Federal Court of Australia

Save Our Strathbogie Forest Inc v Secretary to the Department of Energy, Environment and Climate Action (No 2) [2024] FCA 430

ORDERS

THE COURT ORDERS THAT:

1.    The applicant pay the respondent’s costs of the proceeding, such costs to be assessed on a lump sum basis pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth).

2.    The amount of the costs referred to in Order 1 of these Orders be determined by a Registrar of this Court pursuant to s 35A(1) of the Federal Court of Australia Act 1976 (Cth).

3.    On or before 24 May 2024, the respondent shall file and serve a Costs Summary in accordance with paragraphs 4.10 to 4.12 of the Costs Practice Note (GPN-COSTS).

4.    On or before 21 June 2024, the applicant file and serve a Costs Response in accordance with paragraph 4.13 to 4.14 of the Costs Practice Note (GPN-COSTS).

5.    Pursuant to r 1.37 of the Federal Court Rules 2011 (Cth), the Registrar shall determine the quantum of the lump sum costs in such manner as he or she thinks fit, including, if appropriate, on the papers.

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

REASONS FOR JUDGMENT

1    On 2 April 2024, I made orders dismissing the applicant’s application for an injunction under s 475 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) to restrain the Secretary to the Department of Energy, Environment and Climate Action from carrying out four planned fuel reduction burns in the Strathbogie State Forest. My reasons for judgment were published in Save Our Strathbogie Forest Inc v Secretary to the Department of Energy, Environment and Climate Action [2024] FCA 317 (SOSF No 1).

2    Pursuant to the orders made on 2 April 2024, the parties each filed brief written submissions on the question of costs.

3    The Secretary submits that costs should follow the event, and seeks orders that its costs of the proceeding be paid by the applicant and be assessed on a lump sum basis pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth) and Part 4 of the Court’s Costs Practice Note (GPN-COSTS). Anticipating the applicant’s submissions, the respondent submits that there is no warrant for an “issues based” cost order.

4    The applicant submits that, while the Secretary was successful overall in the proceeding, the Secretary’s costs should be reduced to reflect the success of the parties on the three main issues raised for determination: see SOSF No 1 at [4]. Although the applicant did not succeed in establishing its primary case that the proposed action is likely to have a significant impact on the Southern Greater Glider contrary to s 18(3) of the EPBC Act, the respondent was unsuccessful on its two “defences” relying on s 43B of the EPBC Act and the principle in Melbourne Corporation v The Commonwealth (1947) 74 CLR 31.

5    Accordingly, the applicant submits that the award of costs in favour of the Secretary should be reduced to reflect the applicant’s success on those issues and that, having regard to the additional time occupied by those issues in the trial and to the public interest in resolving the questions concerning the application of the EPBC Act to the proposed actions, the applicant should be “partially indemnified for carrying the cost of the litigation in that respect and having succeeded on those issues”. The applicant submits that the Secretary’s cost should be reduced to between 50 to 70 percent of the costs as between party and party.

6    Section 43 of the Federal Court of Australia Act 1976 (Cth) (the Act) confers on the Court a broad discretion to order costs, which must be exercised judicially and consistently with the purpose of the power, taking into account all relevant facts and circumstances connected with the litigation: Bob Brown Foundation Inc v Commonwealth (No 2) (2021) 286 FCR 160 at [4] (Griffiths, Moshinsky and SC Derrington JJ). The fundamental purpose of the discretion is to compensate the successful party, not to punish the unsuccessful party: PKT Technologies Pty Ltd (formerly known as Fairlight.au Pty Ltd) v Peter Vogel Instruments Pty Ltd (No 2) [2020] FCAFC 46 at [14] (Besanko, Banks-Smith and Stewart JJ).

7    I note at the outset that the applicant has not argued that the ordinary rule that costs follow the event should not apply because of the “public interest” character of the proceeding, nor because it was brought pursuant to wide standing provisions in order to enforce compliance with or obedience to the EPBC Act: cf. Oshlack v Richmond River Council (1998) 193 CLR 72; Ruddock v Vadarlis (No 2) (2001) 115 FCR 229; Bob Brown Foundation Inc at [7]-[16]; VicForests v Friends of Leadbeater’s Possum Inc (No 2) [2021] FCAFC 92 at [7] (Jagot, Griffths and SC Derrington JJ). This is consistent with the position that there is no universal exception in such proceedings from the usual rule that costs should follow the event. As Black CJ and French J stated in Ruddock v Vadarlis (No 2) at [18], “[t]hat a proceeding was brought otherwise than for the personal or financial gain of the applicant, and in that sense in the public interest, does not detract from the general proposition that ordinarily costs follow the event and that the primary factor in deciding on the award of costs is the outcome of the litigation”. Any departure from the ordinary rule as to costs must be based on the circumstances of the particular case.

8    The relevant circumstances can include the extent to which a party has been successful or unsuccessful on particular issues raised in the proceeding. In PKT Technologies at [14]-[15], Besanko, Banks-Smith and Stewart JJ stated:

… a successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s costs of them. If the apportionment of costs is appropriate, the object is not mathematical precision but a result that best reflects the interests of justice in the overall circumstances of the case. See EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd [2011] FCAFC 92 at [9].

However, the mere fact that a court does not accept all of a successful party’s arguments does not make it appropriate to deal with costs on an issue by issue basis: The State of Victoria v Sportsbet Pty Ltd (No 2) [2012] FCAFC 174 at [8]. A court will be reluctant to adopt an approach of apportioning costs between different issues depending on success or failure on those issues where it is likely to be difficult, if not impossible, to allocate items of costs between the different issues. See Marmax Investments Pty Ltd v RPR Maintenance Pty Ltd (No 2) [2015] FCAFC 155 at [16] citing Cretazzo v Lombardi (1975) 13 SASR 4 at 16; and Chevron Australia Holdings Pty Ltd v Commissioner of Taxation (No 5) [2015] FCA 1310 at [15].

9    Similarly, in Commissioner of Taxation v Bosanac (No 2) [2022] FCAFC 5 at [16], Kenny, Davies and Thawley JJ observed:

… a successful appellant who has failed on some issues may be deprived of the costs of the issues on which the party failed or ordered to pay the costs of them to the other party. The determination of costs on an issue by issue basis is ordinarily not desirable, however; and the fact that a court does not accept all of a successful party’s submissions does not necessarily make it appropriate to deal with costs on an issue by issue basis: see Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53; 90 ALJR 270; 327 ALR 192 at [6] and Commissioner of Taxation v AusNet Transmission Group Pty Ltd (No 2) [2015] FCAFC 124 at [23].

10    In the present case, it is not suggested that an order should be made awarding the discrete costs of each particular issue in favour of the party who was successful on that issue and against the party who was unsuccessful on that issue. Rather, the applicant seeks an order by which the costs to which the Secretary would otherwise be entitled as a result of his overall success in the proceeding should be proportionately reduced having regard to the Court’s rejection of the defences in relation to s 43B of the EPBC Act and the Melbourne Corporation principle. Such an approach avoids “the complexities associated in allocating costs to particular issues”: Clough Ltd v FCT (No 2) [2021] FCA 267 at [6] (Colvin J), citing Phonographic Performance Co of Australia Ltd v Copyright Tribunal of Australia [2019] FCAFC 192 (Besanko, Middleton and Burley JJ at [6]-[7]). Any apportionment would not require “mathematical precision” but would seek to reflect the interests of justice in the overall circumstances of the case: PKT Technologies at [14].

11    Accordingly, the question is whether any apportionment of costs is warranted to reflect the applicant’s success on the two defences raised by the Secretary. In deciding whether to adopt such an apportionment, the remarks of Goldberg J in Dr Martens v Figgins Holdings (No 2) [2000] FCA 602 at [54] are apposite:

[A] court should be reluctant to embrace the proposition that, as a general rule, it is appropriate to undertake an enquiry as to who was successful in relation to particular issues in a case to determine whether there should be an apportionment of costs against a successful party. A court should not be too ready to disallow costs simply because a party has failed upon an issue, unless it be quite a separate and distinct issue from the issues in respect of which it succeeded or unless there be some element of unreasonableness or inappropriate conduct in relation to that issue…

12    Along similar lines, Jacobs J sounded a “note of cautious disapproval” of applications to apportion costs in Cretazzo v Lombardi (1975) 13 SASR 4 at 16, stating:

But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues.

13    In the circumstances of the present case, I consider that there is no reason to depart from the ordinary rule as to costs and that it is not appropriate to allow any reduction in respect of the Secretary’s costs.

14    I do not consider that the defences raised by the Secretary involved a significant increase in the time or costs involved in the trial of the proceeding. In particular, I do not accept the applicant’s contention that, if the defences had not been raised, the trial would likely have been shortened by 2 or 3 days (i.e. from 10 days to 7 or 8 days). While there might have been a slight reduction in the duration of the hearing, the overwhelming majority of the evidence and submissions at the trial was focused on the principal question concerning whether the planned burns were likely to have a significant impact on the Southern Greater Glider within the meaning of s 18(3) of the EPBC Act. The defences were not so significant as to warrant any proportional reduction of the Secretary’s costs, let alone a reduction to between 50 percent and 70 percent of the Secretary’s costs as is sought by the applicants.

15    The applicant also contends that “significant court time” was devoted to questions concerning the admissibility of evidence. I assume that the applicant is referring principally to the time taken in dealing with the Secretary’s objections to the admissibility of the applicant’s expert evidence. While some time was spent during the trial in hearing submissions on various objections to evidence, there is nothing particularly unusual about that fact. The Secretary ultimately accepted that many of his grounds of objection to the applicant’s expert evidence were relevant to weight, and they were dealt with as such in the reasons for judgment: SOSF No 1 at [354]. I do not consider that the time spent on these issues during the trial justifies a proportionate reduction in the Secretary’s costs.

16    Each of the defences raised by the Secretary was directed to the ultimate question of whether or not an injunction should be granted under s 475 of the EPBC Act. As a general rule, a respondent should not be deterred from raising multiple arguable defences due to the risk of an adverse costs order if some of those defences are not made out: see Cretazzo at 16; Marmax Investments Pty Ltd v RPR Maintenance Pty Ltd (No 2) [2015] FCAFC 155 at [16]-[17] (Middleton, Foster and Gleeson JJ); Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145 at [19] (Hodgson JA). As Burchett J said in Australian Conservation Foundation v Forestry Commission of Tasmania [1988] FCA 144; 81 ALR 166 at 169:

A party against whom an unsustainable claim is prosecuted is not to be forced, at his peril in respect of costs, to abandon every defence he is not sure of maintaining, and oppose to his adversary only the barrier of one hopeful argument: he is entitled to raise his earthworks at every reasonable point along the path of assault. At the same time, if he multiplies issues unreasonably, he may suffer in costs. Ultimately, the question is one of discretion and judgment.

17    There may be cases in which failure on a discrete point that was unreasonably raised or unduly prolonged the hearing may be reflected in the costs outcome: see generally BHP Billiton Iron Ore Pty Ltd v National Competition Council (No 2) [2007] FCA 557 at [15]-[27] (Middleton J); Commissioner of the Australian Federal Police v Razzi (No 2) (1991) 30 FCR 64 at 67-69 (Wilcox J); Les Laboratoires Servier v Apotex Pty Ltd (2016) 247 FCR 61 at [301]-[303] (Bennett, Besanko and Beach JJ). As Wilcox J noted in Razzi at 69, “[i]n these days of extensive court delays and high legal costs the courts should use all proper means to encourage parties to consider carefully what matters they will put in issue in their litigation”. But the fact that a successful party has lost on a particular issue does not necessarily mean that the party has acted inappropriately or unreasonably in the litigation: BHP Billiton at [21]. In the present case, the defences on which the Secretary was unsuccessful were not unarguable, did not greatly increase the length of the proceeding, and were not of such significance in proportion to the whole case to warrant a special order to deprive the Secretary of the costs of those issues: cf. BHP Billiton at [23].

18    Accordingly, I consider that it is appropriate that the applicant should pay the Secretary’s costs of the proceeding. The Secretary has submitted that its costs should be determined by way of a lump sum costs process. The Court’s stated preference is for the making of lump sum costs orders where it is appropriate and practicable to do so: see Costs Practice Note at [4.1]. In the circumstances of the present case, I see no reason why a lump sum costs order would be inappropriate or impracticable. The Secretary’s costs should therefore be awarded as a lump sum and determined by a Registrar of this Court in accordance with the procedures set out in the Federal Court Rules and the Costs Practice Note.

19    Finally, the Attorney-General for the State of Victoria submitted that there should be no order made in respect of its costs as an intervener in the proceeding. The Secretary joined in that submission, and the applicant advanced no submission to the contrary. While s 78A(2) of the Judiciary Act 1903 (Cth) recognises that the Court may make costs orders against an Attorney-General who intervenes in a matter arising under the Constitution or involving its interpretation, the general approach is that an intervener is neither entitled to nor liable for costs, at least where the intervention has not substantially extended the hearing or put the successful party to unnecessary cost: see City of Burnside v Attorney-General of South Australia (1994) 63 SASR 65 at 67-68 (Debelle J); Mandalinic v Stone (Liquidator) (No 2) [2023] FCAFC 176 at [4] (Stewart, McElwaine and Button JJ). In the present case, the Attorney-General took carriage of the Secretary’s defence based on the Melbourne Corporation principle, and the intervention did not itself lengthen the trial. I have concluded above that the failure of this defence does not warrant any reduction in the Secretary’s costs of the proceeding. The Attorney-General does not seek her costs, and there is no occasion to make any costs order against the Attorney-General in favour of either the applicant or the Secretary.

20    I will make orders that the applicant pay the Secretary’s costs as between party and party, to be assessed on a lump sum basis in accordance with the Costs Practice Note and to be determined by a Registrar pursuant to s 35A(1) of the Act.

Associate:

Dated:    29 April 2024