Donovan v Struber & Ors (No. 4) [2013] QLC 14

LAND COURT OF QUEENSLAND CITATION: Donovan v Struber & Ors (No. 4) [2013] QLC 14 PARTIES: Gary Awarua Donovan (applicant) v. Stephen Roy Struber and Dianne Rose Wilson-Struber (respondents) Chief Executive, Department of Environment and Heritage Protection (Statutory Party) FILE NOs: MRA137-10, EPA209-10, MRA352-09, EPA351-09, MRA354-09, EPA353-09, MRA356-09, EPA355-09, MRA342-11, EPA352-11, MRA341-11, EPA353-11, MRA164-10, EPA165-10, MRA166-10, EPA167-10, MRA328-10, EPA329-10 DIVISION: General Division PROCEEDING: Applications for costs DELIVERED ON: 23 April 2013 DELIVERED AT: HEARD ON: Brisbane Submissions closed 9 October 2012 HEARD AT: On the Papers A/PRESIDENT: PA Smith ORDERS: The applications for costs brought by both the miner and the landholders are refused. CATCHWORDS: Land Court Act 2000 Land and Resources Tribunal Act 1999 Mineral Resources Act 1989 Environmental Protection Act 1994 Costs – unfettered discretion – matters to be taken into account – s.34 Land Court Act 2000 – s.268(8) and (9) of the Mineral Resources Act 1989 – factors governing exercise of discretion – reasonableness of parties – settlement of litigation -- 1 of 8 -- 2 Anson Holdings Pty Ltd v Wallace & Anor (No. 2) [2010] 31 QLCR 130 Donovan v Struber & Ors (No. 3) [2012] QLC 28 Donovan v Struber & Ors [2011] QLC 45 Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liq) & Ors (No. 2) [2012] QLAC 002 Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] 186 CLR 622 Peabody West Burton Pty Ltd & Ors v Mason & Ors (No. 2) [2013] QLC 12 PT Limited and Westfield Limited v Department of Natural Resources and Mines [2007] 28 QLCR 295 South East Queensland Electricity Board v Australian Telecommunications Commission (Unreported; Federal Court of Australia; 10 February 1989) Titan Sandstone Pty Ltd v ChongHerr Investments Pty Ltd [2009] QLC 47 APPEARANCES: Mr J Trevino of Counsel for the applicant Mr J Korn of Counsel for the respondent Mr N Loos of Counsel for the Statutory Party SOLICITORS: Preston Law for the applicant Bottoms English for the respondent Legal Services, Department of Environment and Heritage Protection for the Statutory Party Background [1] I have before me 18 matters in which applications have been made for orders as to costs. This complex litigation has been before this Court for many years. Details of the litigation are set out in the decision of Donovan v Struber & Ors (No. 3)1 and earlier decisions involving these matters. [2] In short, Gary Awarua Donovan (the miner) sought the grant of nine mining lease applications (MRAs). Stephen Roy Struber and Dianne Rose Wilson-Struber (the landholders) lodged both Mineral Resources Act 1989 (MRA) objections and Environmental Protection Act 1994 (EPA) objections to each MLA. Due to the provisions of the EPA, the Chief Executive, Department of Environment and Heritage Protection, became a Statutory Party to each EPA objection. [3] The extent of the objections were far-reaching and complex. A significant amount of time was taken up in preparing the matters for hearing, including the consideration of preliminary legal issues.2 1 [2012] QLC 28. 2 See Donovan v Struber & Ors [2011] QLC 45. -- 2 of 8 -- 3 [4] Ultimately, just before the final hearing of the 18 objection matters, a mediated settlement agreement was reached. The terms of the mediated settlement agreement were detailed in the 2012 Court decision.3 [5] By agreement, the miner withdrew his applications for MLA20594, MLA20564 and MLA20565, and the objectors withdrew their MRA and EPA objections for MLA20605, MLA20606, MLA20607, MLA20608, MLA20660 and MLA20670. The applications [6] The miner seeks orders that the landholders pay the miner’s costs of the 18 matters currently before the Court from 10 April 2012 onwards. The basis for the miner’s application is that the miner made a settlement offer to the landholders to withdraw all mining lease applications on the basis of each party bearing their own costs. The landholders responded with a counter-offer that the mining lease applications be withdrawn with the miner paying a substantial sum to the landholder for their costs. The counter-offer was not accepted by the miner. [7] It is the miner’s contention that the settlement finally achieved as reflected in the Court’s orders,4 was substantially more favourable to the miner than the landholders, and that an award of costs in his favour, for those costs incurred after the miner’s settlement offer was rejected, is appropriate.5 [8] The miner seeks no other orders with respect to costs. [9] The landholders are seeking three distinct orders with respect to costs. Firstly, as regards the six files which relate to the three withdrawn MLAs, the landowners seek that the miner pay their costs on an indemnity basis.6 Secondly, as regards the six MLAs that have been the subject of recommendations by this Court, the landholders seek an order that the miner pay 75% of their costs.7 It should be noted that, in addition to costs ordinarily recoverable, the landholders seek the award of costs to include “business interruption costs”.8 [10] The third costs order sought by the landholders is that the Statutory Party pay or contribute towards the landholders’ costs of the nine EPA objection matters.9 [11] Put simply, each party against whom a costs order is sought strongly opposes the making of such orders. Of course, both the miner and the landholders have maintained that orders in their favour are appropriate. 3 See [2012] QLC 28 at paragraphs [6]-[10]. 4 See [2012] QLC 28. 5 See miner’s submissions 9 July 2012 paragraph 11. 6 Landholders’ submissions 23 July 2012 paragraph 33. 7 Landholders’ submissions 23 July 2012 paragraph 42. 8 Landholders’ submissions 23 July 2012 paragraphs 44-55. 9 See applicant’s general application filed 9 July 2012. -- 3 of 8 -- 4 [12] For completeness, I should add that the Statutory Party contends that, as between the landholders and the Statutory Party, each party should bear its own costs.10 The Legislation [13] Legislative provisions in both the MRA and the Land Court Act 2000 (LCA) need to be referred to given the facts of these matters and the nature of the applications for costs. [14] The Land Court is seized of a general power to award costs by s.34 of the LCA which provides as follows: “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. (3) An order made under subsection (1) may be made an order of the Supreme Court and enforced in the Supreme Court. (4) For subsection (3), it is enough to file the order in the Supreme Court. (5) The court may, if it considers it appropriate, order the costs to be decided by the appropriate assessing officer of the Supreme Court. (6) If the court makes an order under subsection (5), the assessing officer may decide the appropriate scale to be used in assessing the costs.” [15] Further, the MRA sets out specific circumstances where the Court may award costs in s.268(8) and (9) of the MRA as follows: “268 Hearing of application for grant of mining lease … (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.” Relevant authorities [16] As I pointed out in Peabody West Burton Pty Ltd & Ors v Mason & Ors (No. 2),11 there is no automatic or overriding principle that cost orders should follow the event in Land Court matters. However, the outcome of the litigation informs the decision as to the exercise of the discretion. As the Land Appeal Court said in the decision of Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liq) & Ors (No. 2):12 “[3] Section 72(1) of the Act provides that s34, amongst other provisions, applies “with necessary changes” to the Land Appeal Court and a “reference in the applied sections to the Land Court is taken to be a reference to the Land Appeal Court”. [4] Hence the Land Appeal Court may order costs “as it considers appropriate”. The discretion to award costs is unfettered. However the rule often followed, and the rule incorporated in r 689 of the Uniform Civil Procedure Rules 1999, is that costs follow the event. That rule, while it does not govern the exercise of the discretion here, nonetheless informs it, as there is justice in that approach. It protects those put to unnecessary and substantial expense at the behest of others. There is no reason here why costs should not follow the event in the usual way.” 10 Submissions of statutory party 21 August 2012 paragraph 39. 11 [2013] QLC 12. 12 [2012] QLAC 002 at paragraphs 3-4. -- 4 of 8 -- 5 [17] In PT Limited and Westfield Limited v Department of Natural Resources and Mines13 the Land Appeal Court said: “[20] The common law principle which has long dominated the exercise of the discretion to award costs that they “follow the event” has been incorporated into r 689 of the Uniform Civil Procedure Rules 1999 but is found neither in the VLA nor the Land Court Act. In interpreting s 66 the Court should not therefore be bound by any presumptive rule or principle - the discretion is complete, but must be exercised judicially. … [22] There may be any number of factors which a court vested with a general jurisdiction to award costs might entertain. One of those factors is the outcome of the litigation. Another might be the overall purpose of the legislation. Contemporary legislation in Queensland tends to make express provision about costs if it is thought desirable that parties not be discouraged from seeking to assert rights by the fear of adverse costs orders.” [18] The Land Appeal Court considered the issue of costs with respect to mining lease matters under the MRA in the case of Anson Holdings Pty Ltd v Wallace & Anor (No 2)14 and had this to say: “[9] When exercising the discretion under s.34(1) with respect to mining lease applications, it is legitimate for the Court to take into account the fact that the landholder who objects to the grant of a mining lease is exercising a statutory right to object, in circumstances where the grant of a mining lease could lead to an unwelcome intrusion on to the landowner’s property. Clearly, landholders who face having their way of life and operations on their land changed, sometimes dramatically, through mining activities in many respects beyond their control, should not be discouraged from pursuing proper concerns in an appropriate manner before both this Court and the Land Court. Similarly the conduct of the miner in the objection and appeal process is relevant. [10] The respondent’s success in the appeal proceedings is to be balanced against those factors. While the rule that costs follow the event is not automatically applied in this jurisdiction, that rule is one which is deeply embedded in our law and that is a factor to be taken into account when exercising our discretion under s.34(1).” [19] It should be pointed out that the Anson Holdings decision did not involve circumstances where either s.268(8) or 268(9) of the MRA applied. Determination [20] In some respects, the costs applications in these matters remind me of the costs applications I considered in Titan Sandstone Pty Ltd v ChongHerr Investments Pty Ltd.15 In Titan, each party was so convinced as to the worthiness of their own position, and the unreasonable conduct of the other side, that they each sought orders for indemnity costs against each other.16 13 [2007] 28 QLCR 295. 14 [2010] 31 QLCR 130. 15 [2009] QLC 47. 16 [2009] QLC 47 at paragraph [2]. -- 5 of 8 -- 6 [21] In Titan, I had this to say: “[12] As I observed in my substantive decision, both parties had some measure of success. I understand that neither Titan nor ChongHerr instituted any appeal to the Land Appeal Court against the decision. Using colloquial terms, it is apparent that both sides consider that they essentially “won” the litigation, and that the other side “lost”. Having reviewed all aspects of my decision of 24 December 2008, I do not depart from my view there stated that both parties had some degree of success in the litigation. By necessary implication, both parties also had some degree of failure in the litigation. [13] In circumstances such as this, it would seem that the only rational decision open to me would be to order that there be no order as to costs. However, the argument as to costs is further confused by the fact that ChongHerr has revealed, by affidavit evidence filed with its submissions, that it had made an offer to settle to Titan. In ChongHerr’s view, the terms of that offer to settle were more favourable to Titan than the ultimate decision of the Court. This, argues ChongHerr, is a strong argument in favour of an award for costs on an indemnity basis against Titan.” [22] Although the Court in Titan ordered that there be no order as to costs, it must be remembered that the governing legislation in that case was s.50 of the Land and Resources Tribunal Act 1999 and not s.34 of the LCA. [23] Turning to consider the MRA provisions on costs, it is of course true that the miner did withdraw three MLAs, and that therefore the precondition of s.268(8) of the MRA has been met as regards the landholders’ application for costs relating directly to those matters. Likewise, it is true that the landholders did withdraw their MRA objections to six other MLAs, thus meeting the precondition of s.268(9) of the MRA as regards the miner’s application for costs as against the landholders. [24] At face value, the respective applications under s.268(8) and (9) appear to be on firm ground. However, there is an additional factor, referred to earlier in this discussion, which must be taken into account. Unlike most decisions on costs, these applications are not made following a Court determination or by independent actions of the respective parties in either abandoning certain MLAs or objections. Rather, these 18 matters were resolved after an extensive mediation, on terms as agreed between the parties at the mediation. [25] The principles that govern the exercise of the discretion as to costs in circumstances where the matter was settled as between the parties was set out by McHugh J in Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin17 where his Honour said:18 “… It will be necessary to return in a little more detail to the facts of the case, but it is first necessary to state the principles which govern an application for costs when a party elects not to pursue an action because he or she has achieved the relief sought in the action either by settlement or by extra-curial means. In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. 17 [1997] 186 CLR 622. 18 Ibid at pages 624-5. -- 6 of 8 -- 7 When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. … Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission (Unreported; Federal Court of Australia; 10 February 1989) where his Honour ordered the respondent to pay 80 per cent of the applicant’s taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.” [26] A number of things flow from the decision in Lai Qin. Firstly, it is not appropriate for me to make a prediction about the outcome of the proceedings had they proceeded to final determination. In my view, this is relevant in the current circumstances to the MRA s.268(8) and (9) issues. To me, it is impossible to divorce either the actions of the miner in abandoning three applications, or the actions of the landholders in withdrawing six MRA and six EPA objections, from the overall terms of agreement. The mediated agreement, at least on the basis of all material before me, can only be viewed as a whole; that is, as an informed decision by the respective parties in resolution of all issues (save those as to costs) between them. [27] Would the landholders have withdrawn their objections to the six MLAs had the other three MLAs not been abandoned? Would the miner have abandoned the three MLAs without the withdrawal of the objections for the other six MLAs? It is simply impossible for me to know. [28] What it is possible for me to consider is the “reasonableness” of the parties in the conduct of these proceedings. Certainly, these proceedings were not for the faint-hearted. They were not only complex, but strenuously fought. However, those attributes do not of themselves lend support to the view that the actions of any of the parties were unreasonable. [29] Although I have no doubt that the miner considered the actions of the landholders throughout as unreasonable, likewise I have no doubt that the landholders considered the miner unreasonable. So much is clear from the respective submissions. For my part, the -- 7 of 8 -- 8 actions of the miner and the landholders, on the information available to me, and consistent with my observations of them, were reasonable, taken as a whole. [30] The landholders have made significant complaint against the Statutory Party. However, I agree with the submissions of Mr Loos of Counsel that much of which the landholders complain as against the Statutory Party is outside the scope of objections hearings under the EPA. [31] In short, in my view the Statutory Party fulfilled its important statutory function appropriately. [32] There remains for consideration the question of the settlement offers by both the miner and the landholders. Taken in isolation, there is certainly merit in the application brought by the miner. However, it must be remembered that the determination of costs in this matter is made pursuant to s.34 of the LCA, as well as relevant provisions of the MRA. In my view, the offer to settle made by the miner is merely one of the factors to be taken into account in my exercise of my discretion. So much was effectively conceded by the miner, in my view, in his submissions where he included the offer to settle as just one of five considerations which the miner submitted should lead to the conclusion that the order he seeks should be made. As already set out, I have found against the miner with respect to the bulk of his submissions. [33] In my view, it is also appropriate to take into account that the offer to settle by the miner came exceptionally late in the proceedings and certainly well after the landholders had already expended a considerable sum on their case. [34] In the circumstances, I do not consider it appropriate in the circumstances of this matter to make any award of costs. Accordingly, the application by both the miner and the landholders should be refused. Orders The applications for costs brought by both the miner and the landholders are refused. PA SMITH A/PRESIDENT OF THE LAND COURT -- 8 of 8 --