Federal Court of Australia

Mullaley Gas & Pipeline Accord (MGPA) Inc v Minister for Environment and Water (Costs) [2025] FCA 1640

ORDERS

THE COURT ORDERS THAT:

1.    The applicant pay the respondents’ costs.

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

REASONS FOR JUDGMENT

THAWLEY J:

1    An application for judicial review brought by Mullaley Gas & Pipeline Accord (MGPA) Inc against the Minister for the Environment and Water was dismissed on 4 December 2025: Mullaley Gas & Pipeline Accord (MGPA) Inc v Minister for Environment and Water [2025] FCA 1526.

2    The Court’s power to make an award of costs under s 43(1) of the Federal Court of Australia Act 1976 (Cth) is discretionary: s 43(2). The power must be exercised judicially, not arbitrarily or capriciously or on grounds unconnected with the litigation, having regard to relevant principles, and the justice of the case in all the circumstances: Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Mukiza [2022] FCAFC 105 at [4].

3    One of the most important guiding principles by reference to which the discretion is exercised, if not the most important principle, is that the successful party is generally entitled to his or her costs by way of recompense against the expense of litigation: Northern Territory v Sangare [2019] HCA 25; 265 CLR 164 at [25]. Sometimes this guiding principle is referred to as the ‘general rule’ that costs follow the event and sometimes the application of that principle is said to give rise to the ‘usual order’ as to costs. The circumstances may be such – sometimes referred to as ‘special’ or ‘exceptional’ circumstances – that a departure from the ‘general rule’ is warranted – see: Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53; 256 CLR 31 at [6].

4    There is no special principle in public interest litigation that displaces the guiding principle that costs follow the event: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at 123 (Kirby J); Qantas Airways Ltd v Cameron (No 3) [1996] FCA 765; 68 FCR 387 at 389 (Lindgren and Lehane JJ); Friends of Hinchinbrook Society Inc v Minister for the Environment (No 5) [1998] FCA 432; 84 FCR 186 at 188–9 (Northrop, Burchett and Hill JJ); South-West Forest Defence Foundation v Department of Conservation and Land Management (No 2) [1998] HCA 35; 154 ALR 411 at [1] to [2] (Gaudron, McHugh, Hayne and Callinan JJ).

5    That said, there are features of litigation brought by public interest groups under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) that may be relevant in a particular case to whether the circumstances warrant making some order which departs from the guiding principle or ‘general rule’ that costs follow the event.

6    The applicant referred, in particular, to Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2024] FCAFC 97 at [57] (ECCQ), where Mortimer CJ stated:

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.

7    The applicant also referred to the observations of Colvin and Horan JJ 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.

8    The applicant made seven submissions in support of its ultimate contention that the circumstances were sufficiently special or exceptional as to warrant each party bearing its own costs. It is convenient to address the submissions individually, but each of them has been considered together with the others in assessing the appropriate order as to costs.

9    First, the applicant submitted that its case was “arguable”; that it “raised difficult issues in relation to the interpretation of the delegate’s reasons” and the EPBC Act; and that it was “part of the process of clarifying the law”, raising “an important question of law as to the scope of the construction of the first limb of ss 24D and 24E and related provisions”.

10    The applicant’s case was arguable. That is obviously not a reason for denying a successful party its costs of having to defend a case which it did not bring. The litigation was no more difficult than any other case. It was not difficult to read and understand the delegate’s reasons. There was little dispute as to the relevant principles, the parties essentially accepting as accurate the thorough analysis by Perry J in Australian Conservation Foundation Inc v Minister for the Environment [2021] FCA 550; 390 ALR 157 at [15] to [39] (ACF). The relevant provisions had been amended since ACF, but not in a way which made them difficult to construe. In essence, the relevant provisions were expanded so that instead of applying to “coal seam gas developments”, the provisions applied to “unconventional gas developments”, a concept which extended beyond coal seam gas developments to developments involving extraction of gas from coal seams, layers of shale rock and tight gas reservoirs. This was a simple expansion of the provision.

11    I do not accept that the applicant’s case involved some particularly important clarification of the law or important constructional issue.

12    Secondly, the applicant submitted that its case was conducted efficiently, responsibly and without any attributes of vexatiousness, evidenced by the one confined ground of review advanced. So much may be accepted, but it is no more than what the Court expects from any litigant, particularly one who is legally represented.

13    Thirdly, the applicant submitted that the proceedings were in the public interest. It submitted that the applicant, a not-for-profit organisation, had consistently advocated for the environment and the wider community in general on environmental issues.

14    The fact that a body has been set up to pursue public interest, and pursues that interest in court proceedings, does not mean that those against whom proceedings are taken should be deprived of the ordinary protection of an order for costs in the event the claims fail. As Burchett J said in Australian Conservation Foundation v Forestry Commission [1988] FCA 144; 81 ALR 166 at 171:

If a body is set up to pursue causes, which its founders consider to be in the public interest, and which generally may be in the public interest, by means including court proceedings against others, it does not follow that those proceeded against should be deprived of the ordinary protection of a right to an order in respect of their costs in the event the claims made against them prove unfounded.

15    Justice Gummow agreed with these observations in Botany Municipal Council v Secretary, Department of Arts, Sport, Environment, Tourism and Territories [1992] FCA 194; 34 FCR 412 at 416 and they have also been approved by the Full Court in Friends of Hinchinbrook at 188, and Qantas at 389.

16    Further, it is necessary to examine the particular circumstances and context in any case which is said to have been brought in the public interest. Here, the context includes that the Narrabri Gas Project (NG Project) has been approved and is subject to the Commonwealth water trigger protections. The NG Project involves extraction and processing of coal seam gas and is, uncontroversially, an unconventional gas development. This case concerned the Narrabri Lateral Pipeline (NL Pipeline) for transmission of the extracted gas to the existing gas network. The NL Pipeline development will be subject to environmental laws and safeguards at the State level.

17    All other things being equal, the public interest in protection of the environment (particularly on issues pertaining to water) is more acute with the unconventional gas extraction and processing in the NG Project than with the subsequent transmission of extracted gas to the gas network where it will be distributed to consumers along with gas extracted from conventional gas developments.

18    The issues raised in this case were not of the exceptional kind described in ECCQ at [64] as involving matters of “high public importance about which there is substantial public controversy that extends well beyond matters of local or even regional environmental concern”.

19    Lastly, whilst there is an obvious and compelling public interest in protection of the environment, that is not the only place where the public interest lies. Competing public interests include economic development and the use of Commonwealth resources where they are most needed, including administrative resources used to protect the environment.

20    The applicant’s fourth submission concerned the fact that the proceedings were brought in reliance on the “relaxation of standing” provision in s 487 of the EPBC Act. The applicant submitted that this fact was to be afforded significance in determining costs in the context of unsuccessful public interest litigation, lest the EPBC Act’s provisions for broadened standing have little significance.

21    It is clearly relevant to take the particular statutory regime into account. The fact that the legislative regime contemplates the involvement of members of the public, and that it relaxes the requirements to establish standing, is relevant in considering whether there is something special or exceptional about the particular case which might warrant a departure from the guiding principle or ‘general rule’ that costs follow the event. However, there is a risk in confusing questions of standing with questions of costs. The legislature has relaxed the rules about standing with an evident objective of facilitating judicial review of decisions under the EPBC Act in the interests of promoting the protection of the environment. As the Mortimer CJ observed in ECCQ at [55], the environment “cannot speak for itself; someone must speak for it”. This fact is relevant when it comes to costs, as are the relaxed requirements for standing. However, the legislature has not altered the rules about costs. A relaxation in rules about standing does not necessarily suggest it was intended to relax or alter existing principles with respect to costs. Standing and costs are directed to different matters.

22    The applicant emphasised the “chilling effect” which adverse costs orders may have, referring to ECCQ at [51] to [59] (Mortimer CJ).

23    It is plainly relevant in this statutory context to take into account the effects of an adverse costs order. That cannot lead to what is, in substance, the end result if the applicant’s submissions are accepted: that public interest litigants generally should not be ordered to pay costs.

24    The usual costs order reflects what parties understand to be the ordinary and expected outcome of litigation. The usual order for costs might be thought to discourage the commencement of speculative litigation, or the defence of proceedings which are bound to succeed, and to encourage confining litigation to the real issues. An unsuccessful party – such as the applicant – would have expected a favourable costs order if that party had won.

25    There is no general rule that adverse costs orders should not be made where the party can show that the case is in the public interest, whether it be in the public interest from just one perspective or from the predominating or demonstrably most important perspective. That is not to say that the public interest cannot be taken into account, together with all of the circumstances, in exercising the discretion as to costs.

26    The context referred to earlier is also relevant. The case which was brought was arguable, but it was by no means strong. It did not involve any significant development in the law. The NG Project is the subject of water trigger protections. The development in this case concerned connecting the NG Project to the gas network by pipeline of a kind used to transmit gas from conventional developments which could never be the subject of the water trigger provisions.

27    Fifthly, the applicant submitted that it did not have a private, commercial or personal interest in the decision, but was motivated by a desire to ensure the proper application by decision-makers of the provisions of the EPBC Act relating to matters of national environmental significance and to advance its purpose to protect the environment.

28    These matters may be accepted to an extent, although at least some of the financial members of the applicant are landowners in the vicinity of relevant areas and, accordingly, may have an interest which suggests their motivations may not be purely altruistic.

29    Sixthly, the applicant submitted that the Minister’s interests cannot be distinguished from the public interest in the proper administration of the EPBC Act. His interest was served no matter the outcome of the proceeding.

30    The applicant also submitted that the Minister could, and should, have played a more limited role, given the existence of an active and well-resourced contradictor in the proponent, referring to R v Australian Broadcasting Tribunal; ex parte Hardiman [1980] HCA 13; 144 CLR 13 at 35–6.

31    The fact that there is a contradictor does not lead to a conclusion that the Minister should not participate in the litigation commenced against him. The private interests of the proponent and the public interests of the Minister are different. Whilst both the proponent and the Minister sought the same outcome, that does not mean that their interests are the same in all respects. To point out the obvious, the proponent has commercial interests, including the wider commercial interests of the group of companies of which it is a part, which extend beyond the present project. The Minister’s interests include the proper administration of the statutory scheme, the correct interpretation of the statutory provisions, and the ongoing protection of the environment consistently with the statutory scheme. The Minister’s constructional arguments were not identical to those advanced by the proponent. The Minister is not in a position analogous to that of a tribunal, such as in Hardiman.

32    Contrary to the import of the applicant’s submissions, the Minister’s interests are not always served simply because proceedings have been brought which address decision-making under the EPBC Act. The Minister also has an interest in performing relevant functions and using resources where most needed. Proceedings must be funded and human resources diverted from other tasks. No doubt, there are other proposed developments requiring decisions.

33    As is further discussed next, the Minister was acting appropriately by taking the stance that the decision was not affected by error and defending the case in the way he did.

34    Seventhly, the applicant submitted that it would be unfair for an organisation in the position of the applicant to bear two sets of costs where the duplication of arguments as between the respondents was significant, if not entire.

35    I do not accept that there was significant duplication in argument, let alone “entire” duplication. The case management steps were structured to permit the Minister to have regard to the proponent’s submissions first. This resulted in the Minister making confined written submissions on points which either had not been raised by the proponent or on which the Minister differed. This was entirely appropriate. The hearing was conducted efficiently by all parties, with the applicant raising arguable points concerning the meaning of the delegate’s reasons and the construction of the relevant provisions and making the lengthiest written and oral submissions of any party. The Minister’s oral submissions in minor respects diverged from those of the proponent and were otherwise supplemental and in no way duplicative. The hearing was over in a day.

36    None of the reasons advanced by the applicant, individually or cumulatively, justify departure from the guiding principle that costs should follow the event.

37    Although the applicant had no substantial financial interest in the outcome of the litigation, was in part representing the interests of others, and was advancing interests of a public nature, those factors – together with the others addressed above – are not sufficient to justify departing from the guiding principle that a successful respondent to litigation should have an order for costs in its favour.

38    The applicant should pay the respondents’ costs.

Associate:

Dated:    18 December 2025