Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No. 10) [2017] QLC 14

LAND COURT OF QUEENSLAND CITATION: Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No. 10) [2017] QLC 14 PARTIES: Cherwell Creek Coal Pty Ltd (ACN 063 763 002) (applicant) v BHP Queensland Coal Investments Pty Ltd (ACN 098 876 825) QCT Resources Pty Ltd (ACN 010 595 721) BHP Coal Pty Ltd (ACN 010 487 840) QCT Mining Pty Ltd (ACN 010 487 831) Mitsubishi Development Pty Ltd (ACN 009 779 873) QCT Investment Pty Ltd (ACN 010 487 831) Umal Consolidated Pty Ltd (ACN 000 767 386) (respondents) FILE NO/s: MRA1332-08 DIVISION: General division PROCEEDING: Application for costs DELIVERED ON: 23 March 2017 DELIVERED AT: Brisbane HEARD ON: Submissions closed 9 October 2013 HEARD AT: Heard on the papers MEMBER: PA Smith ORDER/S: The applicant pay the respondents’ costs of and incidental to the application dated 27 August 2013 on the standard basis, such costs to be agreed or, failing agreement, to be assessed. -- 1 of 6 -- 2 CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN THE STATE AND TERRITORY COURTS – COSTS – where the applicant failed to comply with court orders – where the respondents filed a general application in response to the applicant’s failure – whether reasonable for respondents to file application Land Court Act 2000, s 34 Peabody West Burton Pty Ltd & Ors v Mason & Ors (No 2) [2013] QLC 12, applied APPEARANCES: Holding Redlich Lawyers for the applicant Allens for the respondents Introduction [1] This is an application for costs by the respondents (“BMA”) against the applicant (“CCC”) for costs of and incidental to a general application by BMA dated 27 August 2013. CCC seeks an order that the costs of the general application be costs in the proceeding. [2] By orders of 3 October 2013, the parties were ordered to file submissions as to costs. The issue would then be determined on the papers. [3] Both parties filed submissions on 9 October 2013. CCC also filed an affidavit of Mr Boys sworn 9 October 2013, and BMA relied on an affidavit of Ms Munnelly sworn 27 August 2013.1 1 I was not aware that submissions etc. had been filed in this matter. Of course, it is common place for orders to be made about submissions or applications for costs but for such matters to never go any further, with the parties resolving costs issues between themselves. By 2013, the complex substantive matter between CCC and BMA had already been before this Court for five years. I understand that the Land Court file was very large. Unfortunately, it would appear that the issue of costs relating to the 27 August 2013 application simply fell through the cracks. So far as I am aware, neither party made any enquiries of the Registry, at least prior to February 2017, regarding the delay in delivery of the decision. I returned from leave on 14 March 2017 on the understanding, consistent with Land Court records known to me, that I had no decisions outstanding in any matter. I was subsequently informed by the President of the Land Court that the issue of the outstanding costs decision in this matter had come to light in mid-February 2017 and the relevant submissions etc. were provided to me for attention. -- 2 of 6 -- 3 Background [4] On 8 February 2013, this Court made an order permitting CCC to enter upon BMA’s ML70403 to undertake a drilling program. An appeal by BMA against that order was dismissed by the Land Appeal Court on 30 May 2013.2 [5] Schedule 2 to the order of 8 February 2013: (a) permitted the drilling program to be carried out in the southern and central districts of ML70403 until 30 June 2013; (b) permitted the drilling program to be carried out in the northern district of ML70403 until 31 July 2013; and (c) required remediation of all Court approved drilling sites to be assessed and signed off at the earliest opportunity. [6] By consent, the Court varied the initial order: (a) on 2 July 2013, to add a new Schedule 1(d) and varying Schedule 2, permitting some additional sites to be drilled and extending the time for CCC to undertake the drilling program in the southern and central districts to 31 July 2013 (to align with the timing of the drilling in the northern district); and (b) on 2 August 2013 which extended the time CCC had to undertake drilling of two remaining holes (H6 and H8) until 5 August 2013 and gave CCC until 16 August 2013 to undertake rehabilitation of 35 drilling sites. [7] Although there are some differences in the accounts of CCC and BMA as to precisely what occurred in the two weeks leading up to the making of the application dated 27 August 2013, the material makes some of the facts clear. [8] On or before 15 August 2013, CCC knew that it would not be able to comply with the order of 8 February 2013 as amended. In particular, CCC clearly knew that it would not be in a position to rehabilitate six deep holes by 16 August 2013 as required by the orders. [9] By 15 August 2013, BMA knew that CCC would not be able to comply with the orders by 16 August 2013. [10] CCC and BMA made various contacts with each other in an endeavour to agree to a new timetable. 2 (2013) 34 QLCR 108. -- 3 of 6 -- 4 [11] As at the filing of the application dated 27 August 2013, there was no agreement between CCC and BMA as to any further amendment of the orders of 8 February 2013 as amended. [12] Due to circumstances beyond the control of CCC, a contractor engaged by CCC to undertake rehabilitation work as required by the Court’s orders withdrew from site. It would appear that this occurred on 26 August 2013 and CCC, through its solicitors, communicated this situation to BMA’s solicitors at 9.50am on 27 August 2013. [13] At the time BMA made its application, CCC did not know when it would be able to organise a replacement contractor by to undertake the rehabilitation, although it was actively seeking other arrangements. Submissions [14] As BMA submits:3 “BMA seeks its costs of and incidental to the application because the costs of the application were occasioned by Cherwell: (a) breaching the terms of the Order by failing to complete the necessary rehabilitation works required to be carried out in respect of the remaining drill holes by 16 August 2013 (having already been granted two extensions to the timeframe in which Cherwell was required to complete such works in accordance with the Order); and (b) being unable to confirm by 27 August 2013 its ability to complete the rehabilitation works within the timeframe that BMA proposed in its correspondence dated 21 August 2013; and (c) not providing BMA, prior to the filing of the application, with any indication as to when it considered that it would be able to confirm its position.” [15] CCC submits that the bringing of the application by BMA was unnecessary for reasons including:4 “a. Between 2 August and 16 August 2013, CCC’s contractors had successfully rehabilitated 29 out of the 35 holes (leaving the 6 Deep holes remaining) without any requirement for intervention by the Court; b. By the email on 15 August 2013, Moultrie Group set out a proposal to work with BMA at an operational level to agree upon a timetable to conduct rehabilitation of the 6 Deep holes; c. Before BMA filed its application, Moultrie Group had communicated to BMA that it had contractors to conduct rehabilitation of the 2 most 3 BMA submissions at para 24. 4 CCC submissions at para 23. -- 4 of 6 -- 5 urgent holes, Deep 1 and Deep 2, in the time required by BMA (before 2 September); d. The 4 remaining holes were required by BMA to be rehabilitated by 16 September and 23 September so there was no urgency in seeking orders about those holes.” [16] CCC contends that a reasonable and measured response by BMA would have resulted in the relevant personnel at an operational level discussing and agreeing upon a timetable for the rehabilitation of the two most urgent holes before the time required, and then subsequent discussions and agreement about the timetable for rehabilitation of the four remaining holes. CCC notes that this is precisely what occurred after 28 August 2013. CCC says that this was the process provided for in order 2 of the orders made on 2 August 2013 and the process previously undertaken by the parties. Determination [17] The factors to be considered in an application such as this in a proceeding before this Court, as the substantive matter clearly is, are well known. There is no automatic or overriding principle that costs orders should follow the event in Land Court matters. My views as to costs orders including issues as to the reasonableness of the actions of the parties, remain consistent with what I had to say in Peabody West Burton Pty Ltd & Ors v Mason & Ors (No 2).5 [18] In determining the current dispute, the relevant legislation remains s 34 of the Land Court Act 2000. [19] Although I understand the submissions of CCC that it was unreasonable for BMA to bring the application, the actions of the parties must be viewed within the litigation that the parties are engaged in. This is not simply a matter of commercial negotiations between two entities requiring further time to sort out. CCC only had a right to undertake the activities on BMA’s tenure as a result of orders following hard fought litigation and an appeal by BMA. [20] The orders made by the Land Court on 8 February 2013 are paramount. They are orders of this Court that the parties are to comply with. In particular, they should not be taken as something little more than advisory which the parties will try to comply with. 5 [2013] QLC 12. -- 5 of 6 -- 6 [21] The importance of the orders was certainly clear to CCC. This is established by CCC’s agreement with the amendment of the 8 February 2013 orders on two occasions. [22] CCC’s submissions completely miss the point that, by 15 August 2013 at the latest, CCC knew that it would be in breach of court orders. Perhaps I am old fashioned, but in my view at such point CCC should have taken the initiative to bring the potential noncompliance with orders to BMA’s and the Court’s attention prior to going into breach and sought orders to ensure that it did not go into breach. Had it followed this course, it would have quickly known if it could reach agreement with BMA for new consent orders on the papers or whether CCC itself should bring an application to the Court. [23] Put simply, CCC was in breach of the orders of the Court of 8 February 2013 as amended on 2 July 2013 and 2 August 2013. [24] Certainly, BMA could have chosen to take a softer stance in response to CCC’s breach. However, I certainly agree that, given the need to amend the orders on two occasions to allow CCC time to complete its drilling and rehabilitation program on BMA’s tenure, BMA was legally entitled to, and did not act unreasonably in bringing the matter to a head by making the application dated 27 August 2013, particularly in light of the fact that BMA waited 11 days before making its application. The breach of order was after all CCC’s, not BMA’s. [25] It follows that, in my view, BMA is entitled to its costs of and incidental to its application dated 27 August 2013. Such costs should be on the standard basis. Order The applicant pay the respondents’ costs of and incidental to the respondents’ application dated 27 August 2013 on the standard basis, such costs to be agreed or, failing agreement, to be assessed. PA SMITH MEMBER OF THE LAND COURT -- 6 of 6 --