QCoal Sonoma Pty Ltd (Principal Holder) v Reed
[2012] QLC 33
•18 July 2012
LAND COURT OF QUEENSLAND
CITATION:QCoal Sonoma Pty Ltd (Principal Holder) & Ors v Garry Reed & Ors [2012] QLC 0033
PARTIES:QCoal Sonoma Pty Ltd, Cliffs Australia Coal Pty Ltd, CSC Sonoma Pty Ltd, JS Sonoma Pty Ltd and Watami (Qld) Pty Ltd
(applicants)
v.
Garry Reed, Greg James, Brett Murphy, Michael Lucas, Cynthia Jean Winston, Carol Cosentino, Carole Denise Wyper, Bill Wyper, Patricia Julien and Whitsunday Regional Council
(respondents)
and
Chief Executive, Department of Environment and Heritage Protection
(statutory party)
FILE NO:EPA1002-11
DIVISION:General Division
PROCEEDING: General Application dated and filed on 22 May 2012 by the respondent Garry Reed
DELIVERED ON: 18 July 2012
DELIVERED AT: Brisbane
HEARD ON: 2 July 2012
HEARD AT:Brisbane
MEMBER:Mr WA Isdale
ORDERS:1. The General Application dated and filed on 22 May 2012 is dismissed.
2.Costs of and incidental to this application are reserved.
CATCHWORDS: Practice and procedure ― separate determination of an issue
Environmental Protection Act 1994, s.219
Water Act 2000
Uniform Civil Procedure Rules 1999
Land Court Act 2000, ss 22, 34(1)
Land Court Rules 2000, s.19Advance Traders Pty Ltd v McNab Constructions Pty Ltd & Anor [2011] QSC 212
Perpetual Nominees Limited v Department of Natural Resources, Mines and Energy [2004] 25 QLCR 98
Watpac Civil Infrastructure Pty Ltd v Komatsu Australia Pty Ltd [2009] QSC 281
Xstrata Coal Queensland Pty Ltd & Ors v Friends of the Earth-Brisbane Co-Op Ltd & Ors and Department of Environment and Resource Management [2012] QLC 013
APPEARANCES: Mr D Kelly SC instructed by McCullough Robertson solicitors for the applicants
Ms P J Hay and Mr D Stevenson instructed by Environmental Defenders Office of North Queensland Inc for the respondent, Garry Reed
Ms L J Hoult, lawyer for the statutory party
Background
On 26 March 2010 QCoal Sonoma Pty Ltd (the company) applied to amend the environmental authority for the Sonoma Coal Mine. After some objections were received, the statutory party referred the application to this Court pursuant to s.219 of the Environmental Protection Act 1994. At present there is only one level 3 objector,[1] Mr Reed.
[1] Land Court Practice Direction 1 of 2012. Level 3 objectors attend the hearing, call evidence, cross-examine witnesses and make submissions at the end of the hearing.
The present application
On 22 May 2012 a General Application dated that day was filed in the Court on behalf of Mr Reed. It sought a stay of the proceedings pending the Commonwealth Environment Minister’s decision, an order no longer sought or, what remains in contention, an order that there be a preliminary hearing on a question of law.
The proposed preliminary point
On 2 July 2012 the Court heard the submissions of the parties on the question of whether there should be a separate hearing of a preliminary point. The point was stated by Counsel for Mr Reed to be:
“Where the draft Environmental Authority dated 3 November 2011 (draft EA) includes conditions that fall within the ambit of the Water Act 2000 (Water Act) and those conditions go beyond the scope of activities authorised under the Mineral Resources Act 1989 (MR Act), those conditions cannot form part of the subject of the Land Court’s objections decision in the form of a recommendation to the Minister under the Environmental Protection Act 1994 (EP Act).”
The applicant and the statutory party oppose the separate hearing which is sought in relation to the preliminary point.
The submissions in support of separate hearing of the proposed preliminary point
In written submissions,[2] Counsel for the respondent stated the following:
[2] Dated 5 June 2012.
“7. For the reasons expressed by the President in Xstrata’s case, the objector rejects the contention that under the EPA the Land Court can amend an existing EA to allow for mining activities in the area of a Creek, which necessarily requires interference with a water way.
8. Paragraph 2 of the applicant’s submissions concede that the mining activities will include the diversion of Coral Creek and extraction of coal from its current location ‘with the consequence that the application to amend the existing EA is to amend that condition to ‘No mining activities will be conducted within 30m…. excluding the Coral Creek diversion area’.’ [my emphasis added]”
The case referred to is Xstrata Coal Queensland Pty Ltd & Ors v Friends of the Earth-Brisbane Co-Op Ltd & Ors and Department of Environment and Resource Management[3] (Xstrata).
[3] [2012] QLC 013.
It was submitted that the proposed preliminary point is a legal one and will not require the hearing of evidence. It was also submitted that all but two of Mr Reed’s objections will fall away if the Court decides the preliminary point in favour of the respondent’s contentions. Relying on the decision of the learned President in Xstrata, it was argued that this Court cannot amend an Environmental Authority to allow, in effect, interference with a waterway. The natural order, it was submitted, would be for the matters subject to the Water Act 2000 to be dealt with before the substantive matter in these proceedings.
Submissions against a separate hearing of the preliminary point
The statutory party did not support the application and the applicants strongly opposed it, contending that there is no utility in hearing and determining the preliminary point separately from the remaining matters before the Court. The applicants submitted, inter alia, that there will not be a saving of either time or costs but an increase in both if the preliminary point is separately heard. Additionally, it was said to be “a possibility” that evidence may need to be presented concerning the relevance of the environmental conditions to the impact of mining activities. This, it was submitted, would possibly require evidence from experts who would have to return to give evidence in the substantive hearing. It was also submitted that there is no real prospect that determination of the preliminary point will contribute to settlement of the litigation. The applicant argued that Mr Reed is disentitled from raising the preliminary point only after the applicants’ expert evidence has been provided and that the applicants will suffer substantial prejudice if the separate determination of the preliminary point delays the substantive hearing.
The applicable law
In the present case there is no suggestion that the Court lacks power to make the order sought, the contest is limited to whether the order ought to be made. In Advance Traders Pty Ltd v McNab Constructions Pty Ltd & Anor[4] Boddice J considered the applicable law in the context of Rule 483 of the Uniform Civil Procedure Rules 1999 that were applicable in the case before His Honour. The implications of that rule are indistinguishable from those in this case and it is helpful to consider His Honour’s comments:
[4] [2011] QSC 212.
“[9] Relevantly, r 483 of the UCPR provides:
‘The Court may make an order for the decision by the court of a question separately from another question, whether before, at, or after the trial or continuation of the trial of the proceeding.’
[10] The rule is intended to provide for the determination of an issue or issues the resolution of which is likely to lead to substantial savings and expense.1 Whether an order is made is subject to the exercise of the discretion of the Court.2 In exercising that discretion, a relevant consideration is whether it would be convenient to determine first the issues raised, and, in particular, whether the successful determination of the separate issues would:
(a)relieve the parties and the Court of the need to otherwise consider a significant volume of documents;
(b)avoid the need for the Court at trial to consider expert evidence,
(c)avoid, or at the very least reduce, the necessity for a lengthy trial.3
[11] In Reading Australia Pty Ltd v Australian Mutual Provident Society & anor,4 Branson J said, in respect of a provision in the Federal Court Rules, which is materially in identical terms to r 483:
‘(a)…
(b)a question can be the subject of an order for a separate decision under 0 29 r 2 even though a decision on such a question will not determine any of the parties’ rights (Landsal Pty Ltd (in liq) v REI Building Society at FCR 425; ALR 647);
(c)however, the judicial determination of a question under 0 29 r 2 must involve a conclusive or final decision based on concrete and established or agreed facts for the purpose of quelling a controversy between the parties (Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; 161 ALR 399; [1999] HCA 9 at [45]);
(d)where the preliminary question is one of mixed fact and law, it is necessary that the question can be precisely formulated and that all of the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable either as facts assumed to be correct for the purposes of the preliminary determination, or as agreed facts or as facts to be judicially determined (Jacobson v Ross [1995] 1 VR 337 at 341, referring to Nissan v Attorney-General [1970] AC 179 at 242-3; [1969] 1 All ER 629 at 663-4 per Lord Pearson; Bass v Perpetual Trustee at [53]);
(e)care must be taken in utilising the procedure provided for in 0 29 r 1 to avoid the determination of issues not ‘ripe’ for separate and preliminary determination. An issue may not be ‘ripe’ for separate and preliminary determination in this sense where it is simply one of two or more alternative ways in which an applicant frames its case and determination of the issue would leave significant other issues unresolved (CBS Productions Pty Ltd v O’Neill (1985) 1 NSWLR 601 per Kirby P at 606);
(f)factors which tend to support the making of an order under 0 29 r 2 include that the separate determination of the question may:
(i)contribute to the saving of time and cost by substantially narrowing the issues for trial, or even lead to disposal of the action; or
(ii)contribute to the settlement of the litigation (CBS Productions Pty Ltd v O'Neill per Kirby P at 607);
(g)factors which tell against the making of an order under 0 29 r 2 include that the separate determination of the question may:
(i)give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial (GMB Research & Development Pty Ltd v Commonwealth [1997] FCA 934);
(ii)result in significant overlap between the evidence adduced on the hearing of the separate question and at trial – possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding: (GMB Research & Development Pry Ltd v The Commonwealth; Arnold v Attorney-General (Vic) (unreported, Fed C of A, Sundberg J, Nos VG629-37 of 1995, 8 September 1995, BC9502745). This factor will be of particular significance if the Court may be required to form a view as to the credibility of witnesses who may give evidence at both stages of the hearing of the proceeding; or
(iii) prolong rather than shorten the litigation (GMB Research & Development Pty Ltd v Commonwealth).’
These factors have been identified as being relevant in considering the operation of r 483.5 Ultimately, the issue for the Court, in determining whether to exercise the discretion and make an order for separate determination, is whether it is “just and convenient” for the order to be made.6
Evans Deakin Industries Ltd v Commonwealth [1983] 1 Qd R 40 at 45-46.
2Body Corporate for Sun City Resort CTS v Sunland Constructions Pty Ltd [2010] QSC 463 at [19].
3State of Queensland v Dale and Meyers Operations Pty Ltd [2010] QSC 361 at [19], [20].
4(1999) 217 ALR 495 at [8].
5 Body Corporate for Sun City Resort CTS v Sunland Constructions Pty Ltd [2010] QSC 463 per Applegarth J at [19].
6Arnold v Attorney-General (Vic) (unreported, Fed C of A, Sundberg J, Nos VG629-37 of 1995, 8 September 1995, BC9502745), followed in Reading Australia Pty Ltd v Australian Mutual Provident Society (supra) at [9].
His Honour then went on to observe[5] that:
“Whilst courts are now more liberal in their consideration of whether to order the separate determination of preliminary questions,8 caution must be exercised before making such an order having regard to the risk of being too readily tempted by the promise of a saving of time and costs whereas the outcome results in time wasting and an increase in costs whilst also fragmenting and delaying the outcome.9
[5] At [15].
See Re Multiplex Constructions Pty Ltd [1999] 1 Qd R 287; Heery v Criminal Justice Commission [2001] 2 Qd R 610.
9Sherlex Pty Ltd v Thornton [2003] QCA 461 at [16]-[20]; Lee v Arisaig Pty Ltd & Ors [2005] QSC 265 at [12], [21]-[22]; Watpac Civil Infrastructure Pty Ltd v Komatsu Pty Ltd [2009] QSC 281 at [4]-[8]. ”
It is not necessary that a decision of the preliminary point would put an end to the whole proceeding.[6]
[6] Perpetual Nominees Limited v Department of Natural Resources, Mines and Energy [2004] 25 QLCR 98 at [5].
The Court has a discretion to make the order sought.[7]
[7] Land Court Act 2000, s.22. Land Court Rules 2000, s.19 and Practice Direction 3 of 2012.
Considering whether to exercise the discretion
The separate determination of the preliminary point will not make unnecessary the continuance of the litigation from which it is sought to excise that point. There will remain objections by Mr Reed such that there is no prospect of even reaching the situation that his involvement or involvement as a level 3 objector comes to an end, so potentially abbreviating or simplifying the overall litigation. The likely result would only be that part of the litigation is heard separately, which does not serve to enhance the attractiveness of exercising the Court’s discretion in favour of the separate determination of the preliminary point. Since further objections to those caught within the preliminary point will still need to be heard, the Court must consider the prospect identified by the applicants, namely that there may be need for evidence and the possibility that experts may need to be called to give evidence twice, once on the hearing of the preliminary point and again for the remaining matters to be determined. I note that there is no agreement on the facts relevant to the decision on the preliminary point so the prospect of there needing to be evidence called is one of real substance.
A decision to not hear the separate preliminary point does not prevent the substance of it being raised by Mr Reed at the hearing in the event that, as is usually the case, all aspects of the dispute are heard together. In addition, a separate hearing leaves open the possibility that an adverse finding in relation to a witness in the preliminary matter may make it necessary for the Court to be differently constituted for the remainder of the hearing, a factor which in practice could lead to delay in determination of the proceedings, particularly in view of the small number of members of the Land Court.[8]
[8] Watpac Civil Infrastructure Pty Ltd v Komatsu Australia Pty Ltd [2009] QSC 281 at [6] and [8]. His Honour McMurdo J found there to be a “strong likelihood” of the judge who conducted the preliminary hearing not being able to hear the balance of the case. Here the risk of this is less but the smaller number of members of this Court does increase the prospect of a delay to the hearing in such an event.
I do not accept the submission that the timing of Mr Reed’s present application is such as to allow it to be properly categorised as disentitling conduct sufficient in itself to result in failure of the application. I am satisfied that the timing of the present application is reflective of the availability of legal services to Mr Reed or at worst, lethargy rather than strategy.
In addition, I am unable to accept that the question proposed is so formulated as to be insufficiently precise to be answered. It is not appropriate to endeavour to answer it now and it is sufficient for present purposes to acknowledge that the question is capable of being given a definite answer and so has merit as a question. I do not accept that it is “natural” to deal with the preliminary point first in view of the Water Act 2000. It appears to me that there is no necessary natural order somehow imposed on the hearing of matters in issue in this litigation.
The decision of the learned President in Xstrata made clear[9] that diverting watercourses is outside of the scope of an environmental authority. For present purposes, it is not appropriate for the Court to in effect determine the merits of the proposed preliminary point in deciding whether to exercise the discretion to hear it as such. It is sufficient when considering the question itself to be satisfied that it is a valid one and not so poorly formulated as to be incapable of an answer. This, in any event, is only one consideration.
[9] [2012] QLC 13 at [210].
Prejudice to the parties
There is no evidence of prejudice to Mr Reed if his question was decided as part of the substantive matters to be dealt with at trial. There is sworn evidence,[10] which was unchallenged, of material prejudice to the applicants. Mr Stokes, a solicitor, affirms that he has been informed by Mr David Nebauer, site superintendent of the Sonoma Coal Mine, and believes the following:
[10] Affidavit of Peter William Stokes affirmed on 1 June 2012 and filed on 4 June 2012. At the hearing on 2 July 2012 this evidence was not challenged although there had been adequate time in which to consider whether to do so and make some response or require that Mr Stokes be present for cross-examination.
“Prejudice to the Applicants
64 I am informed by Mr Nebauer and believe that any further delay to the Land Court proceeding will have a prejudicial impact on the operations of the Sonoma Coal Mine. Specifically, Mr Nebauer has informed me that:
(a)the Sonoma Mine open cut pit shell has, since lodgement of the Amendment Application, been extended to the south as far as the constraint imposed by Two Mile Creek will permit;
(b)the Sonoma Mine open cut pit shell was, prior to lodgement of the Amendment Application, extended to the north as far as the constraint imposed by Coral Creek would permit;
(c)if the Applicants obtain all necessary approvals for the purpose of the diversion of Coral Creek, as is contemplated by the Amendment Application, the Applicants will extend the life of the mine for approximately seven to 12 months. I seek leave to refer to paragraph 25 of the Affidavit of Mr Nebauer filed 19 April 2012 in this regard;
(d)further delays in commencing Coral Creek diversion works will have an operational impact of (sic) the Sonoma Mine. Specifically, if operations are to continue, they will need to continue at deeper levels than otherwise necessary, at higher cost ratios by reference to the material extracted;
(e)the construction of the Coral Creek diversion must be completed prior to the onset of the 2012/13 wet season. To do so, the construction of the diversion must (sic) commenced by 1 September 2012. If this does not occur, it will be necessary to wait a further three to six months to access the coal once the diversion is completed;
(f)the additional cost of delaying access to the coal in the Coral Creek diversion area, in terms of lost Net Present Value (NPV) based on a free cashflow model of cash outgoings and cash incomings, is about $20,987 per day of lost NPV:
(g)therefore, the extension of these proceedings by 28 days would have a total cash impact, in terms of lost NPV for the project, of about $587,636. Further, if the delay causes the Applicants to miss the ‘construction window’ before the onset of the wet season, the costs would be in the range of $1,888,830 (for 90 days) to $3,777,660 (for 180 days);
(h)there will be further costs caused by delay, for example impacting on supplier reliability and reputation, and the potential need to reduce labour levels and incur plant standby costs, which are too difficult to quantify at present.”
Decision on the exercise of the discretion in relation to the preliminary point
Separately hearing the preliminary point does not offer the prospect of eliminating the litigation, some objections will remain to be decided. There are no agreed facts and it is a realistic possibility that there may be, as submitted for the applicant, a need to hear evidence which might result in findings that would make it necessary for another Court member to hear the balance of the proceedings. That would be likely to increase the length of the proceedings. These matters are not heavily influential since they are possibilities only. The matter of prejudice is of real weight. If the preliminary point is not heard separately it may still be dealt with at the hearing, protecting Mr Reed’s right to have that matter considered. The evidence is that extending the proceedings, as would be inevitable if there is a separate hearing, would have a substantial monetary impact on the applicant. Considering all of the matters to which I have referred in these reasons I am satisfied that the interests of justice are best served by the Court exercising its discretion against the application for the separate hearing of the preliminary point.
Costs
The applicants seek their costs of and incidental to Mr Reed’s application and the appearances on 5 June 2012 and 2 July 2012 to be calculated on the standard basis pursuant to s.34(1) of the Land Court Act 2000. The submission on behalf of Mr Reed is that there should be no order as to costs, he being a modestly represented litigant who is a downstream landowner facing a large corporate entity. It is said on behalf of Mr Reed that while it is a significant factor that costs should follow the event in litigation, there is an element of public interest in this litigation.
Decision on costs
As I indicated on 5 June 2012 when considering the costs application made at that time, I believe that the best prospect of doing justice between the parties will be to reserve the matter of costs until the litigation has been completed and a fully informed appreciation may be had of what was necessary and unnecessary. As the matter of the question postulated in this application is now to be decided in the context of the substantive litigation I order that costs in this application be reserved, to be dealt with upon the conclusion of the substantive matter.
Orders
1. The General Application dated and filed on 22 May 2012 is dismissed.
2. Costs of and incidental to this application are reserved.
MEMBER OF THE LAND COURT
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