Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd & Ors
[2020] HCATrans 117
[2020] HCATrans 117
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Brisbane No B34 of 2020
B e t w e e n -
OAKEY COAL ACTION ALLIANCE INC
Appellant
and
NEW ACLAND COAL PTY LTD ABN 081022380
First Respondent
CHIEF EXECUTIVE, DEPARTMENT OF ENVIRONMENT AND SCIENCE
Second Respondent
PAUL ANTHONY SMITH, MEMBER OF THE LAND COURT OF QUEENSLAND
Third Respondent
BELL J
TRANSCRIPT OF PROCEEDINGS
AT SYDNEY ON THURSDAY, 20 AUGUST 2020, AT 9.45 AM
Copyright in the High Court of Australia
MR J.K. KIRK, SC: May it please the Court, I appear with my learned friends, MR C.J. McGRATH and MR O.R. JONES, for the appellant. (instructed by Environmental Defenders Office)
MR N. ANDREATIDIS, QC: If it pleases the Court, I appear on behalf of the first respondent. (instructed by Clayton Utz)
HER HONOUR: Yes, Mr Kirk.
MR KIRK: Your Honour, can I start with the evidence. There have been two affidavits filed upon which we rely. The first is an affidavit of Mr Paul King affirmed on 18 August 2020 and I seek to read that affidavit and rely on the exhibits.
HER HONOUR: I am sorry, Mr Kirk, it is not your application.
MR KIRK: No.
HER HONOUR: I apologise.
MR KIRK: Not at all.
HER HONOUR: Mr Andreatidis, conducting proceedings in cyberspace is never easy - my apologies.
MR ANDREATIDIS: Not at all, your Honour. I was sitting here hopeful, temporarily. Your Honour, the first respondent relies on the application that was filed on 7 August and affidavits of Mr Cook filed that day, an affidavit of Mr Deane also filed that day, together with a further affidavit of Mr Cook filed yesterday, 19 August, together with the written submissions that were filed yesterday in accordance with the directions.
HER HONOUR: Yes. Mr Kirk, is there any objection to me…..material?
MR KIRK: No, your Honour.
HER HONOUR: Yes, thank you.
MR KIRK: For our part – sorry, your Honour – we seek to rely on the affidavit I mentioned earlier, that of Mr King affirmed on 18 August, and also an affidavit of my instructing solicitor, Mr Andrew Kwan, also affirmed on 18 August and we filed submissions on Tuesday, 18 August.
HER HONOUR: Thank you, Mr Kirk. Yes, Mr Andreatidis.
MR ANDREATIDIS: In the written submissions I have noted an objection to one part of Mr King’s affidavit. I will take you through that, though, when I address you, your Honour, if that is in order for you?
HER HONOUR: Yes. I note that in your submissions, Mr Andreatidis, it is an objection to hearsay but perhaps you press a little more firmly on the basis that in light of the generality of the assertions, I would place little weight on…..inclusion.
MR ANDREATIDIS: Yes, that is so, your Honour.
HER HONOUR: We will proceed on that basis, Mr Andreatidis. Yes, do go ahead, Mr Andreatidis.
MR ANDREATIDIS: Thank you, your Honour. In essence, the distinguishing features of this appeal which, in my submission, tip the balance of discretion in favour of the order for security for costs are that the appeal is really about those who stand behind the appellant who are seeking to protect their own private interests and that those same people are unwilling to forgo the limited liability protection that they enjoy and that what the evidence establishes at best for the appellant in the context of this application is an unwillingness of those members to contribute towards security for costs for their hopelessly insolvent corporation, and what the evidence does not demonstrate is that those members, or a number of them, are unable, because they lack the means to contribute towards security for costs.
Your Honour, I place particular reliance on the reasoning of Justice McHugh in a decision of Chellaram v China Ocean Shipping, which I have forwarded to the Registrar, and I understand the hard copy is with you and a copy has been sent to my learned friends.
HER HONOUR: Yes. Is there a – perhaps if you could ‑ ‑ ‑
MR ANDREATIDIS: A particular passage? Yes, please, your Honour. Could I ask you go to page 323? The passage I rely on in particular is from line 35 down to line 48 and in particular his Honour’s reference to the Full Court of the Federal Court’s statement in Bell Wholesale.
HER HONOUR: Yes. Can I take this up with you, Mr Andreatidis? It is one thing to recognise in the case of an impecunious corporation that there may be shareholders, or creditors for that matter, standing behind the corporation who evidently are in a position to make financial gain in the event of success of the litigation.
Here, one has an organisation which, on the evidence, appears to be a registered charity formed with objects that are set out in Mr King’s affidavit at paragraph 3 comprising 60 or thereabout members who may be said to have an interest in seeing that New Acland’s coal mine is not expanded. But it is perhaps a rather different interest to the sort of financial interest that, as I say, a shareholder or a creditor might have in litigation that is going to produce, if successful, financial gain to an impecunious corporation.
MR ANDREATIDIS: In my submission, your Honour, that is in the particular circumstances of the appellant, not a distinction that ought to be made and I rely on the same paragraph your Honour has just taken me to in that regard, paragraph 3 of Mr King’s affidavit. In my submission what that paragraph…..is that the true character of the appellant is to protect, as I have put it in the written submissions, the private interests but having regard to the nature of those private interests, they include, in my submission, substantially, commercial interests, financial interests because they seek to protect the value of their property.
I have interlined the words “value of” but that is to be inferred and “rural residential” - again, I infer – it is to be inferred financial and “protection of good agricultural land” – again, in my submission, it is to be inferred from that that it is a reference to financial interests.
So whilst it is not as clear‑cut as it was in the case that I have taken your Honour to, in my submission the proposition applies equally here because it is not the case of, for example, a body of humans who make up Greenpeace – to take an example – who have – may I continue, your Honour, sorry?
HER HONOUR: I am sorry, by all means.
MR ANDREATIDIS: It is unlike Greenpeace where there is objectively a clear space between those that are members of that organisation and the targeted functions of it. They do not have an interest at all in the ocean, in a direct sense, whereas the members here, by reference to the evidence, are owners of properties, occupants of properties that are not just residential but also agricultural. So, in my submission, the distinction is not one that ought to be made and the proposition does apply.
HER HONOUR: Yes, all right. Really, Mr Andreatidis, that is at the heart of your application, is it not, your ‑ ‑ ‑
MR ANDREATIDIS: Absolutely.
HER HONOUR: As I take it, it is common ground between the parties that Oakey is impecunious and is unlikely to be able to meet an order for security were one to be made and, as I understand it, Mr Andreatidis, you do not contest that it follows that the likelihood is that an order would stultify the proceedings?
MR ANDREATIDIS: No, not at all. Having regard just to the appellant and not taking into account its members, that is correct, your Honour, I accept that.
HER HONOUR: Yes.
MR ANDREATIDIS: Your Honour has correctly identified the essence of the submission being made on behalf of the first respondent and that is that connection between its members and what they are in fact fighting for which is their own personal interests rather than a truly arms‑length charitable public interest organisation.
HER HONOUR: In paragraph 5 of Mr King’s affidavit, the membership is described in general terms as comprising “local farmers and graziers” so one can see the inference that you seek to have drawn there in relation to what might be taken to be their financial interest in maintaining the value of their properties and then there is reference to “veterinarians and concerned townspeople”.
MR ANDREATIDIS: Yes.
HER HONOUR: Yes.
MR ANDREATIDIS: Now, “townspeople”, of course, could be shopkeepers, for example.
HER HONOUR: Just taking “townspeople”, for example, looking at the inferences that you invite me to draw, why would I not conclude that expansion of your client’s mine would be in the financial interest of the townspeople of Oakey?
MR ANDREATIDIS: Indeed, your Honour. That is certainly the proposition that my client advances, one that is opposed by those within the township that make up the membership of the appellant.
HER HONOUR: I think that, Mr Andreatidis, is the issue that I am endeavouring to tease out with you. To the extent that the membership comprises members of the Oakey community who do not hold farming properties but are members of the town, their financial interests might be thought to lie with your client’s successful resistance to the appeal, so that it is – the question of a distinction being drawn between membership of this body and shareholders or creditors of a corporation who can clearly be seen to benefit from the success of that corporation’s litigation – it does seem to me there is some tension there.
MR ANDREATIDIS: Your Honour, I cannot answer that in a direct way because I do not know who the members are or what they all do, but I do point, once again, to paragraph 3.
HER HONOUR: Yes.
MR ANDREATIDIS: Which is framed in terms of protecting against the mine and each of those factors, in my submission, in my subparagraphs a) through to d) go against the proposition your Honour just put to me and also particularly the first sentence of paragraph 6, “Given our members’ concerns”, they were an objector to the application filed on behalf of my client in the Land Court, or may be in the Land Court. So, in my submission, your Honour, the appropriate inference to draw from the evidence is that the members see that the expansion of my client’s mine will not be in their financial interest but will be against it.
HER HONOUR: Yes. I think in Mr Cook’s first affidavit reference is made to statements of the then secretary of Oakey sworn to in statutory declaration in support of the application for waiver of fees in the Court of Appeal to the effect that the membership has exhausted its capacity to raise funds in relation to the litigation.
MR ANDREATIDIS: Yes.
HER HONOUR: Now, that is evident in ‑ ‑ ‑
MR ANDREATIDIS: Yes. Your Honour, I think the statutory declaration you are referring to is in the affidavit of Mr King, which is the appellant’s affidavit, exhibit PK‑4.
HER HONOUR: I thought I first read it – just bear with me.
MR ANDREATIDIS: I am sorry, I am reminded ‑ ‑ ‑
MR KIRK: Sorry, it is at page 103 of Mr Cook’s first affidavit, your Honour, using the numbers on the right‑hand side at the bottom.
HER HONOUR: Yes, and, indeed, I see now at the time of this statutory declaration the secretary was then, as now, Paul Bernard King. Yes. So I just draw to your attention, Mr Andreatidis, that in your own evidence one has the assertion that ‑ ‑ ‑
MR KIRK: Paragraph 8), your Honour.
HER HONOUR:
unable to fundraise further from its members.
MR ANDREATIDIS: It says “unable” but that does not go so far, your Honour, as to say that the members do not have the means. It goes no further than an unwillingness. That is as high as paragraphs 8) and 9), in my submission, go from that statutory declaration. The evidence does not say that the members are unable, because of their own personal circumstances. They have no financial means. The word “unable” is to be understood literally, that the members are – I will interpose the word “unwilling” instead of “unable”, which is the more appropriate term, in my submission, in terms of understanding what paragraph 8) means.
If it was the case that the members were – sorry, I withdraw that. If the state of affairs was that the members, either collectively or individually, had no means one would expect to see that said very forcefully and bluntly in the material and, in my submission not - which is why I invite your Honour to draw the inference that at best it demonstrates an unwillingness as opposed to an inability on the part of the members. I am not pointing to any one person in particular. It could be a number of them. I mean, I just do not know because I do not know who these people are.
HER HONOUR: I think I have that point, Mr Andreatidis. Can I take up with you the significance you place in your submissions on the costs order in the Court of Appeal which to date is unsatisfied. It is just unclear to me – can you explain, at paragraph 3(d) you say that Oakey proposed the costs orders that were made against it in the Court of Appeal. Can you tell me something of the history in this respect because it is not clear to me?
MR ANDREATIDIS: Of course, your Honour. I am speaking outside the record that is immediately before you. The proposition I make in the written submission relies on the transcript that was before your Honour and Justice Gageler in the special leave application, but in answer directly to your question, factually what occurred was there was the hearing before the Court of Appeal proper, the appeal and the cross‑appeal, it was reserved, as one would expect.
Prior to the judgment being handed down, the parties collectively asked President Sofronoff to not make orders so that the parties could digest the reasons and formulate what they understood, between themselves, to be the appropriate orders to be made. In that process, the appellant proposed that the appropriate costs orders be those that the Court of Appeal actually made.
I did not trouble, your Honour, putting those in because in the special leave transcript, which is in before you, that submission was made by Mr Clothier QC at page 8 of the transcript which is AK‑7 of the affidavit of Mr Kwan, page 48. So all that material was before your Honour in the special leave application. I did not put it back into this record.
HER HONOUR: Mr Andreatidis, at the conclusion of the Court of Appeal’s reasons for judgment delivered on 10 September 2019, their Honours indicated the orders that they were proposing to make and those included that the appellant pay the first respondent’s costs of the appeal.
MR ANDREATIDIS: Yes.
HER HONOUR: They did not include any order in relation to the costs of the proceedings before Justice Bowskill and, as I understand it, her Honour made no order as to costs.
MR ANDREATIDIS: Yes, your Honour, you are correct. You are correct, your Honour.
HER HONOUR: Then after that the parties sought to make submissions on the form of the five orders and you tell me that Oakey included proposed orders as to costs in the terms that the Court of Appeal ultimately made. That leaves it somewhat unclear to me whether Oakey was proposing that the Court of Appeal make final orders in the terms that their Honours made.
MR ANDREATIDIS: I am not sure I follow your question, I am sorry, your Honour.
HER HONOUR: It is just not clear to me – the orders that the court made following receipt of the parties’ submissions departed, in some respects radically, from the orders that their Honours had proposed to make, and it is not clear ‑ ‑ ‑
MR ANDREATIDIS: In the sense of expanding it? The costs order you are talking about, your Honour, specifically?
HER HONOUR: No, no, I am not talking of the costs order alone by any means. What I am noting is that ‑ ‑ ‑
MR ANDREATIDIS: I am sorry. No, you are absolutely right, your Honour. The orders as ultimately made were – sorry, I will stop talking.
HER HONOUR: The orders that the court proposed to make in its reasons for judgment on 10 September were to set aside orders made by Justice Bowskill, to refer your client’s applications back to the Land Court and for Oakey to pay your costs of the appeal. Those orders were silent in relation to the proceedings before Justice Bowskill.
MR ANDREATIDIS: Yes.
HER HONOUR: Then the parties made submissions on the form of the final orders and the matter that I am first seeking to get your assistance about is whether Oakey was proposing orders along the lines of those that the Court of Appeal ultimately made, which radically departed from those that they had foreshadowed.
MR ANDREATIDIS: Your Honour, I will have to check that. I cannot recall that off the top of my head. What I think is accurate is the orders that were ultimately made by the Court of Appeal were very different to the orders that Oakey submitted ought to be made in that period. I would have to grab the forms of order, your Honour. I am sorry, I did not anticipate this question.
HER HONOUR: Mr Andreatidis, I am just trying to work out the significance of the submission that you make concerning the outstanding costs order from the Court of Appeal. On the respondent’s part it is said, notwithstanding the grant of special leave to appeal and the exchanges concerning the Court of Appeal’s costs order that took place at the hearing of that application, New Acland proceeded to press for the winding up of Oakey based on the failure to pay the outstanding Court of Appeal costs and that I would draw an inference from that and other circumstances that New Acland brings this application in order to stifle the appeal, as distinct from in order to be secure in the likelihood of getting its costs should the appeal fail.
MR ANDREATIDIS: I am sorry, I think I now understand where your Honour is going and my apologies for being slow.
HER HONOUR: Not at all.
MR ANDREATIDIS: New Acland had costs orders in its favour from the Court of Appeal and was entitled to make the winding‑up application that it did. As to what ultimately happened in that application the record indicates that it has effectively been put on hold and what Justice Davis indicated was that what New Acland can do if it wants is seek to protect itself in terms of costs by making this very application we are making. Now, of course I do not submit that we are taking advice from Justice Davis, but the context of what occurred is as I have put it.
In terms of the nature of this application, my submission is that the application is not designed to stifle the application. This application is designed to secure costs in circumstances where – the primary submission I make being – there are 60 members, the identity of whom is largely unidentified, the means of whom is unidentified, and that in that context and consistent with the decision of Justice McHugh I took your Honour to at the outset, your Honour cannot be satisfied that an order for security would have that consequence.
We just do not know. All we know – sorry, when I say “we” I do not mean to use that in the collective sense – all the evidence demonstrates is an unwillingness. So if the appeal is stifled it is not because of the insolvency of the association – I mean obviously that is a reason, but it is not alone. It really comes down to the central proposition being the unwillingness of those who stand to benefit from the appeal who stand behind the appellant who are not prepared to step out at all.
HER HONOUR: Yes.
MR ANDREATIDIS: That is the extent to which I rely on those circumstances, your Honour.
HER HONOUR: Yes, and what do you say to the contention that New Acland delayed bringing this application?
MR ANDREATIDIS: Plainly, there was delay, your Honour. I cannot pretend that there was not a slow process. I point to what occurred in the Supreme Court and, in my submission, that was an appropriate thing to do. It was within my client’s rights to take that step, but, your Honour, we could have made the application sooner. We did not. I also note no evidence of prejudice on the part of the appellant, acknowledging of course that the appellant, as itself, without assistance from its members, has no funds. I acknowledge that, of course, as I do that the appeal has now been set down.
HER HONOUR: Yes, thank you, Mr Andreatidis. Are there other matters you wish to put?
MR ANDREATIDIS: No, your Honour.
HER HONOUR: Yes.
MR ANDREATIDIS: Actually, sorry, I should add – my apologies – there is no suggestion that the conduct of my client is what has caused the impecuniosity of the appellant. I do not understand that to be a matter that is put against me and nor do I understand it from the evidence to be something that would be inferred. Otherwise I rely on the written submissions.
HER HONOUR: Thank you, Mr Andreatidis.
MR ANDREATIDIS: Thank you, your Honour.
HER HONOUR: Mr Kirk.
MR KIRK: Thank you, your Honour. Can I seek fairly briefly to address five topics? Your Honour, we had some feedback issues earlier so if I am feeding back and causing problems please let me know. But I hope we skate through.
Can I articulate the five issues I will seek briefly to address and then I will address them in turn and they are picking up points my learned friend raised - first, the issue of private interests; secondly, the ability to raise funds or the – also, the stultification issue; third, the issue of the costs orders below; fourth, the purpose and effect of this application; and, fifth, the significance of delay and prejudice.
So, starting with the first of those – the private interests. Can I take your Honour briefly back to Mr King’s affidavit affirmed on 18 August starting at paragraph 3, which has already been referred to. My learned friend gave great emphasis to objects a) and b) and rather skated over c) and d) which are of obvious significance, including protection of environmentally and culturally sensitive areas.
No doubt there may be some members of my client which may have a particular economic interest, but to suggest that that characterises the whole of the Alliance is not a fair reading of those rules and, to be frank, you do not have to be a member of Greenpeace to have a concern about environmental areas, including in your local environment. So the attempt by my learned friend to characterise all this as being driven about commercial interests is not consistent with those objects nor consistent with paragraph 5 indicating that the membership includes veterinarians and townspeople – and I will not go back over that issue.
Secondly, in relation to the ability to raise funds, one has to see that – recalling, of course, that the appellant here is – it is not the individuals behind it. My client, the appellant, is the Alliance. Picking up a few points briefly in Mr King’s affidavit – and I realise, of course, your Honour will have read it carefully – at paragraph 11 there is a reference to the current economic circumstances. My learned friend casts doubt on that, but it is a…..statement of the obvious really in current circumstances.
In paragraphs 13 to 15, Mr King refers to the significance of correspondence I will take your Honour to very shortly whereby threats were made by New Acland through Clayton Utz against the Alliance, its office bearers and people who support it and, indeed, its solicitors and that has had an effect – Mrs Harrison who is the 84‑year‑old current president has engaged her own solicitors out of concern of the threats made by New Acland and in paragraph 15 makes the fairly obvious point, with respect, that New Acland’s actions in pursuing – or threatening to pursue members makes it less likely that its members are going to be willing to provide funds. I will take your Honour to that correspondence shortly.
Paragraph 16, if the Court orders security, the Alliance will endeavour to raise costs. This is a frank affidavit, “but no certain path exists to do so”. Paragraph 17 refers to making request for public donations, but Mr King is, unsurprisingly, very doubtful about the ability to raise $90,000, certainly not in time for the hearing of the appeal and the order that New Acland seeks is that $90,000 security be provided within two weeks of the order, which is a very short period of time to engage in fundraising and so forth.
Paragraph 18 refers to attempts to raise funds from other charities, which has had limited financial success. That was referred to in the statutory declaration too, which I think your Honour is aware of. Paragraph 19 frankly acknowledges the existence of public interest funder but explains the difficulties that might arise in seeking security from that route.
Paragraph 20 refers again to the threats made by New Acland and that leads to the culmination, which has not been challenged, that Mr King, as the secretary, considers it is likely that the Alliance would not be able to raise $90,000 from any known sources in the time available. What that means in practice is that regardless of how rich or poor some of the members of the Alliance are, my client, the Alliance, based on this evidence, is unlikely to be able to raise that amount of money in the time available and the practical effect will be to stultify the appeal, which is obviously a very significant factor.
HER HONOUR: Mr Kirk, Mr Andreatidis’ submissions are directed to the circumstance that your client is a corporation and the…..of Mr King’s affidavit are expressed in considerable generality. As I understand it, New Acland complains about…..wants information about the identity of members of Oakey and in those circumstances, although New Acland accepts…..is not in a position to satisfy that security in the terms that it seeks, New Acland does not accept that those who stand behind…..
MR KIRK: I think in a sense I accept that is what my friend put. In a sense that comes back to the point I sought to make. It may be, I do not know, that there are some well‑off members of the association, it may be that there are not. But the fact is, even accepting your Honour’s fair points, with great respect, about the generality of the affidavit, it does lead to that conclusion at paragraph 21, which is clearly expressed, not challenged, that the likely effect will be to stultify.
Now, my learned friend referred to Justice McHugh’s judgment in Chellaram. It is perhaps worthwhile just going back briefly to that case to contextualise it a little. That was a case – a commercial dispute as I understand the underlying matter. There was actually, also unusually, if your Honour turns to page 323 of the ALR report – 102 ALR up at the top of 323, it seems there was one particular progenitor of the company, Mr Chellaram, who stood behind the company. Unusually he, in fact, offered an undertaking to pay the amount sought which was $8,250.
So the case in a sense actually turned not so much on whether security should be provided in this commercial dispute, but the form of it, and his Honour’s ultimate conclusion – if your Honour turns over to 324, round line 34, 35 is that his Honour was not persuaded that an undertaking was as good in relation to this foreign entity and one presumes a foreign shareholder as making an actual order for security. So he has made an order for security. But it was a small amount. There was no delay. It was a commercial dispute. Can I take your Honour back to page 323 round line 30, that last sentence:
In those circumstances, I would hesitate to make an order for security for costs if the effect of that order would be that the appeal could not be pursued because neither the appellant nor those who stand behind it could provide security for the costs of the appeal.
Now, it is true we do not ultimately know about every single member and whether they could or not here. But they are not shareholders. They are members of a voluntary association which has been pursuing this litigation for a long time, undertaking fundraising and so forth. They have now reached the limits of their fundraising abilities. The effect will be, if security is ordered in the amount sought – the likely effect will be to stultify.
Can I turn then briefly to the third point, the costs issue below. I am not entirely sure who suggested what and when. Suffice it to say that the costs orders made below – and I said, by the way, that we did not dispute below that there should be costs ordered against us in the Court of Appeal – I am not sure about…..her Honour Justice Dowsett, but they are in dispute now and we have addressed it in our written submissions…..your Honour, it is actually behind Mr Kwan’s affidavit. I will just draw your Honour’s attention to it briefly. It is at pages 37 to 38, using the bold numbers at the bottom of the right‑hand side of Mr Kwan’s affidavit.
Paragraphs 70 through to 78, also of our submissions – and can I just draw your Honour’s attention to paragraph 77 where we frankly accept that a particular concession was made below. We say it should not have been made. In any event that was before the Court of Appeal’s second decision. Your Honour was quite right, with respect, to note the evolution of what was proposed before the Court of Appeal.
Now, whether or not it is going to be a hard or easy argument to attack costs below, in a sense does not ultimately go to the issue of whether or not New Acland should have security for its costs in this Court, regardless of what happened below in the Court of Appeal.
One other point about that is a rather pithy expression, with great respect, put by his Honour Justice Davis on this point. If your Honour goes back to Mr King’s affidavit at page 65 – numbers on the bottom right‑hand side – this is his Honour’s judgment. In paragraph [45], his Honour said:
Given the tortuous path of the litigation and the wide discretion in relation to costs, I am not prepared to find that there is no reasonable prospect of the High Court disturbing the costs orders.
That catches the position rather nicely, with great respect. Fourthly, as to the purpose and effect of this application, can I take your Honour to my learned friend’s submissions at paragraph 22 where – third line, third sentence, my friend says:
NAC is seeking to protect itself from a situation where it has been put to tremendous costs and any costs order being worthless –
That is not a reasonable characterisation of the position, in our respectful submission. There has been a prolonged campaign by New Acland to seek to shut down this litigation, in part by the…..application made after the special leave application was granted, in part by the letters – and I said I would take your Honour to those letters, can I just go to them briefly.
If your Honour goes back to Mr King’s affidavit, page 50, bold numbers at the bottom right‑hand side, there is a letter from Clayton Utz dated 5 December 2019 to Ms Harrison, the president of my client, and your Honour would note the second paragraph:
Our client is considering whether to apply to the Court –
and that means, I think, the Court of Appeal:
for orders that each of the office bearers of Oakey Coal Action Alliance Inc . . . be ordered as non‑parties to pay to our client its costs . . .
Our client considers that it has strong grounds to apply for costs orders against you personally for at least the following reasons –
and that is articulated. There was then a letter sent on the same day to my solicitors, the EDO, which is behind Mr Kwan’s affidavit at page 16. It is a rather extraordinary letter sent by Clayton Utz. It is addressed to one of my instructors at EDO, Queensland. The second paragraph raises an alleged issue about continuing to trade and incur further debts – there is no evidence of that by the way, and Justice Davis rejected that type of argument. Then if your Honour looks at the last two paragraphs of the first page:
Our client reserves its rights against your client and its office bearers in all respects . . . have regard to the insolvency –
The implicit threat is made – expressed in the next paragraph:
Our client also reserves its right to rely upon this letter in respect of any costs orders to be sought against the office bearers personally, or against any other non‑parties who are seeking to advance their agenda and interest in the High Court.
That is plainly a threat to any members of the association or other supporters who might provide funding – if you do so – implicitly it is threatened – we may come after you personally for costs. Then over the page, to top it all off, an implicit threat is made against my instructing solicitors in rather remarkable terms:
in the event that a liquidator is appointed to OCAA, our client intends to require the liquidator to investigate any claims which OCAA may have for losses arising from the failure by any advisors to provide advice in accordance with the standards required by law.
That represents an attempt – and this was sent on 5 December. The special leave application was filed on 29 November. It was plainly an attempt to shut down the special leave before it went any further. What is occurring today is a continuation of that course and it has to be seen in the circumstances where the $90,000 they seek is piffling in the context of this vast expansion. We refer to evidence that as of 11 months ago, New Acland had spent $126.2 million – spent or committed in relation to just trying to get this consent through.
Now, $90,000 is completely insignificant in that respect, bearing in mind, by the way that $17,000 is being spent on this very application, according to the analysis by Mr Deane, the costs estimate, so we are really talking about $73,000 where Mr Deane’s analysis also indicates that what they call the pre‑hearing costs that they will incur are about $95,000 out of the about $170,000, nearly all of which will have been spent by today because their submissions are due tomorrow and so they would have incurred more than half of their costs already.
To suggest in those circumstances that this is really about getting security for costs that they may have to incur is unsupportable, in our respectful submission. That leads to the final point I wanted to address, which was – sorry…..
HER HONOUR: …..Mr Kwan’s affidavit…..exhibits…..annual returns of the entity of which your…..New Acland…..subsidiary…..supporting that New Acland has substantial resources available to it…..sum of $90,000 is of material significance…..is, as it were, a trifling sum. I mean, on the one hand, well‑resourced corporations had as great an interest in recovering their costs as not well‑resourced corporations or individuals. Am I right in understanding that you rely on the evidence about New Acland’s resourcing based on the discussion in Pioneer Park Pty Limited v ANZ [2007] NSWCA 344? Have I understood the basis upon which that material has been relied upon?
MR KIRK: That is precisely so, with respect, and in particular paragraph 56 of Justice Basten’s judgment. To be fair, Justice Basten was, I think, at disagreement amongst the three members of the court as to the amount of security that should be ordered but no doubt about the principles. At paragraph 56, last – it is one long sentence, his Honour says – I will read it out because I am not sure my friend may - may not have it:
Thus, it might be seen as oppressive to allow a large corporate defendant to obtain an order for security for costs which would be likely to stifle the litigation in circumstances where it could be seen that the claim had potential merit and that the quantum of costs would in any event be a relatively insignificant amount for the
corporate defendant, though beyond the capacity of the corporate plaintiff to pay. To order security in such circumstances may constitute a form of “oppression”.
So we very much rely on that. The final point I wanted to make briefly was in relation to my friend said there was no prejudice to us. …..says that is right in that I am not likely to get my fees paid for the time spent to date, but nevertheless, significant work has been undertaken on behalf of the association in that we have done written submissions, et cetera, and we are well advanced towards the hearing which is, in two days, less than seven weeks’ time. So there is prejudice in that sense, obviously not very financial prejudice because was $34,000‑odd in the bank account was not likely to cover my fees. Unless I can assist your Honour any further, they are our submissions.
HER HONOUR: Thank you, Mr Kirk. Anything in reply, Mr Andreatidis?
MR ANDREATIDIS: Very briefly, and I suspect I am making obvious points, your Honour. To the submissions made in relation to Chellaram your Honour will have read in my submissions that there is no such undertaking that has been offered by anyone on behalf of the appellant who, as my learned friend has indicated, may or may not include some well‑off people.
In relation to Pioneer that is of course one of the matters that goes into the bucket of considerations that your Honour will take into account, but in my submission that does not drive the result and I, of course, emphasise the Justice McHugh consideration that I have already taken you to.
As to the letters that my instructing solicitor sent, it is one of those situations where, if a party wants to seek costs against non‑parties, the authorities largely indicate that those parties should be put on notice. That was what was done. To describe it as a threat is, of course, a question of the lens through which one looks. The lens through which those that I act for look is doing the correct thing in accordance with what the authorities require or indicate should be done if one is to seek costs against non‑parties.
Unless there are any questions, your Honour, they are my submissions.
HER HONOUR: Thank you, Mr Andreatidis.
Oakey Coal Action Alliance Inc (“Oakey”) has been granted special leave to appeal from the orders of the Court of Appeal of the Supreme Court of Queensland (“the Court of Appeal”). This is an application by the first respondent, New Acland Coal Pty Ltd (“New Acland”) for an order that Oakey give security for New Acland’s costs of the appeal in the sum of $90,000.
The litigation has a lengthy history. In summary, Oakey was an objector before the Land Court of Queensland (“the Land Court”) to New Acton’s applications with respect to two mining leases under the Mineral Resources Act 1989 (Qld) and for the amendment of an environmental authority under the Environmental Protection Act 1994 (Qld).
The Court of Appeal found that the Land Court’s decision was affected by an apprehension of bias, but it declined to set the decision aside and remit the matter for rehearing. By special leave, Oakey appeals to this Court contending error in the failure to remit the proceedings for a rehearing on all issues. A question of general importance to which the appeal gives rise is whether considerations of utility justify not setting aside the findings of a tribunal which are acknowledged to be affected by an apprehension of bias.
Section 77S of the Judiciary Act1903 (Cth) makes provision for the Rules of Court to provide for the giving of security for the prosecution of an appeal without delay and for the payment of the costs that may be awarded against the appellant. Part 59 of the High Court Rules 2004 (Cth) makes such provision.
New Acland has adduced evidence of its estimated costs of the appeal in an amount of close to $170,000, calculated on the professional time likely to be taken on each of the components of the work to be done under the current rates for work on and after 1 January 2020. The estimate includes an amount of around $17,000 for the costs of the present application. New Acland accepts that in light of the present COVID‑19 pandemic, certain of the assumptions on which the estimate is based are likely to be falsified in that it is probable that outlays such as travel and accommodation will not be incurred. Nonetheless, there is no challenge to New Acland’s contentions that its likely costs of the appeal will be well in excess of the amount of $90,000 that it seeks.
Oakey is a registered charity incorporated under the Associations Incorporation Act 1981 (Qld). It has around 60 members. It was formed in 2011 with the object of opposing the expansion of the New Acland Coal Mine. Oakey provided the sum of $40,000 by way of security for the costs of its appeal to the Court of Appeal. This sum was raised from supporters. The moneys remain with the Department of Justice of Queensland.
In a statutory declaration made by Paul Bernard King, Oakey’s secretary, in apparent support of its application for waiver of filing fees in the Court of Appeal, it was stated that Oakey’s members had reached the limit of their capacity to raise funds. It is common ground that Oakey does not have the capacity to pay the costs of an unsuccessful appeal to this Court. As at 3 August 2020, the balance in Oakey’s bank account was $4,783.12. Oakey does not have any regular income and it has no material assets.
Mr King deposes to the membership of Oakey as comprising, “largely local farmers, graziers, veterinarians and concerned townspeople who share a common interest in seeing that the Stage 3 expansion of the New Acland Coal Mine be refused”. Mr King deposes to having had regular contact with fellow members and he asserts his belief that the current COVID‑19 pandemic has had an impact on the income and the economic security of many of them, such as to severely affect their ability to provide further funds to pursue the litigation. Mr King states that Oakey will endeavour to raise funds from the public were an order for security to be made. He expresses doubts, again in the particular economic circumstances, about the prospects of raising $90,000 and confidence about Oakey’s inability to do so in time for the hearing of the appeal.
If security was ordered, Mr King states that Oakey would seek support from other charities, noting that it has received some limited support from one like‑minded charity in the past in the sum of $5,000 and that it has been unsuccessful in respect of a number of recent requests for limited financial assistance from other charities. Mr King draws attention to a body, the Grata Fund, which provides assistance for costs in some public interest cases and deposes to Oakey’s willingness to approach the Grata Fund were an order for security made. He states that the process is “quite involved” and he is unable to say whether the fund would be willing to provide an amount of $90,000.
More generally, Mr King asserts his belief that the prospects of obtaining assistance from any of these sources is weakened, in his view, by steps that have been taken by New Acland seeking personal costs orders against Oakey’s officeholders. Mr King asserts that it is “likely that Oakey would not be able to raise $90,000 from any known source in the time available”, which I take to be a reference to the 14 days proposed by New Acland in its form of order.
Central to New Acland’s application is the contention that Oakey has failed to identify its members or to adduce evidence of their financial position from which it might be inferred that there is no one standing behind the organisation with the capacity to provide the sum sought. New Acland submits that Oakey’s members are not to be viewed as persons acting in the public interest, but rather as individuals with a personal interest in the outcome of the appeal.
Oakey does not contest that some of its members may have financial resources, nor that some may be said to have an interest in the outcome of the appeal, in the sense that the value of farming properties may be increased in the event the expansion of New Acland’s mine does not proceed. Oakey points to its objects, which include ensuring the protection of aquifers and the Great Artesian Basin and the protection of environmentally and culturally sensitive areas, in addition to the protection of rural residential and closely settled areas and good agricultural land. It points to the evidence that its membership includes individuals described as “townspeople”, a reference I take to be persons living in or around the township of Oakey.
As Mr Andreatidis concedes, it may be that the townspeople would see substantial economic advantages in the event that the mine expansion proceeds. It is difficult to characterise the membership of this voluntary, charitable organisation in the same way as the shareholders or creditors of an impecunious corporation who stand to financially gain by litigation prosecuted by the corporation.
The authorities touching on the making of orders for security, in the case of impecunious corporate plaintiffs/appellants, were collected by French J, as his Honour then was, in Bryan E Fencott and Associates Pty Ltd v Eretta Pty Ltd. Relevantly, his Honour summarised the effect of the authorities as rejecting both that a defendant/respondent has an entitlement to an order where the corporation’s impecuniosity is established and that the probability that an order will frustrate the plaintiff’s/appellant’s claim/appeal automatically leads to withholding the order. The latter probability his Honour identified as a factor weighing against the making of an order where there is no party standing behind the corporation who is in a position to provide the necessary security[1].
[1] (1987) 16 FCR 497 at 506-513.
New Acland relies on McHugh J’s reasons in PS Chellaram & Co Limited v China Ocean Shipping Co & Anor[2]. His Honour there observed that he would hesitate to make an order for security for costs if the effect of that order would be that the appeal could not be pursued because neither the appellant nor those who stand behind it could provide security for the costs of the appeal.
[2] (1991) 65 ALJR 642 AT 643; 102 ALR 321 at 323.
The appellant in Chellaram was a company incorporated in Hong Kong with no assets in the jurisdiction and there was no evidence that the two shareholders in the appellant were not in a position to put the appellant in sufficient funds to provide the security that was sought. As earlier noted, it seems to me the position of members of Oakey is to be distinguished from individuals such as the shareholders in Chellaram who had an evident commercial interest in the outcome of the proceedings.
New Acland is a wholly owned subsidiary of New Hope Corporation Limited and part of the New Hope Group. Oakey adduced evidence of extracts from the New Hope Group’s 2019 annual report in support of a submission that the resources available to New Acland and the money that it has expended thus far on the Stage 3 project are such that the sum sought as security is insignificant for New Acland.
Oakey invites the Court to infer from this material that New Acland’s purpose in applying for security for costs is not the need for the financial security itself, but rather to shut down the appeal. Oakey’s submission draws on the observations of Basten JA in the Court of Appeal of the Supreme Court of New South Wales in Pioneer Park Pty Ltd (in liq) v Australia and New Zealand Banking Group Limited[3].
[3] [2007] NSWCA 344 AT [‘55]-[56].
In that case it was suggested that it might be seen as oppressive to allow a large corporate defendant to obtain an order for security of costs, which would likely stifle the litigation, in circumstances in which the claim had potential merits and the costs would, in any event, be a relatively insignificant amount for the corporate defendant‑‑a consideration of the same kind as noted by Lord Denning in Sir Lindsay Parkinson & Co Ltd v Triplan Ltd[4].
[4] [1973] 1 QB 609 at 626.
Bowskill J ordered that there be no order as to the costs of the judicial review proceedings. That order was overtaken by the orders of the Court of Appeal directing that Oakey pay New Acland’s costs of the appeal and cross‑appeal. Those costs have been assessed in an amount of over $736,000. That sum remains outstanding.
Oakey sought special leave on a ground which challenged the Court of Appeal’s costs order. The Court raised with Oakey’s counsel the necessity for such a ground, noting that issues of costs are not normally independently addressed. Notwithstanding the grant of special leave on grounds 1 and 2, New Acland pressed the Supreme Court of Queensland to wind up Oakey, by reason of its inability to pay the costs ordered by the Court of Appeal. On 22 July 2020, Davis J adjourned the winding‑up application to abide the determination of the appeal to this Court.
The likelihood is that were an order for security to be made, it would have the effect of stifling the appeal. Necessarily, any assessment of the merits of the appeal must be tentative, but as Justice Toohey observed in Webster v Lampard[5] it is hard to say that an appeal to this Court that has passed the scrutiny of section 35A of the Judiciary Act is without merit.
[5] (1993) 177 CLR 578.
Contrary to New Acland’s submission, the appeal raises questions of importance and, having persuaded this Court that special leave was warranted, I consider that Oakey should not lightly be shut out because of its impecuniosity. A further consideration is the timing of the application. Special leave to appeal was granted on 5 June 2020. This application was not brought until 7 August 2020. New Acland accepts that it delayed in bringing the application. It seeks to explain that delay by noting that it pursued an avenue that it was open to it to do by way of the proceedings to wind up Oakey.
The consequence of the delay was that Oakey undertook substantial work in preparation of the appeal. On 10 July 2020, Oakey filed the core appeal book and on 24 July 2020 it filed and served its submissions, book of further materials and chronology. New Acland was aware of Oakey’s financial position at the time special leave to appeal was granted. I do not consider the pursuit of the winding‑up proceedings to be a satisfactory explanation for the failure to bring the present application in a timely way.
While the inability of an appellant to meet the costs of an unsuccessful appeal is plainly a relevant factor, it is no more than a factor to be weighed in all of the circumstances. Ultimately, the issue for the Court is whether the interests of justice are served by making the order for security[6]. I am not persuaded that the interests of justice favour the making of the order that is sought. For these reasons the application is dismissed with costs.
[6] Lucas v Yorke (1984) 58 ALJR 20 at 21; 50 ALR 228 at 229 per Brennan J, citing King v Commercial Bank of Australia Limited (1920) 28 CLR 289 at 292.
Adjourn the Court until 1 September at 10.00 am from Canberra by video link.
AT 11.07 AM THE MATTER WAS ADJOURNED
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