Federal Court of Australia

Doctors for the Environment (Australia) Incorporated v National Offshore Petroleum Safety and Environmental Management Authority (Maximum Costs) [2025] FCA 598

ORDERS

THE COURT ORDERS THAT:

1.    The maximum costs as between party and party that may be recovered by the respondents (collectively) from the applicant in the proceeding be no more than $80,000.

2.    The maximum costs as between party and party that may be recovered by the applicant from the respondents (collectively) in the proceeding be no more than $80,000.

3.    The costs of the interlocutory application dated 16 May 2025 are reserved.

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

REASONS FOR JUDGMENT

MCELWAINE J:

1    The applicant has commenced this proceeding for judicial review of a decision made by the National Offshore Petroleum Safety and Environmental Management Authority to accept an Environmental Plan, prepared and lodged by Woodside Energy Scarborough Pty Ltd pursuant to the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2023 (Cth). Regulation 33(1) confers power on the Authority to make a decision on a submitted environmental plan. Amongst other things, the Authority must be “reasonably satisfied that the environment plan meets the environment plan acceptance criteria”, and where that is so, it must decide to accept the plan. The Authority decided to accept the Environmental Plan on 19 February 2025. This proceeding seeks to impugn that decision. There are 16 grounds of review in the application, not including sub particulars. At a high level of analysis, the applicant contends that the Authority could not have been reasonably satisfied that the Environmental Plan complied with various requirements of the Regulations.

2    The applicant contends that the multiple grounds in the originating application “by and large” are centre on two propositions: (1) the Environmental Plan was required to contain control measures, environmental performance standards and other criteria to reduce and measure the reduction of the environmental impacts and risks of the project to as low as reasonably practical and to an acceptable measure; and, (2) the identified control measures, environmental performance standards, environmental performance outcomes and measurement criteria in the Environmental Plan do not meet the statutory requirements.

3    The Environmental Plan relates to activities to develop the Scarborough gas resource, off the coast of Western Australia. In one affidavit made by a solicitor for Woodside, there is attached an ASX announcement dated 22 November 2021. The estimated cost of the project is USD $12 billion. The estimated volume of the resource is approximately 11.1 trillion ft³ of dry gas. The Environmental Plan is the final environmental plan which Woodside was required to obtain before the project can commence operations. Third party contracts have been entered into, and there are significant financial penalties for delay. There is no dispute that the applicant’s proceeding must be resolved urgently. For that reason a two-day hearing has been scheduled to commence on 14 July 2025, with a tight procedural timetable.

4    By an interlocutory application dated 16 May 2025, the applicant seeks an order pursuant to r 40.51(1) of the Federal Court Rules 2011 (Cth) that the maximum costs as between party and party that may be recovered by the respondents collectively from the applicant be no higher than $80,000 and, correspondingly, the maximum costs as between party and party that may be recovered by the applicant from the respondents collectively be no higher than $80,000. The rule confers broad power to make an order “specifying the maximum costs as between party and party that may be recovered in the proceeding”. It is agreed that the interlocutory application be determined on the papers. The Authority takes a neutral position. Woodside opposes the orders. The applicant relies on affidavits made by its Executive Director Ms Wylie on 16 May 2025 and by its solicitor, Ms Hamilton on 4 June 2025. Woodside relies on affidavits made by its solicitor, Mr Blaxill made on 22 and 30 May 2025. Competing submissions have been filed.

5    Like the originating application, there is an urgent need to determine the interlocutory application before the incurred legal costs exceed the proposed cap. The applicant’s position is that if it is unsuccessful, it will be forced to abandon the proceeding. Given those matters, these reasons are necessarily brief.

6    The applicant is an incorporated charity. It relies on donations and member contributions. One of the objects clauses in its Constitution provides: To conserve and restore the natural environment because of its relationship to and impact on human health. For the financial year ended 30 June 2024, it recorded total income of $636,784 and total expenditure of $641,906 resulting in a net loss of $5,122. For that year its balance sheet records total assets of $297,479, total liabilities of $59,069 and net assets of $238,410. Its most significant assets comprise cash held in bank deposits totalling $286,826. That financial information has been updated to 30 April 2025. It discloses a projected loss of $128,671, but assuming budget forecasts are achieved for the 2024/2025 financial year, the projected loss is $32,791. The net assets as at 30 April 2025 are valued at $86,530. Although the applicant may access a charitable account of approximately $54,000; $30,000 of that money is already allocated to be spent on a future health summit, and the account requires a minimum balance of $10,000 to remain open. The projected loss for the second half of 2025 is $76,000.

7    Ms Wylie further deposes that if the applicant’s assets were required to be applied to meet an adverse costs order in excess of $80,000, there is no reliable income to replace those assets and the applicant would be required to cease operating. There is no assessed capacity for the applicant’s members to contribute more to fund the proceeding. The applicant’s lawyers have agreed to act on a no-win, no fee basis. She also states that whilst the applicant engages, in the normal course, in end of financial year fundraising appeals, typically the amount raised is between $100,000 and $120,000, and at best in her assessment if the applicant were ordered to pay costs at the end of the proceeding, it is unlikely that it would be able to raise more than approximately $60,000 to discharge a future costs liability. Overall, the effect of her evidence is that the applicant does not have the capacity to pay more than $80,000 to satisfy an adverse costs order and if the interlocutory application fails, the proceeding will be stultified because the applicant will be forced to discontinue it.

8    I accept the evidence of Ms Wylie.

9    Mr Blaxill estimates that the reasonable party/party recoverable costs of Woodside of the proceeding would be at least $220,000, excluding GST. He provides a detailed, reasoned, analysis for the estimate which I accept.

10    The applicant submits that a maximum party/party costs order should be made in its favour because:

(a)    it brings the proceeding in the public interest to challenge the lawfulness of an important decision made by the Authority. It is not suggested (at this stage) that the grounds of review lack merit;

(b)    the proceeding will not require evidence to be given by witnesses: the grounds turn wholly on a consideration of the Environmental Plan and the construction of the legislative scheme;

(c)    the proceeding is concerned with the proper administration by a public authority of environmental regulations where the project “has the potential to affect a large number of individuals, environmental organisations, titleholders and government agencies”;

(d)    there is a broad public benefit in “careful adherence” to environmental regulations and to ensure that the environmental impacts of the project “are reduced to as low as reasonably practicable and to an acceptable level, consistent with the statutory requirements”;

(e)    a maximum costs order is necessary in order to permit the applicant to continue the proceeding;

(f)    although the range of the maximum costs order the applicant seeks, between $20,000 and $80,000, is less than the likely quantum of a party/party costs order, it is nonetheless a significant sum;

(g)    the applicant has no financial interest in the outcome of the proceeding; and

(h)    the application was brought quickly, with prior notice to the respondents.

11    In summary, Woodside submits:

(a)    the principal purpose of a maximum costs order is to address concerns about access to justice, particularly in “less complex and shorter cases”. This is not such a case. The issues raised by the applicant are of “considerable complexity”;

(b)    a maximum costs order “should not be used to motivate applicants to challenge any project approval”, as that would distort the purpose of r 40.51;

(c)    the applicant’s assertion that the proceeding is brought in the public interest “is no more than an assertion”, based on the belief of Ms Wylie. There is no evidence that the particular issues sought to be agitated are matters of recognised public interest: cf Blue Wedges Inc v Minister for the Environment, Heritage and the Arts [2008] FCA 8; (2008) 165 FCR 211 at [73];

(d)    in any event, identification of some public interest issue is not decisive;

(e)    there is nothing to prevent the applicant from making a submission that there be no order as to costs, on grounds of public interest, in the event that it is unsuccessful;

(f)    financial information adduced by the applicant is “silent” about cash donations received as a result of “the anti-fossil fuel campaign commenced in or around June 2024”, and how those funds were spent. There is no “cogent evidence” that the applicant’s members would be unwilling or unable to contribute to a more general costs order. It should be concluded “in truth” that the applicant has commenced this proceeding in circumstances where its members are not prepared to support it financially;

(g)    the fact that an incorporated association is not willing to risk its assets beyond a particular sum “to pursue litigation in pursuit of its private objects” does not support a maximum costs order, where the purpose is to facilitate access to justice;

(h)    the applicant did not pursue “alternative ways to resolve the dispute”: Australians for Indigenous Constitutional Recognition Ltd v Commissioner of Australian Charities and Not-for-Profits Commission [2021] FCA 435 at [34] – [35]. This is said to be “a powerful factor” that weighs against the exercise of the discretion. Extensive submissions are then made about the engagement between the applicant, the Authority and Woodside between August 2023 and February 2025;

(i)    the proposed order does not operate equally as between the parties: the maximum costs order is plainly unequal, in that it applies to each respondent;

(j)    if the Environmental Plan is held invalid, that will have very serious economic consequences for Woodside, particularly in circumstances where it is already exposed to high financial risk.

12    In my view, this is an appropriate case for the exercise of the discretion to make a maximum costs order pursuant to r 40.51 of the Rules to facilitate access to justice in a case which raises important questions about the lawful exercise of statutory power.

13    I am satisfied that the applicant brings this proceeding in the public interest in order to have determined whether the Authority, in the exercise of public regulatory power, made a decision lawfully in accordance with the statutory requirements. The submission of Woodside, that the applicant acts in its private interests and in order to secure some benefit for it and its members, is plainly incorrect. As Mortimer CJ has recently observed, public authorities have an interest in the proper construction and operation of legislative schemes which they administer: Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2024] FCAFC 97 at [26]. This proceeding questions whether the Authority correctly accepted the Environmental Plan as addressing the clearly important consideration of the long-term release of greenhouse gas emissions into the environment and the controls, mitigation steps and other criteria proposed to address the existential impact of the anthropogenic release of greenhouse gas into the environment, which “cannot speak for itself; someone must speak for it”: Environment Council at [55], Mortimer CJ.

14    And as separately observed by Colvin and Horan JJ in Environment Council at [64]:

[W]here 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.

15    That is the present case. The applicant extensively engaged with the Authority and with Woodside concerning the preparation of the Environmental Plan as a “relevant person” within the meaning of reg 25 of the Regulations (or at least was accepted as such). It is mandatory to consult with relevant persons. The applicant contends that this is a controversial project with long-term adverse environmental and public health consequences. Whether that is so is not relevant to the review function of this Court, but is a matter supporting the public interest consideration in the exercise of the discretion to make a maximum costs order.

16    As to the position of project proponents who are obliged to obtain environmental approvals, as Mortimer CJ further observed at [31], ordinarily they participate in litigation of the present time “to defend their private commercial interest”. That is the case here.

17    It is relevant to consider the assessed party/party costs of Woodside of $220,000, in the context of the project and the limited resources of the applicant. Ms Hamilton in her affidavit of 4 June 2025 attaches a number of publicly available documents. One is the announcement made by Woodside on 25 February 2025, of its full year 2024 results. Net profit after tax was $3.573 billion and the directors determined the final dividend of USD $0.53 per share with a value of $2.316 billion. Another attachment contains details of the market capitalisation of Woodside as at 4 June 2025: in excess of $41 billion. The party/party costs estimate for this proceeding is insignificant both in the context of the estimated costs of the project, and the ability of Woodside to absorb the costs of this proceeding in excess of the maximum amount proposed by the applicant.

18    The relevance of those matters was also addressed by Mortimer CJ in Environment Council at [48], when contrasting proceedings that are brought by a not-for-profit charitable organisation “with no private, commercial or personal interest” in the exercise of public power, unlike the private commercial interests of a proponent who has successfully obtained the exercise of such power in order to permit it to undertake commercial developments. There is also in this case the “potential chilling effect of making an order against an organisation” which is charitable where it brings a proceeding in the public interest: Environment Council at [51].

19    I do not accept a number of the submissions of Woodside. There is no warrant for reading in an implied limitation to the exercise of the power at r 40.51 to the effect that it is, or is ordinarily limited to, less complex cases: Owners of Ship “Shin Kobe Maru” v Empire Shipping Co Inc [1994] HCA 54; (1994) 181 CLR 404 at 421. This is not commercial litigation, where that has been considered as a relevant factor: McKay Super Solutions Pty Ltd (Trustee) v Bellamy’s Australia Ltd (No 2) [2019] FCA 215; (2019) 135 ACSR 278 at [71]. The discretion conferred is broad, and is ultimately to be exercised in the particular circumstances of individual cases. Justice Thawley assembled a useful list of inclusive matters that may be considered in Australian Charities and Not-for-Profits Commission at [8]-[10]. Plainly, however, the exercise of the discretion does not turn on satisfaction of a checklist.

20    I do not accept that making a maximum costs order in this case would, or would likely, “distort the purpose” of the rule. The purpose is to limit the exposure of a party to an adverse costs order where the particular circumstances justify the exercise of the discretion. Ultimately, the discretion is guided by what is an appropriate order in the interests of the administration of justice in the particular circumstances.

21    Although the identification of matters in the public interest, as justifying the proceeding, is not of itself decisive, it is of significant weight in this proceeding. The parties accept that this is the first case where this Court will be required to decide whether an environmental plan complies with the provisions of the regulations in issue, which will involve the important task of construing the legislative scheme.

22    The submission that it will be open to the applicant, if it fails, to submit that there should be no order as to costs, misses the point of the present application. The applicant’s evidence is that unless it has the assurance of a maximum costs order, it will not be able to proceed.

23    I do not accept the criticisms that the financial information adduced by the applicant is insufficient or in some respects unexplained. No application was made to cross-examine Ms Wiley. I have accepted her evidence as stated.

24    This is not simply a case where the applicant is unwilling to “risk its assets” beyond the particular sum. The applicant’s assets are relatively meagre and utterly inconsequential when viewed against those of Woodside. The point of the application is that absent a maximum costs order, the proceeding will be discontinued. If that occurs, the important public interest opportunity in having this Court pronounce upon the legislative scheme and the sufficiency (or not) of the Environmental Plan will be lost.

25    The submission that the applicant has not exhausted alternative ways of raising its concerns, overlooks that this is a judicial review proceeding where private compromise sits incompatibly with the public interest. There is no relevant analogy with Australian Charities and Not-for-Profits Commission because that case concerned an appeal from a refusal of the Australian Charities and Not-for-Profits Commission to register the applicant as a public benevolent institution where the applicant chose to pursue the matter in this Court rather than in the Administrative Appeals Tribunal, where it would not have been subject to an adverse costs order.

26    The submission that the proposed order does not operate equally between the parties is of some merit, but not dispositive overall. The position of the Authority is necessarily different from that of Woodside: Environment Council at [22]-[30].

27    Finally, the submission that if the Environmental Plan is held invalid, that will have very serious consequences for Woodside is clearly correct. Conversely, if Woodside is permitted to proceed in reliance upon an invalid environmental plan, that is likely to have very serious consequences for the environment – which is ultimately the point of this proceeding.

28    For these reasons, I am persuaded to make a maximum costs order. The applicant seeks the order in the range of $20,000 to $80,000. I am unpersuaded it should be anything less than $80,000, because the applicant should be at some material financial risk in the event that it fails in the proceeding and suffers an adverse costs order.

Associate:

Dated:    6 June 2025