BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd [2013] QLAC 2 (2013) 34 QLCR 108

LAND APPEAL COURT OF QUEENSLAND CITATION: BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd [2013] QLAC 2 PARTIES: BHP QUEENSLAND COAL INVESTMENTS PTY LTD ACN 098 876 825 (first appellant) QCT RESOURCES PTY LTD ACN 010 808 705 (second appellant) BHP COAL PTY LTD ACN 010 595 721 (third appellant) QCT MINING PTY LTD ACN 010 487 840 (fourth appellant) MITSUBISHI DEVELOPMENT PTY LTD ACN 009 779 873 (fifth appellant) QCT INVESTMENT PTY LTD ACN 010 487 831 (sixth appellant) UMAL CONSOLIDATED PTY LTD ACN 000 767 386 (seventh appellant) v. CHERWELL CREEK COAL PTY LTD (ACN 063 763 002) (respondent) FILE NO: Appeal No. LAC002-13 Land Court No. MRA1332-08 DIVISION: Land Appeal Court of Queensland PROCEEDING: Appeal ORIGINATING COURT: Land Court of Queensland -- 1 of 21 -- 2 HEARING DATE: 25 March 2013 DELIVERED ON: 30 May 2013 DELIVERED AT: Brisbane HEARD AT: Brisbane THE COURT Peter Lyons J CAC MacDonald, President of the Land Court WL Cochrane, Member of the Land Court ORDER: The appeal is dismissed CATCHWORDS: Mining - Mining Lease - Mineral Resources Act (MRA) s 402 - whether Court order permitting third party to carry out exploration and mining valid - whether activity authorised as "survey" - scope of survey provision intended to be broad, including a discretion - activity held authorised Practice and Procedure - Legal basis for Court order - UCPR (r 250) not sufficient - not based on an Act relating to mining - MRA provision (s 722G) providing basis for specific dispute resolution not sufficient basis - but MRA s 380 provides basis Jurisdiction of Land Court - broad jurisdiction relating to mining - power to decide nature and extent of underground minerals - MRA s 363 Statutory Interpretation - MRA - objectives of Act - definitions broadly expressed - meaning of "explore" and "mine" - whether need to give technical meaning to certain terms - meaning of "survey" Practice and Procedure - exercise of discretion - standard principles - exercise for which authority sought not a "fishing expedition" - specific detriments to appellant miner considered - whether Member had taken into account material considerations and provided reasoned assessment Land Court Act 2000 Mineral Resources Act 1989 Supreme Court of Queensland Act 1999 Land Court Rules 2000 Uniform Civil Procedure Rules 1999 Armstrong v Miles [2004] 1 QdR 481 Beckwith v The Queen (1976) 135 CLR 569 -- 2 of 21 -- 3 Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors [2011] QLAC 0001 Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No. 6) [2013] QLC 1 Collector of Customs v Anglo-Gevaert Ltd (1996) 186 CLR 389 Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 Electric Light and Power Supply Corporation Ltd v Electricity Commission of NSW (1956) 94 CLR 554 Evans Deakin Pty Ltd v Orekinetics Pty Ltd [2002] QdR 345 House v The King (1936) CLR 499 K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 60 ALR 509 Metropolitan Gas Co v Federated Gas Employees’ Industrial Union (1925) 35 CLR 449 Marconi's Wireless Telegraph Co Ltd v The Commonwealth (1912) 15 CLR 685 Maunsell v Olins [1975] AC 373 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 COUNSEL: J McKenna SC, with A Stumer, for the appellants B O'Donnell QC, with J Chapple, for the respondent SOLICITORS: Allens for the appellants Holding Redlich Lawyers for the respondent THE COURT: [1] The respondent (Cherwell Creek) has brought proceedings in the Land Court claiming compensation (compensation proceedings) from the appellants (a group of entities conveniently described as BMA) under the provisions of Part 18A of the Mineral Resources Act 1989 (Qld) (MRA)1. It applied successfully to the Land Court for an order permitting it to enter on land over which BMA has a mining lease (ML 70403) in order to inspect, take samples of the coal resource, and undertake drilling in specified locations. BMA contends that the order was beyond power, and would permit the carrying out of illegal acts; and that, assuming there was a discretion to make the order, the discretion miscarried. Background [2] Prior to the introduction of Part 18A of the MRA, Cherwell Creek had made an application for a mineral development licence (MDLA364) over part of the land (MDLA land) which is now subject to ML 70403. [3] Part 18A of the MRA includes s 722G, part of which is as follows: 1 Part 18A and ss 722A - 722G of the MRA have been renumbered, effective from 1 March 2013, to become Chapter 12, Part 4 and ss 334ZB to 334ZJ by the Mining and Other Legislation Amendment Act 2013 No. 10. In this decision, the section numbers in use at the date of hearing have been retained. -- 3 of 21 -- 4 "722G Compensation payment by prescribed persons … (4) On an application under this section, the Land Court must— (a) decide whether any compensation should be payable; and (b) if it decides compensation should be payable - (i) decide the amount of compensation; and (ii) make an order for payment of the amount by the prescribed persons to Cherwell Creek. (5) In making a decision under subsection (4), the Land Court must have regard to the likelihood that, had this part not been enacted, Cherwell Creek, alone or in conjunction with another person, would have been able to commercialise the MDLA364 coal resource, having regard to the following matters - (a) the likely extent and quality of the MDLA364 coal resource; (b) the likely mineability of the MDLA364 coal resource; (c) the likely market for any coal mined from the MDLA364 coal resource; (d) the likely life of a mine for the MDLA364 coal resource; (e) the likely coal revenue generated from the MDLA364 coal resource; (f) the likely coal revenue generation costs; (g) the likelihood of a mining lease, appropriate for Cherwell Creek to commercialise the MDLA364 coal resource, being granted under this Act; Note— See sections 269(4) and 271(1) for matters that the Land Court and Minister take into account in dealing with an application for the grant of a mining lease. (h) any other relevant matter." [4] In the compensation proceedings, BMA has alleged that Cherwell Creek would not have obtained a relevant authority permitting the mining of the land the subject of MDLA3642. Experts have been retained for the compensation proceedings. Their views as to the extent of the coal resource in that land do not coincide. The application for the orders made in the Land Court was based on the proposition that further data was required for this purpose, and for other issues relating to the getting of coal from the land3. [5] It is apparent that the Land Court decision was reached on the basis that delay would be particularly expensive, and accordingly, in some haste4. [6] The reasons recorded substantial submissions made on behalf of BMA opposing the application on discretionary grounds, including prejudice to BMA and its activities5. The Land Court Member’s concern about the impact on BMA of the orders sought by Cherwell Creek is 2 Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors [2011] QLAC 0001, [4]. 3 Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No. 6) [2013] QLC 1 (Land Court decision) at [22]. 4 Land Court decision, explanation preceding para [1]. 5 Land Court decision at [23]. -- 4 of 21 -- 5 apparent from his reasons6, and some of the orders made7. The learned Member also noted that the contentions made on behalf of BMA included a contention that the Court did not have power to make an order for Cherwell Creek to conduct the proposed activities, because they would be unlawful, being prohibited by s 402 of the MRA8. He dealt with an argument that, because the activity proposed to be undertaken by Cherwell Creek was mining under the MRA, and subject to s 402, accordingly r 250 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) did not authorise the order. He referred to s 380 of the MRA, which he considered to authorise the making of the order9. However he also took the view that what was proposed was not prohibited by s 402; and accordingly, the order could be made under r 250. [7] He also considered a submission that the exercise for which authority was sought was a "fishing expedition", which he rejected10. Contentions on appeal [8] For the appellant, it was submitted that the activities proposed to be carried out pursuant to the order of the Land Court were prohibited by s 402(1)(a) and (d) of the MRA; and not in accordance with the development plan for MLA 70403, and thus contrary to s 318DR of the MRA. The making of the order was not authorised by s 380 of the MRA, nor by r 250 of the UCPR. The learned member's discretion miscarried because, among other things, he erroneously considered the activities not to be prohibited by s 402(1)(a) and (d). [9] In its written outline, BMA contended that the Land Court Member failed to accord natural justice to the appellant, s 380 of the MRA not having been referred to at the hearing in the Land Court. However, BMA orally indicated that it did not rely on this contention. Are the activities prohibited by s 402? [10] Section 402(1) of the MRA is as follows: "402 Offences with respect to unauthorised mining etc. (1) A person shall not - (a) enter or be upon land to carry on prospecting, exploration or mining unless the person is the holder of the relevant authority granted pursuant to this Act or is otherwise duly authorised under this Act or any other Act relating to mining; (b) employ or suffer any other person to enter or be upon land to carry on prospecting, exploration or mining unless that other person is the holder of the relevant authority granted pursuant to this Act or is otherwise duly authorised under this Act or any other Act relating to mining; (c) stay upon or erect any structure, including a residence, on land for purposes associated with prospecting, exploring or mining unless the person is duly authorised under this Act or any other Act relating to mining; (d) carry on mining operations upon or remove mineral or ore from land unless the person is duly authorised under this Act or any other Act relating to mining; 6 Land Court decision at [32]. 7 Land Court decision, orders 3 and 4; see also order 5. 8 Land Court decision at [6]. 9 Land Court decision at [15] – [17]. 10 Land Court decision at [25] – [31]. -- 5 of 21 -- 6 (e) in a mining district or part of a mining district the subject of a regulation, use machinery or equipment for the purpose of prospecting, exploring or mining which under a regulation has been declared shall not be used for that purpose." [11] BMA submitted that the activities which are the subject of the Land Court order are both exploration and mining, by reference to the definitions of "explore" and "mine", referring to Armstrong v Miles11. [12] The issue ultimately is not whether these activities are mining or exploration, or are other activities referred to in s 402(1). The question is whether they are prohibited by that provision. It exempts from the scope of the prohibition, an activity which "is otherwise duly authorised under this Act or any other Act relating to mining". [13] The term "explore" is defined in the MRA to mean: "explore means take action to determine the existence, quality and quantity of minerals on, in or under land or in the waters or sea above land by – (a) prospecting; (b) using instruments, equipment and techniques appropriate to determine the existence of any mineral; (c) extracting and removing from land for sampling and testing an amount of material, mineral or other substance in each case reasonably necessary to determine its mineral bearing capacity or its properties as an indication of mineralisation; (d) doing anything else prescribed under a regulation." [14] The term "mine" is defined in s 6A of the MRA: "Mine means to carry on an operation with a view to, or for the purpose of – (a) winning mineral from a place where it occurs; or (b) extracting mineral from its natural state; or (c) disposing of mineral in connection with, or waste substances resulting from, the winning or extraction." [15] It was not suggested that coal is not a mineral for the purposes of the MRA12. [16] The activities, the subject of the order, are plainly intended to determine the existence and quantity of coal under land, and probably its quality as well13. They involve using instruments, equipment and techniques appropriate to determine the existence of coal in the area where they are to be carried on. They also involve the extraction and removal from that land, for testing, of an amount of coal. It follows that the activities come within the language used to define the term, "explore". 11 [2004] 1 Qd R 481, 484 at [16]. 12 See s 6 of the MRA. 13 Land Court decision [22] paras 9, 18. -- 6 of 21 -- 7 [17] The activities, the subject of the order, are also intended to extract coal from its natural state, albeit in small quantities for testing purposes. The activities therefore come within the language used in paragraph (b) of the definition of the term, "mine". [18] Cherwell Creek submitted that the activities were to be characterised by reference to their purpose, which relates to the claim proceedings. It submitted that, as a matter of common sense, they were neither mining nor exploration. [19] The objectives of the MRA14 include to minimise land use conflicts, to encourage environmental responsibility, and to encourage responsible land care management, in relation to prospecting, exploring and mining. More generally, the Act demonstrates an intention to regulate activities related to the identification of mineral resources, and the winning of minerals. Moreover, the definitions themselves are somewhat broadly expressed. These considerations indicate that the definitions should not be read as subject to restrictions not apparent in their language, or elsewhere in the MRA. Section 402 is supportive of the objectives of the MRA. Notwithstanding that it is penal15, there is no reason to reduce the scope of the fair meaning of the definitions relevant to the expressions, exploration and mining, used in s 40216. It follows that the activities permitted by the Land Court order fall within these expressions. [20] Cherwell Creek submitted, however, that s 402(1) did not prohibit exploration or mining as such, but rather the carrying on of exploration, and the carrying on of mining. It submitted that the activities authorised by the order were, in effect, a single operation, and not the carrying on of exploration or mining. [21] The activities are anticipated to continue over a period of four to six months. They involve the drilling of some 57 holes, the taking of samples, and the testing, no doubt, of those samples. Whatever the scope of the expression "to carry on" as used in s 402(1)(a), it cannot be said that Cherwell Creek would not be carrying on exploration or mining by doing the activities authorised by the order. [22] It therefore follows that the activities authorised by the order fall within s 402(1)(a) of the MRA. It may well be that those activities come within s 402(1)(d)17, but it is unnecessary to decide that question. Scope of s 380 [23] It then becomes necessary to consider whether those activities might be authorised under s 380 of MRA. It is in the following terms: "380 Land Court may order survey If, at any time before or during the hearing for a proceeding, under this Act, in the Land Court, it appears to the Land Court that it is necessary for the proper determination of the proceeding that a survey be made of any land, water, stack or other accumulation of ore, buildings or any other 14 See s 2 of the MRA. 15 See s 412 of the MRA. 16 See Beckwith v The Queen (1976) 135 CLR 569, 576; discussed in Pearce & Geddes, Statutory Interpretation in Australia (6th ed) p 286. 17 This would mean that any activity which is the removal of mineral prohibited by s 402(1)(d), is also mining and exploration, prohibited by s 402(1)(a). Some support for the existence of an overlap between these expressions may be derived from Armstrong v Miles [2004] 1 Qd R 481 at [16]. -- 7 of 21 -- 8 thing the Land Court may order any party to the proceeding as, to it, appears just to cause the survey to be made and the costs of or incidental to the survey shall be costs in the proceeding and shall be paid as the Land Court orders." [24] BMA submitted that what was authorised by the order did not come within the scope of s 380. It submitted that the term "survey" meant activities associated with a survey of the surface of land, to mark out or to delineate its boundaries, being activities of the kind carried out by a cadastral surveyor. It submitted that it did not extend to activities which involve destructive or intrusive investigations. [25] Cherwell Creek submitted that the term should be interpreted in the context in which it is found in the Act, particularly that provided by div 2 of Part 10 of the MRA: as well as that provided by other sections including s 269, and s 722G. It submitted that, given the nature of the legislation, the expression should be construed by a reference to a meaning in common use amongst those familiar with mining. It also submitted that it was relevant that s 380 vested a specialist tribunal with a broad jurisdiction to determine specialist disputes. It also submitted that the purpose of s 380 was to facilitate the proper determination of proceedings in the Land Court, and accordingly the term "survey" should, by reference to s 14A of the Acts Interpretation Act 1954 (Qld), be construed in a way which will best achieve that purpose. [26] The importance of the context of a statutory provision has been recognised on many occasions18. The context provided by the Act as a whole is to be taken into account19. [27] Section 380 occurs in Part 10 (dealing with administration and judicial functions), Div 2 (dealing with the Land Court). The division commences with s 363, which is as follows: "363 Substantive jurisdiction (1) The Land Court shall have jurisdiction to hear and determine actions, suits and proceedings arising in relation to prospecting, exploration or mining or to any permit, claim, licence or lease granted or issued under this Act or any other Act relating to mining. (2) Without limiting the generality of subsection (1), the Land Court shall have jurisdiction to hear and determine actions, suits and proceedings with respect to - (a) the right to possession of or other interest or share in any mining claim, exploration permit, mineral development licence or mining lease; and (b) the rights and entitlements to minerals mined under any mining tenement or other authority granted under this Act or any other Act relating to mining and to the products of mining; and (c) the area, dimensions and boundaries of land (including the surface area of land) the subject of a mining tenement; and 18 See for example, Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390, 397; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 381; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 60 ALR 509, 514; all cited in Pearce & Geddes Statutory Interpretation in Australia (6th ed) at [4.2]. 19 Metropolitan Gas Co v Federated Gas Employees' Industrial Union (1925) 35 CLR 449, 455; see Pearce & Geddes, ibid. -- 8 of 21 -- 9 (d) any encroachment or trespass upon or interference with or damage to land the subject of a prospecting permit, mining claim, exploration permit, mineral development licence, mining lease or other authority granted under this Act or the buildings, plant, machinery or equipment thereon; and (e) any matter arising between applicants or holders in relation to prospecting, exploring or mining, or arising between applicants or holders and owners of land in relation to prospecting, exploring or mining; and (ea) any dispute or other matter arising between persons identified in native title protection conditions as an explorer or as a native title party, if the conditions - (i) under section 25AA, are included in the conditions imposed on a prospecting permit; or (ii) under section 141AA, are included in the conditions determined for an exploration permit; or (iii) under section 194AAA, are included in the conditions determined for a mineral development licence; and (f) any determination or review of compensation as provided for under this Act or any other Act relating to mining; and (g) the enforcement of any agreement or determination as to compensation under this Act or any other Act relating to mining; and (h) any assessment of damage, injury or loss arising from activities purported to have been carried on under the authority of this Act or any other Act relating to mining; and (i) any application required by this Act or any Act relating to mining to be made or heard in the Land Court. (3) The Land Court also has jurisdiction to hear and determine actions, suits and proceedings with respect to any demand for debt or damages arising out of or made in respect of - (a) the carrying on of prospecting, exploring or mining; (b) any agreement relating to prospecting, exploring or mining. (4) This section does not confer jurisdiction on the Land Court in relation to the recovery of wages or amounts owing under an industrial award or agreement." [28] It might be observed the jurisdiction conferred on the Land Court by this section is a rather broad jurisdiction to determine disputes relating to mining. Mention might be made of the following matters to which that jurisdiction extends: (a) the extent of the land (not limited to its surface area) the subject of a mining tenement20; (b) any damage to the land, the subject of an authority under the MRA21; 20 See s 363(2)(c) of the MRA. 21 See s 363(2)(d) of the MRA. -- 9 of 21 -- 10 (c) disputes between applicants or holders in relation to exploring or mining22; (d) the determination of compensation relating to mining23; (e) the assessment of damage, injury or loss arising from activities purported to have been carried on under an authority under the MRA, or any other act relating to mining24; (f) claims for damages relating to the carrying on of exploring or mining25, or any agreement relating to exploring or mining26. [29] The Land Court has other jurisdiction as well. Thus, if an objection is made to an application for the grant of a mining lease, the application and any objections must be referred to the Land Court for hearing27. The Land Court is to hear the application and the objections28; and then to provide its recommendation, whether the application be granted or rejected, in whole or in part29. The recommendation may include conditions, including a condition that mining is not to be carried on above a specified depth below the surface area of the land30. The Land Court has to consider whether "the area of land applied for is mineralised" as well as a range of other matters31. [30] It is therefore likely that the Court will at times be required to determine disputes which involve the identification of the nature and extent of underground materials, or the consequences which may have occurred underground of activities which have led to disputes brought before it. That consideration favours the construction for which Cherwell Creek contends, particularly since s 380 appears in a part of the MRA which deals with the jurisdiction of the Land Court, and confers on it powers relating to the exercise of its jurisdiction. [31] The language used in s 380 indicates that the scope of the power conferred by the section is intended to be broad. Thus it is not restricted to a survey of land, but extends to the survey of a number of nominated things, and finally, to "any other thing". Its purpose appears to be to enable an investigation of physical condition, for the just determination of a proceeding before it. Moreover it confers a discretion on a court32. There is no reason to construe the section, and in particular, the term "survey", in a narrow fashion. [32] References provided on the appeal demonstrate that the term "survey" is not infrequently used to refer to investigations of sub-surface conditions, including by sampling33. It is not a surprising feature of these usages that many occur in relation to mining, and include drilling, 22 See s 363(2)(e) of the MRA. 23 See s 363(2)(f) of the MRA. 24 See s 363(h) of the MRA. 25 See s 363(3)(a) of the MRA. 26 See s 363(3)(b) of the MRA. 27 See s 265 of the MRA. 28 See s 268 of the MRA. 29 See s 269 of the MRA. 30 See s 269(3) of the MRA. 31 See s 269(4) of the MRA. 32 See s 4 of the Land Court Act 2000 (Qld). 33 See the definitions of "seismic survey"; "biological survey"; "resistance survey"; "soil survey"; "velocity survey"; "uphole survey"; "refraction survey"; "geological surveys"; "surface survey" (involving the collection of samples); "resistivity survey"; "geochemical survey"; "field survey" (again involving sampling, as well as shovel testing); "geological survey of Canada"; "geochemical soil survey"; "soil-atmosphere survey"; and various kinds of geochemical surveys referred to in the discussion of “geochemical mineral exploration” (including drilling and sampling); all taken from Oxford Reference Online, Oxford University Press. -- 10 of 21 -- 11 sampling, and other methods of establishing the nature and extent of what might be found beneath the earth’s surface. [33] Though not argued in this way, it may be that the references demonstrate a technical meaning of the term "survey" in the mining industry. If so, the technical meaning is to be preferred34. In any event, in construing legislation, regard is to be had to the audience to whom legislation is directed. In Maunsell v Olins35, Lord Simon of Glaisdale said: "Statutory language, like all language, is capable of an almost infinite gradation of 'register' - ie, it will be used at the semantic level appropriate to the subject matter and to the audience addressed (the man in the street, lawyers, merchants, etc). It is the duty of a court of construction to tune in to such register and so to interpret the statutory language as to give to it the primary meaning which is appropriate in that register (unless it is clear that some other meaning must be given in order to carry out the statutory purpose or to avoid injustice, anomaly, absurdity or contradiction). In other words, statutory language must always be given presumptively the most natural and ordinary meaning which is appropriate in the circumstances." [34] BMA relies upon the use of the word "survey" in other provisions of the MRA, submitting that the context of those provisions either makes it clear, or strongly suggests, that in each of those cases the term is used with reference to a cadastral survey of the earth’s surface36. It then submitted that the word is to be understood in the same sense, in s 380. [35] The submission relies on a principle of construction which is not of great strength37. If it were applicable, it would not outweigh the considerations just discussed. However, that it does not apply here may be demonstrated by reference to the MRA. The word “survey” is used elsewhere in that Act in a way that plainly does not mean a survey of the surface of the land to mark out or to delineate its boundaries38. [36] It follows that the term should be taken to extend to the activities, the subject of the order made by the Land Court. Section 318DR of the MRA [37] This section makes it a condition of a coal mining lease that its holder comply with the development plan for the lease. Were it not clear from the language of the section, the term "holder" is defined39 to mean, so far as is of present relevance, the person in whose name the mining lease is recorded. BMA did not seek to demonstrate that, if it did the things it is required to do under the order made by the Land Court, it would not be complying with the development plan. Thus it did not identify a requirement of the development plan with which action required of it by the order would be non-compliant. Rather its argument seemed to be that its actions required by the order are not mentioned in the development plan; and accordingly are non-compliant with it. 34 See Maunsell v Olins [1975] AC 373, 390-391, per Lord Simon of Glaisdale. 35 [1975] AC 373, 391; cited with approval in Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389, 398. 36 For example, s 57(1) and (4); s 184; s 241(1) and (4); s 289; s 295; s 407(1) and (2). 37 Pearce and Geddes at [4.7]. 38 See s 482, “aerial surveys” (note the examples); “ground-based geophysical surveys” (again, note the examples); see also s 538. 39 See Sch 2 of the MRA. -- 11 of 21 -- 12 [38] While BMA is required to comply with the development plan, it would be a surprising result if s 318DR had the consequence that it was thereby prohibited from doing some act which is expressly authorised by or under some other provision of the MRA. The view that s 318DR has that effect is not to be accepted. Accordingly, the order is not contrary to the requirement imposed by s 318DR. Could the order be made, in reliance on r 250 of the UCPR? [39] Cherwell Creek submitted that power to make the order is found within r 250 of the UCPR. It was submitted that, for the purposes of s 402(1), s 722G made r 250 applicable, with the consequence that the activities were "duly authorised under this Act". Alternatively, it submitted that r 250 gave the Land Court power to authorise an act prohibited by s 402. [40] Section 21 of the Land Court Act 2000 (Qld) authorised the Governor-in-Council, with the concurrence of the Chief Justice and the President of the Land Court, to make rules for the Land Court. The Land Court Rules, made under this provision, include r 4, which makes applicable the UCPR, in respect of matters not provided for in the Land Court Rules. That, in general, makes r 250 of the UCPR applicable to proceedings in the Land Court. [41] There is a sense in which s 722G makes the Land Court Rules, and thus provisions of the UCPR, applicable to these proceedings. That is because, when jurisdiction is conferred on a court, and in the absence of a specific provision to different effect, the legislature is taken to have conferred jurisdiction on the court "as it finds it"; including with its powers and procedures conferred by other statutes40. [42] However, BMA points out that the control found in s 402 in respect of the authorisation of activities under the MRA, or any other act relating to mining, is reflective of the relatively strict control on activities such as those described in s 402(1) intended by the MRA, consistent generally with the scope of that Act. For that reason, it submitted that a reference to an authorisation under the MRA or any other Act relating to mining, had the consequence that a sufficiently close connexion must be shown between the authorisation, and a provision of such an Act. The UCPR are made, initially, under the Supreme Court of Queensland Act 1991 (Qld); and are made applicable to the Land Court under the Land Court Act. Neither of these Acts is an Act relating to mining; nor is the UCPR. [43] In our view, those submissions are correct. The qualification that the authorisation be under the MRA or an Act relating to mining is plainly intended to ensure that the power to grant the authorisation has a relatively close connexion to such an Act. It is difficult to define what degree of connexion is sufficient. However it seems to us that, on the basis that r 250 is looked to as the immediate source of power for the Land Court order, that the rule derives from the Supreme Court of Queensland Act, and that it is made applicable to proceedings in the Land Court by rules made under the Land Court Act, the connexion between the order and the MRA is too remote. Accordingly an order made under r 250 is not an authorisation under the MRA, for the purposes of s 402. The connexion to the MRA provided by s 722G is not sufficient to satisfy the qualification previously mentioned. [44] Cherwell Creek's alternative submission accepts that an order made under r 250 of the UCPR is not an authorisation under an Act relating to mining. In effect, its submission is that r 250 could make lawful an act prohibited by statute. How that might be so was not explained. It reflects an unlikely construction of the rule. The submission should be rejected. 40 Electric Light and Power Supply Corporation Ltd v Electricity Commission of NSW (1956) 94 CLR 554, 559-560. -- 12 of 21 -- 13 Was the order authorised by s 722G (independently of r 250)? [45] For Cherwell Creek, it was orally submitted that the conferral of jurisdiction on the Land Court found in s 722G carried with it the conferral of all powers necessary to determine the compensation proceedings; and that that extended to the making of orders such as the Land Court order. There are, in our view, some difficulties with this submission. [46] Taken literally, it would mean that in dealing with the compensation proceedings, the Land Court had any power considered necessary for the proper determination of those proceedings, regardless of whether such a power was ordinarily conferred on the Land Court, or, for that matter, on any other court. It seems to us that such an approach is inconsistent with the principle previously referred to, that when the legislature confers jurisdiction on an existing court, it intends to take the court "as it finds it" unless the legislation otherwise provides. [47] Taken literally, the submission would mean that the existing powers of the Land Court are to be ignored, and that the court has, by virtue of the jurisdiction under s 722G, any power considered necessary for the proper determination of the compensation proceedings. In effect, it would start with a "clean slate". Cherwell Creek modified its submission, by submitting that the section conferred any power not already conferred on the Land Court, and necessary for the proper determination of the compensation proceeding. Again, that submission has the difficulty that it might support the conferral of a power of the Land Court, not conferred on any other court. It would also make it necessary to show that the powers already conferred on the Land Court were not sufficient for the proper determination of the dispute, something not done by Cherwell Creek's submissions. The submission could only succeed if Cherwell Creek failed in its submissions relating to s 380, whereas we have accepted that that section supports the order of the Land Court. [48] Accordingly, we are not satisfied that the order is supported simply by the conferral of jurisdiction found in s 722G in the MRA. Discretion [49] BMA submitted that, if the learned Member had power to order the proposed drilling under s 380 of the MRA or r 250 of the UCPR, he had erred in the exercise of the discretion granted under those provisions. [50] It is recognised that the power to make somewhat similar orders, such as an order under r 250 of the UCPR is discretionary41. It also appears that s 380 of the MRA is expressed in terms which render the powers granted under that section discretionary - the section provides, in part, that "the Land Court may order any party to the proceeding as to it appears just to cause the survey to be made …". [51] The principles relevant to determination of an appeal against an exercise of discretion were outlined by Dixon, Evatt and McTiernan JJ in the well known extract from House v The King42- "The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that 41 Marconi's Wireless Telegraph Co Ltd v The Commonwealth (1912) 15 CLR 685 at 688 per Griffith CJ; Evans Deakin Pty Ltd v Orekinetics Pty Ltd [2002] 2 QdR 345 at 350 [19] per Chesterman J. 42 (1936) 55 CLR 499 at 504 - 505. -- 13 of 21 -- 14 some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." [52] BMA submitted that the learned Member made two fundamental errors of law which infected the exercise of his discretion - (a) The learned Member erred in law by concluding that the proposed drilling was not prohibited by s 402(1)(a) and (d), and consequently gave no weight to the circumstance that the conduct he ordered was prohibited under the MRA; (b) The learned Member erred in law by failing to find that the proposed drilling was prohibited by virtue of s 318DR of the MRA, and consequently gave no weight to the prohibition of the MRA of conduct that was not contemplated in the Development Plan. [53] As discussed above, we have concluded that, although the activities authorised by the learned Member's orders fall within s 402(1)(a) of the MRA, s 380 of that Act enabled the learned Member to make those orders43. We have also concluded that s 318DR did not prohibit conduct that was expressly authorised by or under some other provision of the MRA. It follows that the exercise of discretion was not tainted as submitted by BMA44. [54] BMA submitted, further, that the exercise of the discretion required a consideration of the supposed benefit of the drilling to be balanced against the inconvenience and expense that the drilling will cause to BMA. BMA contended that the learned Member failed to take account of material considerations and failed to undertake a reasoned assessment of the factors that were relevant to the exercise of his discretion. Once the learned Member had concluded that the drilling would assist Cherwell Creek to determine "the likely extent and quality of the MDLA364 coal resource" his reasons revealed no attempt to give weight to the countervailing considerations. Supposed benefits of proposed drilling [55] BMA submitted that there is little utility in the proposed drilling for a number of reasons. Whether the application to drill is a fishing expedition [56] First, Cherwell Creek plans to conduct drilling of deep holes in order to determine whether the Group I and Group II Coal Measures are present on Mining Lease 70403. BMA contended that the proposed deep drilling is a "fishing expedition" to search for evidence of the Group I and Group II Coal Measures. Mr Whitby (for BMA) reported that the probability of those 43 At [22] and [36] above. 44 At [38] above. -- 14 of 21 -- 15 Measures existing on Mining Lease 70403 is "Rare". Mr Saunders (for Cherwell Creek) reported that the probability of those Measures existing on Mining Lease 70403 is "Moderate". [57] Further, Cherwell Creek had not pleaded the existence of the Group I and Group II Coal Measures until it amended Annexure A to its originating application on 17 December 2012. That was seven days after the hearing of the drilling application. Prior to that amendment it had alleged that the coal resource under MDLA364 was "very shallow being less than 45 metres deep". It now alleged that the Group I and Group II Measures are present at "depths of 500 metres to 1,000 metres". The very late inclusion of any allegations relating to the Group I and Group II Coal Measures suggests that the existence of those Measures is speculative. [58] The Court should not order the deep drilling, BMA submitted, because there is a low probability that it will produce any evidence relevant to the case. [59] We note that BMA had also contended before the learned Member that the application by Cherwell Creek seeking orders to allow the drilling program to be undertaken was a fishing expedition. The learned Member was concerned that a determination whether this was a fishing expedition required a determination of the meaning of s 722G of the MRA which, he said, was an issue to be determined at the substantive hearing of the matter, not on a preliminary basis. He noted that the parties had quite different views as to the interpretation of s 722G and said that Cherwell Creek was entitled to explore its case to the full. If Cherwell Creek should be wrong, at the end of the day, costs would be an appropriate remedy.45 In his view, it was open to Cherwell Creek to assert that its application for MDLA364 incorporated all coal lying within the physical boundaries of MDLA364 including the so called Rugby seam. If Cherwell Creek's interpretation is correct, the ascertainment of the actual coal reserves within MDLA364 is not a fishing expedition but is, arguably, an important step in the compensation process contemplated by Part 18A of the MRA.46 [60] In our opinion there was no error by the learned Member in his conclusion that the application to allow a drilling program was not a fishing expedition. Although Cherwell Creek amended its originating application at a late date to plead the existence of the Group I and Group II Coal Measures, that does not of itself suggest that the existence of the Measures is speculative. There was evidence by one expert, Mr Saunders, that the probability of the Measures existing was moderate. Although Mr Whitby's opinion was that the probability of the Measures existing was rare, we consider that it was open to the learned Member to conclude that there was sufficient evidence to raise a real issue as to the probability of the existence of the deep Measures. Relevance of information obtained from drilling [61] The second reason, BMA submitted, there was little utility in the proposed drilling program was that the information that Cherwell Creek proposed to gather would be of limited relevance to the proceeding. This was because, BMA submitted, in determining the threshold question of whether Cherwell Creek is entitled to compensation (as opposed to the quantum of compensation) the most critical question is whether, were it not for the amending Act, Cherwell Creek would have obtained MDLA364 and, subsequently, a mining lease. [62] Section 722G(1) provides that Cherwell Creek may apply to the Land Court for an order for the payment of compensation for the loss of its opportunity, because of the enactment of this part, to commercialise the MDLA364 coal resource. Subsection (4) provides that - 45 Land Court decision at [14]. 46 Land Court decision at [30], [31]. -- 15 of 21 -- 16 "(4) On an application under this section, the Land Court must - (a) decide whether any compensation should be payable; and (b) if it decides compensation should be payable - (i) decide the amount of compensation; and (ii) make an order for payment of the amount by the prescribed persons to Cherwell Creek." In making a decision under s 722G(4), the Court is also required, by s 722G(5), to have regard to a number of specified matters including - (a) the likely extent and quality of the MDLA364 coal resource, and (g) the likelihood of a mining lease, appropriate for Cherwell Creek to commercialise the MDLA364 coal resource, being granted under the Act. [63] BMA submitted that the threshold question to be determined under s 722G(4) is whether Cherwell Creek is entitled to any compensation. If Cherwell Creek is not able to establish that it had at least some prospect of obtaining a mining lease, it will not be entitled to any compensation since it would follow that Cherwell Creek could not have commercialised the MDLA364 coal resource. [64] BMA also submitted that, in determining whether Cherwell Creek would have been granted MDLA364 in May 2008 and obtained a mining lease based on an application submitted in June 2008, the focus is only on the material that was available to Cherwell Creek in May and June 2008. As at those dates, Cherwell Creek had not conducted the drilling that is now proposed and, BMA submitted, Cherwell Creek cannot improve its position by relying on material that was not, and could not have been, submitted by it in support of its applications and considered by the relevant authorities in May and June 2008. In particular, since the presence of the Group I and Group II Coal Measures on the area of former MDLA364 was not able to be determined on the information available in 2008, it could not have been taken into account by the relevant authorities in deciding whether to grant tenure to Cherwell Creek. [65] BMA submitted that, at best, information obtained from the proposed drilling would be relevant to the extent of compensation payable. [66] These contentions were also considered by the learned Member below47. They are related to BMA's earlier submission that Cherwell Creek's application to enable a drilling program was merely a fishing expedition. As noted above, the learned Member concluded that it was open to Cherwell Creek to assert that its application for MDL364 incorporated all coal lying within the physical boundaries of that tenure including the Group I and Group II Measures. Accordingly the ascertainment of the actual reserves within MDLA364 was, arguably, an important step in the compensation process contemplated by Part 18A of the MRA. [67] We can see no error by the learned Member in the conclusions he reached in this regard. The existence and extent of the coal resource within the former tenure MDLA364 is clearly an issue in these proceedings. The date at which information as to the extent of the coal is to be ascertained is also an issue between the parties and will be a matter for determination by the Land Court in due course. In the meantime, it is not an error in the exercise of discretion to allow Cherwell Creek to endeavour to obtain the best evidence available for the purposes of 47 Land Court decision at [27] - [30]. -- 16 of 21 -- 17 ascertaining the extent of the resource as at the date that Cherwell Creek submits is the appropriate date for the determination of this issue. [68] In any event, BMA has acknowledged that, at best, information obtained from the proposed drilling programs would be relevant to the extent of compensation payable. Admittedly, that question will only arise if it is determined that there was a likelihood that an appropriate mining lease would be granted. But it is nevertheless a very relevant issue in the proceedings while the debate as to the likelihood of the grant of the lease remains live. It was not suggested that the drilling should be deferred, pending a determination as to whether it was likely that Cherwell Creek would obtain a mining lease. That course would have the potential to cause even greater difficulties for BMA's proposed mining activities. Whether the drilling program is necessary [69] The third submission by BMA was that despite the limitations on the data available to them, the experts engaged by the parties have been able to generate models of the resource and estimate the extent of the resource. BMA said that, based on the available data, the experts had reached conclusions that are not dissimilar in that they had agreed that the deposit within the MDLA364 area contained between 23 and 25 million tonnes. The principal disagreement between the experts was as to the classification of the resource under the JORC code.48 BMA submitted that Cherwell Creek's proposal to conduct an extensive drilling program was an inefficient and uneconomical process where the difference between the experts is limited. [70] This submission appears to ignore the evidence that was before the learned Member, referred to by him as follows - "On the basis of the evidence currently before me, the difference between the two views could be well in excess of 100 million tonnes of coal."49 [71] The experts' agreement that the deposit within the MDLA364 area contained between 23 and 25 million tonnes was based on the data available to the experts at the time of the agreement. That agreement did not deal with Cherwell Creek's current contention that there is credible evidence as to the existence of the Group I and Group II Measures and that Cherwell Creek should have the opportunity to conduct the proposed drilling program in order to provide greater certainty as to the existence and extent of that additional deposit. Further, there was unrebutted evidence from Mr Thatcher, a mining engineer specialising in major coal mine development and related areas, who was not cross-examined at the hearing, that he will not be able to prepare a mine plan to account for Group I and II coal without further data. It was not an error for the learned Member to take these factors into account in exercising his discretion to order the drilling program. Detriment to BMA [72] BMA identified eight detriments likely to be suffered as a result of the proposed drilling program. They submitted that these detriments involved the potential for significant financial liability on their part. 48 The JORC code is the Australasian code for reporting exploration results, mineral resources and ore reserves. The code provides a mandatory system for reporting according to the levels of confidence in geological knowledge and technical and economic considerations in public reports. (www.jorc.org Accessed 16 April 2013) 49 Land Court decision at [29]. -- 17 of 21 -- 18 [73] Before dealing specifically with BMA’s list of detriments, it is useful to make some general observations on the Member’s exercise of discretion. [74] It is clear that the learned Member was conscious of the potential difficulties which might arise as a result of his orders and he was also very aware of the potential for delay and expense that the proposed drilling program might cause to BMA. For example, the learned Member said50 - "The course that I proposed to go along with was to allow most of the objections that BMA had made to the application, but to allow limited drilling to occur in specified areas under a very tight timeframe. The timeline was so tight that CCC, in reality, may not have been able to do much, if any, actual drilling. " When further evidence from BMA was filed the day before the decision of the learned Member was due to be handed down, the timelines underpinning the original orders proposed by the Court were altered. In that context, his Honour said51 - "What I intended and in great part due to the urgency of the case and not wanting to disrupt BMA by having this matter delayed, was that I proposed to hand down oral reasons for my decision and a written document setting out in full the analysis of every bore hole." Subsequently, his Honour continued52 - "There are two other very important points that need to be dealt with. The first relates to costs of any delay that may actually be occasioned to BMA. In the material there is no undertaking by CCC to pay any of those costs. I do intend including an order that should any costs be reasonably incurred and ascertainable by BMA as a consequence of the drilling activities, then those costs are to be paid by CCC in a quantum to be agreed between the parties, or, failing agreement, to be referred back to the Court." [75] The learned Member was also aware of the potential for disputes arising from the implementation of the orders made. Accordingly the orders provide for a dispute resolution process to be followed if such disputes were to arise53. [76] We turn now to the detriments identified by BMA 1. If BMA is correct that the proposed drilling on ML 70403 is prohibited under s 402(1)(a) and (d) and constitutes a breach of the mining lease due to the effect of s 318DR, BMA could face the potential loss of the mining lease. [77] As held above, we consider that the activities are authorised under s 380 of the MRA and that they are not prohibited by s 318DR. [78] 2. The purpose of Part 18A of the MRA was to give security of tenure and access to BMA in respect of ML 70403. The orders of the learned Member undermine that security by 50 Land Court decision at [8]. 51 Land Court decision at [10]. 52 Land Court decision at [32]. 53 Land Court decision at [34], [35]. -- 18 of 21 -- 19 permitting a different party to enter on to the mining lease to conduct drilling operations. [79] We consider that the purpose of Part 18A of the MRA was not only to give security of tenure and access to BMA in respect of Mining Lease 70403 but also to provide for appropriate compensation to be paid to Cherwell Creek for the loss of the MDLA364 area. We also consider that the learned Member's orders give appropriate weight to these competing interests. The proposed drilling program is limited in extent and period of operation. The information obtained from it is likely to assist in the proper resolution of some of the issues in this litigation and that is a factor to be taken into account in the exercise of discretion. We do not consider that there has been an error in the exercise of the Member's discretion in this regard. [80] 3. The orders of the learned Member require BMA to cooperate with Cherwell Creek for an extensive period of time in order to facilitate the drilling. Given the extent of the cooperation required, the effect of the orders is to require BMA to render financial assistance to Cherwell Creek in gathering evidence to prove its case. [81] It is recognised that the orders do require a degree of cooperation between the parties. The orders also contemplate that BMA will be compensated for any financial liability incurred by them resulting from the need to cooperate. Although the effect of the orders is to require BMA to cooperate with Cherwell Creek in the latter's gathering of evidence, that in itself is not objectionable nor is it a ground for holding that the Member's discretion miscarried. [82] 4. It is inevitable that the drilling will cause inconvenience and expense to BMA. Although Orders 3 and 4 require Cherwell Creek to compensate BMA for their loss, the obligation to provide compensation is subject to a potentially lengthy and time consuming review process. [83] Although it is possible that the drilling will cause inconvenience and expense to BMA, the orders made by the learned Member require Cherwell Creek to compensate BMA for any loss. The inclusion of a review process provides for the resolution of disputes about costs. That dispute resolution process can take place independently of the mining operations and will not contribute to any delay in that regard. Cherwell Creek itself has some interest in the expeditious and efficient determination of amounts to be paid to BMA. Protracted proceedings will be costly and time consuming. [84] 5. Cherwell Creek offered no undertaking to BMA in respect of the activities Cherwell Creek proposes to conduct on ML 70403. An order that Cherwell Creek indemnify BMA was included over Cherwell Creek's objection. However Cherwell Creek did not provide any evidence of its ability to meet that indemnity. Accordingly the value of the indemnity is unknown. [85] The relevant Order is Order 3 which provides that - "The Applicant will pay to the Respondents any loss, damages, costs or expenses reasonably suffered (Loss) by them as a result of the Drilling Program in accordance with Order 4." -- 19 of 21 -- 20 [86] We can see no error in the exercise of the Court's discretion in making the order in question. If Cherwell Creek fails to comply with any Court orders as to the payment of costs, BMA will be able to take appropriate steps to enforce the orders. Although BMA submitted before the Land Court that Cherwell Creek had given no undertaking as to damages, no issue was raised as to the capacity of Cherwell Creek to meet the indemnity order when it was proposed by the learned Member. Had that issue been raised, it may well have been addressed, either by evidence or in some other way. [87] 6. The orders include a compulsory mediation obligation which can be initiated by either party on short notice. This was a recognition by the learned Member of the very real potential for disputes to arise continually in the execution of the drilling program. BMA will be obliged to spend time and money attempting to resolve such disputes. [88] The provision of a dispute resolution process in Order 2 constitutes an endeavour by the learned Member to ensure that the drilling program is carried out as effectively as possible. Where appropriate, costs orders may be made in respect of the parties' costs incurred as a result of participation in the dispute resolution process. We can see no reason to criticise the learned Member in this regard and there is no error in discretion in taking these steps to ensure the effectiveness of his orders. [89] 7. If further geological information is obtained from the drilling, the geological experts who have already produced reports for the purposes of the proceeding will need to produce entirely new reports to address the new data. That will delay the final determination of the case. [90] While the provision of further geological information may lead to further delay in the final determination of this case, the information obtained from the proposed drilling program may provide further certainty as to the extent of the resource in issue. That should assist the final determination of the issues in the case. That potential advantage is to be weighed against the potential for any delay in the final determination of the case. We consider that the potential for the provision of further certainty and the advantages that would flow from that in the conduct of this litigation far outweigh the alleged delay. We are unable to say that the learned Member has erred in balancing those factors in the exercise of his discretion. [91] 8. All of those detriments occur in the context where Cherwell Creek had the ability to drill on MDLA364 up until 2008, conducted very little drilling, and then delayed for over 4 years between 2008 and 2012 before approaching the Court for permission to engage in the drilling. [92] BMA does not have the benefit of a finding that Cherwell Creek was guilty of any relevant delay in investigating the coal resource on MDLA364. It appears that the dispute as to the existence of the Group I and Group II Coal measures emerged around the middle of 2012, making it unlikely that there has been delay by Cherwell Creek which would be material to the exercise of the discretion. It is therefore difficult to uphold the appeal by reference to the delay alleged by BMA. [93] This is a case where the learned Member was faced with the difficult task of balancing the competing rights and interests of the parties to the litigation. We do not consider that BMA has established that the learned Member has erred in the exercise of his discretion in making the -- 20 of 21 -- 21 orders under appeal. In particular, we do not consider that the learned Member has failed to take account of material considerations, or failed to provide a reasoned assessment of the factors he took into account in exercising his discretion. ORDER: The appeal is dismissed. PETER LYONS, J CAC MacDONALD PRESIDENT OF THE LAND COURT WL COCHRANE MEMBER OF THE LAND COURT -- 21 of 21 --