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Public interest groups can't always count on costs in environmental litigation

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This article was written by Matthew Austin and Brad Egerton.

In recent times there have been numerous court challenges to major projects by environment and community groups whose motives have arguably been well intentioned, but which have ultimately been unsuccessful. Typically, the projects that have been challenged had already been the subject of rigorous environmental impact assessment processes, but the challenges have nonetheless attempted to prove that the assessments undertaken were inadequate, or that the correct assessment procedures had not been followed.

Legal challenges bedevil project timelines and can result in significant costs for a range of stakeholders. In recent cases in both Queensland and New South Wales, the public interest character of the challenges has not been enough to avoid costs orders being made against unsuccessful environmental and community groups. We consider a couple of recent examples below.

Whitsunday Residents Against Dumping Ltd v Chief Executive, Department of Environment and Heritage Protection (No 2) [2017] QSC 159

In a judgment dated 2 August 2017, the Supreme Court of Queensland ordered that an environmental group pay Adani its costs of a proceeding in which the group had unsuccessfully challenged a decision to approve Adani's application for environmental authorities for the development and operation of a coal export terminal at the Port of Abbot Point.

At the hearing on costs, the group contended that the litigation was in the public interest, it had no commercial interest in the outcome, the case involved a consideration of detailed and complex decisional rules relating to environmental protection, and that the subject matter was serious and of general public importance.

In declining to depart from the usual order as to costs, the court was not persuaded that the proceeding was a test case, or that it was a case which determined principles of general application. More generally, the court found that it is not enough for the group to seek to characterise the case as having been public interest litigation in order to avoid the operation of the usual order as to costs.

The court acknowledged that there is a public interest in the due administration of environmental legislation, but that fact alone does not warrant a departure from the general rule as to costs. The court held that the applicant's status as a community-based organisation interested in the health of the Great Barrier Reef does not confer immunity on it from an adverse costs order.

People for the Plains Incorporated v Santos NSW (Eastern) Pty Ltd (No 2) [2017] NSWCA 157

On 28 June 2017, the New South Wales Court of Appeal dismissed a motion to set aside costs that had been awarded in favour of Santos in earlier proceedings. The substantive case involved an unsuccessful challenge by an environmental group known as the 'People for the Plains' against approvals relating to the management of water produced as a consequence of petroleum and coal seam gas exploration operations carried out by Santos in the Narrabri region.

The court determined that the People for the Plains had not established that the ordinary rule that costs follow the event should be departed from. In reaching its decision, the court held that in order to depart from the usual costs order, it was not sufficient for the party seeking to avoid costs to simply establish that the litigation was in the public interest. Something more was required.

By way of background, in 2015 the New South Wales Department of Industry granted approvals under the Petroleum (Onshore) Act 1991 (NSW) relating to petroleum and CGS water management that included the construction of a water treatment plant and brine treatment plant. While the project was being carried out in 2016, People for the Plains unsuccessfully challenged the lawfulness of the development approvals, following which the group applied to set aside the costs order, and in lieu, that there be no order as to costs.

In its submissions to the court, the People for the Plains contended that the proceedings were in the public interest by seeking to clarify the proper application of environmental planning and assessment processes to ensure the lawfulness of government decision-making.

The People for the Plains suggested that the ability to bring appeals on environmental grounds, based on the open standing provisions of the Environmental Planning and Assessment Act 1979 (NSW), would be an "empty gesture" if the public character of the litigation could not be taken into account in departing from the usual order as to costs.

The court decided the matter on the basis that, even assuming the appeal could be considered to be public interest litigation, the court was not persuaded that the appeal involved "something more" than the public interest character in order to displace the ordinary rule as to costs.

Key takeaways

Stakeholders should be mindful that a high level of interest from the community (or a group purportedly representing a part of the community), of itself, does not necessarily mean that the litigation is being conducted in the public interest.

Factors which may be relevant in the exercise of the court's discretion with regard to the question of costs may conceivably comprise the determination of issues that are novel, or alternatively the clarification of an area of the law which needed clarifying, or otherwise that the decision of the court be capable of general application.

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