Broken Hill Cobalt Project Pty Ltd v Lord (No 2)

[2023] NSWCA 17

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Broken Hill Cobalt Project Pty Ltd v Lord (No 2) [2023] NSWCA 17

Hearing dates:

On the papers

Date of orders:

15 February 2023

Decision date:

15 February 2023

Before:

Ward P; Mitchelmore JA; Kirk JA

Decision:

1.   The appellants pay two-thirds of the respondents’ costs of the appeal.

2.   There be no order as to the appellants’ costs of the appeal.

Catchwords:

COSTS

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98

Mining Act 1992 (NSW), s 155

Suitors’ Fund Act 1951 (NSW), s 6(1)

Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:

Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304

Broken Hill Cobalt Project Pty Ltd v Lord [2022] NSWCA 271

Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373

James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296

Lord v Broken Hill Cobalt Project Pty Ltd [2021] NSWLEC 126

Category:

Costs

Parties:

Broken Hill Cobalt Project Pty Ltd (First Appellant)
Cobalt Blue Holdings Ltd (Second Appellant)
David Anthony Lord (First Respondent)
John Montgomery Lord (Second Respondent)

Representation:

Counsel:
I Hemmings SC with J Reid (Appellants)
CL Lenehan SC with PM Lane (Respondent)

Solicitors:
Lander & Rogers (Appellants)
Harris Freidman Lawyers (Respondents)

File Number(s):

2021/00348680

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Land and Environment Court of New South Wales

Jurisdiction:

Class 8

Citation:

[2021] NSWLEC 126

Date of Decision:

12 November 2021

Before:

Duggan J

File Number(s):

2021/256624

JUDGMENT

1. THE COURT: On 16 December 2022, this Court published reasons (Broken Hill Cobalt Project Pty Ltd v Lord [2022] NSWCA 271) allowing in part an appeal from a decision of the Land and Environment Court (Lord v Broken Hill Cobalt Project Pty Ltd [2021] NSWLEC 126) on an application for review of an Arbitrator’s decision pursuant to s 155 of the Mining Act 1992 (NSW) (Mining Act) in respect of an access arrangement for access by the appellants to the respondents’ land (Thackaringa Station) for specific activities in relation to the three Exploration Licences over the land. The primary judge had awarded, among other things, a lump sum payment of $20,000 per annum for each Exploration Licence as compensation for non-financial losses. The aspect on which the appeal was allowed was as to the adequacy of reasons for the lump sum compensation awarded for non-financial losses.

2. As the respondents had indicated at the hearing that they would seek to be heard on costs regardless of the outcome of the appeal and the appellants had acceded to the suggestion that this be addressed by written submissions once the reasons were delivered, directions were made to enable submissions to be made as to costs with a view to that issue being determined on the papers. The parties have duly filed brief written submissions and they have filed submissions in reply to each other’s submissions.

3. In summary, the appellants (on a broad brush approach and in light of their admittedly mixed success on the appeal) submit that there should be an order that the respondents pay 65% of their costs of the appeal (and that the respondents be granted certificates under the Suitors’ Fund Act 1951 (NSW), (Suitors’ Fund Act) if qualified); whereas the respondents contend that there is strong justification for an order that the appellants pay the respondents’ costs (or such proportion of those costs as the Court determines), pointing to what they characterise as the very limited measure of success enjoyed by the appellants on the appeal, the appellants’ part in producing the error found on the part of the primary judge, and the circumstance that, under the Mining Act, the holder of a mining authority is required to pay the reasonable costs of the landholder in both the arbitration and in the Land and Environment Court. Although not suggesting that the costs scheme under the Mining Act qualifies this Court’s broad discretion as to costs, the respondents submit that it is a contextual matter to which the Court can have regard, namely that the apparent purpose of the statutory scheme is to ensure that a landholder’s position as to costs is protected if the landholder considers that the compensation offered or determined does not adequately compensate for entry and disturbance of the land under a mining authority.

Determination

4. The breadth of the costs discretion pursuant to s 98 of the Civil Procedure Act 2005 (NSW) is not disputed; and the parties accept that the general rule is that costs follow the event (see r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW)) unless it appears to the Court that some other order should be made.

5. In the present case, where there was a mixed outcome on the grounds of appeal, the appellants accept that a departure from the general rule is appropriate; and they invoke the principles governing the making of proportionate costs orders or orders on an issue by issue basis in such a case (summarised by the Court in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 (Bostik) at [38]).

6. In that context, the appellants have analysed the time and cost spent on the issues on appeal (including the proportion of paragraphs and pages of the respective submissions), from which they calculate that their success on the dominant aspect of the appeal (ground 6 – the adequacy of reasons ground) was not trivial, minor or insubstantial, noting also that ground 1 (the no evidence ground, which was not necessary to determine) was bound up with ground 6 (see at [139] of Ward P’s reasons). In reply submissions the respondents respond to the emphasis placed by the appellants on the time taken in the hearing and submissions (and extent of consideration of compensation issues in the judgment) by noting that in Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [11] the Court accepted that it was often difficult to decide in retrospect how much time was occupied on one issue or the other in the course of an appeal. The respondents say that a proper focus on the issues shows that the appellants did not succeed in respect of the primary relief they sought (namely to set aside or vary the determination), citing Bostik at [38].

7. The appellants further submit that, absent the primary judge giving adequate reasons for judgment, it was reasonable and appropriate for them to pursue ground 1 (the no evidence ground), noting that Ward P was inclined to consider that this ground was made good in relation to the aspect of compensation for “inherent damage”. The respondents in reply submissions point out that it was only in respect of one aspect (compensation for inherent damage) that this view was expressed.

8. Accepting that they were unsuccessful on grounds 2-5, and that mathematical precision is illusory and the exercise of the discretion depends upon matters of impression and evaluation (see James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 per the Court at [34]), the appellants contend that the appropriate order is that the respondents pay the appellants’ costs of the appeal, with an appropriate reduction to account for those grounds on which it was not successful. As noted above, they submit that the appropriate reduction would be reflected by an order that the respondents pay 65% of the appellants’ costs of the appeal.

9. The respondents say that this is not a case where the issues can be neatly separated and an evaluation made on the basis that a particular and discrete issue has taken up a quantifiable amount of time. As adverted to above, the respondents maintain that the appellants had only a very limited measure of success (succeeding on only one of the five grounds of appeal that remained at the commencement of the appeal hearing; and, even then, there being only limited acceptance of the appellants’ arguments – the respondents here referring to [111]-[116] of Ward P’s reasons). Moreover, the respondents say that the appellants bore some responsibility for the approach that the primary judge had adopted in the fixing of a global lump sum (referring to [114] of Ward P’s reasons) and hence played a part in producing the error ultimately established in this Court.

10. As noted above, the respondents also rely on the statutory scheme for costs under the Mining Act as a contextual matter supplying (together with the limited measure of the appellants’ success and their part in producing the error) strong justification for an order that the appellants pay their costs of the appeal (or a proportion of them). The respondents point out that they did not in this Court seek any alteration to the determination of the primary judge but simply to retain the benefit of that determination, in respect of which their costs position was protected in the Land and Environment Court.

11. The respondents accept that they could have submitted to the jurisdiction of the Court but they say that this would have deprived the Court of the benefit of a contradictor in an appeal which involved matters of some complexity and novelty (pointing to the exposition of the interpretation of the compensation provisions under the Mining Act as a matter of some public interest).

12. In reply submissions, the appellants take issue with the reliance placed by the respondents on this contextual matter, emphasising that the statutory scheme is silent in relation to appeals in this Court (a matter not disputed by the respondents) and pointing out that a common theme running through different classes of jurisdiction in the Land and Environment Court is that different cost rules apply as between first instance proceedings and appeals. They say that there is nothing about the Mining Act cost rules before the arbitrator and the Land and Environment Court on review to support a departure from the ordinary application of the costs principles in this Court and they contend that consideration of other parts of the Land and Environment Court’s jurisdiction where special costs rules apply, yet normal principles apply in this Court, supports the application of those normal costs rules in this Court.

13. Taking into consideration the submissions and reply submissions on costs, it remains the case that, although the appellants characterise the success they obtained in the appeal as not insubstantial, they failed in their substantive challenges to the primary judge’s decision and in their attempt to have the primary judge’s determination set aside or varied. The appellants ultimately succeeded simply in having the matter remitted for the purpose of the primary judge’s further exposition of the reasoning underlying the fixing of a lump sum for non-financial loss. That represents a substantial success for the respondents in resisting the grounds of appeal advanced by the appellants. The arithmetical analysis of the parties’ written submissions (and of the judgment itself) does little to assist the appellants’ argument that they should have an order in their favour for some 65% of their costs of the appeal. The reality is that they succeeded only in establishing an inadequacy of reasons.

14. The nature of the statutory costs scheme for applications under the Mining Act is something relevant to take into account, albeit (as the respondents themselves accept) not determinative (and noting that there are instances where special costs rules apply in the Land and Environment Court that do not obtain on appeal). However, it is not necessary to rely on this in order to reach the conclusion as to the exercise of the costs discretion in the present case.

15. Ultimately, the complaint raised by the appellants under the only ground on which they succeeded (ground 6) was that it was impossible for them to discern from the primary judge’s reasons how the compensation had been calculated or what had been accepted or rejected in that regard (see as set out at [69]-[72] of Ward P’s reasons) and that they were entitled to know the basis on which the lump sum figure for compensation for non-financial loss had been arrived at by the primary judge. That this was the dominant focus of their arguments on appeal was no doubt a considered forensic decision. Having succeeded in that claim, they have been remitted to a jurisdiction in which they will bear the reasonable costs of the respondents of any further hearing in relation to the determination of the compensation payable under the approved access arrangements. However, they failed in their attempt to set aside or vary the determination. Essentially, it is for their edification that the matter has been remitted.

16. In all the circumstances, there is considerable force to the proposition that, not only should the respondents not be required to pay the appellants’ costs (whether on an issue by issue or proportionate basis) of the one issue on which the appellants succeeded, but that the appellants should be required to pay a significant proportion of the respondents’ costs (to reflect the fact that the respondents were largely successful on the substantive issues relating to the primary judge’s determination). On a broad brush basis, the appropriate order is that the appellants pay two-thirds of the respondents’ costs of the appeal.

17. Finally, in reply submissions the respondents, in the event that a costs order is made in respect of a percentage of the appellants’ costs as sought by the appellants, seek an indemnity certificate in respect of the appeal under the Suitors’ Fund Act, repeating that they were the (only proper) contradictors on the appeal (being an appeal on questions of law) and did not bear any identifiable responsibility for any deficit in the reasons of the primary judge. Had a costs order been made against the respondents, such a certificate would have been appropriate. As it is, no such order arises.

Orders

18. For the above reasons, the Court orders as follows:

1. The appellants pay two-thirds of the respondents’ costs of the appeal.

2. There be no order as to the appellants’ costs of the appeal.

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Decision last updated: 15 February 2023