Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors - [2010] QLC 122

LAND COURT OF QUEENSLAND

CITATION: Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No. 4) [2010] QLC 122

PARTIES:Cherwell Creek Coal Pty Ltd
(applicant)

v.
BHP Queensland Coal Investments Pty Ltd, QCT Resources Pty Ltd, BHP Coal Pty Ltd, QCT Mining Pty Ltd, Mitsubishi Development Pty Ltd, QCT Investment Pty Ltd and Umal Consolidated Pty Ltd
(respondents)

FILE NO:MRA1332-08
DIVISION:General Division
PROCEEDING:  Costs of Applications
DELIVERED ON:                  27 August 2010
DELIVERED AT:                   Brisbane
HEARD AT:Brisbane
MEMBER:Mr WA Isdale

ORDER/S:1. The Respondents pay, on the standard basis, the Applicant’s costs of and incidental to the Respondents’ General Application dated and filed 28 September 2009 for separate determination of a question. The Respondents also pay, on the same basis, the Applicant’s additional costs thrown away in relation to submissions made on that matter.
2. The Applicant pay, on the standard basis, the Respondents’ costs of and incidental to the Applicant’s General Application dated 4 March 2010 and filed on 5 March 2010 seeking to have parts of the Respondents’ defence struck out.

CATCHWORDS: Costs of applications

Mineral Resources Act 1989, s.722G
Mineral Resources (Peak Downs Mines) Amendment Act 2008
Land Court Act 2000, s.34
BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd [2009] QLAC 0005, referred to
BHP Queensland Coal Investments Pty ltd & Ors v Cherwell Creek Coal Pty Ltd (No. 2) [2009] QLAC 0008, referred to
Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors [2010] QLC 104, referred to
Calcifer Industrial Minerals Pty Ltd v Daraleigh Pty ltd as Trustee for the DC and ML Dillon Trust [2010] QLC 0095, referred to
Kabale Holdings Pty Ltd v Chief Executive, Department of Transport (1997) 18 QLCR 166, referred to
Haber v Department of Main Roads [2004] QLAC 0102, referred to
Wyatt v Albert Shire Council [1986] 1 Qd.R 486, referred to

Barns v Director-General, Department of Transport (1997) QLCR 133, referred to
Anson Holdings Pty Ltd v Wallace & Anor [2010] QLAC 004, referred to

PT Limited and Westfield Management Limited v The Department of Natural Resources and Mines [2007] 28 QLCR 295, referred to
Solomon Services Pty Ltd v The Council of the Shire of Woongarra [1988] 2 Qd.R. 202, referred to
Ghose v CX Reinsurance Company Ltd [2010] NSWSC 110, referred to

Darkinjung Local Aboriginal Council v Darkinjung Pty Ltd [2010] NSWSC 132, referred to

APPEARANCES: Written submissions
SOLICITORS: Holding Redlich Lawyers for the Applicant
Allens Arthur Robinson for the Respondents

The Mineral Resources Act 1989 was amended by the Mineral Resources (Peak Downs Mine) Amendment Act 2008 which took away the Applicant’s (CC’s) opportunities to renew or obtain certain tenures, replacing them with a right to seek compensation from the Respondents (BMA).
CC commenced proceedings in the Land Court claiming compensation under s.722G of the Mineral Resources Act 1989.
BMA sought an order in the Land Court that CC provide security for their costs in the event that they were successful in resisting CC’s claim. The learned Member declined to order security and BMA was successful in appealing that matter to the Land Appeal Court.[1] Costs of that appeal to the Land Appeal Court were the subject of a separate decision.[2]
[1] BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd [2009] QLAC 0005.
[2] BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd (No. 2) [2009] QLAC 0008.
BMA’s amended defence includes, in paragraph 3(b)(ii), a claim that Exploration Permit for Coal 545, which by the 2008 Amendment Act CC lost the opportunity to renew, was not validly granted in 1994 and not validly renewed in August 2003.
On 28 September 2009 BMA’s solicitors filed a General Application applying for the separate determination of the questions raised by paragraph 3(b)(ii).
On 5 March 2010 a General Application was lodged on behalf of CC focused on paragraphs 3(b)(ii) and (iii) of the amended defence. Referring to s.370 of the Mineral Resources Act, it claims that this Court lacks jurisdiction in those matters, which are exclusively within the jurisdiction of the Supreme Court.
Both applications were heard together and both were refused.[3] The parties were unable to reach agreement as to the costs of the applications and provided written submissions as to the orders which they now seek.
[3] Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors [2010] QLC 104.
CC submits that costs should follow the event in both applications and that BMA also ought to be ordered to pay the costs of CC having to make submissions as it proposed an agreement in those terms on 6 July 2010 to which BMA, without explanation, failed to agree.
BMA contends that CC should pay BMA’s costs of the unsuccessful application CC made to strike out the part of BMA’s defence which has been referred to. BMA also submits that the costs of and incidental to BMA’s application for a separate question should be costs in the proceedings.
The Land Court’s power to order costs is found in s.34 of the Land Court Act 2000. It 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.”
This provision was considered by the learned President of the Land Court in the recent case of Calcifer Industrial Minerals Pty Ltd v Daraleigh Pty Ltd as Trustee for the DC and ML Dillon Trust.[4] At [8] of the decision, the learned President summarised the meaning of s.34(1) as follows:
“The Land Appeal Court has held on many occasions that the discretion conferred by s.34(1) to order costs as the Land Court considers appropriate is unfettered.² Those cases relied on an earlier decision of the Full Court of Queensland in Wyatt v Albert Shire Council³ where it was held, in relation to s.31 of the City of Brisbane Town Planning Act 1964 (which is very similar to s.34(1) of the Land Court Act), that the effect of s.31 was that the discretion conferred with respect to costs was complete or full. The discretion was 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. 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.⁴
^2.See, for example, Kabale Holdings Pty Ltd v Chief Executive, Department of Transport (1997) 18 QLCR 166; Haber v Department of Main Roads [2004] QLAC 0102; BHP Queensland Coal Investments Pty Ltd v Cherwell Creek Coal Pty Ltd (2) [2009] QLAC 008.
^3.[1986] 1 Qd.R 486.
^4. At 489, 493.”
[4] [2010] QLC 0095.
At [11] of the decision, the learned President said:
“While there is no preconception in this Court that costs follow the event, the Land Appeal Court has recognized that the rule that costs will usually follow the event is one which is deeply embedded in our law⁵ and that is a factor which I may take into account in exercising my discretion under s.34(1) of the Land Court Act.⁶
^5.Barns v Director-General, Department of Transport (1997) QLCR 133 at 135.
^6.BHP Queensland Coal Investments Pty Ltd v Cherwell Creek Coal Pty Ltd (2) [2009] QLAC 0008 at [12].”
The application in Calcifer was for the rehearing of a mining lease application and associated matters.
In Anson Holdings Pty Ltd v Wallace & Anor[5] the Land Appeal Court very recently considered, in a mining matter, s.34(1) of the Land Court Act which, by s.72(1) applies, with necessary changes, to the Land Appeal Court. The Land Appeal Court was constituted by Cullinane J, the President and Member Mr PA Smith.
[5] [2010] QLAC 004.
In its judgment, at [7] the Court referred to the decision of the Land Appeal Court in PT Limited and Westfield Management Limited v The Department of Natural Resources and Mines[6] with approval.[7] The Land Appeal Court agreed that where the Land Court is given a discretion to order the payment of costs, it should not be bound by any presumptive rule or principle but was not precluded from resorting to a settled practice. The discretion is complete but must be exercised judicially.[8]
[6] [2007] 28 QLCR 295.
[7] Ibid at [7], [8].
[8] Anson Holdings [5].
At [8] the Land Appeal Court said:
“We do not consider therefore that this Court should recognize that there is a settled rule that easy access be available to the Land Court in mining applications by way of costs not being awarded against either party other than in special cases. Rather each case should be considered on its merits.”
I consider that this is equally applicable to the present matters before this Court.
In [10] the Land Appeal Court stated:
“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 law¹¹ and that is a factor to be taken into account when exercising our discretion under s.34(1).
^11.Barns v Director General, Department of Transport (1997) 18 QLCR 133 at 135.”
In BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd (No. 2)[9] the Land Appeal Court considered BMA’s application to the Land Court for an order that CC provide security for costs. The Land Court declined to order security and BMA successfully appealed to the Land Appeal Court. In the Land Appeal Court, CC 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.
At [6] the Land Appeal Court referred with approval to Wyatt v Albert Shire Council[10] where a similar provision to s.34(1) was held by the Full Court to confer a complete discretion to be exercised judicially, that is for reasons that can be considered or justified. Resort may be had to a settled practice but relevant considerations must inform the exercise of the discretion. A rigid adherence to preconceptions would be an error of law and it would not be correct to start with a preconception that costs follow the event. The exercise of the discretion should be governed by the circumstances of each case.
[9] [2009] QLAC 0008.
[10] [1987] 1 Qd-R. 486.
The Land Appeal Court noted that the decision in Wyatt was considered by the Full Court in Solomon Services Pty Ltd v The Council of the Shire of Woongarra.[11] At 207 Dowsett J with whose reasons Matthews and Ryan JJ agreed, said:
“    Although as was pointed out by this court in Wyatt, it may be dangerous, and in many ways undesirable, for this court to seek to lay down the considerations which might be relevant to the exercise of such a broad discretion, it is not of necessity dangerous, and may be helpful for me to express briefly the approach which might be taken in the consideration of this issue in future cases.
    The courts should keep in mind that the discretion is an unfettered one. Consideration should then be given to all relevant considerations which might include the issues which have been raised, their public nature or otherwise, the extent to which the 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 town planning principles. I do not for a moment suggest that these considerations are exhaustive, and I have no doubt that the learned judges of the Local Government Court, who are much more experienced in these matters than am I, will be able to add many others. A consideration of all relevant issues will indicate whether or not an order for costs is indicated in the circumstances of that case.
[11] [1988] 2 Qd.R. 202.
    This is a procedure which is much more difficult to discuss in the abstract that it will be to follow in practice. In each case, starting from the position that the discretion is unfettered, I feel sure that the learned judges will derive a reasonable indication of the appropriate order from all of the circumstances deemed by them to be relevant. No doubt it is desirable that as far as possible their reasons for making particular orders be given, however I would not like to think that anything that I have said will lead them to spend substantial amounts of judicial time in preparing detailed reasons for orders for costs simply so that no challenge can be made to the eventual order.”
In its conclusion, the Land Appeal Court said:
“[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 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.
^9.Barns v Director-General, Department of Transport (1997) 18 QLCR 133 at 135.”
In the present case, the submissions made on behalf of CC are that costs should follow the event in both cases and that BMA should pay CC’s additional costs of having to make written submissions as BMA failed without explanation to accept CC’s proposal made on 6 July 2010 to that effect.
BMA’s submissions are that CC should pay the costs of and incidental to CC’s unsuccessful strike out application and that the costs of and incidental to BMA’s application for a separate question should be costs in the proceedings.
I will deal first with BMA’s application for a separate question as it was first in time. BMA submits that the application was brought in a genuine attempt to assist the Court to deal with a complex case efficiently and was not a case of a party simply seeking a forensic advantage. It sought an order for hearing a separate question rather than an immediate answer to a question such that proceedings might be truncated. At paragraph 18 of its submissions it is stated that:
“BMA should not be penalised with a costs order for having made that attempt.”
There is no consideration here of costs being in any way punitive. As the Land Appeal Court said in Anson Holdings:[12]
“Ordinarily costs are not awarded to punish the unsuccessful parties. Costs are intended to compensate the successful party against the expense which he or she has incurred by reason of the legal proceedings.”
This was acknowledged by CC in the submissions in reply made on its behalf.
[12] Anson Holdings at [7].
It is submitted on behalf of CC that the overall character of the litigation is not such that, by for instance having a public purpose, the considerations in a costs application should warrant a departure from the usual order which is urged to be that the costs follow the event.
The submissions for BMA refer to a decision of the Supreme Court of New South Wales, Ghose v CX Reinsurance Company Ltd[13] which is an example of where it was found that costs should be costs in the cause. That however was a case where the parties having originally sought that order, subsequently sought costs against the other in what was an application to consolidate four proceedings which, although the court decided not to do, it clearly had an eye towards doing somewhat later. I do not find that decision useful for present purposes.
[13] [2010] NSWSC 110.
Reference was also made, on behalf of BMA, to Darkinjung Local Aboriginal Council v Darkinjung Pty Ltd.[14] This was a case where the costs of actually determining a separate question were made costs in the cause. The case involved a party asserting rights as a trustee to have their legal expenses paid out of trust property. This is a particular and discrete area of law which is distinct from the present case of litigation between commercial parties.
[14] [2010] NSWSC 132.
While I accept that BMA’s application was directed towards the commendable goal of assisting the Court with case management, it comes to the Court as a party to litigation rather than, for instance, as a friend of the Court, and ought not to be thought of as acting in a way which might be characterised as altruistic. As a non-impecunious party to litigation and being well represented, I consider that there is no reason to consider BMA as other than a rational and prudent litigant acting correctly towards the Court and not in any way which might adversely affect its interest. It was under no obligation to bring its application and ought to be regarded as having done so in the free exercise of its prudent decision-making power. Corporations, like other citizens, are assumed to be rational until the contrary is shown.
In this case a well represented BMA chose to bring an application which was not successful. It was an application brought in private litigation rather than where there was some purpose of a sort that would lend it the character of being of a public benefit. The application was brought reasonably and on a basis which was fairly arguable. The dispute in relation to the application was between commercial entities which are not impecunious. There does not appear to be any reason to postpone the determination of costs in this application until the end of the substantive litigation. The content was not able to be properly characterised as simply seeking directions but was a substantial dispute in itself with two days of hearing and leading counsel representing both parties.
In view of these considerations I am satisfied that the costs of BMA’s application should not be costs in the cause and that taking into account the additional factor that costs commonly, but not automatically, follow the event, this is a case where CC should have the costs of and incidental to BMA’s application. Additionally, in view of CC having proposed this to BMA by letter of 6 July 2010 CC should also have its additional costs thrown away by having to make submissions in relation to the matter. The costs are to be on the standard basis.
I will now turn to CC’s application to strike out part of BMA’s defence. Once again this was a rational and deliberate step in private litigation; a step taken by a well represented corporation. It sought to have part of BMA’s defence struck out and can only be seen as seeking a forensic advantage.
It was inevitable that BMA would resist this application and BMA did so in a prudent manner expending the resources necessary for the task. Both parties submit that the costs of this application should follow the event. The submissions for BMA state that BMA was successful, CC unsuccessful and:
“Costs should therefore follow the event in accordance with the general rule, recognised by the Land Appeal Court.”
I order accordingly, with costs on the standard basis.
Orders
1. The Respondents pay, on the standard basis, the Applicant’s costs of and incidental to the Respondents’ General Application dated and filed 28 September 2009 for separate determination of a question. The Respondents also pay, on the same basis, the Applicant’s additional costs thrown away in relation to submissions made on that matter.
2. The Applicant pay, on the standard basis, the Respondents’ costs of and incidental to the Applicant’s General Application dated 4 March 2010 and filed on 5 March 2010 seeking to have parts of the Respondents’ defence struck out.

WA ISDALE
MEMBER OF THE LAND COURT