Federal Court of Australia

Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2024] FCAFC 97

ORDERS

THE COURT NOTES THAT:

A.        The orders of the Court made in VID 400 of 2023 and VID 401 of 2023 on 7 December 2023 remain in effect.

THE COURT ORDERS THAT:

1.    There be no order as to the costs of the appeals in VID 885 of 2023 and VID 886 of 2023.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MORTIMER CJ:

1    On 16 May 2024, the Full Court made orders in VID 885 of 2023 and VID 886 of 2023 dismissing each appeal from two sets of orders and a single set of reasons of the primary judge. See Environment Council of Central Queensland Inc v Minister for the Environment and Water [2024] FCAFC 56 (principal reasons). The Full Court allowed the parties time to attempt to agree on orders as to costs, and to make submissions in the absence of any agreement. No agreement was reached and the parties made submissions on appropriate costs orders.

2    In their submissions as to costs, no party sought to have the Court disturb the costs orders made by the primary judge in Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 3) [2023] FCA 1532.

3    The primary judge’s costs orders were:

1.    The Applicant in proceeding VID 400 of 2023 and VID 401 of 2023 is to pay:

(a)    one half of the costs of the First Respondent to be taxed; and

(b)    the costs of the Second Respondent to be taxed.

4    Although the appellant had appealed from these orders in each proceeding, no independent submissions were made about the primary judge’s costs orders in the course of substantive argument in the appeals. It can be assumed that the appeals from those orders were to facilitate setting the costs orders below aside if the appellant were successful on the substantive appeals. That has not occurred, and in the absence of any independent challenge to the exercise of the costs discretion by the primary judge, the Court’s costs orders at first instance should stand.

5    As to the costs of the appeals, in summary:

(a)    the appellant submits each party should bear its own costs of the appeals;

(b)    the first respondent, the Minister, submits the appellant should pay 50% of the Minister’s costs of the appeals, on a party-party basis, as agreed or assessed, in each of VID 885 of 2023 and VID 886 of 2023; and

(c)    the second respondents, Narrabri Coal Operations Pty Ltd and MACH Energy Australia Pty Ltd, submit the appellant should pay their costs of the appeals “as agreed or taxed”. Since the second respondents chose to have shared representation before the primary judge and in the appeals, I assume this submission means the second respondents, like the Minister, seek a costs order in their joint favour in each of VID 885 of 2023 and VID 886 of 2023.

6    In my opinion, the appropriate costs orders are that the parties should each bear their own costs of the appeals. I have also had the advantage of reading Colvin and Horan JJ’s separate reasons in draft. While my reasons travel more widely than those of Colvin and Horan JJ, I respectfully agree with the matters their Honours have identified.

Reasoning

7    Some of the applicable principles are uncontroversial, and form the starting point for the exercise of the Court’s discretion. The way in which those principles have been applied necessarily depends on the facts and circumstances of each case, and it is in that context that there have been some obiter remarks made in the authorities which I consider need consideration and clarification.

8    In Northern Territory v Sangare [2019] HCA 25; 265 CLR 164 at [25], the Court said:

A guiding principle by reference to which the discretion is to be exercised – indeed, “one of the most, if not the most, important” principle – is that the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon that party.

(Footnotes omitted.)

9    Plainly enough, in the ordinary case the reference to “indemnity” is not to be taken literally.

10    Sangare was a case which sought to challenge the (to that point) confirmed irrelevance of the impecuniosity of the party against whom a costs order was sought. The High Court reaffirmed that impecuniosity, of itself, was not relevant to the exercise of the costs discretion. Some of the observations by the Court should be understood to be made in that context, although it can be accepted they may apply more broadly.

11    At [27] in Sangare, the Court explained the basis for the guiding principle described at [25]:

In point of principle, it is basic justice that a successful party should be compensated for expenses it has incurred because it has been obliged to litigate by the unsuccessful party. That consideration of basic justice does not lose its compelling force simply because the successful party happens to be wealthy: the successful party, whether rich or poor, did not ask to be subjected to the expense of unmeritorious litigation.

12    The use of the phrase “basic justice”, in Australia at least, reflects the historical and traditional approach to the costs discretion, in costs-based jurisdictions. It should not in my respectful opinion be taken as precluding the development of the law on the exercise of a statutory costs discretion in a way that gives prominence to other aspects of “justice”, such as principles of access to justice, and the public interest in ascertaining lawful limits of public powers.

13    As other authorities make plain, and indeed as other parts of Sangare also make clear, the concept of “merit” in litigation is not singular. An unqualified description of the position of a losing party as “unmeritorious” is not always appropriate. In an adversarial system, generally one party will be the losing party. The competing arguments may have been finely balanced. Alternatively, each side’s position may have had its strengths and weaknesses, yet one party’s contentions are generally required to prevail. Or success may have turned on the burden of proof, or on the effect of particular evidence that was adduced. The use of the adjective “unmeritorious” in this passage might reveal more about the Court’s views of Mr Sangare’s case than it reveals about any wider principle. Litigation may have merit, but ultimately not be successful. In my opinion, that proposition applies to the current appeals.

14    At [33] in Sangare, the Court referred to Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72. This passage demonstrates that the Court in Sangare accepted there could be “merit” in a case brought about the nature and content of statutory powers, even if unsuccessful, and accepted this could be relevant to the exercise of the costs discretion:

The majority in this Court held that it was open to the Land and Environment Court to conclude that the litigation was motivated by a desire to ensure obedience to environmental law and to preserve the habitat of endangered fauna, and that there was, objectively speaking, a “‘public interest’ in the outcome of the litigation”. It could also be said in favour of the order made by the Land and Environment Court that it was not unfair to require the local authority to bear its own costs of litigation where it had an interest in resolving uncertainty attending the valid exercise of its powers, and wide standing provisions facilitated the bringing of such litigation. None of these considerations can be said to be relevant in this case. The litigation here was brought to vindicate the respondent’s private interest in his reputation by the recovery of damages.

(Footnotes omitted.)

15    In Oshlack at [43], Gaudron and Gummow JJ observed that:

Nor, before or since the introduction of the Judicature system, has there been any absolute proposition that the sole purpose of a costs order is to compensate one party at the expense of another.

16    At [45], their Honours also emphasised that the statutory context of the litigation in that proceeding was material to the application of costs principles in the context of:

new species of litigation and the discretion it [s 69 of the Land and Environment Court Act 1979 (NSW)] confers is to be exercised so as to allow for the varied interests at stake in such litigation.

17    A similar point was made by Kirby J in Oshlack at [126]-[132], about the context in which the High Court’s previous decision in Latoudis v Casey [1990] HCA 59; 170 CLR 534 needed to be understood; see especially Kirby J at [131]. His Honour returned to this issue at [143]:

This argument also rests upon a misreading of [Latoudis]. Once it is appreciated that compensation to the successful party is the reason why that party will ordinarily have a reasonable expectation of recovering its proper costs, the limits of the principle are clear. It says nothing about exceptional or special circumstances which warrant a departure from the general rule. Such departures have quite often arisen in the past, as I have demonstrated. Public interest litigation is just one category into which may be grouped particular kinds of cases that will sometimes warrant departure from the general rule. The possibility of such departure cannot be denied, given the breadth of the statutory language in which the discretion is expressed.

18    Having explained the historical choice made in Australia to follow the “English rule” on costs rather than the “American rule” (where the general presumption is that each party bears its own costs), Kirby J went on, in the context of making some “general remarks” about the New South Wales statutory costs recovery provision subject of the High Court’s reasons “and provisions like it”, to explain why the compensatory principle should not be viewed as a rigid rule or presumption (at [134]):

Absent special statutory provisions, Australian law has followed this English rule. But the compensatory principle cannot be treated as an absolute rule. Otherwise, the discretion conferred in unqualified terms would indeed be shackled and confined. To permit this would be incompatible with statutory language expressed in such terms. Therefore, although there are “rules” or ordinary principles which will guide the donee of power in the exercise of the discretion, they cannot extinguish the element of discretion. They must not be allowed to harden into rigid or inflexible requirements.

(Footnotes omitted).

19    At [136], Kirby J explained the approach taken by the primary judge in Oshlack:

However, the series of cases to which his Honour referred illustrates, clearly enough, that in this country, as well as in England, New Zealand, Canada and elsewhere a discrete approach has been taken to costs in circumstances where courts have concluded that a litigant has properly brought proceedings to advance a legitimate public interest, has contributed to the proper understanding of the law in question and has involved no private gain. In such cases the costs incurred have occasionally been described as incidental to the proper exercise of public administration. Upon that basis it has been considered that they ought not to be wholly a burden on the particular litigant.

(Footnotes omitted).

20    At [139], Kirby J referred to the special standing rule in the NSW Environmental Planning and Assessment Act there under consideration, explaining:

Parliament has itself expressly facilitated litigation of the kind of issues raised in these proceedings. It has done so by adopting a special standing rule which could have no purpose other than to permit challenges by persons such as the appellant which would otherwise have been difficult or legally impossible. If a court considers that the litigant, whoever it may be, has wasted the court's time, had no legal merits or should have prosecuted its objections elsewhere, the ordinary compensatory rule would prevail. I would also invoke the words of Curtis J in the Supreme Court of British Columbia when ordering each party to environmental proceedings to bear their own costs:

“Disputes involving environmental issues, such as this one, are all too liable to provoke confrontations outside of the law. In my opinion it would not be conducive to the proper and legal resolution of this case which is one of significant public interest, to penalise the petitioners who have acted responsibly by attempting to resolve the issues according to law, through awarding costs against them.”

(Footnotes omitted.)

21    I respectfully agree with the factors identified by Kirby J in Oshlack, to which I have referred above, and consider them relevant to the exercise of the costs discretion in the present appeals.

The appropriate orders on these appeals

Particular considerations concerning the Minister’s costs

22    In these appeals, the Minister took an active role in defending the decisions and reasoning, notwithstanding the presence of two well-resourced contradictors in Narrabri Coal Operations Pty Ltd and MACH Energy Australia Pty Ltd who were quite capable of taking on that role.

23    The primary judge’s costs reasons at [10] described this as the “ordinary course”, relying on a decision of a Full Court of this Court in Peacock v Human Rights and Equal Opportunity Commission [2005] FCAFC 45 at [76]. Peacock is but one of many authorities that have touched on this issue, not always consistently. A number of authorities have considered whether a decision-maker in the position of the Minister should take an active role in a challenge to their decision, and if so, in what circumstances (eg only where there is otherwise no active contradictor), and whether the approach set out in R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; 144 CLR 13 at 35-36 applies only to review tribunals. These authorities include (not an exhaustive list): Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3) (1987) 77 ALR 609 at 612 (Wilcox J); Geographical Indications Committee v The Honourable Justice O’Connor [2000] FCA 1877; 32 AAR 169 (von Doussa, O’Loughlin and Mansfield JJ); TXU Electricity Ltd v Office of the Regulator-General [2001] VSC 4; 3 VR 93 at [42]-[43] (Ashley J); Community Television Sydney Ltd v Australian Broadcasting Authority (No 2) [2004] FCA 614; 136 FCR 338 at [13]-[14] (Sackville J); Capricornia Credit Union Ltd v Australian Securities and Investments Commission [2007] FCAFC 112 at [14] (Dowsett, Edmonds and Besanko JJ); Macedon Ranges Shire Council v Romsey Hotel Pty Ltd [2008] VSCA 45; 19 VR 422 at [37] (Warren CJ, Maxwell P and Obsorn AJA); Commissioner of Police (NSW) v Fine [2014] NSWCA 327; 87 NSWLR 1 at [58]-[81] (Bathurst CJ, Beazley P and Ward JA); Huon Aquaculture Group Ltd v Minister for the Environment (No 2) [2018] FCA 1938 at [44]-[46] (Kerr J); Freedom Pharmaceutical Pty Ltd v Minister for Health (No 2) [2021] FCA 1250 at [7] (Burley J); Bob Brown Foundation Inc v Minister for the Environment and Water (No 3) [2022] FCA 989 (Moshinsky J).

24    No submissions expressly addressing application of the Hardiman principle were made to the Court about the Minister’s participation in the appeals, so I say no more on that issue.

25    Nevertheless, putting active participation to one side, a decision-maker seeking costs from another party for such participation may raise different considerations.

26    The Minister has no private or personal interest in the subject matter of the litigation: they are an officer of the Commonwealth exercising public power. The Minister plainly does have an interest, in that capacity, in the proper construction and operation of the relevant legislative scheme. There is a public benefit, including to the Minister as repository of any powers under the scheme and as the Minister responsible for the administration of the scheme, from the Court’s pronouncement on the construction and operation of the provision or provisions concerned, or from an analysis of the scheme as a whole or in part. Active participation means a Minister gains the benefit of advancing (and defending) the approach they consider is the correct one, and having that tested.

27    Any funds that are at stake (because of the litigation itself, or the cost of re-exercising a power in accordance with the processes required) are public funds. The Minister is accountable for the expenditure of those funds, but there should be no serious criticism of the expenditure of public funds to ensure Environment Protection and Biodiversity Conservation Act 1999 (Cth) statutory powers are exercised in accordance with law. As much is accepted at [7] of the Minister’s costs submissions.

28    The question is whether a Minister should be compensated for that expenditure in proceedings which bear the characteristics of this proceeding. For my own part, I consider the appropriate exercise of the costs discretion is that the appellant not be ordered to pay the costs of the Minister. That would be consistent, as Moshinsky J pointed out in Bob Brown Foundation at [10], with authorities about an appropriate exercise of the costs discretion where the Minister, as decision-maker, participates in a hearing, in particular where there is another active contradictor – for EPBC Act litigation, generally the proponent of the action under consideration. In Bob Brown Foundation, Moshinsky J referred to Muswellbrook Shire Council v Hunter Valley Energy Pty Ltd [2019] NSWCA 216; 238 LGERA 295 at [67], [176], [207], and Our Town FM Pty Ltd at 612.

29    As I explain below, the statutory provisions in issue in these appeals have rarely been considered and the Minister now has the benefit of the Court’s consideration of them, to inform the performance of the various statutory tasks in the future. The expenditure of public funds has afforded the Minister some clarity about the nature and content of these statutory powers, not previously considered.

30    In the alternative, I would also have rejected the Minister’s costs application on the basis I now explain, which also applies to the costs application of the second respondents in each appeal.

Consideration of the costs applications of all respondents

31    The second respondents came to this litigation to defend their private commercial interests in securing the extended operation of the Narrabri and Mt Pleasant coal mines. Not being repositories of public power, the second respondents have no direct interest in the ongoing proper construction and application of the EPBC Act and its various provisions.

32    Therefore, any justification for deciding that the second respondents should not have the benefit of the “ordinary compensatory approach” on these appeals, will rely on factors other than those I have set out above.

33    In Oshlack in the High Court, Gaudron and Gummow JJ at [20] set out a summary of the six relevant factors identified by Stein J at first instance (see Oshlack v Richmond River Shire Council (1994) 82 LGERA 236 at 246). Of those, three (as described by Gaudron and Gummow JJ at [20]) are especially relevant to the exercise of the costs discretion on these appeals:

(iii)    The appellant's pursuit of the litigation was motivated by his desire to ensure obedience to environmental law and to preserve the habitat of the endangered koala on and around the site; he had nothing to gain from the litigation “other than the worthy motive of seeking to uphold environmental law and the preservation of endangered fauna”.

(iv)    In the present case, “a significant number of members of the public” shared the stance of the appellant as to the development to take place on the site, the preservation of the natural features and flora of the site, and the impact on endangered fauna, especially the koala. In that sense there was a “public interest” in the outcome of the litigation .

(v)    The basis of the challenge was arguable and had raised and resolved “significant issues” as to the interpretation and future administration of statutory provisions relating to the protection of endangered fauna and relating to the ambit and future administration of the subject development consent; these issues had “implications” for the Council, the developer and the public.

(Footnotes omitted.)

34    Those features are present in the current appeals. In my opinion, they and a number of further factors support an order that each party bear its own costs of the appeals.

35    Given the position outlined at [4] above, the primary judge’s costs orders will remain in effect, and the respondents will be compensated, to the extent they sought to be, for the conduct of the trial. Thus, it is relevant that the order I propose does not result in the respondents being entirely uncompensated for their costs in relation to the proceedings as a whole. For similar observations see Ruddock v Vadarlis (No 2) [2001] FCA 1865; 115 FCR 229 at [17] (Black CJ and French J).

36    That there was some duplication in the respondents’ arguments was recognised by the Minister seeking only 50% of her costs, both at trial and in the appeals. The second respondents have not recognised any duplication but instead described the second respondents’ roles as “complementary” to that of the Minister. The quantum of the second respondents’ costs is, I infer, fixed by reference to ordinary commercial rates and not the government rates payable to the legal representatives for the Minister.

37    It can be accepted that all counsel and solicitors sought to conduct the appeals efficiently, but it remains the case that the respondents effectively were able to put arguments twice, in defence of the Minister’s decision. Describing the respondents’ roles as “complementary” recognises this, in a way.

38    At trial there may be greater justification for a dual approach, where evidence is adduced more in support of one respondent’s contentions than another, where the course of the proceeding might be less predictable, and where the differing focus of respondents might emerge more justifiably. On appeal the evidence is by and large fixed, and the parameters of the debate well established.

39    An organisation like the appellant should not have to compensate all respondents through a costs order for the duplication they elected to undertake. I do not consider it is fair in all the circumstances of these appeals for a not-for-profit environmental charity like the appellant to be exposed to two sets of costs, where the likely greater quantum of costs has not been proactively reduced by the second respondents in recognition of the duplication in arguments between themselves and the Minister, nor the forensic advantage obtained by respondents with different interests being able to ‘complement’ each other’s approach.

40    For the Court to endorse a dual compensatory approach could contribute in a substantive way to the “chilling effect” of costs orders in the area of environmental litigation, which I discuss below. Of course, this consideration sits alongside many others, and as Kirby J observed in Oshlack, it does not gain any traction if the litigation brought is ill considered, vexatious, poorly presented and prepared or if an appeal from a trial judgment displays those features. That is not these appeals.

41    The construction and operation of s 78A and particularly s 78(1)(a) of the EPBC Act has not been raised in this Court before. No party pointed the Court to any existing authority on these provisions. The appellant’s requests under s 78A were itself somewhat novel, but sought legitimately to address what it contended were gaps in the controlling provisions identified by the Minister’s delegate in the initial controlled action decisions under s 75(1) of the EPBC Act. The reconsideration requests under s 78A were neither vexatious nor frivolous; they were seriously considered and advanced, and supported by a large volume of material, including expert material. It was taken seriously by the Minister’s Department, and by the second respondents, who engaged at a substantive merits level with the arguments put, as the Minister’s reasons disclose.

42    On the appeals, each party’s submissions about various aspects of s 78(1)(a), and the provision as a whole, raised a number of important issues of construction, including the kind of causal link required by the provision. The appellant’s contentions, both before the Minister and then on judicial review, squarely raised the issue of indirect impacts of actions, and how they are dealt with in accordance with s 527E of the EPBC Act, especially when those alleged impacts are widespread, indeed worldwide. This issue also had its complexities in the context of s 78(1)(a). So too, as the principal reasons disclose, did arguments about the nature of the task required of the decision-maker in terms of the use of various standards of likelihood in s 78(1)(a). While some of these issues were not reached in detail because of the opinion of the Court about the correct interpretation of the Minister’s reasons, this shift in the focus of the argument came only at the hearing of the appeals.

43    If not new, this contention was certainly couched quite differently from the way it was put to the primary judge. These appeals ran over two days so that all parties had an adequate amount of time to consider the arguments that were being made, and I do not suggest there was anything unfair or untoward in the approach taken on behalf of the respondents. The correct interpretation of the Minister’s reasons occupied a significant amount of time at oral hearing, and senior counsel for the appellant did not submit the appellant had been caught by surprise by this argument; instead tackling it at a substantive level. Nevertheless, this emphasis by the respondents did mean that, as Colvin J and I observed at [20] of the principal reasons (see also Horan J at [146]), the correct interpretation of the Minister’s reasons ended up being dispositive of the majority of the grounds of appeal. It was this fact that led to it being unnecessary to consider some of the legal arguments put on behalf of the appellant, not because they were not arguable. That fact does not diminish the objective importance of the legal issues raised on the appeals.

44    With a fresh focus on the Minister’s path of reasoning, the Court found no legal error in the way the Minister had approached the provisions. By the Court’s decision in the appeals, some clarity has been brought to the operation of EPBC Act provisions that had not been previously judicially examined, as well as some further refinement of the construction and operation of s 527E of the EPBC Act.

45    The respondents’ submissions about the correct interpretation of the Minister’s reasons led to the Court’s findings about the level of acceptance by the Minister, as a member of the executive government of the Commonwealth as well as the repository of the specific powers in ss 78A and 78C, of the demonstrated effects of climate change on matters protected by the EPBC Act: see Minister’s reasons at [97] and [99], extracted at [25]-[26] of the principal reasons. It was this level of acceptance which led to the observations by Colvin J and I at [70]-[72] of the principal reasons, distinguishing the decisions in Anvil Hill Project Watch Association Inc v Minister for the Environment and Water Resources [2007] FCA 1480; 243 ALR 784 and the Full Court in Anvil Hill Project Watch Association Inc v Minister for the Environment and Water Resources [2008] FCAFC 3; 166 FCR 54 (together, Anvil Hill), contrary to the respondents’ submissions, and in some respects contrary to the approach taken by the primary judge.

46    Recognition by the Minister of the reality of these impacts of climate change on matters of national environmental significance protected by the EPBC Act is a matter of significant public interest. It was a matter that needed some explanation and teasing out in the appeals, being the first time that on behalf of the Minister, the level of acceptance of these matters was made so express in argument. This approach in the appeals also means that one of the bases for the primary judge’s award of costs – that the appellant’s contentions were contrary to authority (see primary judge’s costs reasons at [7], being the Full Court in Anvil Hill) was not accepted by the joint reasons of Colvin J and I.

47    With respect, the reasoning I have outlined to this point should make it plain that I do not share the primary judge’s opinion that the appellant’s applications for judicial review were without merit. There were some difficult issues of both the interpretation of the Minister’s reasons (not clarified in detail until the appeals) and the operation of s 78(1)(a) and s 527E, which were raised by the appellant’s contentions. That is why I prefer not to embrace the obiter remarks in Sangare to which I have referred at [8] above.

48    I consider it to be relevant that the appellant is a not-for-profit charitable organisation, with no private, commercial or personal interest in the Minister’s exercises of power, unlike the second respondents. In each letter to the Minister requesting reconsideration under s 78A, Environmental Justice Australia (the solicitors for the appellant) described the appellant in the following terms:

ECoCeQ is a not-for-profit environmental registered charity and association (ABN 56740735001). The organisation’s principal objectives are the conservation, protection and enhancement of the natural environment in Australia. In furtherance of these objectives, ECoCeQ promotes awareness, lobbies government, and is committed to taking advantage of any lawful right or privilege to raise awareness of environmental issues.

49    The reconsideration letters referred to at [48] each run to 47 paragraphs, and 14 pages, and carefully, thoroughly and rationally set out the contentions made by the appellant to the Minister for the purposes of s 78A. While ultimately the Minister did not accept those contentions, and this Court has found those decisions were not affected by any of the legal errors identified on judicial review, the s 78A requests and the material supporting them were substantial, substantive and well satisfied the description of arguable.

50    It was for the Minister to decide if the burning of coal produced from the proposed extended operation of these two coal mines was a substantial cause of the adverse effects on matters of national environmental significance protected by the EPBC Act, which effects the Minister accepted were occurring in part by reason of the burning of fossil fuels and the acceleration of climate change. However, for the purposes of considering the appropriate exercise of discretion on costs, it is important to recognise that there were issues of evaluation and judgment involved in the assessments undertaken by the Minister. The material and contentions put on behalf of the appellant were capable of being accepted by the Minister as matters of fact. They were not fanciful or irrational; and much depended on the Minister’s assessment of the factual issue about substantial cause. There was, as the principal reasons recognise at [46], a different approach to this term that may have been available to the Minister as decision-maker.

51    The final aspect I have weighed is the potential chilling effect of making an order against an organisation like the appellant. I have discussed the potential chilling effect of costs orders in several other decisions: see DBE17 v Commonwealth (No 2) [2018] FCA 1793 at [23(b)]; Helmbright v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 3) [2021] FCA 955 at [34]; Knowles v Commonwealth of Australia (No 2) [2022] FCA 1003 at [39].

52    The costs of EPBC Act proceedings can be considerable. In one of the cases relied on by the parties in their submissions, Logan J fixed an EPBC Act proponent’s costs at $1,090,031.50, ordering the community organisation applicant in that proceeding to pay that sum, less a set off of $50,000: see Wide Bay Conservation Council Inc v Burnett Water Pty Ltd (No 9) [2011] FCA 661; 194 FCR 250 at [134]. This was an order fixing the costs in gross and made partly on an indemnity basis, after his Honour’s fact finding about the conduct of the Conservation Council, but even on a party-party basis the reported figure gives some indication of the considerable sums involved for a community organisation. In that case, there was only one set of respondent costs.

53    In Ruddock v Vadarlis (No 2), Black CJ and French J (as his Honour then was) said at [13]:

Where the case is close or difficult and involves no obvious element of fault on the part of the loser the proposition that costs automatically follow the event may work unfairness. Moreover it may set up a significant barrier against parties of modest means even if the contemplated claim has substantial merit: See Tollefson, “When the ‘Public Interest’ Loses: The Liability of Public Interest Litigants for Adverse Costs Awards” (1995) 29 University of British Columbia Law Review 303 at 309-311; see also McCool, “Costs in Public Interest Litigation: A Comment on Professor Tollefson's Article” (1996) 30 University of British Columbia Law Review 309. These criticisms will not justify a global modification, in public interest cases, of the usual rule that costs follow the event. They do however indicate the desirability of avoiding calcification of the discretion with rigid rules governing its exercise.

(Emphasis added.)

54    The EPBC Act confers public powers, for the advancement of the public interests set out in the legislative scheme. Primarily, and putting aside any debate about its effectiveness, this legislative scheme is one designed to protect Australia’s environment through the protection of the identified matters of national environmental significance, by controlling (including prohibiting) actions that have been assessed as affecting those matters. See my observations in Wilderness Society (Tasmania) Inc v Minister for the Environment [2019] FCA 1842; 275 FCR 287 at [125].

55    As the evidence about the purposes of the appellant organisation identifies, the environment cannot speak for itself; someone must speak for it.

56    Where there are well resourced private commercial interests propounding the undertaking of large scale actions captured by the regulatory provisions of the EPBC Act, as the second respondents do, the reality is that it is only organisations such as the appellant which might consider taking the risk, in an adversarial costs jurisdiction, of reviewing the exercise of public power, where that exercise has permitted an action to proceed. It is these kinds of community organisations which might be able to fundraise in order to attempt to persuade the repository of an EPBC Act power to exercise that power against the taking of a particular action, and which then might also be able to fundraise to initiate judicial review litigation.

57    The s 78A reconsideration requests by the appellant in these appeals are a good example; it is clear that there was a huge amount of material to be gathered for this persuasive exercise at merits level and then in the judicial review proceedings, including expert reports. Community organisations such as the appellant play, in my opinion, a legitimate public interest role in holding the repositories of significant public powers to account, in presenting competing views about what the appropriate exercise of power might be, and then in seeking to test the lawfulness of the exercise of those public powers.

58    Provided the litigation is conducted efficiently, responsibly and without attributes of vexatiousness or hopeless in terms of arguments, the role played in litigation under a legislative scheme such as the EPBC Act by organisations such as the appellant is in my view an important consideration for the exercise of the costs discretion at the appellate level in particular.

Conclusion

59    I accept that not every case brought by a charitable environmental organisation under the EPBC Act should result in a costs order of the kind I have found appropriate in these appeals. Considering all the facts and circumstances, the interests of justice favour the orders I propose, but also favour no interference with the primary judge’s costs orders.

Associate:

Dated:    17 July 2024

REASONS FOR JUDGMENT

COLVIN AND HORAN JJ:

60    We have the considerable advantage of receiving a draft of the reasons of the Chief Justice concerning the orders as to costs to be made in these proceedings. Respectfully, for the following reasons, we agree that the appropriate orders are that the parties should each bear their own costs of the appeals.

61    The award of costs is discretionary: s 43 of the Federal Court of Australia Act 1976 (Cth). The discretion is to be exercised judicially and guided by principles: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [34]-[35]. Those principles are not to be elevated to rules: Norbis v Norbis (1986) 161 CLR 513. Generally, the discretion is exercised in favour of the successful party: Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 at [25] and Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 at [25]. This is sometimes referred to as the compensatory principle or the ‘general rule’. It has been said that: ‘the compensatory principle informs the usual approach to costs (costs follow the event), an approach which generally is not displaced other than in special circumstances, with such circumstances to be assessed in the context of the particular case’: IFTC Broking Services Limited v Commissioner of Taxation [2010] FCAFC 22 at [8]. As to the possibility that special circumstances may warrant departure from the ‘general rule’: see Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53 at [6].

62    In South-West Forest Defence Foundation v Department of Conservation and Land Management (No 2) [1998] HCA 35 a submission was advanced to the effect that each party should bear its own costs because of the public interest character of the proceedings in seeking to enforce environmental laws for the benefit of the general public and the benefit of endangered species. Another matter was also advanced to support the making of such an order. Gaudron, McHugh, Hayne and Callinan JJ concluded that: ‘notwithstanding these considerations, the costs of these applications should follow the event’: at [2]. See also at [4] (Kirby J).

63    In the earlier decision in Oshlack, a majority of the High Court (Gaudron and Gummow JJ, Kirby J writing separately) determined that the order of Stein J in the Land and Environment Court that there should be no order as to costs should be reinstated. However, they did so on the basis of a proper construction of the statutory provisions that conferred a discretion that pertained to a ‘new species of litigation’ (Gaudron and Gummow JJ at [45]) and which was ‘special, and in some ways peculiar, legislation’ (Kirby J at [117]). That is to say, it was a decision in which the particular statutory context was the justification for the order. The reasons did not articulate an approach that was to be adopted for ‘public interest litigation’ more generally: see Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229 at [21] (Black CJ and French J). See also: Save the Ridge Inc v Commonwealth [2006] FCAFC 51 at [6]-[16] (Black CJ, Moore and Emmett JJ).

64    However, where the issue concerns the exercise of statutory power and raises matters of high public importance about which there is substantial public controversy that extends well beyond matters of local or even regional environmental concern and in respect of which it might be said there was reasonable merit then those aspects together may provide a principled basis for an order that each party bear its own costs on the basis that the circumstances are exceptional. This is especially so where the statutory regime invites the involvement of members of the public as part of the mechanism to advance the statutory purpose.

65    For the following reasons, we consider the present case to be of that character.

66    Section 78 and s 78A of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) provide an important legislative protection where the Minister is satisfied that there is substantial new information available concerning the impact of an action on a matter protected under the Act. In such cases, the Minister may revoke a decision that has been made about an action under s 75(1) of the Act and substitute a new decision. Those provisions allow a person to make a request to the Minister to reconsider on the basis that there is substantial new information. The protection that it affords depends upon those who are aware of substantial new information being able to bring that information to the attention of the Minister and the Minister forming the views required by the legislation.

67    The Minister’s decision the subject of the appeal was founded upon an unqualified acceptance of the certainty of the causal connection between greenhouse gas emissions and climate change. It led the Minister to accept the impacts of climate change on matters of national environmental significance as well as the consequential significant public interest.

68    The acceptance of that climate science necessarily recognised the scale of the environmental threat both globally and across many matters of national environmental significance throughout Australia posed by any actions that will have material consequences for the process of climate change.

69    The Minister also accepted that substantial new information had been presented by the appellant which included reports of authoritative national and international organisations.

70    In addition to raising matters concerning the nature and extent of the Minister’s power to revoke, the appellant advanced contentions to the effect that the Minister had failed to engage with the likelihood or real possibility aspect of the required test. This was a very significant contention when there is due regard to the broad and fundamental environmental significance of the issues advanced before the Minister as substantial new information. These aspects gave the case special significance.

71    Further, as the Chief Justice has explained, the material presented to support the request that the Minister invoke the power was ‘substantial, substantive and well satisfied the description of arguable’.

72    Finally, the appellant sought to advance a case as to the way in which the concept of ‘indirect impact’ as deployed in the Environment Protection and Biodiversity Conservation Act might be applied in the case of a global phenomenon such as climate change. By reason of the Court’s view as to the reasoning pathway of the Minister, the foundation for many of those submissions was not established. However, that outcome does not detract from the scale of the significance of the matters raised by the case.

73    In addition, the appeal succeeded on the basis of contentions advanced by the Minister and supported by the other respondents which focussed upon a close consideration of the reasoning pathway of the Minister as disclosed by the reasons. This was not the focus of the proceedings before the primary judge. This is a further reason why costs orders that the parties bear their own costs of the appeal are appropriate.

Associate:

Dated:    17 July 2024