Federal Court of Australia

Environment Centre (NT) Inc v Minister for the Environment and Water (No 2) [2026] FCA 1493

ORDERS

THE COURT ORDERS THAT:

1. The applicant pay the second respondent’s costs of the proceeding to date (including reserved costs), such costs to be determined on a lump sum basis.

2. There be no order as to costs in relation to the costs of the first respondent.

3. By 4.00 pm on 30 October 2026, the parties file any agreed proposed minute of orders fixing a lump sum in relation to the second respondent’s costs.

4. In the absence of agreement:

(a) by 4.00 pm on 13 November 2026, the second respondent file and serve an affidavit constituting a Costs Summary in accordance with paragraphs 4.10 to 4.12 of the Court’s Costs Practice Note (GPN-COSTS) (Practice Note).

(b) by 4.00 pm on 27 November 2026, the applicant file and serve any Costs Response in accordance with paragraphs 4.13 and 4.14 of the Practice Note; and

(c) the matter of an appropriate lump sum figure for the second respondent’s costs be referred to a Registrar for determination.

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

REASONS FOR JUDGMENT

MOSHINSKY J:

Introduction

1 These reasons for judgment deal with an issue of costs which has arisen upon the proposed discontinuance of the proceeding by the applicant, the Environment Centre (NT) Inc (the ECNT).

2 The proceeding was commenced on 27 May 2026, with the filing of an originating application for judicial review dated 26 May 2026.  The originating application sought judicial review of two decisions of a delegate of the Minister for the Environment and Water (the Minister), namely:

(a) a decision made on 13 February 2026 to accept a referral by Top End Pastoral Company Pty Ltd (Top End) under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act) (rather than deciding, under s 74A of the Act, not to accept the referral on the basis that the proposed action is a component of a larger action); and

(b) a decision made on the same day, pursuant to s 75 of the EPBC Act, that the proposed action is not a controlled action (the Section 75 Decision).

3 On 11 June 2026, the ECNT filed an interlocutory application seeking interlocutory injunctive relief (the Interlocutory Application).

4 On 12 June 2026, a case management hearing took place before me.  The Interlocutory Application was listed for hearing on 22 June 2026, and timetabling orders were made for the filing and service of affidavit material and submissions.

5 On 22 June 2026, the hearing of the Interlocutory Application took place.  I delivered oral reasons for judgment on 23 June 2026: Environment Centre (NT) Inc v Minister for the Environment and Water [2026] FCA 811.  For the reasons there set out, I dismissed the Interlocutory Application.  I also made an order reserving the costs of the Interlocutory Application.

6 On 23 July 2026, a case management hearing took place before me.  By this date, another proceeding had been commenced in relation to the Section 75 Decision (Huddleston v Minister for the Environment and Water & Anor, VID758/2026) (the Huddleston Proceeding).  At the case management hearing, an order was made that the present proceeding and the Huddleston Proceeding be heard together.  The two proceedings were listed for hearing on 8 September 2026, on an estimate of two days.  Timetabling orders were made for the purposes of the hearing.

7 On 29 July 2026, the ECNT emailed my chambers stating that it had decided to discontinue the proceeding.  The email attached proposed orders which were largely agreed between the parties.  However, there was an issue between the parties as to the costs of the proceeding.  There was also an outstanding potential claim by Top End against the ECNT, seeking compensation under an undertaking as to damages which had been given by the ECNT earlier in the proceeding.

8 On 4 August 2026, I made orders vacating the hearing date of the present proceeding and the associated hearing orders.  In light of the issue of costs and Top End’s potential claim for compensation under the undertaking as to damages, I considered it appropriate for the proceeding to remain on foot (rather than being discontinued or dismissed).

9 The orders dated 4 August 2026 provided a timetable for the parties to file affidavit material and written submissions on the issue of costs.  The orders provided that, subject to further order, the issue of costs would be determined on the papers.  The timetable for the filing of submissions was subsequently extended by consent.

10 By email to chambers dated 21 August 2026, the Minister indicated that he did not seek an order for costs in his favour and did not intend to file material in relation to costs.

11 Top End and the ECNT have now filed written submissions on costs.  Top End filed submissions dated 26 August 2026.  The ECNT filed submissions dated 9 September 2026.  Top End filed reply submissions dated 16 September 2026.

12 The positions of the parties are, in summary, as follows:

(a) Top End seeks an order that the ECNT pay its costs of the proceeding.

(b) The ECNT seeks an order that all parties bear their own costs.

The parties’ submissions

13 Top End submits that it has been wholly successful in the proceeding, in that the Interlocutory Application was dismissed and the ECNT then decided to discontinue its claims.  Top End submits that the successful party is generally entitled to its costs.  Top End also submits that, where a party claiming relief discontinues a proceeding, by virtue of r 26.12(7) of the Federal Court Rules 2011, the respondent has a prima facie entitlement to costs: Travaglini v Raccuia [2012] FCA 620 (Travaglini) at [36] per McKerracher J; Taylor v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1760 (Taylor) at [9] per Flick J.  Top End submits that there is no “good reason” why it should be deprived of its costs: see El-Debel v Secretary, Department of Immigration and Border Protection [2014] FCA 474; 141 ALD 611 at [17] per Foster J.

14 The ECNT submits that there are four “good reasons” (see Taylor at [8]-[11]) why all parties should bear their own costs:

(a) First, the ECNT has sought to discontinue the proceeding prior to any final determination because further prosecution has been rendered futile by an external or supervening event, being the substantial conclusion of the impugned land clearing: Simatis v Walgenup Aboriginal Corporation (No 2) [2023] FCA 607 at [3] per Colvin J; Travaglini at [13]; Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; 186 CLR 622 at 624-625 per McHugh J.

(b) Second, the ECNT is a not-for-profit charitable organisation, with no private, commercial or personal interest in the Minister’s exercises of power: Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2024] FCAFC 97; 425 ALR 224 (ECCQ) at [44], [51]-[58] per Mortimer CJ, [64] per Colvin and Horan JJ. The ECNT’s pursuit of the litigation was motivated by its desire to ensure obedience to environmental law and to preserve the habitat of vulnerable and endangered species: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [20(iii)] per Gaudron and Gummow JJ.

(c) Third (and relatedly), the relaxation of standing provided by s 487 of the EPBC Act is to be afforded significance in determining costs in the context of public interest litigation: Bob Brown Foundation Inc v Commonwealth (No 2) [2021] FCAFC 20; 286 FCR 160 at [9], [11]; ECCQ at [21].

(d) Fourth, the ECNT’s case was plainly arguable and raised difficult questions in relation to the interpretation of the EPBC Act.  The application raised issues of broader public importance beyond the particular decisions in issue.

Consideration

15 In Taylor, which has been cited by both the ECNT and Top End, Flick J set out the following principles relating to costs in the context of discontinuance of a proceeding:

8    Rule 26.12(7) … provides as follows:

Unless the terms of a consent or an order of the Court provide otherwise, a party who files a notice of discontinuance under subrule (2) is liable to pay the costs of each other party to the proceeding in relation to the claim, or part of the claim, that is discontinued.

Rule 26.12(7), it has been said, “creates a presumption that the discontinuing party will pay the costs of the other side, unless for a good reason shown, the Court orders otherwise”: Dalian Huarui Heavy Industry International Co Ltd v Duro Felguera Australia Pty Ltd [2018] FCA 905 at [7] per Barker J. His Honour had previously made similar observations in Croft v Evertop Investments Pty Ltd [2014] FCA 1098 at [66] (“Croft”). Rule 26.12(7) has also been referred to as creating “a prima facie entitlement on the part of the party not discontinuing to costs”: Travaglini v Raccuia [2012] FCA 620 at [36] per McKerracher J.

9    In El-Debel v Secretary, Department of Immigration and Border Protection [2014] FCA 474, (2014) 141 ALD 611 (“El-Debel”), Foster J repeated the reference to there having to be “good reason” but expressed the policy behind r 26.12(7) more broadly as follows:

[17]    … r 26.12(7) reflects a more general policy of the law to the effect that a party should always be permitted to discontinue its proceedings but, in the modern setting, should usually have to pay the costs of the other parties occasioned by the bringing of the proceedings and their subsequent abandonment. This is not to gainsay the broad discretion in respect of costs given to the court by s 43 of the Federal Court of Australia Act 1976 (Cth). None the less, the court should give effect to this general policy when making costs orders unless there is some good reason for declining to do so.

Other cases have also repeated the reference to there having to be “good reason” not to order the discontinuing party to pay costs: e.g., Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Building and Construction Commissioner [2017] FCA 1062 at [2] per Perram J (“CEPU v ABCC”). Some reservation may be expressed as to whether such a constraint otherwise unexpressed in the terms of r 26.12(7) should nevertheless be implied. But, however that reservation may ultimately be resolved, there could be no cavilling with a proposition that a discontinuing party must bring forward some explanation as to why costs should be ordered in a manner different to that provided for in the Rules. The more so is this the case where the form of the current r 26.12(7) departs from the former O 22 r 2(1) of the now repealed Federal Court Rules 1979 (Cth) which left the question of costs entirely to the discretion otherwise conferred by s 43 of the Federal Court of Australia Act 1979 (Cth). See: Armstrong v Australian Community Pharmacy Authority [2012] FCA 577 at [9] per Rares J; Travaglini v Raccuia [2012] FCA 620 at [15] to [27].

16 Applying these principles, the question is whether good reason has been shown to depart from the position referred to in r 26.12(7), namely that the discontinuing party (the ECNT) should pay the costs of the other party (Top End).  In the circumstances of this case, I am not satisfied that good reason has been shown to depart from that position or that it is otherwise appropriate to order that there be no order as to costs.

17 Insofar as the ECNT submits that the proceeding has been rendered futile by reason of an external or supervening event (namely, the substantial conclusion of the impugned land clearing), in my view, properly analysed, the land clearing is not to be regarded as an external or supervening event.  At the time the proceeding was commenced, it was reasonably foreseeable, indeed likely, that those works would proceed absent a successful application for an interlocutory injunction.  Further, the impugned land clearing was due to be carried out soon after the commencement of the proceeding.  At the time the proceeding was commenced, it was likely that (absent a successful application for an interlocutory injunction) the impugned land clearing would occur before completion of the proceeding.  Thus, I do not consider this to be a case where the continuation of the proceeding has been rendered futile by an external or supervening event.  Rather, this is a case where it was always likely that, if an application for an interlocutory injunction were unsuccessful, the impugned land clearing would proceed and be largely completed before the determination of the proceeding.

18 Insofar as the ECNT submits that the ECNT is a not-for-profit charitable organisation, with no private, commercial or personal interest in the Minister’s exercises of power, and that its pursuit of the litigation was motivated by its desire to ensure obedience to environmental law and to preserve the habitat of vulnerable and endangered species, I accept that these are relevant considerations in the exercise of the discretion as to costs.  In the circumstances of this case, however, I am not persuaded that this factor (whether alone or together with the other matters relied on by the ECNT) has sufficient weight to displace the position under r 26.12(7) or otherwise to justify an order that there be no order as to costs. Given the stage that the proceeding had reached at the time when the ECNT indicated that it wished to discontinue, it is likely that most of the parties’ costs of the proceeding to date relate to the application for an interlocutory injunction.  That application was unsuccessful.  There is, in my view, force in the proposition that, in the absence of a final judgment in the proceeding, it is appropriate for the costs of the application for an interlocutory injunction to follow the event (i.e. for the ECNT as the unsuccessful party to pay the costs of Top End). Further, I am not persuaded that the proceeding was likely to involve determination of broader issues of public importance (such as the proper interpretation or operation of the “precautionary principle”); my impression is that the proceeding was likely to be largely concerned with the particular decisions that were the subject of challenge.

19 For these reasons, I consider the appropriate order to be that the ECNT pay Top End’s costs of the proceeding to date (including reserved costs).  In accordance with usual practice, these costs are to be determined on a lump sum basis.  In relation to the Minister’s costs, the Minister does not seek a costs order in his favour and no party seeks costs from the Minister.  Accordingly, it is appropriate that, in relation to the Minister’s costs, there be no order as to costs.

Associate:

Dated:    9 October 2026