Peabody West Burton Pty Ltd v Mason (No. 2)
[2013] QLC 12
•22 March 2013
LAND COURT OF QUEENSLAND
CITATION: Peabody West Burton Pty Ltd & Ors v Mason & Ors (No. 2) [2013] QLC 12 PARTIES: Peabody West Burton Pty Ltd, CITIC West/North Burton Pty Ltd and Talbot Group Exploration Pty Ltd
(applicants)v.
Edward Peter Mason, Mora Ellen Mason and Valda Ann Mason
(respondents)FILE NO: MRA788-11 DIVISION: Land Court of Queensland - General Division PROCEEDING: Application for costs DELIVERED ON: 22 March 2013 DELIVERED AT: Brisbane HEARD AT: On the Papers MEMBER: Mr PA Smith ORDER: The Application for costs is refused. CATCHWORDS: COSTS — unfettered discretion — matters to be taken into account — s.34 Land Court Act 2000 — factors governing exercise of discretion — reasonableness of parties — outcome of litigation — test case
Land Court Act 2000, s.34
Mineral Resources Act 1989, s.363
Uniform Civil Procedure Rules 1999, Schedule 3, Part 3Dunn v Burtenshaw & Ors (2011) 32 QLCR 270
Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liq) & Ors (No. 2) [2012] QLAC 002
PT Limited and Westfield Limited v Department of Natural Resources and Mines (2007) 28 QLCR 295
Peabody West Burton Pty Ltd & Ors v Mason & Ors [2012] QLC 23
Xstrata Coal Queensland Pty Ltd & Ors v Friends of the Earth - Brisbane Co-Op Ltd (No. 2) [ 2012] QLC 67
Anson Holdings Pty Ltd v Wallace & Anor (No 2) (2010) 31 QLCR 130APPEARANCES: H Bowskill of Counsel for the applicants
G Houen, agent, for the respondentsSOLICITORS:
McCullough Robertson, Lawyers for the applicants
Background
On 31 May 2012, I delivered my decision in the matter of Peabody West Burton Pty Ltd & Ors v Mason & Ors.[1] That decision determined the applicants’ future compensation liability to the respondent for certain activities pursuant to Schedule 1 of the Mineral Resources Act 1989 (“the MRA”). Further, pursuant to s.363 of the MRA, the applicants were allowed to access the respondents’ property for the purposes of the authorised activities.
[1] [2012] QLC 23.
Application for costs
Subsequently, by way of a general application, the applicants sought orders that the respondents pay the applicants’ costs of the proceedings, including costs incurred in a Court ordered mediation.[2] The applicants also sought orders that the costs be assessed under Schedule 3, Part 3, Uniform Civil Procedure Rules 1999, which applies to costs claimed in excess of $50,000.00.[3]
[2] See General Application 28 June 2012 page 2.
[3] Ibid.
For their part, the respondents seek an order that there be no order as to costs.[4]
[4] Respondents’ Costs Submissions in Reply, paragraph 1.
Relevant Legislation
There is agreement between the parties as to the source of the Court’s power to award costs. That is found in s.34 of the Land Court Act 2000 (“LCA”) which 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.”
Applicants’ submissions
While it is true that all heads of compensation under Schedule 1 of the MRA were in dispute, the core dispute between the parties related to what compensation, if any, was payable under diminution in value of the land.[5] As my reasons show, the applicants contended that the appropriate amount payable for diminution was zero,[6] whilst the respondents contended for an amount of $50,000.[7] My finding was that the respondents should receipt zero compensation under this head.[8]
[5] See Schedule 1 MRA s.13(4).
[6] See Peabody paragraph 22.
[7] See Peabody paragraph 23.
[8] See Peabody paragraph 38.
Given the circumstances of the matter, and the findings of this Court, the applicants contend that the position adopted by the respondent at the hearing was unreasonable, particularly with respect to the respondents’ claim for diminution in value of the land. The applicants say that this position is strengthened by the lack of sales evidence relied on by the respondents’ valuer.[9]
[9] See applicants’ costs submissions paragraph 12.
The applicants further contend that they had no option but to come to Court for a determination in light of the stance taken by the respondents. They also rely on the reasonableness of the prehearing proposal for compensation which they put to the respondents which was in excess of the quantum ultimately awarded by the Court.
In the applicants’ view, they were wholly successful before the Court.[10]
[10] See applicants’ costs submissions paragraphs 13-14.
Respondents’ submissions
The respondents contend that various factors point to this matter being run by the applicants as a test case. They also contend that they acted reasonably in the circumstances as there had been no judicial decision on Schedule 1 of the MRA compensation; diminution in value of the land was a new compensation concept for exploration activities; and they reasonably relied on the opinion of an expert who held a valid opinion. The respondents further contend that the proposition that their valuer did not rely on any evidence was taken out of context.[11]
[11] See respondents’ costs submissions in reply paragraphs 3-12.
The respondents further say that they acted reasonably at all times throughout the process, including mediation. They point out that they engaged a valuer at their own expense to assist in reaching a resolution.[12] I note that the respondents also did not appear in person but rather engaged the services of an experienced agent.
[12] See respondents’ costs submissions in reply paragraphs 13-16.
The respondents contend that, in all the circumstances, there should be no order as to costs.[13]
[13] See respondents’ costs submissions in reply paragraph 17.
Relevant Authorities
It is certainly clear that there is no automatic or overriding principle that cost orders should follow the event in Land Court matters. However, as the relevant authorities make clear, the outcome of the litigation informs the decision as to the exercise of the discretion. As the Land Appeal Court said in the decision of Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liq) & Ors No. 2:[14]
[14] [2012] QLAC 002 at paragraphs 3-4.
“[3] Section 72(1) of the Act provides that s34, amongst other provisions, applies “with necessary changes” to the Land Appeal Court and a “reference in the applied sections to the Land Court is taken to be a reference to the Land Appeal Court”.
[4]Hence the Land Appeal Court may order costs “as it considers appropriate”. The discretion to award costs is unfettered. However the rule often followed, and the rule incorporated in r 689 of the Uniform Civil Procedure Rules 1999, is that costs follow the event. That rule, while it does not govern the exercise of the discretion here, nonetheless informs it, as there is justice in that approach. It protects those put to unnecessary and substantial expense at the behest of others. There is no reason here why costs should not follow the event in the usual way.”
Further, in PT Limited and Westfield Limited v Department of Natural Resources and Mines[15] the Land Appeal Court said:
[15] (2007) 28 QLCR 295.
“[20] The common law principle which has long dominated the exercise of the discretion to award costs that they “follow the event” has been incorporated into r 689 of the Uniform Civil Procedure Rules 1999 but is found neither in the VLA nor the Land Court Act. In interpreting s 66 the Court should not therefore be bound by any presumptive rule or principle - the discretion is complete, but must be exercised judicially.
…
[22]There may be any number of factors which a court vested with a general jurisdiction to award costs might entertain. One of those factors is the outcome of the litigation. Another might be the overall purpose of the legislation. Contemporary legislation in Queensland tends to make express provision about costs if it is thought desirable that parties not be discouraged from seeking to assert rights by the fear of adverse costs orders.”
The Land Appeal Court considered the issue of costs with respect to mining lease matters under the MRA in the case of Anson Holdings Pty Ltd v Wallace & Anor (No 2)[16] and had this to say:
[16] (2010) 31 QLCR 130.
“[9] When exercising the discretion under s.34(1) with respect to mining lease applications, it is legitimate for the Court to take into account the fact that the landholder who objects to the grant of a mining lease is exercising a statutory right to object, in circumstances where the grant of a mining lease could lead to an unwelcome intrusion on to the landowner’s property. Clearly, landholders who face having their way of life and operations on their land changed, sometimes dramatically, through mining activities in many respects beyond their control, should not be discouraged from pursuing proper concerns in an appropriate manner before both this Court and the Land Court. Similarly the conduct of the miner in the objection and appeal process is relevant.
[10]The respondent’s success in the appeal proceedings is to be balanced against those factors. 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 law and that is a factor to be taken into account when exercising our discretion under s.34(1).”
As regards the decision in Anson, it must of course be remembered that the current case involves exploration activities rather than the much more intrusive grant of a mining lease over the landholder’s property. However, any time the rights of mining interests and landholders clash under the MRA, some of the rights and interest of the landholders change under a process first initiated by a mining and/or exploration company. Whilst it is true to say that in the current case it was the mining company which had no option but to commence the compensation proceedings, it must always be remembered that such proceedings only arise due to the desire of the mining/exploration companies to undertake the exploration activities in the first place.
I also note that, in the recent Land Court decision of Xstrata Coal Queensland Pty Ltd & Ors v Friends of the Earth - Brisbane Co-Op Ltd (No. 2),[17] President MacDonald observed that, in that case:[18]
“The proceedings determined and clarified important issues of law affecting the community generally and the proceedings have affected the development of the law generally which should reduce the need for future litigation. As such they have the character of test case proceedings.”
[17] [2012] QLC 67.
[18] Ibid at paragraph 30.
President MacDonald had earlier in that decision referred to the Land Appeal Court decision of Dunn v Burtenshaw & Ors[19] and in particular to the reference in that case to the Australian Law Reform Commission Report No. 75 titled “Costs Shifting - Who Pays for Litigation”, making specific reference to recommendation 45. Referring to the conditions that should be present in considering the public interest of proceedings, the report said the following should be taken into account:
“1.the proceedings will determine, enforce or clarify an important right or obligation affecting the community or a significant sector of the community.
2.the proceedings will affect the development of the law generally and may reduce the need for further litigation.
3.the proceedings otherwise have the character of public interest or test case proceedings.”
[19] (2011) 32 QLCR 270.
Although noting that the Law Commission Report was referring to Federal Courts or Tribunals, the Land Appeal Court in Dunn considered the observations as apposite to the proceedings before that Court.[20]
[20] Dunn at paragraph 31 page 273.
The Land Appeal Court in Dunn ultimately made a limited award of costs against Mr Dunn but considered that as the principal point in that case was one that “had not previously been tested and one in respect of which there was no guiding decision he ought be given the benefit of the doubt with respect to the prospect of a costs order being made against him”.[21] It did so notwithstanding the reservations the Court held as to Mr Dunn’s conduct.[22]
[21] Dunn at paragraph 33 page 273.
[22] Ibid.
Determination
In my view, there a number of factors which I have to take into account in the exercise of my discretion in this matter.
I certainly agree that the applicants were successful insofar as there was a zero award for diminution of value of the land. However, it is important to realise that the applicants were not quite as wholly successful on this point as they make out.
As I pointed out in my Peabody decision:
“[34]When Ms Bowskill’s submissions, both orally and written, are considered in their entirety, in my view it is a fair summary to say that, whilst the applicants acknowledge the existence of a reference to diminution in value of the land in s.13 of Schedule 1, in a practical sense they find it difficult to contemplate any circumstances which would result in a monetary award for diminution in value being made with respect to advanced exploration activities actually undertaken under an EPC.
[35]In my view, s.13 is not to be read as narrowly as the applicants would have the Court believe. There can be no doubt that Parliament clearly inserted diminution of value of the land as a head of compensation under s.13, Schedule 1. It did so for a purpose. … ”
The above is of great importance when assessing the relevant reasonableness of the actions of both parties. Clearly, in my view, the stance of the applicants throughout was that it was not possible for there to be a determination for diminution of value of the land under Schedule 1 of the MRA. In response, the respondents obtained professional expert advice from someone who I found to be an experienced valuer.[23] His expert view was that diminution of value of the land was recoverable and he used his expertise to assess such amount in the sum of $50,000. The fact that I ultimately rejected the quantum contended for by Mr Jinks does not mean that the respondents did not act properly and reasonably in pursuing their claim. In all the circumstances, I find the actions of the respondents in seeking an award for diminution in value of the land to have been both reasonable and proper.
[23] Peabody at paragraph 25.
For completeness, I should point out that I agree with the submissions of the applicants in reply that the actions taken by the applicants subsequent to the determination are not relevant in the circumstances of this case. Even if I had considered it necessary to consider such actions, I would find the program and timing of exploration activities as proposed by the applicants reasonable.[24]
[24] See Affidavit of Mr Stokes filed 27 July 2012.
My determination in Peabody was the first Court determination of compensation under Schedule 1 of the MRA. I have absolutely no doubt that the decision in Peabody was of significant importance not just for the parties concerned, but also of importance for both the mining/exploration industries, landholder, and those concerned with primary production.
Given all of the circumstances, in my view this is an appropriate matter, particularly in light of its ‘test case’ status, for there to be no order as to costs. The applicants’ application for costs is accordingly refused.
Order
1. The Application for Costs is refused.
P A SMITH
MEMBER OF THE LAND COURT