Bengal Coal Pty Ltd v Cradcorp Pty Ltd as TTE [2017] QLC 16

LAND COURT OF QUEENSLAND CITATION: Bengal Coal Pty Ltd v Cradcorp Pty Ltd as TTE [2017] QLC 16 PARTIES: Bengal Coal Pty Ltd (applicant) v Cradcorp Pty Ltd as TTE (respondent) FILE NO/s: MRA1148-16 DIVISION: General PROCEEDING: Application to stay proceedings DELIVERED ON: 3 April 2017 DELIVERED AT: Brisbane HEARD ON: 29 March 2017 HEARD AT: Brisbane PRESIDENT: FY Kingham ORDER/S: 1. The application to stay the proceedings is refused. 2. Bengal Coal Pty Ltd’s costs of the application are reserved. CATCHWORDS: PROCEDURE – STATE AND TERRITORY COURTS – STAY OF PROCEEDINGS – Where the proceedings commenced by referral – Where proceedings to determine compensation on grant of mining lease – Where landowner sought to stay proceedings pending other approval and further evidence – Where relevance of those matters to determination of compensation was in issue – Whether a stay should be granted PROCEDURE – STATE AND TERRITORY COURTS – COSTS – Where application for stay lacked merit – Where applicant for stay put on notice that costs would be sought – Whether costs should be awarded to the respondent to the stay application – where costs reserved -- 1 of 8 -- 2 Land Court Act 2000, s 7A(2)(c), s 34 Mineral Resources Act 1989, s 281, s 281(3)(a)(i), s 281(3)(a)(iii), s 283B Regional Planning Interests Act 2014, s 5(1), s 5(2), s 8, s 10, s 16, s 59(2) Moreton Bay Regional Council v Mekpine Pty Ltd & Anor (No. 2) (2015) 35 QLCR 273 APPEARANCES: MG Lyons (instructed by McCullough Robertson Lawyers) for the applicant (respondent for the stay application) G Houen (instructed by the Landholder Services Pty Ltd as agent) for the respondent (applicant for the stay application) [1] Bengal Coal Pty Ltd (“Bengal Coal”) has applied for an underground coal mining lease for a 25 year term over land owned by Cradcorp Pty Ltd (“Cradcorp”). By August 2016, all objections to the application had been resolved. Cradcorp was not one of the objectors. These proceedings will determine what compensation Bengal Coal must pay for the impact of the grant of the lease on Cradcorp’s land. Until that is determined, the mining lease cannot be granted. [2] On 9 February 2017, the Court made directions to progress the case. Mr Houen, the agent for Cradcorp, indicated his client’s intention to apply for a stay. Directions were made requiring any application to be made by a fixed date. In accordance with that direction, Cradcorp applied for an order staying the proceedings until such time as: 1. The outcome of any application by the applicant (Bengal Coal) for a Regional Interests Development Approval (RIDA) is known. 2. Alternatively, the applicant can prove that no RIDA or other specific approval is required for mining of the subject land. 3. In any case, the matter be stayed until the applicant produces planning and analysis of the subsidence risk arising from the proposed multi-seam mining, sufficient to satisfy the Court and inform the parties as to the subsidence impact on compensable matters.1 [3] Bengal Coal opposed the application. [4] The Court has the power to stay proceedings.2 As the applicant for the stay, the onus is on Cradcorp to establish the stay should be granted. 1 General application filed by Cradcorp Pty Ltd, 13 March 2017. 2 Land Court Act 2000, s 7A(2)(c). -- 2 of 8 -- 3 [5] There is no suggestion of abuse of process by Bengal Coal. It did not institute the proceedings which commenced on 30 November 2016, when the Department of Natural Resources and Mines referred the matter to the Court. This Court is the proper forum to determine compensation. [6] Cradcorp says the stay should be granted because the Court cannot properly assess compensation until the processes identified in the proposed orders are complete. [7] Relying on the formulation of their case on compensation, Bengal Coal challenged the relevance of the matters raised by Cradcorp. Assessing relevance at this stage is tentative as Cradcorp has not formulated its case for compensation. Its statement is due shortly. [8] Until the hearing, it was not clear that Cradcorp proposed the stay should be argued on the basis that it will seek compensation for the potential impact of underground mining on land owned by Cradcorp, but not subject to the mining lease. That had limited bearing on Bengal Coal’s submissions; and only to the extent that compensation might be awarded for off lease impacts. [9] In essence, the issues raised by Cradcorp relate to the potential RIDA and the risk of subsidence from the underground mining. [10] On the formulation of compensation proposed by Bengal Coal, neither of those matters is relevant in determining compensation for the impact of grant of the lease on the mining lease area. [11] Bengal Coal’s case is that the Court should determine compensation at the full value of the entire area of land subject to the mining lease. The effect of that is Cradcorp would be compensated as if it had sold its land at market value. The short and long term impacts of the mining lease, therefore, would be fully compensated, as it would be assumed Cradcorp has lost the total value of the land. [12] Mr Houen submitted the Court must determine compensation according to the relevant provisions of the Mineral Resources Act 1989 (“MRA”) and is not bound to accept any party’s position in relation to compensation. That is true. [13] However, Bengal Coal has filed a compensation statement supported by a valuation report which supports the methodology proposed. There is no ambiguity about -- 3 of 8 -- 4 Bengal Coal’s stance in these proceedings, which was confirmed by Mr Lumb at [19] of his affidavit filed on behalf of Cradcorp on 24 March 2017. Mr Lyons, counsel for Bengal Coal, submitted that was in the nature of an admission. [14] Mr Houen has not established any basis upon which Cradcorp might seek compensation in excess of the full value of the land subject to the mining lease. Nor did he suggest Cradcorp would seek less than full value. The prospect that Cradcorp will receive, or request, less than Bengal Coal has proposed is unlikely. [15] The application for the stay must be determined on the evidence before the Court. Were the claim for compensation made in relation to the mining lease area alone, there could be no basis for staying the proceedings. [16] However, Mr Houen stated Cradcorp will claim compensation for injurious affection on the balance of its land due to the possibility of subsidence3 and for severance. Because of those claims, it is necessary to canvass the issues raised about a RIDA and subsidence. [17] Severance is not raised as a basis for the stay. In any case, it appears that Cradcorp’s land is already subject to severance, at least legally, because of a different mining lease already granted over some of Cradcorp’s land. [18] Turning to the RIDA, Mr Houen argued the approval could reduce the constraints on the mining operation, leading to a greater impact on the land. For reasons already given, on this application I am only concerned with the balance lands, not the land subject to the mining lease. [19] Mr Houen’s proposition that a RIDA may reduce rather than add to the constraints on the miner is fanciful given the evident purpose and function of a RIDA. [20] A RIDA is an approval under the Regional Planning Interests Act 2014 (“RPI”). The RPI is an Act to manage the impact of resource activities (such as mining) on areas of the State that contribute, or are likely to contribute, to Queensland’s economic, social and environmental prosperity.4 3 Mineral Resources Act 9189, s 281(3)(a)(iii). 4 Regional Planning Interests Act 2014, preamble. -- 4 of 8 -- 5 [21] The RPA provides for areas of regional interest to be identified. They include strategic cropping areas and priority agricultural areas. Strategic cropping land is land that is highly suitable for cropping because of a combination of the land’s soil, climate and landscape features.5 Priority agricultural areas are identified through regional plans and include regionally significant watercourses.6 [22] The RPA applies despite any resource Act, including the MRA and the Environmental Protection Act 2001 (“EPA”).7 The RPA can imposes additional restrictions or requirements.8 [23] A RIDA approves a resource activity in an area of regional interest. The approval follows an assessment of the extent of the expected impact of the activity on the area.9 If there is any inconsistency between the conditions of a RIDA and a condition of an Environmental Authority or Resources Authority, the conditions of the RIDA prevail.10 [24] It is that provision that Mr Houen relies on to support his submission that a RIDA may impose less restrictive conditions regarding environmental impacts, including subsidence. [25] That outcome is not consistent with the stated purpose of the RPA or of the process for regulating activities within the protected areas. Nor is it consistent with the tenor of the provision governing what conditions may be imposed by a RIDA. 50 Conditions Generally (1) A regional interests condition may – (a) limit or restrict the carrying out of a resource activity or regulated activity, including, for example, by – (i) requiring the applicant to start or complete the carrying out of the activity by a stated date or within a stated period; or (ii) requiring the applicant to ensure the impact of the activity is limited or restricted to a stated level; or … (c) for a resource activity or regulated activity to be carried out in an area that is the strategic cropping area–require the applicant to have mitigation in place before carrying out the activity on land in the area; or 5 Ibid s 10. 6 Ibid s 8. 7 Ibid s 5(1). 8 Ibid s 5(2). 9 Ibid s 16. 10 Ibid s 59(2). -- 5 of 8 -- 6 (d) require the applicant to do, or refrain from doing, anything else the chief executive considers is necessary or desirable to achieve this Act’s purposes. [26] As Mr Lyons submitted for Bengal Coal, a RIDA, if it is needed, could be expected to impose more, not less, stringent controls. I am not persuaded the compensation proceedings should be stayed pending clarification of the need for, or conditions of, a RIDA. [27] Turning to the issue of subsidence, this has been addressed in Bengal Coal’s valuation in relation to the mining lease area, but there is no express reference to any potential for impact on the value of the balance lands. [28] Bengal Coal will be subject to the draft Environmental Authority which does not authorise any subsidence off site and requires monitoring on site. The means proposed to manage the risk of subsidence are referred to in the valuation report (at p 27). The performance goal is negligible subsidence: the amount of subsidence being so small as to be imperceptible and tolerable for most types of surface infrastructure. [29] Mr Houen relied on an email from a Professor of Rock Mechanics with UNSW Engineering. The Professor read the report referred to by Bengal Coal’s valuer. Although comfortable with some aspects of the report, he expressed caution about others. I was not referred to the report itself. There is nothing in the Professor’s email to indicate a concern about, let alone a prospect of, a risk of subsidence outside the mining lease area. [30] Cradcorp has not established the asserted risk of subsidence off site has any substance or that it would materially affect the compensation awarded. That may change when Cradcorp files its compensation statement and supporting material. At this stage, though, there is no justification to stay the proceedings. [31] I also observe that, if compensation is ultimately determined on the basis of no off- site impacts, and that proves not to be so, Cradcorp can apply to review the compensation.11 It may also have grounds to make a claim in other courts for damages. 11 Mineral Resources Act 1989, s 238B. -- 6 of 8 -- 7 [32] Cradcorp has not established the proceedings should be stayed and I refuse the application. [33] Bengal Coal sought an order for costs in its favour on this application. The Court has an unfettered discretion to award costs, which must be exercised judicially.12 It may make any order it considers appropriate. Often, an order that costs follow the event is a just approach as it protects those put to unnecessary cost by another party’s conduct.13 [34] On 23 March 2017, Bengal Coal put Cradcorp on notice it would seek its costs of the application. By the time Cradcorp filed its application for a stay, Bengal Coal had filed its valuation and Compensation Statement and its approach to compensation was clear. The application to stay the proceedings never had any real prospect of succeeding. [35] On the day of the hearing, the Court had to adjourn so Mr Houen could read and prepare to respond to comprehensive written submissions prepared by counsel and provided by the solicitors for Bengal Coal the evening before. His failure to do that earlier was not satisfactorily explained, although I am proceeding on the basis this was an oversight. [36] Cradcorp’s agent is not a lawyer; but he is no stranger to this Court or its predecessors. He has appeared as agent in many compensation determinations. Given his experience he must understand that the Court can only act on evidence properly placed before it. Presumably, he considered and advised his client about its prospects of securing a stay and its exposure to costs if the application was unsuccessful. He certainly should have done so once he was put on notice that Bengal Coal would seek a costs order. [37] Cradcorp has chosen to engage a non-legal agent. That is their right in this Court. However, that does not relieve Cradcorp of its obligations in this litigation. [38] The only factor that counts against a costs order against Cradcorp is that its involvement in these proceedings is, to some extent, involuntary. The question of compensation arises because Bengal Coal is applying to mine Cradcorp’s land. 12 Land Court Act 2000, s 34. 13 Moreton Bay Regional Council v Mekpine Pty Ltd & Anor (No. 2) (2014) 35 QLCR 273, at [12]. -- 7 of 8 -- 8 [39] However, compensation proceedings are not an opportunity to delay the grant of a mining lease. Cradcorp did not object to the grant of the lease. Had it done so, it could have raised the issues it now seeks to agitate in the compensation proceedings. [40] Bengal Coal did not suggest Cradcorp was abusing the process of the Court; nor are these observations intended to do so. However, it is appropriate to remind Mr Houen that all parties in any action before the Court must proceed expeditiously, in an endeavour to resolve the real issues in a proceeding. [41] Although Bengal Coal has good reason to ask for a costs order on this application, I have decided to reserve the costs until the matter is determined. [42] The next step in this case is for Cradcorp to formulate its Compensation Statement and to provide the evidence upon which it will rely, including valuation evidence. Given Bengal Coal’s approach to determining compensation, no doubt Cradcorp will give careful consideration to Bengal Coal’s valuation and determine where, if at all, there is a material dispute about what compensation should be awarded. [43] This case will be reviewed again on 21 April 2017 when directions will be made to bring the matter to trial. [44] I am confident Mr Houen will provide these reasons to Cradcorp so the company is fully informed of the reasons the stay was refused. [45] I make the following orders: 1. The application to stay the proceedings is refused. 2. Bengal Coal Pty Ltd’s costs of the application are reserved. FY KINGHAM PRESIDENT OF THE LAND COURT -- 8 of 8 --