Kvelde v State of New South Wales (No 2)

1. [1]

   By a Summons filed 12 October 2022, Ms Helen Kvelde and Ms Dominque Jacobs (“the plaintiffs”), sought declarations that s 214A of the Crimes Act 1900 (NSW) (“Crimes Act”) (“the impugned law or provision”) and cl 48A(1) of the Roads Regulation 2018 (NSW) (“Roads Regulation”) (together, the “impugned provisions”) are invalid. The plaintiffs submitted that:

   1. (1)

      Section 214A of the Crimes Act is invalid because it infringes the implied freedom of political communication (“the implied freedom”) and is thus beyond the power of the Parliament of New South Wales; and

   2. (2)

      Clause 48A(1) of the Roads Regulation is invalid because it is beyond the scope of the regulation-making power contained in the Roads Act 1993 (NSW) (“Roads Act”).

2. [2]

   The defendant, the State of New South Wales (“the State”), disputed that the plaintiffs had standing to challenge the validity of either provision.

3. [3]

   Kvelde v State of New South Wales [2023] NSWSC 1560 (“the primary judgment”) was published on 13 December 2023. In the primary judgment, the Court applied the three-part test established by the High Court to establish whether a law contravenes the implied freedom: McCloy v New South Wales (2015) 257 CLR 178; [2015] HCA 34 (“McCloy”) at [1]-[2]; Brown v Tasmania (2017) 261 CLR 328; [2017] HCA 43 (“Brown”) at [104] (Kiefel CJ, Bell and Keane JJ), [155]-[156] (Gaegler J), [277] (Nettle J) and [481] (Edelman J). The test as re-stated in Clubb v Edwards (2019) 267 CLR 171; [2019] HCA 11 (“Clubb”) at [5] and the answers provided by the Court in that respect were as follows:

   1. (1)

      Does the law effectively burden the implied freedom in its terms, operation or effect? The Court answered the question in the affirmative with respect to subs 214A(1)(c) (as to partial closure of a major facility) and subs 214A(1)(d).

   2. (2)

      If “yes” to question one, is the purpose of the law legitimate, in the sense that it is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government? The Court answered this question in the affirmative; the purpose of the impugned provision was legitimate.

   3. (3)

      If “yes” to question two, is the law reasonably appropriate and adapted to advance that legitimate object in a manner that is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government? [1] Question three was answered by the Court embarking upon a structured proportionality analysis to determine whether the restriction which the impugned provision imposes on the implied freedom is justified. [2]

4. [4]

   The Court applied the McCloy-Brown analysis, as affirmed in Clubb, and applied by this Court in Burton at [16], as follows:

5. [5]

   The Court found that the prohibitions under subs 214A(1) were suitable for the legitimate purpose, that the impugned law as to subss (1)(d) and (1)(c) (with respect to partial closure of the facility)) but failed at the stage of ‘reasonable necessity.’ Finally, although not strictly necessary to consider the question of balance considering the Court’s findings with respect to subs (1)(d) and in part, subs (c) under the second limb, the Court, considered that, even if those provisions were suitable and necessary, they were not adequate in its balance.

6. [6]

   The administrative law challenge to cl 48A(1) was dismissed.

7. [7]

   Ultimately, the orders made by the Court on 13 December 2023 were as follows:

8. [8]

   By an email on 21 December 2023, the plaintiffs made an application pursuant to order 5, seeking to vary order 4 with respect to costs. The plaintiffs sought an order that the defendant should be ordered to pay 50% of the plaintiffs’ costs of the proceedings (to be agreed or assessed on the ordinary party/party basis).

9. [9]

   The State opposed the plaintiff’s application to vary order 4. The State’s primary position was that the appropriate order was the one made in the primary judgment, that each party should bear their own costs of the proceedings. In the alternative, the State submitted that if the Court considered it appropriate to re-engage with the process of apportioning costs, then it would be open to the Court to order that the plaintiff’s pay 25% of the State’s costs.

10. [10]

    On 22 December 2023, the parties agreed that the matter be dealt with on the papers and a timeline was set for submissions.

11. [11]

    The balance of this judgment will deal with the question as to costs in this light.

The Position of the Parties

1. [12]

   The plaintiffs’ submitted that the defendant should be ordered to pay 50% of the plaintiffs’ costs of the proceedings (to be agreed or assessed on the ordinary party/party basis).

2. [13]

   The plaintiffs’ submissions were, in summary, as follows:

   1. (1)

      In their constitutional challenge to s 214A of the Crimes Act, the plaintiffs were successful in obtaining declarations as to the invalidity of subss (1)(d) and (c), in a certain respect. The plaintiffs were unsuccessful in their challenge to the validity of cl 48A(1) of the Roads Regulation pursuant to principles of administrative law. In relation to the issue of standing, which was relevant to both the constitutional challenge and the administrative law challenge, the plaintiffs were wholly successful. Plainly, mixed success was enjoyed by the parties in respect of distinct issues.

   2. (2)

      An order that apportions costs is appropriate in this case to reflect that there is not one single “event” but distinct events. That is already reflected in the Court’s preliminary view, expressed in the primary judgment at [576], that each party should pay their own costs, because the disposition of the proceedings has variously favoured both parties. The plaintiffs seek a variation from that preliminary position on the basis that a closer consideration of the nature of the issues determined by the Court demonstrates that the plaintiffs have enjoyed far greater success than the defendant and it is just that this be reflected in a costs order in favour of the plaintiffs.

   3. (3)

      The plaintiffs enjoyed success in respect of the constitutional challenge which occupied the vast bulk of the time devoted by the parties to the matter (as reflected in the Court’s judgment). The plaintiffs also prevailed in relation to standing, which was the issue that required the bulk of the evidence and associated work. Those were the most complex and time-consuming issues, as can be shown by multiple measures. An order that the defendant pay 50% of the plaintiffs’ costs would do justice between the parties.

   4. (4)

      The plaintiffs should be seen as having prevailed to the extent of 75% of the substantive resolution of the matter. The defendant, having enjoyed 25% success, is entitled to have that set off against the plaintiffs’ position, resulting in the outcome of an order that the defendant pay 50% of the plaintiffs’ costs.

3. [14]

   As to the application of the apportionment principles in this case, the plaintiffs submitted the following:

   1. (1)

      Notwithstanding the general position that costs should not be determined on an issue-by-issue basis that involves disaggregation of overall “events”, [3] the two challenges brought by the plaintiffs in the present case were discrete and separable claims. [4] It is appropriate to differentiate between the two challenges. [5] There was not a single “event” in the proceedings which costs should follow.

   2. (2)

      Both the general rule that costs should follow the event, and departures from that rule in cases of mixed success, are informed by the “idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs”. [6] The following matters are relevant to such an assessment in the present case:

4. [15]

   The State's primary position was that the appropriate order was the one made, order 4. In the alternative, if the Court considered it appropriate to re-engage with the process of apportioning costs as between different issues in the proceedings, the State submitted that it would be open to the Court, in the exercise of its discretion, to order that the plaintiffs pay 25% of the State's costs. This order would fairly take account of the State's success in defending the constitutional challenge to subss 214A(1)(a), (b) and part of (c) of the Crimes Act as well as the administrative law challenge to cl 48A(l) of the Roads Regulation.

5. [16]

   The State made the following submissions, in summary:

   1. (1)

      The bulk of the plaintiffs' evidence that went to their standing to make the constitutional and administrative law challenges was prepared and filed before the State raised standing as an issue in the Response to Summons filed on 24 November 2022. [11] The evidence filed after the State raised the standing issue comprised of two affidavits (each only two pages in length) and some documentary material in the form of newspaper articles and an extract from a book. The State did not object to this evidence, minimising time spent on the standing issue at the hearing. Further, as the Court accepted in the primary judgment at [60], the Court would have, in any event, taken judicial notice of the history of political activities described in the documentary material. There is no further mention of the documentary material under the "Consideration: Standing" heading of the primary judgment at [106]­[139].

   2. (2)

      The costs incurred by the State in successfully defending the validity of subss 214A(1)(a), (b) and part of (c) should be reflected in the costs order.

   3. (3)

      The administrative law challenge by the plaintiffs to cl 48A of the Roads Regulation was predicated on the grounds that it lacked reasonable proportionality and/or impermissibly sub-delegated. Those issues were substantive, complex, and time-consuming and comparable to the standing issue.

LEGAL PRINCIPLES

1. [17]

   The parties agreed as to the relevant legal principles, which are as follows.

2. [18]

   In Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40 (“Ryde”) at [6], the New South Wales Court of Appeal described the general position on apportioning costs in cases of mixed success as follows:

3. [19]

   The principles applicable to determining when and how costs should be apportioned between issues in proceedings were stated by the Court of Appeal in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38]: [12]

4. [20]

   In appropriate circumstances, the Court may, after considering the respective costs entitlements of the parties by a consideration of their success or failure, conclude that the costs entitlements of the parties are broadly equivalent. [13] In that case, an appropriate outcome is that each party should bear its own costs. But if the Court is satisfied that the respective costs entitlements are not equivalent, because one party has enjoyed a greater share of the success, that may be reflected in the costs outcome.

5. [21]

   I will approach the consideration of this matter in accordance with those principles.

CONSIDERATION

1. [22]

   In my view, the State is correct to submit that the assessment made by the Court resulting in orders made on 13 December 2023 should not be disturbed and, in particular, it is unnecessary to reengage in a process of apportioning costs. The cost entitlements of the parties are, on a broad approach, equivalent.

2. [23]

   In any event, no different conclusion would follow from re-engagement in a process of apportionment based on the submissions on costs received from the parties and a review of the proceedings.

3. [24]

   As agreed by the parties the exercise of apportioning costs between different claims or issues defies arithmetical precision and necessarily requires an impressionistic discretionary evaluation. [14] The exercise should be carried out on a broad-brush basis, taking account of the degree of success and the likely extent of costs associated with different aspects of the case.

4. [25]

   The Court is entitled to take into account the importance of the matters upon which the parties have been successful or unsuccessful, the time occupied, and the ambit of the submissions made, as well as any other relevant matter. [15]

5. [26]

   The starting point of this analysis must be an acknowledgment that there were two discrete issues before the Court in this matter: the administrative law challenge and the constitutional law challenge. The State was successful in defending the administrative law challenge and partly successful in defending the constitutional law challenge.

6. [27]

   The plaintiffs challenged the validity of s 214A in its entirety. The Court was not required to deal with that challenge with respect to s 214A(1)(a)( b) and (c) (in part) beyond the question of the burden on the implied freedom because the Court concluded that only subss 214A(1)(d) and part of (c) imposed an incremental burden on the implied freedom. Hence, the State successfully defended the challenge to the validity of subss 214(1)(a), (b) and part of (c). The State is correct to submit that costs incurred by the State in successfully defending the validity of subss 214A(1)(a), (b) and part of (c) should be reflected in the costs order.

7. [28]

   The plaintiffs also failed to make good their contentions as to legitimate purpose.

8. [29]

   In terms of the structured proportionality test, and by expansion on my earlier observations, the Court found as follows:

   1. (1)

      The plaintiffs failed in establishing that the law was not suitable for the achievement of the purpose in the sense of having a rational connection to the purpose found in the primary judgment. [16]

   2. (2)

      The impugned law failed at the stage of ‘reasonable necessity’. The second alternative means (or a law of that kind) may be reasonably expected to have imposed a significantly lesser burden upon the implied freedom and still achieved Parliament’s purpose to the same or a similar effect. [17] This was a success for the plaintiffs.

   3. (3)

      It was found that, even if subss 214A(1)(c) and (d) were suitable and necessary, the provisions were not adequate in their balance. [18] This was a success for the plaintiffs, although strictly unnecessary to decide.

9. [30]

   There is some force in the submission advanced by the plaintiffs that the length of time spent in the primary judgment on the consideration of subs 214A(1)(d), as well as the ultimate conclusions drawn by the Court suggest the constitutional challenge substantially hinged upon subs 214A(1)(d). [19]

10. [31]

    However, care needs to be taken in examining arguments of that kind. A significant part of the primary judgment dealt with the construction of s 214A, including the chapeau and the provisions of subs 214A(1) and its various components. This attention to consideration of the construction of s 214A was not replicated in the parties’ submissions (written or oral).

11. [32]

    The State was correct to submit that the administrative law challenge by the plaintiffs to cl 48A of the Roads Regulation was predicated on the grounds that it lacked reasonable proportionality and/or was impermissibly sub-delegated. Those issues were substantive, complex, and time-consuming and had some aspects comparable to the standing issue. It may be observed, in that respect, that there was an approximately equal number of paragraphs devoted to the administrative and constitutional legal challenges in both parties' written submissions and the primary judgment. Argument related to the administrative law challenge to cl 48A of the Roads Regulation occupied a substantial amount of time during the hearing (about 1.5 hours).

12. [33]

    The fact that evidence was not required to be filed in support of this part of the administrative law challenge of the plaintiffs' case does not undermine the significance of the issue or the time spent preparing each parties’ case. The State's success in defending both limbs of the plaintiffs' administrative law challenge should be reflected in the costs order.

13. [34]

    The plaintiffs were correct to contend that it was the State who challenged the plaintiffs’ standing to bring both the constitutional challenge and the administrative law challenge and that that issue was ultimately resolved in the plaintiffs’ favour. I also agree with the plaintiffs’ submission that a substantial part of the evidence was prepared in response to the State’s contention as to standing and was not relevant to the administrative law challenge, which did not involve any factual dispute.

14. [35]

    However, the evidence that was brought by the plaintiffs in support of their submissions as to standing had a wider compass at hearing than just that issue. So much was reflected in the primary judgment.

15. [36]

    In the primary judgment, the Court found that the documentary evidence of the plaintiffs was relevant to the Court’s consideration of the question of burden, together with forming part of the factual background. That evidence was also utilised by the Court in construing subs 214A(1). [20] The affidavit evidence of the plaintiffs was primarily directed to standing but was also relevant to burden. [21]

16. [37]

    Further, there was no demur to the State’s submission that the bulk of the plaintiffs’ evidence that went to their standing to make the constitutional challenge was prepared and filed before the State raised standing as an issue in response to the Summons filed on 24 November 2022. The evidence raised after the State identified the standing issue comprised of two affidavits and some documentary material in the form of newspaper articles and an extract from a book. Additionally, the Court accepted at [60] that it would have in any event taken judicial notice of the history of political activities described in the documentary material.

17. [38]

    As to the question of relevance, the Court made the following observations and findings in the primary judgment at [52]-[60]:

18. [39]

    In that light, the State is incorrect to say that it did not object to the evidence but is correct to say that the State’s ultimate position as to the admission of evidence minimised time spent on the standing issue and the issue of relevance fell away during the hearing.

19. [40]

    Accordingly, notwithstanding the success of the plaintiffs in their challenge to subss 214A(1)(c) (with respect to partial closure of major facilities) and (d), overall, the parties had mixed success over major issues of importance in the matter and about which the attribution of time and the ambit of submissions was not significantly different. On a closer analysis, the issue of standing was not as poignant a consideration in resolving the issue of costs as contended for by the plaintiffs. Those conclusions do not indicate support for either the costs order sought by the plaintiffs, nor the costs order sought by the State (in its alternative submission). The interests of justice as to costs is best served by the order made by the Court in the primary judgment.

CONCLUSION

1. [41]

   In the circumstances, in my view, the interests of justice dictate that the costs order in the primary judgment (order 4) remain unaltered.