Reed v Department of Natural Resources and Mines & Ors
[2014] QLC 1
•31 January 2014
LAND COURT OF QUEENSLAND
CITATION: Reed v Department of Natural Resources and Mines & Ors [2014] QLC 1 PARTIES: Garry Arthur Reed
(appellant)v. Chief Executive, Department of Natural Resources and Mines
(first respondent)and
QCoal Sonoma Pty Ltd, CSE Sonoma Pty Ltd, JS Sonoma Pty Ltd and Watami (Qld) Pty Ltd
(second respondent)FILE NO: WAA114-13 DIVISION: General Division PROCEEDING: Application for costs DATE OF HEARING: 20 November 2013
DELIVERED ON: 31 January 2014 DELIVERED AT: Brisbane HEARD AT: Brisbane PRESIDENT: CAC MacDonald CATCHWORDS: Costs - Water Act 2000 - criteria guiding discretion to award - whether discretion applies to interlocutory steps - defaults by appellant in complying with procedural requirements - costs awarded - form of award subject to submission by parties.
Costs - Water Act 2000 - costs provisions - whether decisions on similar provisions in Integrated Planning Act (repealed) applicable - caution necessary in use.
Costs - Water Act 2000 - costs provisions - use of UCPR - philosophy of costs award in UCPR.
Costs - Water Act 2000 - discretion in awarding costs - application where one party is a public interest litigant - obligation to conduct litigation in appropriate manner.
Integrated Planning Act 1997
Water Act 2000
Land Court Act 2000
Local Government (Planning and Environment) Act 1990Land Court Rules 2000
Uniform Civil Procedure Rules 1999Burdekin Shire Council v Pioneer Sugar Mills Pty Ltd and The State of Queensland [2005] QPELR 13
Chrismel Pty Ltd v Department of Natural Resources and Mines [2005] 26 QLCR 87
Gauci Developments Qld (1) Pty Ltd v Bundaberg City Council [2009] QPELR 66
Jeteld Pty Ltd v Toowoomba Regional Council [2010] QPELR 19
Mudie v Gainriver Pty Ltd (No 2)
Vanbrogue Pty Ltd v Department of Environment and Resource Management [2013] QLC 52APPEARANCES: Ms R Spiller, solicitor, for the appellant
Ms D Silvester, Principal Lawyer, for the first respondent
Mr M Johnston of Counsel for the second respondentSOLICITORS: p&e Law for the appellant
Crown Law for the first respondent
McCullough Robertson for the second respondent
Background
The substantive proceedings in this matter concern an appeal brought by Garry Arthur Reed (the appellant) against a review decision made by the Chief Executive, Department of Natural Resources and Mines (the first respondent) dated 25 February 2013. The first respondent approved a water licence relating to a proposed diversion of a section of Coral Creek, to access coal reserves beneath the creek on the northern boundary of the existing Sonoma Coal Mine located near Collinsville in Central Queensland.
On 13 November 2013, the second respondent, QCoal Sonoma Pty Ltd, CSE Sonoma Pty Ltd, JS Sonoma Pty Ltd and Watami (Qld) Pty Ltd, filed a general application seeking four orders which, in summary, were that -
1.On or before 4 pm 22 November 2013, the appellant file and serve any reports, statements or other material in reply on which the appellant intends to rely.
2.The disputed issues between the parties are limited to the grounds of appeal outlined in the further amended notice of appeal and the relevant criteria section in 210(1) of the Water Act 2000.
3.On or before 4 pm 22 November 2013, the appellant file and serve further and better particulars of any allegations that the criteria in s 210(1) of the Act are engaged by any of the grounds of appeal.
4.The appellant pay the second respondent's costs of the application.
The application was listed for hearing on 20 November 2013. At the hearing I was informed that the matters raised in the general application had been settled other than the second respondent's application for costs.
The second respondent has sought an order that the appellant pay the second respondent's costs of the general application, pursuant to s 882(4)(e) and (g) of the Water Act 2000 (the Act). The costs application was resisted by the appellant.
Section 882(3) of the Act provides -
"(3) Each party to the appeal must bear the party’s own costs for the appeal."
Section 882(4) of the Act provides -
"(4)However, the court may order costs for the appeal, including allowances to witnesses attending for giving evidence at the appeal, as it considers appropriate in the following circumstances -
(a) the court considers the appeal was started merely to delay or obstruct;
(b) the court considers the appeal, or part of the appeal, to have been frivolous or vexatious;
(c) a party has not been given reasonable notice of intention to apply for an adjournment of the appeal;
(d) a party has incurred costs because the party is required to apply for an adjournment because of the conduct of another party;
(e) a party has incurred costs because another party has defaulted in the court’s procedural requirements;
(f) without limiting paragraph (d), a party has incurred costs because another party has introduced, or sought to introduce, new material;
(g) a party to the appeal does not properly discharge its responsibilities in the appeal."
Chronology
On 30 August 2013 I ordered that the second respondent serve its lay and expert evidence in the substantive appeal, by 6 September 2013. The appellant was ordered to file evidence in reply by 26 September 2013.
The second respondent served its lay and expert evidence on 16 September 2013.
The appellant's evidence in reply was not filed by 26 September 2013. Accordingly, on 10 October 2013, I ordered the appellant to file and serve the evidence in reply by 1 November 2013. I further ordered that the appeal be set down for hearing for 3 days commencing 8 January 2014. I also indicated to the parties that I required that the issues in dispute in the substantive appeal be clarified and that this could be done either by agreement between the parties or by an order for particulars. No order as to the provision of particulars was made as the parties' representatives intimated that they would deal with the issue without the need for a court order.
On 24 October 2013, the second respondent's solicitor wrote to the appellant's solicitor seeking further and better particulars by 1 November 2013, and proposing a consent order as to the identification of the issues in dispute.
On 31 October 2013, the appellant's solicitor proposed to the respondents an extension of time for filing the evidence in reply and noted that an application to the Court would be made. Both respondents indicated that that application would be opposed and, in the result, no application for an extension of time was made by the appellant.
By letter dated 11 November 2013, the second respondent's solicitors noted that the appellant had not served the evidence in reply and had not responded to the letter from the second respondent's solicitor dated 24 October 2013. The letter advised that the second respondent intended to make application to the Court.
By letter dated 11 November 2013, the appellant's solicitor said that their expert would be conferring with Counsel on 14 November 2013 to settle the report. The letter did not state when the report would be served and did not respond to the second respondent's requests in the letter of 24 October 2013 as to further particulars and the identification of the issues in dispute.
By letter dated 12 November 2013, the second respondent noted the appellant's failure to comply with the orders of 10 October 2013 and to respond to the letter of 24 October 2013. The letter also advised that the second respondent would seek to list the matter and to seek costs.
The general application was filed on 13 November 2013. On 15 November 2013, the appellant served the expert's report and the particulars. On 19 November 2013, the appellant indicated that it would consent to the proposed order as to the issues in dispute but only on the basis that there be no order as to the second respondent's costs of the application filed on 13 November 2013.
Second Respondent's submissions
The second respondent submitted that the Court should make the order for costs, in the proper exercise of its discretion. The second respondent had incurred costs because the appellant had defaulted in the court's procedural requirements, within the meaning of s 882(4)(e) of the Act in that -
(a) The appellant took no steps to make an application to extend the time for filing its material, despite indicating an intention to do so in the letter from his solicitors dated 31 October 2013 and despite knowing that both the first and second respondents opposed an extension of time.
(b) At no time prior to the filing of the application did the appellant indicate when it would serve the expert report in reply.
(c) It was imperative for the appellant to take the appropriate steps to meet the timeframe ordered by the Court because the appeal was listed for trial early in January 2014 and Christmas leave and the holiday season would intervene.
(d) The second respondent had no option but to file and serve the application in circumstances where the appellant had been dilatory. The second respondent was given no assurances as to when the evidence in reply would be served before it filed the application.
(e) The timeframe in the orders of 10 October 2013, as to the service of the appellant's material, was nominated by the appellant and consented to by the other parties.
(f) Some nine weeks elapsed between the service of the second respondent's evidence (16 September 2013) and the appellant serving its reply evidence (15 November 2013).
(g) Court orders cannot be ignored and treated as a matter of convenience by any party.
Alternatively, the second respondent submitted, the appellant's conduct constituted a failure to properly discharge his responsibilities within the meaning of s 882(4)(g) of the Act. Rule 5 of the Uniform Civil Procedure Rules 1999 (UCPR), which, counsel submitted, apply in the Land Court by virtue of r 4 of the Land Court Rules 2000, requires parties to proceed in a way that facilitates "the just and expeditious resolution of the real issues … at a minimum of expense".
Counsel also referred to Chrismel Pty Ltd v Department of Natural Resources and Mines[1] where the Land Appeal Court said:
"Having regard to the apparent legislative intent evinced in the provisions of s 882(4), which is to give the court the power to compensate a party disadvantaged by the unmeritorious conduct of another party in the appeal, there is no reason why s 882(4)(g) ought not to be construed as extending to a wide variety of unmeritorious conduct in the appeal, such as the presentation of irrelevant evidence or the raising of plainly unarguable matters."
[1] [2005] 26 QLCR 87, 95 [50].
The appellant had failed to respond and engage with respect to the second respondent's letter of 24 October 2013, counsel submitted. That letter was ignored prior to the filing of the application. Had the appellant properly engaged with the second respondent, consistently with its obligation in UCPR r 5 and its responsibilities, the application would not have been necessary and the second respondent would not have incurred unnecessary costs. Accordingly, the appellant failed to properly discharge its responsibilities and this was a proper case for the exercise of the Court's discretion to order costs.
Appellant's submissions
Ms Spiller, the solicitor for the appellant, submitted that the behaviour of the appellant was not unmeritorious.
Ms Spiller said that the reason for the delay in providing the statement by the appellant's expert witness was that Crown Law (solicitor for the first respondent) had not advised that disclosure was complete until 30 October 2013.[2] The following day the appellant's expert was briefed with the final documents. The expert report was provided on 15 November 2013. Ms Spiller said that on 31 October she had quite plainly and fairly put the other parties on notice that the appellant would require an extension for provision of the report and had indicated that she intended to apply for an extension. That intention to make an application, Ms Spiller said, was overtaken by the vehement opposition of both respondents to any extension. It was then necessary for Ms Spiller to seek her client's instructions about the costs and the likely futility of an application to the Court.
[2]It is to be noted that Ms Silvester, Counsel for the first respondent, vigorously denied that Crown Law had delayed in providing disclosure. It is unnecessary to make any findings in this regard.
Ms Spiller submitted that there was no mala fides in the matter. If there was an unexplained delay of five business days between 31 October and 15 November, she submitted, the appellant should not be penalised because the practicality was that Ms Spiller was instructing in the Planning and Environment Court in Brisbane and was unable to attend to the file because she was not in her office in Cairns with the file.
Ms Spiller also submitted that the appellant should not be penalised by an order to pay costs because he was a public interest litigant who derived no commercial benefit from the proceedings. Ms Spiller had previously filed an affidavit deposing to the fact that her client resided at Collinsville and she had been informed that he is permanently retired from the work force due to his health. The costs provisions in the legislation were designed to ensure that citizens are not discouraged from bringing proceedings because of a fear that a crippling costs order might be made. The costs primary rule recognizes the wider public interest character likely to be involved in the proceedings.
Conclusions
Section 882(3) of the Water Act provides that each party to the appeal must bear its own costs. However s 882(4) provides the Court with a discretion to order costs in certain circumstances.
The first issue to be considered is whether ss 882(3) and (4) apply only to the final determination of the appeal or whether they also apply to applications for costs in respect of interlocutory steps. Both parties have submitted that s 882(3) and (4) apply to interlocutory steps in the appeal.
It appears that there is no earlier decision of the Land Court in which this issue has been considered. However counsel for the second respondent has drawn to my attention the provisions of s 4.1.23 of the now repealed Integrated Planning Act 1997 (IPA) which provided that:
"4.1.23 Costs
(1) Each party to a proceeding in the court must bear the party's own costs for the proceeding.
(2) However, the court may order costs for the proceeding (including allowances to witnesses attending for giving evidence at the proceeding) as it considers appropriate in the following circumstances -
(a)the court considers the proceeding was instituted merely to delay or obstruct;
(b)the court considers the proceeding (or part of the proceeding) to have been frivolous or vexatious;
(c)a party has not been given reasonable notice of intention to apply for an adjournment of the proceeding;
(d)a party has incurred costs because the party is required to apply for an adjournment because of the conduct of another party;
(e)a party has incurred costs because another party has defaulted in the court's procedural requirements;
(f)without limiting paragraph (d), a party has incurred costs because another party has introduced (or sought to introduce) new material;
(g)if the proceeding is an appeal against a decision on a development application or master plan application and the applicant did not, in responding to an information request, or to a request for information for the master plan application, give all the information reasonably requested before the decision was made;
(h)the court considers an assessment manager, a referral agency or a local government, or a coordinating agency for a master plan application, should have taken an active part in a proceeding and it did not do so;
(i)an applicant, submitter, referral agency, assessment manager or local government or a coordinating agency for a master plan application, does not properly discharge its responsibilities in the proceedings."
The circumstances in which the Planning and Environment Court could order costs for a proceeding under s 4.1.23(2)(a) - (f) and (i) are virtually identical with those that are set out in s 882(4) of the Act, other than that the words "the proceeding" were used in the IPA whereas the words "the appeal" are used in s 882(4).
There are numerous decisions of the Planning and Environment Court where ss 4.1.23(1) and (2) were construed to enable the court to order costs with respect to interlocutory hearings. For example, in Gauci Developments (Qld 1) Pty Ltd v Bundaberg City Council[3], Wilson SC DCJ said:
"Certainly s.4.1.23 refers to costs "… for the proceeding" and, because IPA does not define that term it might at first blush be thought to apply, in instances like the present, only to the appeal in toto. The discretion arising under subs.(2) has, however, been construed on a number of occasions to apply to interlocutory matters including applications within proceedings. That is unsurprising, for two reasons: first some of the nine instances adumbrated in the subsection plainly refer to part, rather than the whole, of the proceeding (subs.(2)(e) is an obvious example. I do not think the particular reference to "part" of the proceeding which appears only in subs.(2)(b) tells against this conclusion. The second reason concerns the wide nature of the discretion which subs.(2) obviously intends to give to the Court - as the phrase "… as it considers appropriate" plainly envisages." (Citations omitted).
[3][2009] QPELR 66 at [7]. See also Jeteld Pty Ltd v Toowoomba Regional Council [2010] QPELR 19 at 22 and Burdekin Shire Council v Pioneer Sugar Mills Pty Ltd [2005] QPELR 13 at 15, 16.
It was recognized by the Land Appeal Court in Chrismel v Department of Natural Resources and Mines that it is appropriate for the Land Court to have recourse to decisions dealing with s 4.1.23 IPA in construing s 882(4) of the Act[4]. However the Land Appeal Court also said that some caution must be exercised in relying on the Planning and Environment Court cases, given that there are differences in the wording of the respective provisions.[5] For present purposes, the only material difference between the relevant provisions is the use of the word "proceeding" in IPA as compared with the use of the word "appeal" in the Water Act. In my view that difference does not prevent application, by this Court, of reasoning similar to or analogous with the reasoning of the Planning and Environment Court. Accordingly I adopt, with respect, the reasoning of Wilson SC DCJ in Gauci Developments set out in the quotation above. I conclude, therefore, that ss 882(3) and (4) apply to costs of interlocutory matters, including applications within appeals.
[4] (2005) 26 QLCR 87, 94 [45].
[5] At [47].
I turn now to consider the merits of the second respondent's submissions in support of its application for costs. The application identifies three instances where the appellant is said to have failed to comply with the Court's requirements - a failure to comply with the Court's order as to the provision of the expert report by 1 November 2013, the failure of the appellant's solicitors to reply to correspondence from the second respondent's solicitors concerning the provision of further and better particulars and the failure to respond about the proposed order concerning the identification of issues in dispute.
With regard to the expert report, the appellant's solicitor did advise the other parties that the appellant was unable to comply with the Court order for provision of the report by 1 November. However, the appellant's solicitor made no attempt to obtain an extension of time from the Court nor provide any indication to the other parties as to when the outstanding report would be provided. The report was provided on 15 November along with the particulars requested by the second respondent - after the general application had been filed. Until that time there had been no communication from the appellant as to when the expert report or the requested particulars would be supplied. Similarly, there was no response from the appellant's solicitor to the second respondent's request that the appellant agree to the formulation of the issues set out in paragraph 9(b) of the letter from the respondent's solicitor to the appellant's solicitor, dated 24 October 2013.[6]
[6] Affidavit of Mr PW Stokes filed 13 November 2013, page 30 of the Exhibits.
In my opinion, the appellant has failed to comply with the Court's procedural requirements within the meaning of s 882(4)(e) of the Act. The failure to comply with the Court's order as to provision of the expert's report was clearly a default in observing the Court's procedural requirements. Similarly, the failure to communicate with the second respondent's solicitors about the provision of particulars amounted to a default in the Court's procedural requirements, in circumstances where I had indicated to the parties that it was my expectation that they would resolve that issue appropriately without an order of the Court.
Alternatively I consider the appellant has not properly discharged his responsibilities in the appeal within the meaning of s 882(4)(g) of the Act. As recognized by the Land Appeal Court in Chrismel Pty Ltd v Department of Natural Resources and Mines[7], the apparent legislative intent evinced in s 882(4) is to give the Court the power to compensate a party disadvantaged by the unmeritorious conduct of another party in the appeal.
[7] [2005] 26 QLCR 87 at [40].
The Court also said that s 882(4)(g) of the Act should not be confined to circumstances where there has been a default in compliance with procedural requirements. It was clear, the Court said, that a default in complying with the Court's procedural requirements was already catered for by s 882(4)(e). While there may be some overlap between s 882(4)(g) and s 882(4)(e) of the Act there may be cases where there is default in procedural requirements that cannot be characterised as coming within s 882(4)(e), but which may fall within s 882(4)(g).[8]
[8] At [49].
It was accepted in Vanbrogue Pty Ltd v Department of Environment and Resource Management[9] that it is appropriate to consider the provisions of r 5 of the UCPR when considering an application for costs under s 882(4) of the Water Act. Rule 5 of the UCPR provides as follows:
"5 Philosophy - overriding obligations of parties and court
(1) The purpose of these rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.
(2)Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.
(3) In a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.
(4)The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court.
[9] [2013] QLC 52, [13] - [19].
Example -
The court may dismiss a proceeding or impose a sanction as to costs, if, in breach of the implied undertaking, a plaintiff fails to proceed as required by these rules or an order of the court."
The appellant's solicitor failed to advise when the expert report and the further and better particulars would be supplied. Similarly there was no response to the second respondent's solicitor's correspondence about identification of issues. That is contrary to the philosophy expressed in Rule 5 of the UCPR, particularly in subrule (3). It is to be remembered that the appeal was set down for hearing in early January 2014 and it was essential, for that deadline to be met, that the parties should comply with the Court's schedule. Accordingly, I consider that the appellant has not properly discharged his responsibilities in the appeal.
The failure by the appellant to carry out his obligations caused the second respondent to file the general application on 13 November 2013. The appellant belatedly complied with the Court's requirements and the second respondent's requests, although final agreement as to the formulation of the matters in issue in the case was withheld because of the dispute about costs. If the appellant had complied with the Court's requirements, or alternatively had applied to the Court for an extension of time to comply with the Court orders and communicated with the second respondent about an extension of time to carry out his obligations in relation to the provision of particulars and the identification of the issues in dispute, it would not have been necessary for the second respondent to file the general application. The result is that the second respondent has incurred costs which would otherwise have been avoided.
I do not accept the appellant's submission that, because the appellant is a public interest litigant, the appellant should be excused from the consequences of the failure to conduct the case properly. Even if the appellant is a public interest litigant, the position under s 882(3) is that each party bear its own cost of an appeal unless s 882(4) applies. Section 882(3) provides a mechanism to enable public interest litigants to pursue litigation without fear of incurring costs orders. However if a party embarks on such litigation then it must conduct that litigation in an appropriate manner. The purpose of subs (4) is to compensate a party for costs incurred because one of the other parties to the litigation has not fulfilled its duties in the ways identified in the subsection.
Accordingly I consider that the appellant should be ordered to pay the second respondent's costs of this application. I will hear the parties as to the terms of the order.
CAC MacDONALD
PRESIDENT OF THE LAND COURT
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