Martin v State of New South Wales (No 10)

[2011] NSWCA 287

Court of Appeal

New South Wales

Case Title:

Martin v State of New South Wales (No 10)

Medium Neutral Citation:

[2011] NSWCA 287

Hearing Date(s):

6 September 2011

Decision Date:

14 September 2011

Jurisdiction:

Before:

Basten JA at 1; 
Handley AJA at 26

Decision:

(1) Leave to appeal granted.
(2) Costs of the application for leave to appeal should be costs in the appeal.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

PROCEDURE - security for costs - pleading struck out but with leave to replead - security to be provided before claim repleaded - security ordered on basis that applicant acting for the benefit of a third person - appropriateness of order for security on basis that may not apply to repleaded claim - security sought by party which made decision possible for ulterior purpose

Legislation Cited:

Land and Environment Court Act 1979 (NSW), s 57
Mining Act 1992 (NSW)
Uniform Civil Procedure Rules 2005 (NSW), rr 42.7, 42.21

Cases Cited:

Martin v Minister for Mineral and Forest Resources [2010] NSWLEC 131

Texts Cited:

Category:

Principal judgment

Parties:

Anthony Gilbert Martin - Applicant
The State of New South Wales - First Respondent
Highlake Resources Pty Ltd - Second Respondent
Mr Ross Savas - Third Respondent
Mrs Kaylene Savas - Fourth Respondent
Central West Scientific Pty Ltd - Fifth Respondent
Tellus Resources Ltd - Sixth Respondent

Representation

- Counsel:

Counsel:

Applicant in person
Submitting appearance - First Respondent
Mr P W Larkin - Second Respondent
Mr B Goldsmith (Solicitor) - Third and Fourth Respondents
Ms K J Williams - Sixth Respondent

- Solicitors:

Solicitors:

Applicant self-represented
I V Knight, Crown Solicitor - First Respondent
HWL Ebsworth Lawyers - Second Respondent
Goldsmiths Lawyers - Third and Fourth Respondents
Allsop Glover - Sixth Respondent

File number(s):

CA 2011/84040

Decision Under Appeal

- Court / Tribunal:

- Before:

Pain J

- Date of Decision:

24 February 2011

- Citation:

Martin v State of New South Wales [2011] NSWLEC 20

- Court File Number(s)

80006 of 2010

Publication Restriction:

Judgment

1. BASTEN JA : This matter related to proceedings in the Land and Environment Court brought by the applicant seeking a declaration that exploration licence 7613 (EL 7613) was null and void and should be cancelled.

1. The proceedings were commenced in the Land and Environment Court by summons filed on 13 December 2010 (matter no 80006 of 2010). On 1 February 2011 the applicant filed points of claim. On 11 February 2011 the second respondent, Highlake Resources Pty Ltd, filed a notice of motion seeking orders striking out the points of claim and seeking a stay of the proceedings until security for costs in the sum of $49,378 was provided. Further, the motion sought an order that the applicant not plead a case involving "improper conduct or the grant of licence for personal monetary gain" without an affidavit verifying the supporting facts.

1. On 24 February 2011 Pain J delivered judgment on the motion: Martin v State of New South Wales [2011] NSWLEC 20. Her Honour struck out the points of claim, made an order requiring provision of security for costs; stayed the proceedings pending provision of security and ordered that the proceedings be dismissed if no security were provided within two months of the date of the order (namely by 24 April 2011). In the event that security was provided, the applicant was granted 28 days thereafter to file amended points of claim, to be accompanied by an affidavit verifying facts supporting "any general statements" made in the amended points of claim and facts supporting the applicant's standing to bring the claim. Costs were reserved.

1. On 12 April 2011 Mr Martin filed a notice of appeal in this Court challenging the whole of the judgment and orders in the Court below.

1. The statutory right of appeal in relation to class 8 proceedings, relied on by Mr Martin, is to be found in s 57 of the Land and Environment Court Act 1979 (NSW) ("the LEC Act"). Such appeals are limited to decisions of that Court "on a question of law": s 57(1). Such decisions may be interlocutory orders or decisions but, in that case, can only be brought with leave of this Court: s 57(4)(d). It follows that the notice of appeal was incompetent.

1. The notice nevertheless claimed, as an "interim order", leave to appeal. The matter has proceeded on the basis that, if the notice of appeal were found to be incompetent, the Court should consider the application for leave.

Strike out of pleading

1. The primary judge summarised the applicant's case in the following passage at [33]:

"The Applicant submitted that his [points of claim] raise three matters: theft of intellectual property, about which most of his case is concerned; the delegation under which approval for EL 7613 was granted was void; and that he has an equitable/legal interest in the area the subject of EL 7613."

1. In substance, her Honour held that a cause of action for theft of intellectual property, or misuse of confidential information, could not form the basis for challenging the grant of EL 7613. Secondly, she held that the challenge to the delegation under the Mining Act 1992 (NSW) was misconceived and must fail for the reasons given by Biscoe J in a related matter: Martin v Minister for Mineral and Forest Resources [2010] NSWLEC 131. (That matter was the subject of separate challenge by Mr Martin, in which leave to appeal has been refused.) Thirdly, her Honour concluded that Mr Martin had no interest in the area subject to EL 7613.

1. In relation to the third point, she noted that the applicant had relied upon his interest in EL 6355, which covered part of the area now subject to EL 7613. According to evidence presented by Highlake Resources, and apparently not challenged by the applicant, EL 6355 had been held by the applicant's wife, but renewal was refused on 17 June 2009. The primary judge was not satisfied that the applicant had an interest in EL 6355, or that it remained valid when EL 7613 was granted on 31 August 2010, pursuant to an application lodged by Highlake Resources on 24 April 2010.

1. In relation to the second point, no tenable legal basis has been shown for challenging the validity of the delegation pursuant to which EL 7613 was granted.

1. As the primary judge noted, the thrust of the applicant's case, as pleaded, was that applications for EL 7613 and other mining authorities were based on confidential information obtained by the applicant in the course of his exploration activities and conveyed to persons connected with Highlake Resources and, in particular, Mr and Mrs Savas. Her Honour accepted that such allegations may give rise to a claim in equity for breach of confidence, but not one within the jurisdiction of the Land and Environment Court, even if the information related to a mining tenement. In order to attack the validity of the grant of EL 7613, it was necessary to demonstrate some level of knowing involvement of the officers responsible for the grant of the authority so as to permit the conclusion, for example, that the grant was made corruptly or for an improper purpose. Although there were intimations in the points of claim that such a connection was a necessary element of the challenge, facts sufficient to establish that element in the period prior to the grant of EL 7613 were not identified. No error of law is demonstrated in her Honour's conclusion that the points of claim should be struck out.

1. Her Honour nevertheless granted leave to replead: at [60]. Order 6 also directed that the affidavit accompanying amended points of claim must identify facts supporting the applicant's standing. That order was made in a context where her Honour had tentatively concluded that the applicant had no relevant interest equitable or otherwise in EL 6755, held by his wife, to satisfy common law principles of standing: at [38] and [52]. These directions were not all adverse to the applicant's interests, but in any event were not attended by legal error.

Security for costs

1. The order made with respect to security for costs was more problematic. First, it precluded repleading until the security had been provided. It was therefore made in ignorance of the basis upon which the applicant might assert standing to challenge the validity of EL 7613. On the other hand, the order for security was made upon the basis that the sole purpose of the proceedings was to assert the interests of the applicant's wife, which her Honour had otherwise, at least tentatively, held did not provide a basis for standing. Further, no consideration was given to the possible bases on which the applicant himself might be entitled to challenge the validity of the mining authority. Thus, if there were substance in his allegations as to misuse of confidential information, it was confidential information which he had acquired in respect of the particular area of land the subject of the authority and which he had conveyed to persons associated with Highlake Resources. If, as seems plausible, the mineralisation may warrant further exploration to determine commercial viability, presumably the applicant may have an interest in seeking to pursue a further exploration licence if EL 7613 were to be set aside. His interest in that regard is not necessarily to be treated as the same as that of any member of the public; it is, at least arguably, a greater interest based upon knowledge acquired through exploration activities he had carried out in the area.

1. Assuming for present purposes, that such a contention is plausible, it is necessary to identify the basis upon which the primary judge ordered security for costs. She did so pursuant to r 42.21(e) of the Uniform Civil Procedure Rules 2005 (NSW) ("the UCPR"). That rule permits an order for security for costs where it appears to the Court that "a plaintiff is suing, not for his or her own benefit, but for the benefit of some other person and there is reason to believe that the plaintiff will be unable to pay the costs of the defendant if ordered to do so". Although not dismissing the proceedings for lack of standing, it clear that the primary judge was of the view that he had no standing to pursue the proceedings on behalf of his wife. To then order security on the basis of the proceedings being pursued only for her benefit and not for his own benefit, was to exercise a power which was not available in the circumstances so identified. The error is revealed in the following statement at [55]:

"Under r 42.2(1)(e) [sic] the issue arises of whether the Applicant is taking these proceedings on behalf of another person. The evidence shows that Mrs Martin was the holder of EL 6355 which has now lapsed. It appears that if anyone has some kind of claim relating to EL 7613 it is Mrs Martin, not the Applicant. In the absence of evidence that any interest was assigned to him by Mrs Martin, the Applicant can have no legal interest in EL 6355. I therefore accept the Second Respondent's submission that the Applicant is suing on behalf of another person. Mrs Martin stands to benefit from this litigation and has not offered to provide any security in relation to costs."

1. In relation to the second limb of the rule, namely that the plaintiff would be unable to pay costs if ordered to do so, her Honour noted that he had failed to respond to a notice to produce documents concerning his financial position: at [56]. Relying upon that failure, unexplained by the applicant, she concluded that it was "reasonably possible" he will not be able to meet a costs order: at [57]. That was not a finding in the language of the rule ("there is reason to believe") and appears to apply a lower threshold.

1. Further, she noted that there were "a number of outstanding costs orders against the Applicant": at [58]. By "outstanding" her Honour no doubt meant unpaid. However, it is not clear whether her Honour was referring to orders made in proceedings which had been determined, or orders made at an interlocutory stage. If, as appears likely, her Honour had in mind interlocutory costs orders, there was a failure to take into account the important consideration that, absent an order that the costs were payable forthwith upon assessment, such costs "do not become payable until the conclusion of the proceedings": UCPR, r 42.7(2).

1. With respect to the security for costs order, there are at least arguable grounds for the view that her Honour decided questions of law erroneously.

Grant of leave to appeal

1. The applicant has made good an arguable case that the orders with respect to security for costs were attended by erroneous decisions in point of law. That may not be sufficient in itself to warrant a grant of leave to appeal against such interlocutory orders, but there are other considerations which favour such a grant.

1. First, the orders have the potential to stultify the proceedings. Indeed, as there was no stay, the proceedings were automatically dismissed on the expiration of two months without security being provided.

1. Secondly, the terms of the order may have been misconceived. When the order was made, it was not known if the applicant had standing and a reasonably arguable claim, nor how the respondents would seek to meet it. For example, although the claim as originally proposed suggested improper, if not corrupt, behaviour on the part of government officers, the State had filed a submitting appearance. If the applicant were to plead a supportable claim in respect of which he had a relevant interest, the very basis on which the order had been made would disappear.

1. Thirdly, if the applicant were to pursue a claim in which he has a relevant interest and it involves a reasonably arguable case of the kind described above, implicating both officers in the department and private individuals and corporations seeking mining authorities, it might be thought unfortunate that the proceeding could not go ahead because those implicated in the conduct complained of were able to obtain an order for security for costs which was not met.

1. Fourthly, the applicant was ordered to provide security for the costs of the trial before he could file amended points of claim, and before it was known whether the case would go to trial.

1. Finally, although the real complaint of the second respondent might be thought to have been the costs thrown away by the need to bring the motion to strike out the points of claim, her Honour did not award costs of the motion, but reserved that issue.

Limitation on grant of leave

1. The "notice of appeal" contains a number of grounds and requests for relief which are unsupportable and should not be the subject of any grant of leave. The leave should be restricted to ground 7 contained in the notice of appeal filed on 12 April 2011 and the relief sought should be limited to that sought in order 4, in so far as it seeks to strike out orders 2, 3, and 4 made by Pain J on 24 February 2011, with necessary consequential amendments to order 5.

1. Costs of the application for leave to appeal should be costs in the appeal.

1. HANDLEY AJA : I agree with Basten JA.

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