FEDERAL COURT OF AUSTRALIA

Lawyers for Forests Inc v Minister for the Environment, Heritage and the Arts [2008] FCA 588

PRACTICE AND PROCEDURE – security for costs – impecunious applicant – public interest litigation – whether second respondent should be granted security for costs – bona fide and arguable case – poverty no bar to litigation

Associations Incorporation Act 1981 (Vic)

Administrative Decisions (Judicial Review) Act 1977 (Cth) s 5(1)

Judiciary Act 1903 (Cth) s 39B

Environment Protection and Biodiversity Conservation Act 1999 (Cth) s 487(3)

Federal Court of Australia Act 1976 (Cth) s 56

Federal Court Rules (Cth) O 28 r 3  

Friends of Hinchinbrook Society Inc v Minister for the Environment (No. 1) (1996) 69 FCR 1, followed

Tigers AFC (Mayne) Inc v The AFL and Others [2000] FCA 1650, followed

Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1, applied

LAWYERS FOR FORESTS INC v MINISTER FOR THE ENIVRONMENT, HERITAGE AND THE ARTS and GUNNS LIMITED

VID 1112 OF 2007

MARSHALL J

30 APRIL 2008

MELBOURNE

THE COURT ORDERS THAT:

1.                  The second respondent’s motion dated 24 January 2008 is dismissed.

2.                  The second respondent pay the applicant’s costs of, and associated with the motion, including the costs of compliance with subpoenas, to be taxed in default of agreement.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     The matter currently requiring resolution is an application by the second respondent, Gunns Limited (“Gunns”), for an order that the applicant, Lawyers For Forests Inc (“LFF”), provide security for its costs in the proceeding in such amount as the Court determines. The substantive proceeding is an application under s 5(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth) to review a decision made by the first respondent Minister to approve the construction and operation by Gunns of a bleached Kraft pulp mill at Bell Bay, Tasmania. The Minister made the impugned decision under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (“EPBC Act”).

2                     LFF is an association incorporated pursuant to the Associations Incorporation Act 1981 (Vic). Its purposes include the promotion of the conservation and better management of Australia’s native forests and the stimulation and encouragement of public interest in the value and importance of protecting native forests and related environmental issues.

3                     Under s 487(3) of the EPBC Act, LFF has standing to bring this proceeding as a person aggrieved by the Minister’s decision. That is because in the two years immediately before the Minister’s decision LFF has engaged in a series of activities in Australia “for protection or conservation of, or research into, the environment”: see s 487(3)(b). Further, the time of the Minister’s decision its purposes included “protection or conservation of, or research into, the environment”: see s 487(3)(c).

4                     In support of its application for security for costs, Gunns refers, in an affidavit of its solicitor, to the meagre assets of LFF which stood at about $6,450 as at 30 June 2006 and to the considerable expenditure required by Gunns to defend the proceeding, running to over $100,000.

5                     In a reply affidavit, a member of the committee of LFF says that as at 31 January 2008 LFF had assets of approximately $8,700 which it intends to use to pay for disbursements in the proceeding. The affidavit also states that LFF is funded by voluntary contributions and that LFF could not provide security for costs in the sum of $103,445 as requested by Gunns. If such an order was made, the proceeding could not continue. From an affidavit filed this morning it appears that LFF’s financial position has improved by a few thousand dollars as a result of fundraising.

6                     Section 56 of the Federal Court of Australia Act 1976 (Cth) permits the Court to order that an applicant in a proceeding give security for the payment of costs that may be ordered against it. If security is not given in accordance with any order made to provide it, the Court may order that the proceeding be dismissed. Order 28 rule 3 of the rules of Court provides:

(1)   When considering an application by a respondent for an order for security for costs under s 56 of the Act, the Court may take into account the following matters:

            …

(b)that an applicant is suing, not for the applicant’s own benefit, but for         the benefit of some other person and the Court has reason to believe           that the applicant will be unable to pay the costs of the respondent if       ordered to do so;

            …

7                     LFF concedes that it is impecunious but contends that no order for security for costs should be made against it. It relies on the following factors:

·                    the special standing it has under the EPBC Act;

·                    the public interest nature of the litigation;

·                    the likelihood that the proceeding would not continue if security for costs was ordered;

·                    the relative insignificance of Gunns’ costs in the proceeding when compared with the enormous costs associated with the construction and operation of the proposed pulp mill, estimated at $2 billion; and

·                    the bona fide and arguable nature of LFF’s case.

8                     Gunns submits that the subject matter of the proceeding is concerned solely with the conditions of approval granted by the Minister concerning the effluent discharge into Bass Strait at an outfall, some 1.2 kilometres off-shore. Gunns says that that issue is not relevant to the question of the conservation and protection of native forests.

9                     Gunns submits that LFF is not authorised to bring the current proceeding. That submission is without merit. LFF’s purposes include the stimulation and encouragement of public interest in the value and importance of native forests and related environmental issues. Opposition to the operation of a pulp mill which may lead to adverse environmental effects and use wood sourced from native forests, fits well within the purposes of LFF. The application is one capable of being made by LFF and one which it is acknowledged to have a special standing to make in accordance with s 487 of the EPBC Act.

10                  Gunns also contends that there is no evidence that those persons who stand behind LFF do not have the funds to provide security, so that it can’t be concluded that the litigation would be stifled because of a security for costs order. That submission is rejected. There is a relevant difference between members of a non-profit voluntary association formed for some public policy purpose and shareholders of a company. Members of LFF do not stand to gain any financial benefit from the proceeding. The proceeding is one in which LFF sues for its own benefit to advance a purpose or purposes for which it was formed; see Friends of Hinchinbrook Society Inc v Minister for the Environment (No 1) (1996) 69 FCR 1 at 21-22, per Branson J and Tigers AFC (Mayne) Inc v The AFL and Others [2000] FCA 1650at [28] to [29] perSpender J.

11                  It must also be borne in mind that there is uncontradicted evidence before the Court from a committee member of LFF that LFF would be unlikely to continue the proceeding in the event of a security for costs order.

12                  The only factor of any substance which supports the making of a security for costs order is LFF’s impecuniosity. To make such an order in those circumstances would deprive LFF of its right of access to this Court in circumstances where it qualifies as an aggrieved person pursuant to expanded standing provisions made under s 487(3) of the EPBC Act in litigation which is asserted to be in the public interest. However, that is not to say that public interest litigation will necessarily be immune from a security for costs order.

13                  Some of the submissions advanced by Gunns in favour of an order for security for costs concerned the prospect that LFF would be liable to pay Gunns’ costs if its application failed. Whether or not that is so is not the question currently before the court. It would not be a proper exercise of the discretion to award security for costs simply to do so because an impecunious applicant may be ordered to pay costs. Further, a court should be cautious about making an order for security for costs in circumstances where the respondent whose decision is under challenge doesn’t seek such an order.

14                  The discretion to make a security for costs order is wide and unfettered but must be exercised judicially; see Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 at 3. As the only factor of any substance raised in support of the proposed order is LFF’s impecuniosity, Gunns has not satisfied its onus of demonstrating that a security for costs order should be made. To hold otherwise would stifle the litigation and prevent an applicant with standing to bring the application from agitating a matter which it considers to involve questions of public importance and which seems, on the material currently before the Court, to be made bona fide and raises arguable questions of law.

15                  The Court will order as follows:

1.                  The second respondent’s motion dated 24 January 2008 is dismissed.

2.                  The second respondent pay the applicant’s costs of, and associated with the motion, including the costs of compliance with subpoenas, to be taxed in default of agreement.

Associate:

Dated:         30 April 2008