, there was no evidence that the electors and residents supported the appellant’s formal proposal. As the respondent noted, this situation “can in a sense be equated with that of a trustee suing for the benefit of its beneficiaries”: Finn J in Botany Bay City Council v Minister for Transport and Regional Development [1999] FCA 65 at [5].

In the alternative, there is much to be said for the views expressed by Finn J in Botany Bay City Council v Minister for Transport and Regional Development [1999] FCA 65 at [5]:

The appellant placed some weight on the fact that the provisions of the Local Government Act considered in the appeal had never before been tested, and contended that “the State is no doubt much assisted by this clarification and judicial guidance”.

In response to this argument, the respondents cited the following observations of Finn J in Botany Bay City Council v Minister for Transport and Regional Development at [5]:

For the reasons we have stated above at [11]-[12], we do not place much, if any weight, on the perceived benefit to the respondents from the clarification of the law in this appeal. It was not suggested that these proceedings involved a ‘test case’ of any kind. In any event, by the very nature of our adversarial common law tradition, the success of one party in proceedings will often, if not inevitably, entail a clarification of the law to some extent or in some respect. In that light, it is hard to see how clarification of the law could amount to a factor tending strongly in favour of a departure from the usual rule as to costs.

The respondents contended that, even if it were accepted that the first instance proceedings exhibited an element of public interest, that would not subsist with respect to the appeal. In that regard, the respondents cited the observations of Gyles J, in the context of an application for security for costs, in Save the Ridge Inc v Commonwealth [2005] FCA 355 at [3]:

The respondents also referred to Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts (No 2) [2011] FCAFC 84 at [23], where the Full Court of the Federal Court of Australia observed:

Even if the appellant’s proceedings involved a public interest element, that would not, of itself, have been sufficient for the Court to make some ‘other order’ under UCPR, r 42.1. As Hodgson JA observed in Kindimindi Investments Pty Ltd v Lane Cove Council [2007] NSWCA 38:

We accept that, in an appropriate case, the pursuit of proceedings through the appellate hierarchy may sufficiently be in the public interest as to warrant a costs order other than that costs follow the event in accordance with UCPR, r 42.1. For the reasons we have given above, this is not such a case, nor was it such a case at first instance.

Accordingly, we reject the application that some other order be made and confirm the order made on 15 April 2016 that the appellant pay the respondents’ costs.

The orders of the Court are: