BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd (No 2) [2009] QLAC 8 (2009) 30 QLCR 173

LAND APPEAL COURT OF QUEENSLAND CITATION: BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd (No 2) [2009] QLAC 8 PARTIES: BHP Queensland Coal Investments Pty Ltd (ACN 098 876 825) and QCT Resources Pty Ltd (ACN 010 808 705) and BHP Coal Pty Ltd (ACN 010 595 721) and QCT Mining Pty Ltd (ACN 010 487 840) and Mitsubishi Development Pty Ltd (ACN 009 779 873) and QCT Investment Pty Ltd (ACN 010 487 831) and Umal Consolidated Pty Ltd (ACN 000 767 386) (appellants) v. Cherwell Creek Coal Pty Ltd (ACN 063 763 002) (respondent) FILE NO: LAC2008/1110 PROCEEDING: Costs of appeal to the Land Appeal Court ORIGINATING COURT: Land Court of Queensland DELIVERED ON: 30 July 2009 DELIVERED AT: Brisbane -- 1 of 6 -- 2 THE COURT: White J Mrs CAC MacDonald, President of the Land Court Mr RP Scott, Member of the Land Court ORDER: The order of this Court made on 12 June 2009, that the respondent should pay the appellants' costs of and incidental to the appeal, is affirmed. CATCHWORDS: Costs – Land Appeal Court – security for costs order overturned – discretion in Court to award costs of appeal – costs follow event longstanding principle – but each case governed by its circumstances – relevant considerations – costs awarded to successful party. Costs – Land Appeal Court – discrete appeal issue – substantive issue (for later hearing) relates to disputed rights under Mineral Resources Act – not akin to resumption case – legislative intervention between parties – such not decisive in exercise of costs discretion. Costs – Land Appeal Court – discrete appeal issue – costs to follow appeal result – not left until end of full trial. APPEARANCES: Written submissions SOLICITORS: Allens Arthur Robinson for the appellant Holding Redlich Lawyers for the respondent [1] The background to this matter is set out in the substantive decision of this Court delivered on 12 June 2009.1 For present purposes it is sufficient to say that there have been longstanding tenure disputes between the respondent, Cherwell Creek, and the appellants as to the respondent's entitlement to and right to renew Exploration Permit for Coal No. 545 (EPC 545) and as to its application for Mineral Development Licences 364 and 366 (MDLA 364, MDLA 366) based on EPC 545. The appellants are the holders of Mining Lease No. 1775 (ML 1775) and Special Lease No. 12/42239 (SL 12/42239). Part of each of EPC 545, MDLA 364 and MDLA 366 overlap part of SL 42239. [2] In 2008, the Mineral Resources Act 1989 was amended by the Mineral Resources (Peak Downs Mines) Amendment Act 2008. The amending legislation terminated Cherwell Creek's application for renewal of EPC 545 and applications for MDLAs 364 and 366 and provided in s.722G(1) that 1 BHP Queensland Coal Investments Pty Ltd v Cherwell Creek Coal Pty Ltd [2009] QLAC 0005 at [1] – [7]. -- 2 of 6 -- 3 "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 MDLA 364 coal resource." The legislation also provided that the area covered by Cherwell Creek's application for MDL 364 was made available to the appellants as holders of MDL 1775 for an application for mining leases, to be lodged within two years. [3] Cherwell Creek commenced proceedings in the Land Court claiming compensation from the appellants pursuant to s.722G of the Mineral Resources Act. Subsequently, the appellants applied to the Land Court for an order that the respondent provide security for their costs in respect of those proceedings in the event that they successfully defended Cherwell Creek's claim for compensation. The Land Court declined to order security. The appellants appealed successfully to this Court which ordered that the proceedings be remitted to the Member to determine the quantum of the security to be provided in the event that the parties were unable to agree on the quantum. The Court also ordered that the respondent pay the appellants' costs of and incidental to the appeal unless the respondent contended that some other order ought to be made. The respondent has submitted that there should be no order as to costs, or alternatively, that the costs be costs in the cause in the Land Court proceedings. [4] Section 34 of the Land Court Act 2000 relevantly 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. …" Section 72 of the Land Court Act provides that s.34 applies, with necessary changes, to the Land Appeal Court [5] Counsel for the respondent has submitted that the effect of s.72 combined with s.34 is that the Land Appeal Court has a wide discretion in determining whether to award costs and although the discretion cannot be exercised arbitrarily and must be exercised judicially, it ought not be construed with any preconceptions as to its exercise. In particular, it was submitted, s.34 ought not be construed from the starting point that costs ought follow the event. However, Counsel accepted that the concept that costs follow the event is one which is deeply embedded in the law and one which applies on ordinary principles.2 2 See Barns v Director-General, Department of Transport (1997) 18 QLCR 133. -- 3 of 6 -- 4 [6] In Wyatt v Albert Shire Council3, 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.4 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.5 [7] The decision in Wyatt was subsequently considered by the Full Court in Solomon Services Pty Ltd v The Council of the Shire of Woongarra6. While acknowledging that the discretion is an unfettered one, Dowsett J said that, in exercising the discretion, a non-exhaustive list of relevant matters to be considered might include the issues which have been raised, their public nature or otherwise, the extent to which a party may be said to have a commercial interest in the outcome, the success or failure of the parties on particular issues, the amount of time spent on issues and the extent to which they might be said to have been arguable or otherwise, and the difficulty of resolving the matter according to commonly understood principles.7 [8] Counsel for the respondent has submitted that the Court should exercise its discretion by ordering that there be no order as to costs or, alternatively, that the costs be costs in the cause of the Land Court proceedings because –  it was not appropriate that the precept that "costs follow the event" should be applied;  the circumstances of this case were unusual;  the principles raised were clearly arguable; 3 [1986] 1 Qd R 486. 4 Kabale Holdings Pty Ltd v Chief Executive, Department of Transport (1997) 18 QLCR 166 at 198; Haber v Department of Main Roads [2004] QLAC 102 at [6]. The decision in Kabale Holdings dealt with s.44(16) of the Land Act 1962 which was, relevantly, to the same effect as s.34(1) of the Land Court Act 2000. 5 At 489, 493. 6 [1988] 2 Qd R 202. 7 At 207. -- 4 of 6 -- 5  the determination of the merits of the case and liability for costs were best left until the end of the trial when the justice of the case could be best served; and  the respondent had acted reasonably in the presentation of its argument both at first instance and on appeal. [9] The unusual circumstances identified by the respondent were that the respondent was in a position not dissimilar to that of a dispossessed owner in that this litigation was caused by the enactment of legislation which had the purpose of rejecting the respondent's alleged proprietary rights in EPC 545 and its expectation of having MDLA 364 and MDLA 366 considered in accordance with the provisions of the Mineral Resources Act. It also had the effect of "gifting" to the appellants the valuable right to apply for and be granted a mining lease over the area taken away from Cherwell Creek. [10] As pointed out by this Court in its decision in the substantive appeal in this matter,8 this litigation is not akin to land resumption cases. There is a substantial issue in this case as to whether the original grant of EPC 545 to Cherwell Creek was void which is relevant to the assessment of the likelihood of a mining lease being granted, a matter to be taken into account in determining compensation under s.722G(5)(g) of the Mineral Resources Act. While we accept that the legislative intervention in this dispute between the parties is somewhat unusual, we are unable to say that that is a factor which has disadvantaged the respondent because one of the critical issues to be determined is whether that intervention has caused a compensable loss to the respondent. Thus the legislative intervention of itself does not point to an exercise of discretion in favour of the respondent or the appellants. [11] We also accept that the principles raised by the respondent were arguable and that the respondent has acted reasonably in the presentation of its argument at first instance and on appeal. Neither of those are factors which point positively to the exercise of our discretion in favour of the respondent. [12] The appellants have been successful in this appeal. We do not accept that the principle that costs follow the event should not be applied in this matter. Section 34(1) of the Land Court Act gives this Court an unfettered discretion as to the award of costs. As this Court has said previously, the rule that costs will usually follow the event is one which is deeply embedded in our law9 and that is a factor which may be taken into account in exercising our discretion under s.34(1) bearing in mind that this dispute is between significant commercial entities on the part of the appellants and a respondent who can call upon a funder for this expensive litigation. In our opinion that principle points to an 8 BHP Queensland Coal Investments Pty Ltd v Cherwell Creek Coal Pty Ltd [2009] QLAC 0005 at [21]. 9 Barns v Director-General, Department of Transport (1997) 18 QLCR 133 at 135. -- 5 of 6 -- 6 award of costs in favour of the appellants and we can find no compelling reasons to order otherwise. [13] Further, we can see no reason to postpone the determination of the costs of this appeal until the end of the trial. The application for security for costs was a discrete issue and the costs pertaining to the determination of that issue may be determined at this juncture. [14] In the circumstances we consider that our indicative order should stand. We therefore affirm the order made on 12 June 2009 that the respondent should pay the appellants' costs of and incidental to the appeal. ORDER The order of this Court made on 12 June 2009, that the respondent should pay the appellants' costs of and incidental to the appeal, is affirmed. WHITE J CAC MacDONALD PRESIDENT OF THE LAND COURT RP SCOTT MEMBER OF THE LAND COURT -- 6 of 6 --