In Bowers v Northern Beaches Council and Anor (No 2)  NSWLEC 46 the Land and Environment Court of NSW (the Court) considered the costs of the primary proceedings in circumstances where the applicant (Mr Bowers) was not represented by a lawyer.
This judgment is one of very few judgments whereby the Court has found it appropriate to distribute costs between the parties by way of percentages.
In the primary proceedings, Mr Bowers relied on the grounds that Northern Beaches Council’s (Council) decision to grant development consent was affected by fraud or bad faith, and that the development, subject of the development consent, was prohibited.
The primary proceedings were dismissed. The only remaining issue for the Court to consider was costs.
Mr Bowers submitted that the Court should deviate from the general rule that “costs follow the event” (that is, “the loser pays”). Instead, Mr Bowers said that he should not have to pay costs on the following basis:
- the “public interest exception”, pursuant to rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). That is to say, the proceedings were brought in the interests of the public and the Court should decide not to order costs against Mr Bowers on this basis.
- that no costs order should be made against him because the defendants were both late with the provision of their documentation and evidence, and that Council as a public authority should have put evidence before the Court.
Council submitted that the suggestion of improper conduct on the part of a decision-maker meant that it was appropriate for Council to take an active role in the defence of councillors and officers. Council also submitted that it put forward the appropriate legal submissions and evidence.
The second defendant was a Councillor. They sought costs because Mr Bowers made allegations of fraud which they said:
- were serious and unsupported by evidence of any conduct which could disclose any wrongdoing that could amount to fraud;
- were not reasonable;
- the allegations were made in circumstances where Mr Bowers had knowledge and experience which would allow him to appreciate the seriousness of the allegation; and
- the proceedings were not in the public interest because they did not advance or contribute to the understanding of the law and were not brought to protect the environment.
The Court found that Council and the Councillor were entitled to an award of 75% their costs for the two reasons that follow.
1. Public interest exception
With respect to Mr Bowers reliance on the public interest exception, Robson J found that the proceedings were not brought in the public interest.
Robson J considered the law and determined that rule 4.2(1) of the Land and Environment Court Rules 2007 (NSW) (Court Rules) applied. Rule 4.2(1) relevantly states:
“(1) The Court may decide not to make an order for the payment of costs against an unsuccessful applicant in any proceedings if it is satisfied that the proceedings have been brought in the public interest.”
However, Robson J found that while the enforcement of public obligations and the correct application of environmental laws has a “public character”, characterising this appeal as being one which was brought “in the public interest” would be “too crude a criterion to enable the Court to differentiate between various matters that could be characterised as being brought in the public interest.”
2. Community interest
With respect to the costs order to be made, the Court considered a line of authorities which establish that, in general, more than one set of costs will not be awarded to respondents who are putting forward consistent arguments in the presentation of their cases.
This general rule was set out by Woodward J in Statham v Shepard (No 2) (1974) 23 FLR 244 and was recently considered in HP Mercantile Pty Ltd v Hartnett  NSWCA 79 at  where the Land and Environment Court said that:
“the ultimate question is not (as the respondents submit) whether they have acted reasonably, nor whether there has shown to be duplication. The question is whether it is reasonable for the unsuccessful litigant to bear more than one set of costs.”
It followed that the essential question was whether it was reasonable for Mr Bowers to bear the entirety of the costs of Council and the Councillor. This question turned on whether there was “no possible conflict of interest between them and the presentation of their cases”.
Accepting that both Council and the Councillor were necessary parties to the litigation, the interests of both respondents nonetheless overlapped to the extent that they both sought to uphold the granting of the development consent. The Court determined that the community interest in maintaining the validity of the development consent was sufficient to find that it was not ‘reasonable’ for Mr Bowers to bear the entirety of both respondents’ costs.
Despite the fact that the Court would not usually apportion costs in this way, the Court considered that the circumstances are such that each of the successful parties were entitled to only 75% of its costs.
What does this mean?
A take-away from this judgment is that it is important to consider what issues you will put forward in proceedings where there are multiple parties on each side (that is, more than one applicant or one respondent). This is because there can be cost consequences and, even if a party is successful, the Court may not require that the losing party cover their costs in full. This is particularly important to consider in proceedings which involve the public interest exception, or a community interest in general.