Queensland Cement Limited v Lucke
[2002] QLC 28
•10 April 2002
LAND COURT
BRISBANE
10 APRIL 2002
Re: Application for Costs setting aside Subpoena
Land Court Act 2000 and Uniform Civil Procedure Rules 1999
(AV2000/0163)
Queensland Cement Limited
v.
AE Lucke & Others
DECISION ON APPLICATION FOR COSTS
On 24 August 2001 Queensland Cement Limited (the applicant) filed a General Application seeking an order of the Court to set aside a subpoena issued at the request of AE Lucke and Others (the respondents) on the grounds of want of relevance and oppressiveness, and seeking a further order that the respondents pay the applicant's costs of and incidental to the application.
In the alternative, the applicant sought an order that the respondents make payment of any loss or expense incurred in complying with the subpoena.
The application to set aside the subpoena was heard by the Land Court on 30 August 2001. The Court determined that the subpoena be set aside on the basis of lack of relevance and oppressiveness.
Mr R Jones, counsel for the applicant, applied for costs. However, the respondents were not legally represented, but were represented by one of their number, Mr AE Lucke. In view of the ongoing dispute between the respondents and the applicant, I adjourned the matter of costs and suggested that Mr Jones might seek further instructions so that any application for costs could be in writing, which would give the respondents the opportunity to provide a written reply.
Background
On 10 August 2001 a subpoena for production was issued by the Land Court to Mr Michael Rynne, Gladstone Plant Manager, Queensland Cement Limited, Fisherman's Landing, Gladstone, 4680. The subpoena was returnable to the Court House, Gladstone, at 10.00 a.m. on Monday, 3 September 2001.
The subpoena was issued at the request of AE Lucke and Others dated 7 August 2001. The subpoena was in connection with three appeals by landowners in the Shire of Calliope (including the present respondents) against the unimproved values applied to their properties by the Chief Executive, Department of Natural Resources and Mines, as at 1 October 1999, under the provisions of the Valuation of Land Act 1944. At the time those appeals were part heard, having commenced on 1 August 2001 and were due to recommence on 3 September 2001 at Gladstone.
The grounds of appeal of appellants AE Lucke and Others (the present respondents) and the other appellants in those cases make it clear that they see the operations of the QCL East End Mine as being the cause of the depletion of water in surface streams and underground, and of deteriorating water quality.
It also became clear that the appeals against the valuations in that area were not simply to have the valuations reduced to lessen the potential impacts of Council rates and, possibly, land tax on the landowners. There was a wider agenda as demonstrated by the following extract from the present respondents' grounds of appeal:
"If the valuation increases stand then the community believe they will be seen officially to have no valid case for compensation or claim against QCL. Valuation increases sought to be imposed upon the already disadvantaged community within the QCL project area are therefore considered unjust, discriminatory and a shameful corruption of the valuation process."
QCL commenced dewatering activities for open-cut mining operations at its East End Mine in 1979. The East End Mine is situated south of the town of Mt Larcom. There was no dispute that these dewatering activities have an adverse impact and have depleted water on properties within an area identified by modelling by a consultant to QCL, which has been referred to as the "Kalf zone of water depletion". There was dispute, however, as to the extent to which the mine dewatering activities caused water depletion beyond that zone. The property owned by AE Lucke and Others is outside that zone.
There was also no dispute that there had been severe water depletion of streams and underground water supplies in the Mt Larcom area on properties outside the Kalf zone of water depletion. However, the significant point of disagreement between the appellants on the one hand and QCL and the Queensland Government on the other, was whether the depletion of water levels had been caused by dewatering at the East End Mine, or whether water levels had been affected by drought.
When the hearing of the valuation appeals was adjourned on 2 August 2001, the evidence of the expert hydrologist called by the appellants had been completed, but the expert hydrologist called by the respondent was still giving evidence. The appellants (the present respondents) considered that they needed further material in order to prove that the dewatering activities of the East End Mine were the cause of the water depletion on properties in the district. Therefore, they requested that the subpoena for production be issued to the present applicant. The subpoenaed material included:
the standing water levels and original drill logs and analysis of drilling results of QCL 1974 bore drilling program on the then authority to prospect at Bracewell and East End;
the drill logs from 46 diamond drill holes with standing water levels drilled at an angle of 45 degrees to horizontal plus the drill logs of a further 58 shallow percussion holes drilled to determine the subsoil content of the limestone plus the drill logs of 79 scout holes drilled specifically to test the overburden;
the standing water levels and drill logs of 58 drill holes in a detailed 100 metre grid covering an area of 700 x 800 metres at the site of the East End Mine;
the current environmental authority for the East End Mine;
the current plan of operation for the East End Mine; and
hydrology reports, letters and advice prepared by Professor Col Dudgeon in his role as consultant to the QCL Mine during the term of the QCL mining leases.
The subpoena was served on QCL's Gladstone Plant manager on 16 August 2001. He sent a copy of the subpoena by overnight courier to the company's secretary in Brisbane. On or about 17 August 2001 the company's secretary sent a copy of the subpoena to QCL's environmental consultants to obtain details regarding the production and location of the material requested in the subpoena. On 20 August 2001 the company's secretary sent a copy of the subpoena to QCL's solicitors, Clayton Utz.
The Hearing of the Application to set aside the Subpoena
Mr AE Lucke appeared on behalf of the respondents. His evidence was to the effect that the appellants considered they needed the subpoenaed material to be able to demonstrate conclusively that the operations of the East End Mine caused the water depletion of streams and groundwater in the area which affected the property values, including that of the respondents' land. However, the affidavit of Mr AA Spierings, the Gladstone Plant manager of QCL, indicated that most of the subpoenaed material would require QCL to expend a great deal of time and effort in searching for and accumulating the material. Furthermore, the terms of the subpoena were so imprecise as to require Mr Spierings to make assumptions and judgments as to exactly what documents or class of documents were required.
The main challenge to the subpoena by QCL was the lack of relevance of the subpoenaed material to the unimproved value of the respondents' land. A further challenge was mounted on the basis of oppressiveness.
In his attempt to demonstrate that the subpoenaed material was relevant to the issue, Mr Lucke produced a number of documents which, far from demonstrating relevance, had just the opposite effect. However, those documents did demonstrate that from as early as July 1975 the residents of the Mt Larcom district expressed concern that the proposed mining operation would affect the groundwater supplies of farmers in the area. These concerns have intensified over the years and the members of an organisation known as the East End Mine Action Group (EEMAG), comprising about 50 local landowners, hold genuine beliefs about the impact of the mine upon their community and particularly the water depletion of streams and water tables in the area, which they contend is the result of mine dewatering activities.
After hearing evidence and submissions on the application to set aside the subpoena, I found that none of the subpoenaed material was relevant to the question of the valuation of the respondents' land. Furthermore, I found that the subpoena was oppressive in the sense that some of the required material was described in vague terms and would require the applicant to go to a great deal of time and trouble to assemble the material. In addition, it would require the applicant to make assumptions and judgments as to exactly what documents or class of documents were required.
Application for Costs
The present matter concerns an application for costs by the applicant against the respondents.
The solicitors for the applicant made a written submission that the applicant was entitled to costs of and incidental to the application pursuant to Rule 689 of the Uniform Civil Procedure Rules 1999 and s.34 of the Land Court Act 2000 as against the respondents, on the basis that:
the subpoena was clearly wrong and bad at law;
the conduct monies sufficient to meet the reasonable expenses of complying with the subpoena had not been tendered;
the material subpoenaed was not relevant to the appeal against the annual valuation;
the subpoenaed material was oppressive;
the subpoena was used for a "fishing expedition"; and
the respondents have a long history of seeking information from QCL in a manner which has now become frivolous and vexatious.
The respondents also made written submissions in relation to costs through Mr AE Lucke. Mr Lucke admitted that he had attended the hearing of the application to set aside the subpoena prepared to deal with the cause of the depletion in water, whereas since my decision in that matter, he has realised that what he was required to deal with was the effect of the depletion in water. In his written submission he went on to say, "It was then a matter of whether the Court considered Lucke and Brady needed to PROVE the QCL mine impact upon their water table; water loss being a principal component in support of their objections against DNR unimproved valuations. To that point in time, it was the view of Brady and Lucke (Murphy was already in the zone of injurious affection) that they had to PROVE the existence of hydrology impact by QCL and the subpoena was predicated upon that basis." It was because of their uncertainty about what they were required to prove, that the respondents sought to obtain certain hydrological and other material by subpoena.
In answer to the points made in the applicant's written submission, Mr Lucke made the following points:
He did not accept that the subpoena was clearly wrong or bad at law; rather, it was his very limited experience as an advocate, his financial means, advice and resources which prevented him from successfully justifying the subpoena.
With regard to conduct money, Mr Lucke stated that he had sought guidance from the Land Court, the District Court, the Magistrates Court and the Supreme Court without being able to ascertain the required fees. He admitted that he had an "obviously erroneous understanding" of the requirement of conduct money. However, he wished "to convey within the limitations of my understanding and endeavours to be informed there were pitfalls for the uninitiated in gaining access to appropriate information."
In relation to the subpoena being not relevant to unimproved values, Mr Lucke submitted that he was disadvantaged in that the Court had not completed the hearing of the valuation appeals. He therefore could not anticipate in advance the matters subsequently to be considered by the Court. Much of the evidence to date had related to geology and hydrogeology, as evidenced by the number of hydrology reports and the evidence of expert hydrologists.
While he continued to believe that the subpoenaed material was relevant to the unimproved valuations, he realised from the hearing of the application to set aside the subpoena that the appellants should no longer try to prove in absolute terms the cause of the water loss. The appellants' principal grounds of appeal to the Land court were in respect of the mine-induced water depletion and subsequent socio-economic impact. He appeared to consider that without the subpoenaed information the appellants were disadvantaged.
Mr Lucke did not accept that the subpoena was oppressive or was simply a fishing expedition. He explained that the subpoena was hand delivered to Michael Rynne, then Gladstone Area Plant Manager, who according to Mr Lucke was familiar with the grievances and representations between the East End Mine Action Group and QCL. However, the new Gladstone Area Manager, Mr Spierings, did not have that familiarity with the matter or knowledge of the material sought to be subpoenaed. The extent of the subpoenaed material came as a great surprise to the respondents.
With regard to the "fishing expedition" aspect of the subpoena, Mr Lucke's arguments only served to confirm that the respondents were seeking to ascertain just what material the applicant had. As he put it, "… we do know in general terms what is in the drill logs. No-one can be absolutely specific. Drill logs from such a complex area will be notoriously variable and open to subjective judgment and interpretation on a hole-by-hole basis. To say otherwise would be dishonest."
Mr Lucke took exception to the accusation that he had a long history of seeking similar information from QCL in a manner which has now become frivolous and vexatious. He considered the statement absurd and to smack of "aggravation and ulterior motive", the ulterior motive being the intimidation of his community and the reinforcement of QCL's dominating power. He went on to say that many members of his community lacked the ability to make representations on their own behalf and that EEMAG had provided that representation. As publicity officer for the organisation, he had been probably the most visible and politically active figure.
In conclusion, Mr Lucke submitted that it would be a travesty of justice should costs be awarded against the respondents.
The Relevant Legislation
The applicant submitted that it should be granted an award of costs of and incidental to the application to set aside the subpoena pursuant to s.34 of the Land Court Act 2000 and Rule 689 of the Uniform Civil Procedure Rules 1999. Section 34 relevantly provides:
" (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."
Rule 689 is headed "General Rule about Costs" and provides as follows:
" (1) Costs of a proceeding are in the discretion of the court but follow the event, unless the court considers another order is more appropriate.
(2) Subrule (1) applies unless these rules otherwise provide."
The combined effect of those provisions is that the Court has discretion to make an award of costs, but the general rule is that costs follow the event unless there are circumstances in which the Court should otherwise order. Where an issue has been tried and decided, there is an "event" upon which the successful party is entitled to have his costs as following that "event": Slatford v. Erlebach [1912] 3 KB 155 at 160.
However, it is clear that costs do not automatically follow the event, the Court has absolute discretion in such cases. However, that is not to say that the discretion may be exercised in an arbitrary manner. The discretion must be exercised judicially, that is for reasons that can be considered and justified. However, where the exercise of the discretion appears to lack rational justification either in the findings or in the reasons expressed for it, the question may arise whether the discretion has been arrived at judicially: Wyatt v. Albert Shire Council [1987] 1 Qd R 486 at 489.
In Latoudis v. Casey (1990) 170 CLR 534, Dawson J of the High Court of Australia said at 557:" In non-jury cases the costs were left to the discretion of the court. Whilst the discretion was absolute and unfettered, it was to be exercised judicially, that is to say, not by reference to irrelevant or extraneous considerations, but upon facts connected with or leading up to the litigation. … nevertheless, it was said that a court should not exercise the discretion against a successful party 'except for some reason connected with the case': Donald Campbell & Co v. Pollak [1927] AC 732 at 811-812, per Viscount Cave LC."
In the present case, the subpoenaed material was required in connection with a valuation appeal under the Valuation of Land Act 1944. Under s.70 of that Act the Court has a discretion to award costs, albeit a fettered discretion, to the successful party. However, in valuation cases costs do not automatically follow the event. The principles which should govern the exercise of the Court's discretion in such cases were considered by the Land Appeal Court in WH Bowden v The Valuer General (1980) 7 QLCR 138. The Court said at 146:
" We think, in dealing with questions of costs, that it is an important consideration that there be ease of access to the Land Court and the Land Appeal Court. … Fear of any adverse order with respect to costs may deter citizens with just complaints from resorting to the Courts... It seems to us unjust to adopt a restrained attitude towards awarding costs against citizens without adopting an equally restrained attitude towards awarding costs against the Valuer-General. That is not to say that, in a proper case, the Land Court or the Land Appeal Court will not award costs against either a citizen or an authority subject to the provisions of the statute which governs the matter."
The Court then went on to say at 147:
" Easy access to the Land Court to air grievances and have valuations reviewed is, as we have already stressed, most desirable in revenue cases, and such access should be available without fear of costs being awarded to either party except in special cases."
This reasoning has been adopted by this Court and costs are rarely awarded in valuation cases. However, this is not a matter under the Valuation of Land Act. It concerns a subpoena issued under Rule 414 of the Uniform Civil Procedure Rules against a person who is not a party to the valuation appeal. The present matter is an application for costs following a successful application by the applicant to set aside that subpoena under Rule 416. The general approach of the Land Court to costs of a valuation appeal is therefore not really relevant, but it does reflect the Court's concern that access to the Land Court should not be hindered by fear of an award of costs.
Although the general rule is that costs follow the event, the Court clearly has discretion to otherwise order. It remains to consider whether there are sufficient grounds for departing from the general rule.
The applicant's case is simple. It was successful in all respects in having the subpoena set aside. It therefore feels that it is entitled to an award of costs.
On the other hand, there are circumstances relating to the respondents that should be considered. First, the respondents were not legally represented. They did not realise the consequences of issuing a subpoena or their liability for costs should the subpoena be set aside.Second, their reason for seeking the subpoenaed material was that they considered that it was necessary to prove their case that the dewatering activities of the East End Mine had caused depletion of water in their district which had an adverse effect on land values. Such a view was mistaken, as the issue was not the cause of the water depletion, but rather its effect on land values. That issue could best be determined by a competent valuer investigating sales of land in the area. However, the respondents' view of the need for the subpoenaed material was reinforced as the Department of Natural Resources and Mines had joined issue on the hydrology and geology of the area. It is understandable therefore, that the respondents sought to obtain material which they hoped could prove their case.
Third, there is an ongoing dispute between the applicant and the respondents which has been briefly outlined earlier. The respondents' position was perhaps best summed up by Mr Lucke when he said:
"Now what we have here is the world's biggest cement company. We have a cement company that is operated in my community to the detriment of the community … a community that really has fallen on hard times for a variety of reasons, not least of all being that they are subsidising a multi-national company because of the loss of some value in their holdings. … It becomes a matter of, I would have argued and still would continue to argue, that this company has forfeited the right to reimbursement. They've been bitten by a flea but we've been bitten by something much bigger than that." (Transcript p.32)
Fourth, there is the matter of conduct money. Rule 419(1) states:
"A person is excused from complying with a subpoena unless conduct money sufficient to meet the reasonable expenses of complying with the subpoena is tendered –
(a) when the subpoena is served; or(b)within a reasonable time before attendance under the subpoena is required."
The respondents, not being legally represented, had no idea about the requirement for conduct money. They sought advice which proved to be incorrect, and shortly after the subpoena was served they tendered conduct money of only $49, which was quite inadequate.
The subpoena was addressed to Mr Michael Rynne, the previous Gladstone Plant Manager, who was well known to the respondents and in whom, it would seem, that they had some degree of trust, despite the unresolved conflict between QCL and the respondents. According to Mr Lucke's evidence, Mr Rynne would have known the location and extent of the documents which they were seeking. However, it seems that because of his imminent departure for a post in Fiji, the subpoena was dealt with by the new Gladstone Plant Manager, Mr Spierings.
The applicant is a stranger to the action between the respondents and the Department of Natural Resources and Mines. It is a third party which has been put to trouble and expense to have the subpoena set aside. On one view, the applicant should be entitled to an award of costs. However, the applicant is not a stranger to the respondents. There is an ongoing conflict and obvious tension between them which extends back to the 1970's. The respondents have endeavoured to obtain material from a variety of different sources to demonstrate that the water depletion in the area has been caused by the operations of the East End Mine.
The strained relationship between the parties can be seen in the applicant's submissions that the material was subpoenaed in an attempt to ascertain what information the applicant had in its possession in order to aid the respondents bringing further legal proceedings. The submissions went on to say that the respondents have a long history of seeking similar information from QCL in a manner which has now become frivolous and vexatious.
It is true that Mr Lucke in attempting to support the subpoena mentioned that he had obtained legal advice that the landowners in the area who had suffered water depletion may have a civil action against QCL. However, there is no evidence that the subpoenaed material was sought other than for the valuation appeals.Could it be said that this method of seeking of information from QCL by the respondents was frivolous and vexatious? Certainly the subpoena was misconceived and it was set aside for reasons previously stated. However, in my view, it could not be said to be frivolous or vexatious. It was issued in an attempt to obtain information which the respondents considered they needed to prove their case in the valuation appeals.
In my view, if there was not ongoing conflict between the parties or if Mr Rynne had been available to deal with the subpoena, the outcome may have been different. Mr Rynne, from his previous contact with the respondents would have realised that it was most unlikely that they would be legally represented. He could have put them on notice that there would have been substantial costs involved for the applicant to comply with the subpoena. If the respondents had persisted with the subpoena after being so advised, the applicant need not have complied with the subpoena because reasonable conduct money had not been tendered (Rule 419(1)). If the respondents had realised the amount of the conduct money that would have been required to comply with the subpoena, it is most unlikely that they would have tendered the required amount.
I am also concerned that the respondents were not put on notice of the likelihood that the subpoena would be set aside and the likely amount of any award of costs. They were served with a copy of the application to set aside the subpoena, but they do not appear to have fully appreciated that the application was likely to be successful, or the significance of the application for the order for costs against them.
In this regard, I wish to make it clear that I am not suggesting that the applicant was guilty of any misconduct. However, misconduct is not a necessary element in considering the conduct of the parties in relation to costs: Keddie v. Foxhall (1955) VLR 320.
Conclusions
Having regard to the matters which I have considered, in addition to the disparity of power between the applicant and the respondents, the ongoing conflict between the two and the necessity for them to be members of the same community in the future, I consider this case to be one where it would be appropriate not to make an award of costs.
Order
In the exercise of my discretion under s.34 of the Land Court Act 2000, I make no order as to costs.
In respect of this application, each of the parties should bear their own costs.
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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