Re Michael;

[2003] WASCA 288 (S)

RE MICHAEL; EX PARTE WMC RESOURCES LTD [2003] WASCA 288 (S)

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2003] WASCA 288 (S)
Court:	THE FULL COURT (WA)
Case No:	CIV:1584/2003	Heard:	6-7 OCTOBER 2003, 3 MARCH 2004
Coram:	TEMPLEMAN J MILLER J	Delivered:	2/12/03
Supplementary Delivered:	18/03/04
No of pages:	9	Judgment Part:	1 of 1
Result:	Declaration Costs orders
Category:	B
PDF Version

Parties:	WMC RESOURCES LTD (ACN 004 184 598) THE STATE OF WESTERN AUSTRALIA NEWMONT WILUNA GOLD PTY LTD THE HONOURABLE CLIVE MORRIS BROWN MINISTER FOR STATE DEVELOPMENT TOURISM SMALL BUSINESS THE HONOURABLE ERIC STEPHEN RIPPER MINISTER FOR ENERGY WESTERN AUSTRALIAN INDEPENDENT GAS PIPELINES ACCESS REGULATOR SOUTHERN CROSS PIPELINES AUSTRALIA PTY LTD SOUTHERN CROSS PIPELINES (NPL) AUST LTD DUKE ENERGY WA PTY LTD
Catchwords:	Final orders Declaration Costs
Legislation:	Legal Practitioners (Supreme Court) (Contentious Business) Determination Legal Practitioners Act, s 59 Supreme Court Act, s 4
Case References:	Mellifont v Attorney-General for the State of Queensland (1991) 173 CLR 289 Nil

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : RE MICHAEL; EX PARTE WMC RESOURCES LTD [2003] WASCA 288 (S) CORAM : TEMPLEMAN J

MILLER J

HEARD : 6-7 OCTOBER 2003, 3 MARCH 2004 DELIVERED : 2 DECEMBER 2003 SUPPLEMENTARY
DECISION : 18 MARCH 2004 FILE NO/S : CIV 1584 of 2003 MATTER : An application for a Writ of Prohibition

Against

KENNETH COMININOS MICHAEL, WESTERN AUSTRALIAN INDEPENDENT GAS PIPELINES ACCESS REGULATOR

and

THE STATE OF WESTERN AUSTRALIA

and

THE HONOURABLE CLIVE MORRIS BROWN, MINISTER FOR STATE DEVELOPMENT, TOURISM, SMALL BUSINESS

and

THE HONOURABLE ERIC STEPHEN RIPPER, MINISTER FOR ENERGY

(Page 2)
EX PARTE

WMC RESOURCES LTD (ACN 004 184 598)
Applicant

Catchwords:

Final orders - Declaration - Costs

Legislation:

Legal Practitioners (Supreme Court) (Contentious Business) Determination

Legal Practitioners Act, s 59
Supreme Court Act, s 4

Result:

Declaration

Costs orders

Category: B

(Page 3)

Representation:

Counsel:

Applicant : Mr G H Murphy SC

The State of Western Australia : Ms J C Pritchard
Newmont Wiluna Gold Pty Ltd : Mr J Gilmour QC & Mr C W Lockhart
Minister for State Development,
Tourism, Small Business : Ms J C Pritchard
Minister for Energy : Ms J C Pritchard
Western Australian Independent
Gas Pipelines Access Regulator : Ms C Brown
Southern Cross Pipelines Australia
Pty Ltd
Southern Cross Pipelines (NPL)
Aust Ltd
Duke Energy WA Pty Ltd : Mr M J Buss QC & Mr A G Castledine

Solicitors:

Applicant : Clayton Utz

The State of Western Australia : State Solicitor's Office
Newmont Wiluna Gold Pty Ltd : Pullinger Readhead Stewart
Minister for State Development,
Tourism, Small Business : State Solicitor's Office
Minister for Energy : State Solicitor's Office
Western Australian Independent
Gas Pipelines Access Regulator : Corrs Chambers Westgarth
Southern Cross Pipelines Australia
Pty Ltd
Southern Cross Pipelines (NPL)
Aust Ltd
Duke Energy WA Pty Ltd : Minter Ellison

Case(s) referred to in judgment(s):

Mellifont v Attorney-General for the State of Queensland (1991) 173 CLR 289

Case(s) also cited:

Nil

(Page 4)

1 TEMPLEMAN J: The Full Court delivered its decision in this matter on 2 December 2003. However, it was not then possible to make final orders. That is because the parties were not agreed about the orders and because the only member of the Court then available was precluded by s 61 of the Supreme Court Act 1935 from making any substantive orders. The matter was therefore re-listed for further argument before the two members of the Court who remain available to deal with it.

2 The two outstanding issues are the form of the relief to be granted and the costs of the proceedings. I deal with each in turn, adopting the same terminology as that used in the principal decision.

The relief

3 In the decision of Parker J at par [65], his Honour held that although prohibition might properly be granted at this stage, declaratory relief would be adequate because the Regulator had informed the Court he intended to abide by its decision.

4 At par [72], Parker J proposed that declaratory relief be granted in respect of "the main issue". The other members of the Court agreed that the matter should be concluded in that way.

5 The "main issue" to which Parker J referred is that identified in par [16] to [18] of the decision. Parker J summarised it in the following terms:

"By an announcement on 6 November 2002 the Regulator stated that he proposed to consider the effect of cl 21(3) of the State Agreement on the application of the Code to the pipeline. In effect, the applicant contends it is beyond the statutory power and function of the Regulator to do so. It is supported in this by the State and Newmont."

6 The applicant identified the main issue in par [13] of its outline of submissions dated 30 September 2003 in the following way:

"The main issue is whether the Regulator has power to consider whether the pipeline owners can demonstrate material adverse effect, as referred to in cl 21(3), and to determine the extent (if any) to which the Code does not apply to the pipeline."

7 In response, and rather more succinctly, the owners summarised what they described as "the Primary issue" in the heading to par [3] of

(Page 5)

their outline of submissions dated 2 October 2003. It was in the following terms:

"Whether the application of the Code to the pipeline has been, or is capable of being, affected by cl 21(3)."

8 It is clear, therefore, that however expressed, the principal question for the Court was whether the Regulator was entitled to have regard to cl 21(3) when performing his functions under the Code.

9 Equally clearly, the answer given by the Court was that the Regulator was not so entitled. As Parker J put it, at par [58]:

"Whatever the legal force and effect of cl 21(3) as between the parties to the State Agreement, I am not able to read its provisions as conferring, or purporting to confer, any role or function or jurisdiction on the Regulator."

The other members of the Court agreed.

10 The applicant advanced various arguments in support of the main issue. The parties have brought in draft minutes of orders in which they have formulated various forms of declaration for the purpose of encapsulating the decision of the Court in relation to these arguments.

11 There is no doubt that it would be open to the Court to make declarations of the kind proposed. That is because such answers would be "given as an integral part of the process of determining the rights and obligations of the parties which are at stake in the proceedings in which the questions are reserved": Mellifont v Attorney-General for the State of Queensland (1991) 173 CLR 289 at 303. However, in the present case, I think it neither necessary nor desirable to embark upon that exercise.

12 I do not think it necessary because, ultimately, it is only the answer to the main or primary issue identified by the parties and the Court which matters: the answer to that question will determine the course to be followed by the Regulator when applying the Code.

13 I do not think it desirable to attempt to resolve the various differences of opinion reflected in the draft declarations brought in by the parties. That is because the Court's reasons were directed towards the formulation of a definitive answer to the main or principal issue. The answer can be stated with the degree of precision necessary for declaratory relief. However, in my view, it is more difficult to summarise in a satisfactory way the answers to the questions considered by the Court

(Page 6)

in reaching its ultimate conclusion. The Court has expressed its views in relation to those matters. I think it preferable that they be understood in the context of the reasons in which they appear.

14 In my view, having regard to the answer given by the Court to the main or principal question in issue, the proceedings should be concluded by a declaration in the following terms:

"On the proper construction of the State Agreement ratified by the Goldfields Gas Pipelines Agreement Act 1994 and on the proper construction of that Act, s 3 of the Government Agreements Act 1979 and the Gas Pipelines Access (Western Australia) Act 1998, the Regulator is required to perform his functions under the Code without regard to cl 21(3) of the State Agreement."

15 In reaching that conclusion, I have not accepted the owners' submission that a declaration in these terms would be too wide. In essence, the owners contend that although cl 21(3) has no binding contractual force, the expression of comfort which it contains is relevant to their decision to invest in the pipeline and their reasonable business expectations, and should therefore be taken into account by the Regulator to that extent.

16 The owners point to such provisions as s 2.24(a), 8.1(d) and 8.10(g) of the Code. The first of those provisions requires the Regulator to take into account the owners' "legitimate business interests and investment" in the pipeline when assessing a proposed access arrangement.

17 The second of those provisions provides that a reference tariff and a reference tariff policy should be designed so as not to distort investment decisions in pipeline transportation systems or in upstream and downstream industries. The third provision is directed to the establishment of the initial capital base for the pipeline: a base which is to be established so that "the reasonable expectations" of persons including the owners under the regulatory regime which applied to the pipeline before the commencement of Code, are taken into account.

18 The owners rely on par [45] of the reasons of Parker J, where his Honour said:

"In my view, it is clear from the nature of the subject matter of cl 21(2) and (3) that the parties cannot have intended these two subclauses to have binding contractual force and effect.

(Page 7)

Further, whatever the intention of the parties, cl 21(2) and (3) cannot be enforced by the courts as binding contractual provisions. They can only be seen as expressions of comfort as between the parties to the contract, as to what they each then expected or hoped would be the course of future events. No doubt these provisions in the State Agreement may reflect some degree of moral commitment by each of the parties to the future courses contemplated, but in no sense can it be accepted that a legally binding obligation to give effect to what is contemplated by the two subclauses was intended, or achieved as a matter of contract."

19 Although the Court recognised the possible existence of a moral commitment of the kind referred to above, the Court was equally clear that cl 21(3) did not confer or purport to confer any role or function or jurisdiction on the Regulator: see reasons par [58] set out above.

20 In my view, therefore, the declaration set out above is appropriate. That is not to deny the efficacy of s 2.24(a), s 8.1(d) and s 8.10(g) of the Code, which the Regulator will no doubt apply as he thinks fit: but not via cl 21(3).

Costs

21 It is common ground that the owners should pay the applicant's costs of the proceedings, to be taxed if not agreed. However, Newmont Wiluna Gold also seeks an order for costs: and both the applicant and Newmont Wiluna Gold ask that the time limits and the hourly rates of the Supreme Court Scale of Costs be removed. That application is made on the basis that the application involved issues of considerable complexity which were of legal and public importance.

22 Against that, the owners submit that although the case involved "some complexities" the hearing was concluded within one and half days. The owners say there is no evidence before the Court about the time actually spent by the applicant's solicitors and counsel: nor is there any basis for increasing hourly rates above the Scale in the absence of any costs agreement made pursuant to s 59 of the Legal Practitioners Act.

23 The relevant scale of costs is that incorporated in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2002. Item 27 of the Scale refers to proceeding by way of prerogative writ. The relevant costs are to be calculated in accordance with item 20, which applies to appeals to a member of the Court or to the Full Court.

(Page 8)

The Scale allows a senior practitioner to charge 10 hours for getting up the matter for hearing. Counsel are permitted to charge for two days of preparation. This includes senior counsel where an appropriate certificate has been given.

24 In my view, the Court does not require evidence to be satisfied that this is a matter which involved much more than 10 hours in getting up and much more than two days of preparation by counsel. Clearly, it is a matter which is fit for senior counsel.

25 In my view, therefore, it would be appropriate, so far as the applicant is concerned, to remove the time limits imposed by the Scale and to permit the Taxing Officer to allow a reasonable time for getting up and preparation. I would certify for senior counsel.

26 However, I am not persuaded that it would be appropriate to remove the limit on the hourly or daily rates prescribed by the Rules. I accept the owners' submissions in relation to that aspect of the matter.

27 Somewhat different considerations apply to Newmont Wiluna Gold which had a substantially similar interest to that of the owners. By order of Scott J on 14 June 2003, Newmont Wiluna Gold was served with the papers. It subsequently filed a notice of intention to appear (under its previous name of Wiluna Gold Pty Ltd). Accordingly, Newmont Wiluna Gold was a party to the proceedings within the definition provided by s 4 of the Supreme Court Act 1935.

28 In my view, in the circumstances summarised above, Newmont Wiluna Gold is also entitled to have its costs paid by the owners. However, having regard to the more limited involvement of Newmont Wiluna Gold and its position as a supporter of the applicant, I do not think it appropriate to depart from the Scale. I would, however, certify for senior counsel.

29 The owners contend that they wasted a significant amount of costs in opposing the involvement by two other Newmont companies, Newmont Power Pty Ltd and Newmont Yandal Operations Ltd, which also filed notices of intention to appear on 26 June 2003. In the end, the additional Newmont companies did not persist in their application: only Newmont Wiluna Gold appeared at the hearing.

30 The owners say that in these circumstances, while it would be appropriate for the Newmont companies to be ordered to pay the costs

(Page 9)

thrown away, the more convenient course would be to make no order as to costs as between the owners and Newmont Wiluna Gold.

31 I accept that the owners have incurred costs in opposing the involvement of the additional Newmont companies. However, having regard to the magnitude of the costs which the owners must have incurred in the application generally, I would expect the costs thrown away to have been relatively small. Had I been of the view that the costs of Newmont Wiluna Gold should be taxed without regard to the Scale, I would have been inclined to make some allowance for the wasted costs. However, I think that course would add an unwarranted degree of complexity, given that I would not allow Newmont Wiluna Gold to depart from the Scale.

32 I would therefore make the following costs orders:

1. Southern Cross Pipelines Australia Pty Ltd, Southern Cross Pipelines (NPL) Australia Ltd and Duke Energy WA Pty Ltd do pay the costs of the application of WMC Resources Ltd and Newmont Wiluna Gold Pty Ltd, to be taxed if not agreed.

2. The costs of WMC Resources Ltd are to be taxed without regard to the time limits prescribed by the Supreme Court Scale of Costs.

3. WMC Resources Ltd and Newmont Wiluna Gold Pty Ltd are each to have a certificate for senior counsel.

33 MILLER J: I have had the opportunity of reading in draft the reasons to be delivered by Templeman J on the question of the form of declaratory relief and the appropriate orders for costs. I agree with those reasons and the orders proposed by his Honour. I have nothing to add.