Mackenzie v Minister for Natural Resources, Mines and Water
[2006] QLC 65
•6 October 2006
LAND COURT OF QUEENSLAND
CITATION: Mackenzie v Minister for Natural Resources, Mines and Water [2006] QLC 0065 PARTIES: David James Mackenzie
(applicant)v. Minister for Natural Resources, Mines and Water
(respondent)FILE NO.: LA2005/1797 DIVISION: Land Court of Queensland PROCEEDING: An application for costs of and incidental to the hearing of an appeal against the Minister's decision to refuse a tree clearing permit. DELIVERED ON: 6 October 2006 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER: Mr JJ Trickett, President ORDERS: 1. The respondent pay 50% of the applicant's costs of and incidental to the hearing and determination of the appeal.
2. The respondent pay 50% of the applicant's costs of this application.
3. The costs are to be assessed on the standard basis by the appropriate assessing officer of the Supreme Court.
CATCHWORDS: Costs - Appeal under Land Act 1994 - Appellant partially successful - Partial award of costs - Principles to be considered - Costs of agent - Without prejudice offer to settle - Whether Court can consider offer in deciding costs application - Land Court Act 2000: s.34 APPEARANCES: Mr P Sheridan, of counsel, instructed by Devine Agribusiness, for the applicant
Mr C McGrath, of counsel, instructed by the Crown Solicitor, for the respondent
This is an application for costs by Mr Mackenzie (the applicant) following the hearing and determination of an appeal against the Minister's review decision confirming an original decision to refuse to issue a tree clearing permit.
On 15 September 2006, I delivered a judgment allowing the appeal, setting aside the review decision and substituting the review decision with a decision that a tree clearing permit be issued with the conditions shown in that permit. At that time, the applicant made an application for costs of and incidental to the hearing of the appeal. The respondent opposed that application and contended that the parties bear their own costs.
I received written submissions and heard oral argument from both counsel. I reserved my decision on costs. Since then, further written submissions have been made.
Factual Background
The applicant is the lessee of a pastoral holding situated approximately 50 km north-east of Augathella. On 5 November 2001, the applicant made an application to the Department of Natural Resources and Mines (the Department), for a tree clearing permit to clear approximately 3,727 ha of remnant vegetation on the property.
On 30 July 2003, almost 20 months after the initial application was lodged, officers of the Department inspected the property to assess the application and decided that the regional ecosystem (RE) mapping for part of the application area did not appear to have the correct RE description.
On 9 September 2003, a subsequent inspection was made by one of the Department's officers to correct the RE mapping. On 2 March 2004, the applicant received written confirmation of an amendment to the RE mapping. As a result of that amendment, a substantial part of the application area was remapped from "not of concern" to "endangered". Then on 7 July 2004, the applicant received written confirmation of the refusal of the entire application. The reasons given for the refusal were that the application did not comply with the purposes of the Broadscale Tree Clearing Policy for State Lands (2003).
On 20 August 2004, the applicant commenced the appeal process with an application for internal review of the decision to refuse the tree clearing permit application. There was further delay when the applicant was advised that the internal review could not be commenced until the appropriate forms had been filled out (3 September 2004); and that the application for internal review had been lodged outside the prescribed time (30 September 2004). Then on 26 November 2004, the Department advised that the application for internal review had been lodged within the relevant timeframe and that the application would be progressed.
However, by 4 April 2005, the review decision had not been completed and the applicant appealed to this Court under s.428 of the Land Act 1994. Because the respondent had not completed the internal review on 10 June 2005, the Court was advised that the respondent intended to raise a jurisdictional point at the hearing of the appeal.
The applicant then sought a directions hearing for the purpose of obtaining orders from the Court that the respondent complete the internal review. The directions hearing was set down for 15 September 2005, but was discontinued by consent, on the undertaking of the respondent to complete the internal review process within 28 days.
On 29 September 2005, the applicant was advised that the internal review had been conducted and the respondent had decided to confirm the original decision to refuse to issue a tree clearing permit. The reasons given for the refusal were: "The application is refused in full because it fails to meet the Broadscale Tree Clearing Policy for State Lands May 2003 and s.262(1)(a), (c), (ca), (d), (e), and s.262(2)(c)". The reasons were based on 28 findings of fact relating to the application area.
On 8 November 2005, the applicant appealed against the review decision to the Land Court. Following various interlocutory steps, the appeal was heard on 30 August 2006.
The Appeal
As a result of interlocutory orders given by the Court, the issues in this case were considerably narrowed. The areas of commercial timber and the watercourse buffer areas were not in dispute. The area required for a biodiversity corridor was identified by the parties' experts and was accepted. Following inspection and remapping of the area by the respondent's vegetation expert, some areas which were previously "of concern" were amended to "not of concern" and not contested by the respondent at the appeal.
The remaining issues related to the classification of regional ecosystems comprising part of the application area which were mapped by the respondent as "endangered", and the conservation status of RE 6.5.9, a "not of concern" regional ecosystem which was on the threshold of changing to "of concern".
On 7 September 2006, I delivered my decision in this matter, allowing the appeal in respect of those issues upon which the parties had agreed and giving preliminary reasons as to why I preferred the evidence of the respondent's expert, Dr Butler, to that of the applicant's expert, Dr Beale, in respect of the two disputed issues. I also ordered that the respondent prepare a tree clearing permit in accordance with the Court's preliminary reasons and that the parties confer on the appropriate conditions.
On 15 September 2006, I ordered that the review decision be set aside and that Tree Clearing Permit No. 2006/001433 issue with the conditions shown in that permit, authorising the clearing of an area of 1,373 ha. I also delivered detailed reasons for my decision.
The appellant (now the applicant) has applied for costs and this application is opposed by the respondent.
The Relevant Legislation
This application for costs is in respect of an appeal under the provisions of s.427 of the Land Act 1994. That Act makes no provision for the payment of costs of an appeal. However, the general power of the Land Court to award costs is contained in s.34 of the Land Court Act 2000, which 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.
(3)…
(5) The court may, if it considers it appropriate, order the costs to be decided by the appropriate assessing officer of the Supreme Court."
Therefore, unlike matters under the Acquisition of Land Act 1967 or the Valuation of Land Act 1944, where the discretion of the Land Court to award costs is constrained, the discretion conferred by s.34 is unfettered. The operation of s.34 was considered by the Land Appeal Court in Haber v Department of Main Roads [2004] QLAC 0102. In that case, the Court said at 6:
"It is clear that the discretion given to this Court by s.34(1) of the Land Court Act is unfettered, but the discretion must be exercised judicially, that is, for reasons that can be justified and by reference to relevant considerations (Wyatt v Albert Shire Council [1987] 1 QdR 486 at 489; Kabale Holdings Pty Ltd v Chief Executive, Department of Transport (1997) 18 QLCR 166 at 198). In Barns v Director-General, Department of Transport (1997) 18 QLCR 133, the Land Appeal Court said (at 135):
'This Court has an unfettered discretion as to the costs of and incidental to an appeal before it. An unfettered discretion is not an unprincipled one, and on ordinary principles, costs in circumstances such as these would follow the event. The general rule that costs will usually follow the event is one which is deeply embedded in our law. … It is a general rule which prima facie should be applied in this case'."
The Parties' Submissions
Counsel for the applicant, Mr Sheridan, argued that the appeal had been allowed and the applicant was successful in being permitted to clear 1,373 ha, whereas the respondent had refused to permit any clearing. Therefore, it was submitted, the general rule should apply that costs follow the event.
Alternatively, it was argued, if the Court was to consider that the applicant had been only partially successful in the appeal, the Court should take into account the area now permitted, compared with the respondent's decision.
Furthermore, it was submitted, the review decision of the respondent's delegate confirming the original decision to refuse the application for a tree clearing permit was based on 28 findings of fact, many of which were subsequently found to be erroneous.
Two issues were in dispute at the hearing, (i) concerning the classification of a number of regional ecosystems within part of the application area, and (ii) the "threshold" conservation status of RE 6.5.9. Mr Sheridan submits that while the Court made findings against the appellant on both those issues, RE 6.5.9 had been assigned "threshold" status since September 2004. He contends that if the permit application had proceeded in a timely manner, the threshold issue would not have arisen.
On the other hand, Mr McGrath, counsel for the respondent, argued that the parties should bear their own costs, because the applicant had not been substantially successful in the appeal; the Court's decision is that the area permitted to be cleared is only 1,373 ha, slightly more than one-third of the area applied for. Even though technically the appeal was allowed, the applicant had been wholly unsuccessful in the two issues that went to trial.
Mr McGrath further argued that any costs awarded to the applicant must exclude costs payable for the fees of his agent, Mr Graham Kenny of Devine Agribusiness. It was argued that the work done by Mr Kenny as the applicant's agent, were actions normally carried out by a solicitor engaging in legal practice.
Mr McGrath submitted that if Mr Kenny had been engaging in legal practice, it would seem to be an offence against s.24 (1)of the Legal Profession Act 2004. If Mr Kenny had engaged in legal practice contrary to s.24(1), it was argued, no costs are recoverable for his fees: s.24(3).
In response to the respondent's submissions, Mr Sheridan argues that the Land Court Act 2000 and the Land Court Rules 2000 clearly contemplate that an applicant may authorise a non-lawyer to act as his agent.
Consideration of the Arguments
Although the appeal has been allowed in this case, the applicant has only been partially successful and, as the respondent points out, the applicant was wholly unsuccessful in the two issues that went to trial. However, of the 28 reasons given for the respondent's decision on the internal review, many of those reasons have been found to be erroneous. Only by appealing to this Court was the applicant granted a permit to clear any area at all.
Although only two issues went to trial, there were several other issues resolved because of the intervention of the Court. Only after the various experts had prepared their reports and discussed them and a Court ordered conference held, were the issues narrowed. If the applicant had not appealed, that would not have occurred.
In addition, there has been a succession of unexplained delays since the lodging of the application for the tree clearing permit in November 2001. It is difficult to comprehend how it could take nearly five years to resolve this matter. With the enactment of legislation in May 2004 to impose a moratorium on all broadscale tree clearing to take effect on 31 December 2006, one would have thought that the Department would have an obligation to deal with this matter urgently. There is no doubt that those delays and the inaccurate ecosystem mapping caused the applicant to incur considerable expense. In my view, that is sufficient reason to justify at least a partial award of costs to the applicant.
Partial Award of Costs
The question of costs in respect of a partially successful appeal was decided by the Land Appeal Court in Yalgan Investments Pty Ltd v Council of the Shire of Albert (1997-1998) 17 QLCR 401 at 417-418. While that case was in respect of compensation following the acquisition of land under the Acquisition of Land Act 1967, the general principles established in Yalgan are applicable here.
The Land Appeal Court referred to the following two decisions of the Federal Court setting out the factors which a court ought to take into account in deciding whether to make a partial award of costs.
In Hughes v Western Australian Cricket Association (Inc) (1986) 8 ATPR 48,134, Toohey J stated:
"1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order …
2. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed …
3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, 'issue' does not mean a precise issue in the technical pleading sense, but any disputed question of fact or of law …" (at 48,136)
In its decision in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261, the Full Court of the Federal Court of Australia observed that the propositions enunciated by Toohey J in Hughes v Western Australian Cricket Association are:
"… subject to the further consideration that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case … In Trade Practices Commission v Nicholas Enterprises Pty Ltd (No. 3) (1979) 42 FLR 213; 28 ALR 201, Fisher J regarded the discretion to apportion costs as one to be exercised only in the most exceptional circumstances. Nevertheless he accepted that where a considerable part of the trial is taken up in determining issues upon which a party fails, it is a proper exercise of the discretion to reduce the costs allowed to that party."
I am of the view that there are special circumstances in the present case which warrant the apportionment of costs. I have come to the conclusion that it would be appropriate to award the applicant 50% of his costs of and incidental to the hearing and determination of this matter.
I do not intend to comment upon the allegation that Mr Kenny may have committed an offence under the Legal Profession Act. As to whether the applicant can claim costs of his agent in such circumstances, I simply point out that a party to a proceeding in the Land Court may appear personally or by lawyer or agent (Land Court Act s.24) and Part 2 of the Land Court Rules envisages that an agent may commence proceedings on behalf of an applicant.
Neither counsel was able to refer me to an authority on this issue. Mr McGrath informs me that the only cases that he was able to find concerning the Legal Profession Act related to legal misconduct.
Whether Mr Kenny has committed any offence is not a matter for this Court. As to whether or not the applicant can claim any or all of the costs of his agent, in my view, is a matter best left to the appropriate assessing officer of the Supreme Court.
The Offer to Settle
At a very late stage in the proceedings, in a further submission as to costs, Mr McGrath contends that on 25 August 2006, at a "without prejudice" conference ordered by the Court, the respondent made an oral offer to settle the matter and the applicant rejected that offer.
Mr McGrath submits that as the applicant did not achieve a materially better result than offered by the respondent, the respondent could seek costs incurred after the settlement offer was rejected, effectively the costs of the hearing. As the respondent does not seek costs, any costs awarded to the applicant, he contends, should not include costs incurred after the settlement offer was rejected.
Mr Sheridan responds to that submission by pointing out that the oral offer to settle was made under the "without prejudice" privilege and should not be taken into account in the matter of costs.
The respondent does not deny that the offer was made "without prejudice", but submits that it related only to the substantive issues and now that the Court has decided those issues, the offer can be raised in relation to costs.
The "Without Prejudice" Issue
Chapter 9 Part 4 of the Uniform Civil Procedure Rules 1999 (the Uniform Rules) provides for the procedure by which a formal offer to settle can be made. If such an offer is made by the defendant and not accepted by the plaintiff and the plaintiff obtains a judgment that is not more favourable to the plaintiff than the offer, the Court must order the defendant to pay the plaintiff's costs up to service of the offer, unless a party shows that another order for costs is appropriate: Rule 361.
However, an offer made other than under the procedure in the Uniform Rules is an informal offer and if drawn to the attention of the Court is a matter which the Court may consider in exercising its discretion to award costs. It does not matter whether the offer is in writing or made orally: Transit Australia Pty Ltd v Crewford Australia Pty Ltd [1998] 1 QdR 690. In that case, Thomas J held that the refusal of an arbitrator to receive evidence of an offer communicated orally was an error of law.
The respondent also relied on that case as authority for the proposition that even a "without prejudice" offer can be raised in relation to costs, particularly relying on the passage where Thomas J stated at 691:
"Sometimes problems arise when the offer is made 'without prejudice', but there is a distinct tendency to interpret such offers as reserving the protection from disclosure in relation only to issues such as liability and quantum, but not as preventing disclosure to the Court in the course when the question of costs comes to be considered (Johns Perry v International Rigging (Aust.) [1988] 2 QdR 556, 557)."
In Pajares v The State of Queensland [2003] QLC 0063, I considered whether an informal offer made on a "without prejudice" basis could be relied on in the absence of consent by both parties. I concluded that the strict principle contained in the decision of the English Court of Appeal in Walker v Wilsher (1889) 23 QBD 335, had been qualified by the later Court of Appeal decision in Cutts v Head [1984] 1 Ch 290, which recognised that there were exceptions, such as where the offer to settle an action contains a reservation relating to the use of the offer in relation to costs.
In Pajares there was no such reservation, although the claimant in that case argued that such a reservation was clear from the terms of the "without prejudice" letter. However, I held that the letter could not be construed as reserving the right to bring the offer to the attention of the Court on the issue of costs.
Similarly, in the present case there is no evidence that the offer was made on the basis of "without prejudice save as to costs", but the respondent argues that this did not prevent the matter from being referred to the Court, relying on the passage quoted above by Thomas J in the Transit Australia case.
However, the authority referred to by Thomas J for that proposition was Johns Perry v International Rigging (Aust.). In that case, Ryan J was considering an informal offer to settle contained in a "without prejudice" letter reserving the right to seek to recover costs.
Ryan J considered what might be thought to be the absolute prohibition on "without prejudice" letters being taken into consideration in determining whether there is good cause for depriving a successful litigant of costs. He found that the principle appears to have been qualified to a marked degree by more recent English decisions which have given recognition to what have come to be called Calderbank letters. His Honour referred to the qualifications made to the rule in Walker v Wilsher by the decision in Cutts v Head, which seemed to him to be based on three considerations. One is that the rule of public policy was too widely expressed in that case so that there was no longer any reason in public policy why offers that have been made and refused should not be brought to the Court's attention in the argument as to costs. The second was that there was no policy of the law to prevent a party from putting forward an offer of compromise on the footing that it shall be treated as "without prejudice" upon the issue of liability only. The third was that the words "without prejudice" had become capable of modification where expressed reservation was made at the time of the offer without infringing the public policy which protects negotiations from disclosure whilst liability is still an issue.
Ryan J concluded that the meaning of the "without prejudice" formula should not extend to a case where a reservation is made that a "without prejudice" communication will be taken into account on the question of costs. As there was such a reservation in that case, he had regard to the "without prejudice" letters.
In my view, the statement by Thomas J in the Transit Australia case, must be read in that context. There is nothing in the judgment of Ryan J to indicate that all "without prejudice" offers may be disclosed to the Court once the substantive issues have been decided. In my view, disclosure of such offers is limited to those cases where they are contained in a Calderbank procedure, or where there is a reservation in relation to the "without prejudice" protection not extending to costs.
Therefore, I am of the view that I should pay no regard to the informal "without prejudice" offer made by the respondent to the applicant.
However, even if I am wrong and could have regard to the terms of that offer, it is clear from the authorities that such an offer can be taken into account only when such an offer is unreasonably refused by a party. Having regard to the background to this matter, including the inaccuracy of the regional ecosystem mapping which has gone through at least three revisions since the application was made in 2001, in my view, it was not unreasonable for the applicant to refuse to accept the accuracy of the various maps which formed part of the offer to settle.
In this case there have been inordinate delays in bringing this matter to a final conclusion. Apart from those delays, the original application was refused and the internal review confirmed the original decision for reasons which have proved to be largely erroneous. If the applicant had not persisted with his appeal, he would not have been granted a permit to clear any land. As a result of the appeal, he was successful in that he can clear 1,373 ha, but that was achieved at a cost.
However, he has not been completely successful. The original application was to clear 3,727 ha of remnant vegetation. After the appeal was referred to the Court, the applicant made concessions and at the trial he did not dispute the exclusion of certain areas, such as the area containing commercial timber, the riparian buffer areas along the watercourses and the agreement of the biodiversity experts. Of the only two issues that went to trial, the applicant was unsuccessful. However, it was not unreasonable to contest those issues, in view of the continued alterations to the regional ecosystem mapping in the application area.
Therefore, having regard to all those matters and to the principles in Hughes v Western Australian Cricket Association and Dodds Family Investments v Lane Industries, I consider that the applicant is entitled to a partial award of costs. In my view, it is appropriate that the applicant be awarded 50% of his costs of and incidental to the hearing and determination of the appeal.
Orders
1.The respondent pay 50% of the applicant's costs of and incidental to the hearing and determination of the appeal.
2.The respondent pay 50% of the applicant's costs of this application.
3.The costs are to be assessed on the standard basis by the appropriate assessing officer of the Supreme Court.
JJ TRICKET
PRESIDENT OF THE LAND COURT
3
0