CAML Resources Pty Ltd & Ors v Small & Ors [2014] QLC 44 (2014) 35 QLCR 399

LAND COURT OF QUEENSLAND CITATION: CAML Resources Pty Ltd & Ors v Small & Ors [2014] QLC 44 PARTIES: CAML Resources Pty Ltd, Anglo Coal (Foxleigh) Pty Ltd and Nippon Steel & Simitomo Metal Australia Pty Ltd (applicants) v Gregory William Small, Marie Eva Small and Brian James Small (respondents) FILE NO: MRA331-13 DIVISION: General Division PROCEEDING: Application for costs DELIVERED ON: 9 December 2014 DELIVERED AT: Brisbane HEARD ON: 9 September 2014 HEARD AT: Brisbane MEMBER: WA Isdale ORDERS: 1. The general application is dismissed. 2. The applicants are ordered to pay the respondents’ costs of and incidental to the general application on the indemnity basis. Such costs are to be agreed or, failing agreement, to be assessed. 3. There are no other orders as to costs. CATCHWORDS: Mineral Resources Act 1989, ss 260, 261, 268(9), 269 Land Court Act 2000, s 34 Costs – indemnity basis – standard basis – discretion – exercise of discretion Anson Holdings Pty Ltd v Wallace & Anor (2010) 31 QLCR 74 APT Petroleum Pipelines Pty Limited v Western Downs Regional Council (No 2) [2014] QLC 27 Cherwell Creek Coal Pty Ltd v BHP Queensland Coal -- 1 of 17 -- 2 Investments Pty Ltd & Ors (No 4) (2010) 31 QLCR 141 Moreton Bay Regional Council v Mekpine Pty Ltd & Anor (No 2) [2014] QLAC 5 Ostroco v Department of Transport and Main Roads (No 3) [2014] QLAC 7 Townsville City Council v Moyses & Ors (1979) 6 QLCR 271 Wallace v Anson Holdings Pty Ltd and The Environmental Protection Agency [2009] QLC 107 APPEARANCES: GW Batt, solicitor, Blackston Lawyers, for the applicants DA Skennar instructed by Rees R & Sydney Jones, solicitors, for the respondents Background [1] The applicants applied for the grant of a Mining Lease (ML) 70310. The respondents made an objection to the granting of the lease and the objection was referred to the Land Court for determination. The Mining Registrar made the referral to the Land Court on 27 August 2013 in accordance with the Mineral Resources Act 1989 (the Act). [2] The Court listed the matter for directions on 5 November 2013. On 30 October 2013 the solicitors for the applicants wrote to the Court requesting that the matter be adjourned until after 14 January 2014 as there were reasonable prospects of the matter being resolved by private negotiations. The solicitors for the respondent agreed. The Court adjourned the matter to 4 February 2014. [3] On 4 February 2014 the Court ordered at the request of and by consent of the parties that the matter be adjourned to 9 April 2014. Written submissions provided to the Court in support of the adjournment referred to the “amicable working relationship over the past 15 years” that had allowed the parties to negotiate the grant of four other mining leases. The submissions set out the meetings which had already taken place and which were planned in order to try to resolve the dispute. [4] On 9 April 2014 the parties returned to Court and advised that progress had been made and sought some more time to resolve the matter. The Court adjourned the case to 24 June 2014 for review and directions at the request of the parties. At that time the Court said: “… what I’m looking to see next time is that the time has been used productively by both sides to progress the matter. And I’ll be less likely to be willing to give an adjournment in the future without very good reason shown. I’ll be having to move towards resolving the dispute which the parties have brought to the Court, because the Court has limited resources and has timetables for progressing these matters and endeavours to progress them all as quickly as possible so that they can be resolved within, for instance, about a year of being lodged. So if it’s adjourned for -- 2 of 17 -- 3 too much longer, that’ll compromise the Court’s case management of all of its matters, including this.” [5] On 24 June 2014 the matter came back before the Court which was advised that the applicants were in the process of partial abandonment of the lease area being sought, reducing it to the point where it was anticipated that the objection would then be withdrawn. The parties sought some more time so that this could occur. The Court adjourned the case until 22 July 2014. The applicants sought this adjournment which the respondents did not oppose. [6] On 11 July 2014 the respondents withdrew their objection to the granting of ML 70310. On 8 August 2014 the applicants filed the present application. The general application [7] The applicants request that costs on an indemnity basis be awarded against the respondents. The grounds upon which the order is sought are that the “majority of the Respondents’ concerns listed in the objection of 19 August 2013 should have been addressed by way of out-of-Court negotiations for surface rights compensation, as opposed to submission of an objection and referral of this matter to the Court.” The application states that the parties are continuing to negotiate surface rights compensation outside of the Court. [8] The application is brought under s 268(9) of the Act which provides: “(9)The Land Court on the application of an applicant for a mining lease may award costs against an objector who withdraws the objection or does not pursue the objection at a hearing.” [9] The Court’s general power to order costs is set out in s 34 of the Land Court Act 2000. It provides: “34 Costs (1) Subject to the provisions of this or another Act to the contrary, the Land Court may order costs for a proceeding in the court as it considers appropriate. (2) If the court does not make an order under subsection (1), each party to the proceeding must bear the party’s own costs for the proceeding.” In Townsville City Council v Moyses & Ors1 the Land Appeal Court quoted with approval the words of Philp J in Middleton v Frier & Ors where His Honour, referring to authority, said: “It has been held again and again that where an unfettered discretion is given by statute or a rule no court can by its decision impose conditions upon the free exercise of that discretion by another court, …”2 1 (1979) 6 QLCR 271, 274. 2 (1958) QdR 351, 357. -- 3 of 17 -- 4 The Court has an unfettered discretion with regard to costs orders under s 34.3 As the Land Appeal Court said in Moreton Bay Regional Council v Mekpine Pty Ltd & Anor (No 2):4 “It has been held on many occasions that the discretion to award costs granted by s 34 is unfettered but that the discretion is to be exercised judicially, that is for reasons that may be explained and substantiated. However it has also been recognized by the Land Appeal Court that although the discretion to award costs is unfettered, the rule that costs follow the event may inform the exercise of the discretion granted under s 34(1), ‘as there is justice in that approach. It protects those put to unnecessary and substantial expense at the behest of others.’ [references omitted]” [10] The Land Appeal Court considered an application for indemnity costs in Ostroco v Department of Transport and Main Roads (No 3).5 The Land Appeal Court said: “[38] The law relating to indemnity costs was conveniently summarised by Chesterman J (as he then was) in Emanuel Management Pty Ltd (in Liquidation) & Ors v Foster’s Brewing Group Ltd & Ors and Coopers & Lybrand & Ors. His Honour had this to say: ‘[17] The authority to which attention is usually directed is Colgate- Palmolive Co. v Cussons Pty Ltd (1993) FCA 536; (1993) 46 FCR 225 in which Sheppard J identified a number of circumstances in which it may be appropriate to make an order for indemnity costs. They include: (i) Making allegations of fraud knowing them to be false or making irrelevant allegations of fraud. (ii) Misconduct that causes loss of time to the court and the opponent. (iii) Commencing or continuing proceedings for some ulterior motive or in wilful disregard of known facts or clear law. (iv) Making groundless allegations. (v) An imprudent refusal of an offer to compromise. ‘The question must always be whether the particular facts and circumstances … warrant the making of an order for payment of costs other than on a party into (sic) party basis.’ [18] Rosniak v Government Insurance Office (1997) 41 NSWLR 608 (at 616) has perhaps taken the position furthest in deciding that it is not necessary for the party seeking the protection of indemnity costs to establish ethical or moral delinquency by its opponent. It is enough to show ‘unreasonable conduct’ of some sort. That case itself demonstrates that the inexactness of such a test can give rise to difficulty in its application.’ ” [references omitted] 3 Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 4) (2010) 31 QLCR 141. Amendment of section 34 subsequent to that decision has not affected this conclusion. The amendment removed some machinery provisions for enforcing orders. 4 [2014] QLAC 5, [12]. 5 [2014] QLAC 7, [38]. -- 4 of 17 -- 5 [11] In Ostroco the Land Appeal Court went on to say: “[56] This review of the cases would suggest that an offer, and in particular a Calderbank offer, made outside the rules may well be a significant matter in determining whether to award costs on the indemnity basis; and that there are strong policy reasons for making such an award, even when there is not a marked difference between the offer and the ultimate result. However, the making of an order for indemnity costs is discretionary; and there is no fixed rule that in certain circumstances, it should be made. … [61] … There is a difference between contesting a matter on a basis which fails; and contesting a matter on a basis which is groundless or without substance. The appellant has not demonstrated that any of the matters on which it relies fall into the latter category. In those circumstances, the fact that the respondent made no offer to settle and paid no advance in respect of compensation could hardly be said to justify an order for indemnity costs for the whole of the proceedings. The Land Appeal Court refused to order that the appellant have its costs in the Land Court on an indemnity basis. It was awarded indemnity costs from the time at which it made a realistic offer to settle the proceedings. [12] In Emanual6 Chesterman J said: “[31] I have said enough to indicate that in my opinion there was a degree of irresponsibility in the plaintiffs’ bringing and prosecuting their action against the first defendants. It is significant that extravagant claims of dishonesty, corruption and gross impropriety were made in support of which not the slightest evidence was called. It is a case in which it is right to regard to (sic) the defendants as having been vexed. It is therefore an appropriate case in which to order an order of indemnity costs.” Applicants’ submissions [13] The applicants submit that s 260 of the Act provides that an objection may be made to the grant of a mining lease. The Act requires the chief executive, in the present case by the Mining Registrar, an officer of the chief executive’s department, to forward properly made objections to the Land Court which will hear the application and objection(s) and then, under s 269, forward to the Minister the objection(s), any evidence adduced at the hearing, any exhibits and the Court’s recommendation. Section 261 allows for an objector to withdraw their objection by written notice as set out in the section. [14] The applicants criticise the objection on the basis that it does not contain a recommended outcome, contains questions and matters related to the environment when there was an objection to the grant of the Mining Lease as opposed to an Environmental Authority. The applicants concede that s 269(4)(j) of the Act makes such matters relevant and says 6 [2003] QSC 299. -- 5 of 17 -- 6 that the impacts referred to are pre-existing features. Reference to severance, they submit, is relevant to compensation only. [15] In view of the attention which the applicants have directed to the content of the objection, it is appropriate to set it out in full so that it can be properly appreciated. It was in these terms: “OBJECTION TO MINING LEASE APPLICATION 70310 We, GREGORY WILLIAM SMALL, MARIE EVA SMALL AND BRIAN JAMES SMALL, C/- “Lake Lindsay” Middlemount, being the registered proprietors of the lands described as Lot 15 on SP178417 County of Roper Parish of Ternallum and being the whole of the land contained in Title Reference 50544874 (‘the Land’) which is the subject of an Application for the Mining Lease to MLA70310 (‘MLA70310’) object to the grant of MLA 70310 on the following grounds: 1. The surface of the land in respect of which the MLA70310 is made is not of an appropriate size and shape. There is no definite statement as to what will be constructed on MLA70310 and no justification for the need for such a large area for the construction of infrastructure on the surface of the land. The grant of MLA70310 will cause a significant severance on part of ‘Lake Lindsay’ which is not appropriate as: (a) The purpose of which the MLA70310 has been applied, is for the construction of infrastructure and not for conducting specific mining operations; (b) There is no definite statement by the Mining Lease Applicant as to the use to which the land will be put. The original mining lease application stated that the purpose for which the Mining Lease was sought was for: ‘Infrastructure, dams, spoil heaps, haul roads, water storage, water treatment and reticulation, administration infrastructure, coal stock pile, processing and hauling infrastructure, workshops and employee amenities and fencing, water management and erosion structures.’ In the Certificate of Public Notice for the Mining Lease which was issued on 25 June 2013, the purpose for which the Mining Lease was applied was stated as follows: ‘Environmental Dam Mine waste / spoil dumps Stock pile ore / overburden Tailings / settling dam Transport / conveyor / vehicular Water management Water supply.’ (c) There is no clear definite statement by the Mining Lease Applicant as to what employee amenities or accommodation is proposed and whether the ‘erosion structures’ will be in the form of a levee bank, and if so where it will be located. The construction of a levee bank on MLA70310 will substantially impact the balance of ‘Lake Lindsay’ by directing floodwater in Roper Creek onto the balance of the property. -- 6 of 17 -- 7 (d) Annexure A to the Application for Mining Lease which was made on 17 December 2002 does not provide any reason or justification for why the area of the Mining Lease of 740.1 hectares is required and there is no map or sketch plan indicating why such a large area is required or where any proposed infrastructure will be located; (e) Annexure B to the MLA70310 dated 17 December 2002, states that the application has ‘been shaped so the area is offset 50 metres to the east of Roper Creek’. There is no indication of any infrastructure being constructed in the north-eastern section of the mining lease application, particularly where it abuts with existing Mining Lease70171. That north eastern section of MLA70310 is shown as much wider than would be required for a buffer to the east of Roper Creek; (f) There is no plan showing the location of the proposed spoil dumps and co (sic) disposal dams or any justification as to why it is appropriate to locate such infrastructure in an area which is subject to flooding; (g) The shape of the MLA70301 (sic) means that there is a large area of land which is severed from the balance of the property. This area of land which runs to the north of MLA70310 area up to the boundary with ‘Tralee’ is estimated to be approximately 600 hectares and will be effectively severed from the balance of the property. At present we have access to the land north of the main haul road by way of a registered easement with is Easement B on SP128608. The benefit of this easement will be lost if MLA70310 is granted; 2. The term of 32 years which is sought by the Mining Lease Applicants is not appropriate as it is for a longer period than the term of the adjoining MLA70171. (a) At the time MLA70310 was originally applied for on 17 December 2002, the term applied for was for a period of 31 years, 11 months and 19 days; (b) The term of the Mining Lease applied for, as shown in the Certificate of Public Notice, issued on 25 June 2013 is 32 years; (c) the justification provided by the Mining Lease Applicant for the term applied for was to enable the term to expire on the same day that MLA70171 expires, namely 30 November 2034; (d) As it is proposed that MLA70310 is to finish on the same day on which ML70171 expires, namely 30 November 2034, the term of the lease applied for should be reduced to 21 years and not 32 years; 3. The Landowners will suffer a severe disadvantage to ‘Lake Lindsay’ in that an adverse environmental impact will be caused by the grant of MLA70310: (a) At the present time, Roper Creek floods extensively over the area which is the surface of MLA 70310; (b) There is a very extensive water shed for Roper Creek to the north of the land. In addition, a number of mines including the ‘Foxleigh Mine’ and the ‘Middlemount Mine’ have recently had authority to discharge surface water into Roper Creek as a means of removing excess surface water from the respective mine sites; -- 7 of 17 -- 8 (c) The Landowners, whose family has been the owner of ‘Lake Lindsay’ for some 50 years, have knowledge and experience of the flow of flood water down Roper Creek during the 50 years that they have owned ‘Lake Lindsay’. (d) As Roper Creek carries a large volume of surface water from a large catchment area to the north of the land and in light of the fact that previously the regulator has granted a licence to a number of mines to discharge water into Roper Creek, the volume of water flowing down Roper Creek, in the future, will be equal to or greater than the volume of water which has flowed down Roper Creek previously; (e) The Landowners have observed large volumes of water flowing down Roper Creek and in the area of MLA70310 following large after rain fall events either on the land or in the extensive catchment to the north of the land. This have (sic) caused large volumes of water to flow outside the bed and banks of Roper Creek and onto the adjoining pasture, (f) The construction of Mining Activities, levee banks and overburden and spoil dumps on ML70171 has caused water, which has previously flowed down Roper Creek, to be diverted outside the bed and banks of Roper Creek and on to the grazing property ‘Lake Lindsay’, owned by the Landowners. The proposed construction of overburden and spoil dumps, containment dams and other infrastructure on ML70310 which will be protected by a levee bank, will cause floodwater which escapes from the bed and banks of Roper Creek after large rain fall events, onto the severed area and on to other parts of ‘Lake Lindsay’ impacting upon the Landowners grazing operations; (g) The overall impact of the construction of infrastructure on the ML70310 will cause flood water which previously flowed down Roper Creek to be forced on to other lands owned by the Landowners causing a most severe adverse environmental impact on the grazing property ‘Lake Lindsay’; (h) The adverse environmental impacts which will be sustained by the grazing property ‘Lake Lindsay’ are as follows: (i.) More extensive flooding of the balance of Lake Lindsay as areas where flood waters previously have flowed after large rain fall events are now protected by levee banks and large infrastructure; (ii.) The rate of flow of water will increase as water will be directed away from the natural flow of Roper Creek; (iii.) The increased volume of water and the increased rate of flow of water will cause erosion on areas of the grazing property ‘Lake Lindsay’. (iv.) There is potential for substantial increase in the amount of suspended solids to be deposited over the grazing property ‘Lake Lindsay’ as large parts of the area of the mining lease application will contain disturbed soil which will be collected by the flood waters from Roper Creek. As a result, silt will be distributed over the balance of the grazing property ‘Lake Lindsay’. -- 8 of 17 -- 9 (i) The area which is effectively severed from the balance of ‘Lake Lindsay’ will be subject to substantial adverse environmental impacts as a result of the operations proposed to be conducted on MLA70310 by the Mining Lease Applicant which can be summarised as follows: (i.) The establishment of infrastructure including dams and overburden or spoil dumps on the area of the MLA70310 will mean that water which previously would have flowed over the surface of the MLA70310 will be directed over the area which is severed, resulting in flooding to grazing land, causing erosion and depositing silt on the pasture; (ii.) Noise and dust generated from the establishment and operation of the overburden or spoil dumps, stock pile and coal transport infrastructure on the MLA70310 will have a serious adverse impact on the grazing operations in the severed area rendering the area a small isolated pocket of grazing land which will be adversely impacted by noise and dust from the surface of the MLA70310. This impact will reduce the use of the severed area and render it unfit for use for grazing operations. Even if access were granted, by agreement, by the Mining Lease Applicant, the small area of the severance and the severe adverse impact of noise and dust from the adjoining infrastructure operations on the surface of the Mining Lease Application have a severe adverse impact on the ability of the Landowners to effectively use this pocket of land for grazing purposes. Dated this 19th day of August, 2013. (Signature) 16/08/13 Gregory William Small (Signature) 19/08/13 Marie Eva Small (Signature) 16/08/13 Brian James Small” [16] The applicants submit that the respondents have not put forward any materials or arguments to support their objection and their conduct was limited to consenting to adjournments proposed by the applicants until they withdrew their objection. [17] They point to the decision of the Land Appeal Court in Anson Holdings Pty Ltd v Wallace & Anor7 where the Land Appeal Court said: “General conclusions [36] The submissions on the appeal amounted to the proposition that the appellant had a statutory right to object to the application for a mining lease and that, in the course of exercising that right, the appellant was entitled to take any point that indicated that the application was defective without incurring liability as to costs. 7 (2010) 31 QLCR 74. -- 9 of 17 -- 10 [37] We accept that the appellant had a statutory right to object to the mining lease on the basis that the relevant statutory provisions had not been complied with. However that does not mean that someone in the position of the appellant is automatically exempt from any liability for the payment of costs. As discussed above, s.34 of the Land Court Act gives the Court complete and full discretion as to whether to award costs. In exercising that discretion it is relevant, as the learned Member did, to take into account the fact that the grant of a mining lease can lead to an unwelcome intrusion on to the objector's property. But that is only one factor to be taken into account in the exercise of the discretion. Without attempting to be exhaustive or prescriptive, other factors that may be taken into account are the conduct of the objector in pursuing the objections including a consideration of the nature of the objections, whether there was any reasonable prospect of success in pursuing those objections, the degree of prejudice likely to be suffered by the appellant if the right to object was not pursued, whether the appellant's conduct lead to an unnecessarily lengthy hearing and whether in general the objector has conducted the progress of the objections in a reasonable manner. [38] That is not to suggest that the conduct of the other parties to a proceeding is free from scrutiny. When exercising its discretion under s.34(1), the Court will take into account the conduct of all the parties to the proceeding and any other relevant factor in deciding whether to make an order for costs. [39] We can find no error in the matters which the learned Member took into account in exercising his discretion under s.34(1) of the Land Court Act. Accordingly, we consider that the appeal should be dismissed.”8 [references omitted] [18] The applicants submit that the principal matter referred to the Court has not been discontinued as the applicants have not consented to discontinuance under Rule 16(2) of the Land Court Rules 2000. [19] The applicants have referred to the decision of this Court in Wallace v Anson Holdings Pty Ltd and The Environmental Protection Agency.9 In that case Member Scott said: “[3] The objector made reference to s.268(8) and (9) of the Mineral Resources Act 1989 which provides: (8) The Land Court on the application of an objector or owner may award costs against an applicant for a mining lease who abandons the application or does not pursue the application at a hearing. (9) The Land Court on the application of an applicant for a mining lease may award costs against an objector who withdraws the objection or does not pursue the objection at a hearing. [4] It was submitted for the objector that the provisions referred to compromise provisions contrary to s.34(1) of the Land Court Act and limit the operation of s.34 accordingly. It follows according to that submission that it is only in the limited circumstances provided for in s.268(8( and (9) of the Mineral Resources Act that costs with respect to a mining lease application can be awarded. 8 (2010) 31 QLCR 74, [36] - [39]. 9 [2009] QLC 107. -- 10 of 17 -- 11 [5] I do not accept that submission. The provisions referred to in s.268 of the Mineral Resources Act provide particular examples of circumstances where costs may be awarded and can be read consistently with the power created by s.34 of the Land Court Act for the Land Court to award costs in a proceeding. … [11] Whilst the success of the applicant in gaining a recommendation for the grant of a mining lease is not an irrelevant consideration in a costs application of this type it is not in my view conclusive. The landholder has exercised a statutory right to object in circumstances where the grant of a mining lease can lead to an unwelcome intrusion on to the objector’s property. Nevertheless an objector must conduct himself reasonably in progressing an objection. As the reasons in the substantive decision demonstrate, the objector founded the bulk of his grounds of objection on matters of a formal nature in respect of which no prejudice to the objector was demonstrated. Each of those objections was dismissed, albeit in the case of two matters, only following a conclusion by me under s.392 of the Mineral Resources Act that substantial compliance was found, thus leading to a dismissal of the relevant grounds of objection. I might also mention that whereas the applicant sought a lease with a 50 year term, my conclusion was to recommend a 21 year term only.” [20] In that case the Court ordered that the objector pay 40% of the applicants’ costs of the proceeding including the directions hearing and the substantive hearing. The appeal, which has already been referred to, was dismissed.10 [21] The applicants point to Member Scott’s words at paragraph [13] of his decision where he said: “[13] The objector landholder has a statutory right to object to an application for a mining lease and in my view ought not to be the recipient of a contrary costs order in circumstances where that right has been exercised reasonably and responsibly. I am concerned in the present case that the manner in which the objector focused extensively on matters of a formal nature, whilst not claiming any resultant prejudice, must go against the objector in an order for costs. Whilst the discretion exercised in considering an objection against an application for a mining lease is administrative in nature rather than judicial, that does not lead to a conclusion that an objection may be made replete with all manner of trivial complaint. The applicant ought to have the costs associated with the need to meet a case involving such formal non-prejudicial matters rather than simply addressing the substantive aspect of the application for mining lease. Accordingly I conclude that the objector must pay some of the costs of the objector.”11 [22] The applicants trace the history of the provision that is now s 268(9) and refer to the second reading speech where it was said that the provision was to discourage frivolous or vexatious objections.12 10 Anson Holdings Pty Ltd v Wallace & Anor (2010) 31 QLCR 74. 11 Wallace v Anson Holdings Pty Ltd and the Environmental Protection Agency [2009] QLC 107. 12 Hansard 29 May 1990, Queensland Parliament. -- 11 of 17 -- 12 [23] The applicants objected to correspondence marked “without prejudice” from their solicitors to the respondents’ solicitors being exhibited in an affidavit filed by the respondents’ solicitors. While doing so they also seek to rely on a passage in a letter objected to. That passage, in the letter dated 4 April 2014 is to the effect that the proposed partial abandonment of the lease addresses the objections and the respondents require the withdrawal of the objection that was lodged. The respondents’ submissions [24] The respondents have relied on the decision of the Land Appeal Court in Anson Holdings Pty Ltd v Wallace & Anor,13 in particular the following passages: “[18] We do not accept that s.268(8) and (9) of the Mineral Resources Act cover the field in relation to the Land Court's powers to award costs in respect of the hearing of mining lease applications and objections lodged under the Mineral Resources Act. We agree with the learned Member that s.268(8) and (9) are not inconsistent with the power created by s.34 of the Land Court Act for the Court to order costs for a proceeding in the Court as it considered appropriate. Because the circumstances referred to in s.269(8) and (9) do not apply in this matter, s.34 remains the operative provision in respect of the power to award costs. … [22] Previous decisions of this Court in relation to s.34(1) of the Land Court Act indicate that the discretion given to the Land Court under s.34 is complete and that that discretion is not to be fettered by any preconceived rules or principles other than that the discretion is to be exercised judicially. Thus in BHP Queensland Coal Investments Pty Ltd v Cherwell Creek Coal Pty Ltd (No. 2) the Land Appeal Court said - ‘[6] In Wyatt v Albert Shire Council, the Full Court considered s.31(1) of the City of Brisbane Town Planning Act 1964 which relevantly provided that the Local Government Court may make such order as it thinks fit as to the costs of any proceeding before it. The similarity between s.31(1) and s.34(1) has been recognized by this Court in the past. The Full Court held in Wyatt that the effect of s.31 was that the discretion conferred with respect to costs is complete or full. The discretion is not to be exercised arbitrarily, but judicially, that is, for reasons that can be considered or justified. Resort may be had to any settled practice of a court but a purported exercise of discretion which fails because the mind is closed to relevant considerations through a rigid adherence to preconceptions is an error of law. Thus an approach that required exceptional circumstances to be established before such a wide discretion is exercised is likely to be incorrect. Similarly it would not be right to start with the preconception that costs follow the event. The Court also said that it would be wrong to attempt to lay down rules governing the exercise of the discretion and each case should be governed by its circumstances.’” (Footnotes omitted). 13 (2010) 31 QLCR 74. -- 12 of 17 -- 13 [25] The respondents point to the affidavit of solicitor Ms VB Barrios sworn and filed on behalf of the applicants on 23 June 2014. The affidavit exhibits (VB-04) a letter to the applicants’ solicitors from the respondents’ solicitors, dated 15 April 2014, it states: “Dear Colleagues, RE: GW SMALL & ORS ATS CAML RESOURCES PTY LTD – MLA 70310 I refer to your letter of 11 April, 2014. Your client proposes to partially abandon MLA 70310 and that the proposed area to be retained by MLA 70310 so far as it effects Lot 15 on SP178417 is as identified in Annexure B to the affidavit of Gerard William Batt filed on 8 April 2014. I can confirm that once the partial abandonment of MLA 70310 (as identified above) is recorded by the office of the Mining Registrar, my clients will withdraw their objection to the grant of MLA 70310. The issue of compensation will then need to be determined. Yours faithfully,” [26] On 30 June 2014 the applicants’ solicitors wrote to the respondents’ solicitors stating that on 25 June 2014 the Mining Registrar had advised that the partial abandonment had been recorded on the department’s database. This letter refers to the letter dated 15 April 2014 and requires that the objection be withdrawn.14 [27] On 11 July 2014 the respondents’ solicitors wrote to the Mining Registrar withdrawing the objection. A copy of the letter went to the applicants’ solicitors.15 [28] The respondents submit that they had no warning of an intention to make the present application. On 3 September 2014 the respondents’ solicitors wrote to the applicants’ solicitors requesting that the present application be withdrawn and giving notice of an intention to engage Counsel to oppose it. They also advised of an intention to seek an order for indemnity costs of and incidental to the application in the event that they were successful in opposing it. [29] By letter dated 5 September 201416 the applicants’ solicitors maintained the claim. [30] The respondents submit that the criticism made against them, that out-of-court negotiations were the appropriate course, fails to take into account that the respondents had a legal right under the Act to proceed in the way that they did, engaging the process provided by the Act. It is not a valid criticism that the respondents used the legal option available to them. In order to properly consider the case, however, it is necessary to go 14 Affidavit of solicitor JP Houlihan filed 8 September 2014, Exhibit JPH-06. 15 Affidavit of JP Houlihan filed 8 September 2014, Exhibit JPH-07. 16 Affidavit of JP Houlihan filed 8 September 2014, Exhibit JPH-10. -- 13 of 17 -- 14 beyond the fact of the objection, to its content, to determine whether making it was reasonable or not. The objection, which has already been set out, does contain a number of questions. It also contains matters of objection which clearly would be relevant, such as an objection to the proposed term of the lease being sought. This objection is presented rationally. This alone would be a relevant consideration to bring before the Court at a hearing. There are other matters of objection raised, including detailed claims which would be relevant for consideration as matters of asserted adverse environmental impact. For present purposes it is not necessary to further analyse the details of the objection. It is established that it is an objection that, on its face, was reasonable to bring. The survival of all or a majority of its parts or the success of any is not necessary to justify bringing the objection. [31] The respondents cannot be validly criticised for using the process up to the point of the matter coming to the Court. The respondents’ conduct of the matter in Court is not able to be said to have caused any delay at all or to have been characterised by any conduct adverse to the applicants other than the inconvenience inherent in the process itself. As has been set out, the Court actively managed the matter, the applicants exercised positive influence in seeking adjournments with a view to using the time effectively towards resolving the dispute and it was resolved. There was no complaint, at the times when the matter was mentioned before the Court, of delay or obstruction by the respondents or request for suitable orders directed to such conduct. [32] The applicants are, in the end, free of the objection because they changed their position and reduced the area over which they sought the lease. The letter dated 8 April 2014 from the applicants’ lawyers to the Mining Registrar says: “Change in Surface Area We note that the area of MLA70310 as it affects Lot 15 on SP 178417 will be reduced by approximately 541 hectares, subject to final survey. Overall, it is estimated that the area sought by MLA70310 will be reduced to approximately 199 hectares, from the original 740.1 hectares, subject to final survey.”17 The same letter says: “The proposed partial abandonment arises from ongoing negotiations with the owners of Lot 15 on SP 178417 for surface rights compensation and with respect to the referral of their objection to the Land Court of Queensland (MRA133-13). Our client anticipates that the proposed partial abandonment will address the grounds for their objection against the grant of MLA70310.”18 17 Affidavit of JP Houlihan filed 8 September 2014, Exhibit JPH-06. 18 Ibid. -- 14 of 17 -- 15 [33] The subsequent withdrawal of the objection resulted in an outcome satisfactory to the applicants, which was achieved because of the negotiations. The Court had no issue left to resolve. The respondents submit that it was an implied term of the agreement between the parties that there would be no order for costs. It was also submitted that the Court’s role had ended so that s 34(2) of the Land Court Act 2000 applied, there having been no order for costs, the parties must bear their own. The absence of a recommendation to the Minister from the Court or a discontinuance inclines the Court to the view that the present application was able to be made. The absence of evidence that costs was considered by the parties in their dispute resolution and a consideration of all of the material provided to the Court does not convincingly show an implied term relating to costs. [34] The respondents submit that the alteration of the lease area indicates that its objection has effectively been successful, which favours its position regarding costs. [35] The letter of 5 September 2014 from the applicants’ solicitors to the respondents’ solicitors19 asserts that the respondents did not pursue their objections. This is weakened by the fact that adjournments of the matter were either at the applicants’ request or with its consent. There is nothing in the respondents’ conduct which could be properly understood as failing to proceed to pursue the objection in a proper and timely way. The objections could not be seen as not having any reasonable prospects of success and the respondents have not proceeded in any way unreasonably in the matter before the Court. It is not established that the objection process was used improperly. Its resolution on the matter of the area sought and subsequent withdrawal of the objection does not support a conclusion that the purpose was related to compensation. The objection was withdrawn when it was proper to do so. Exercising the discretion on the general application for costs [36] The Court has not accepted that the agreement between the parties impliedly excluded either from making an application for costs. The discretion falls to be exercised in view of the facts and circumstances which have been considered. There has been no unreasonable conduct on the part of the respondent and nothing which would warrant the making of the order sought by the applicants. Accordingly, the general application is dismissed. The material shows, in relation to the substantive matter referred to the Court, appropriate conduct by both groups represented before it. The circumstances show that it would be appropriate for the Court to make no order as to costs so that pursuant to s 19 Affidavit of JP Houlihan filed 8 September 2014, Exhibit JPH-10. -- 15 of 17 -- 16 34(2) of the Land Court Act 2000, each party must bear their own costs for that proceeding. Costs of the general application [37] The respondents seek an order that their costs of and incidental to the general application be paid by the applicants on an indemnity basis. This application was foreshadowed in the letter dated 3 September 2014 to the applicants’ solicitors.20 [38] The grounds for this application are that the general application was not able to be successful as none of the grounds could support the order sought. It was also submitted that the settlement excluded a costs claim and that the application was unmeritorious to the extent of being untenable and ought not to have been brought. [39] As has been considered, the settlement is not in such terms that the Court finds any implied term as to costs which would have prevented the general application being brought. The grounds of the general application, that the majority of the objection should have been dealt with by out-of-court negotiations for compensation and that there was a consequent waste of time and money have already been considered. The Court is satisfied that the objection cannot properly be criticised on this basis and nor can the conduct of the respondents. The respondents did not fail to pursue their objection in a proper and timely way. The Court is satisfied that the general application could technically be brought as proceedings had not ended. The Court is also satisfied that none of the grounds of the general application would be capable in the circumstances of the present case of supporting the order sought. The application, when considered on its merits, had no prospects of success and ought not have been brought. [40] Costs are an indemnity to compensate the successful party for the expense incurred and are not punitive.21 Although the discretion is unfettered, the rule that costs follow the event may inform the exercise of discretion.22 [41] The general application was bought and persisted with when it did not ever have any proper basis to be brought and could not have been successful. The respondents have been put to the expense of resisting it and ought to be indemnified for their costs upon their success. As the application was without substance, ought not to have been brought and had no merit or prospects of success the respondents’ indemnity for their costs in responding to it should be on the indemnity basis rather than on the standard basis. 20 Affidavit of JP Houlihan filed 8 September 2014, Exhibit JPH-09. 21 APT Petroleum Pipelines Pty Limited v Western Down Regional Council (No 2) [2014] QLC 27, [8], [9]. 22 Ostroco v Department of Transport and Main Roads (No 3) [2014] QLAC 7, [8]. -- 16 of 17 -- 17 [42] The applicants should be ordered to pay the respondents’ costs of and incidental to the general application on the indemnity basis. Orders 1. The general application is dismissed. 2. The applicants are ordered to pay the respondents’ costs of and incidental to the general application on the indemnity basis. Such costs are to be agreed or, failing agreement, to be assessed. 3. There are no other orders as to costs. WA ISDALE MEMBER OF THE LAND COURT -- 17 of 17 --