Titan Sandstone Pty Ltd v ChongHerr Investments Pty Ltd
[2009] QLC 47
•3 April 2009
LAND COURT OF QUEENSLAND
CITATION: Titan Sandstone Pty Ltd v ChongHerr Investments Pty Ltd [2009] QLC 0047
PARTIES:Titan Sandstone Pty Ltd
(applicant)
v
ChongHerr Investments Pty Ltd
(respondent)
FILE NO:MRAA118/2007
DIVISION:Land Court of Queensland – General Division
PROCEEDING: Application for costs
DELIVERED ON: 3 April 2009
DELIVERED AT: Brisbane
MEMBER:Mr PA Smith, Member of the Land Court
ORDERS:1. There be no order as to costs with respect to either the substantive hearing of the application by Titan; the counterclaim by ChongHerr; or any interlocutory or other applications with respect thereto, including reserved costs.
2.The Court declines, at this time, to make any order for the repayment by ChongHerr to Titan of the security for costs.
CATCHWORDS: Costs – indemnity costs – jurisdiction – matter commenced in Land and Resources Tribunal – Decision of Land Appeal Court – submissions not to follow Land Appeal Court decision – special circumstances – each party partially successful – Significant sums sought by both parties not awarded – security for costs
APPEARANCES: Not applicable – Heard on the Papers
Background
On 24 December 2008 I handed down my substantive decision in this matter. It is common ground between the parties that the determination of this matter involved complex issues as regards the claims made by the applicant Titan Sandstone Pty Ltd (Titan) and the resulting counterclaims made by the respondent ChongHerr Investments Pty Ltd (ChongHerr), together with the respective defences of Titan and ChongHerr to the various claims made. The decision encompassed 178 paragraphs over 76 pages, with 17 specific orders made.[1] Order no. 13 made on 24 December 2008 allowed any party seeking costs time to file and serve their submissions. A timetable was also set up for reply submissions.
[1] See Titan Sandstone Pty Ltd v ChongHerr Investments Pty Ltd [2008] QLC 0235.
Both Titan and ChongHerr have filed detailed submissions, each seeking that it be awarded costs on an indemnity basis. I am not aware of any other proceeding where both parties to litigation, at the conclusion of that litigation, have each claimed that the other party should pay their costs on an indemnity basis.
Which costs regime applies
This matter was originally commenced in the Land and Resources Tribunal (LRT). On 21 September 2007, the relevant jurisdiction of the LRT was transferred to the Land Court.[2] The proceedings subsequently continued in the Land Court as “a proceeding in the Land Court”.[3]
[2] See Land Court and Other Legislation Amendment Act 2007.
[3] See s.91 of the Land Court Act 2000.
The LRT and the Land Court have different costs regimes. The costs regime of the LRT is governed by s.50 of the Land and Resources Tribunal Act 1999 (LRT Act), whilst the general costs provisions of the Land Court are set out in s.34 of the Land Court Act 2000. The question then arises as to which regime should apply for the determination of any application for costs, s.50 of the LRT Act or s.34 of the Land Court Act? This question was recently resolved by the Land Appeal Court in the matter of Sykes v Minister for Mines and Energy and Queensland Gas Company Limited.[4] Like the case at hand, Sykes’ case was commenced in the LRT and transferred on 21 September 2007 to the Land Court.[5] The Land Appeal Court determined that the appropriate provision for determining costs in the circumstances at hand is s.50 of the LRT Act. Specifically, the Land Appeal Court had this to say:
“A construction of the amendments which best gives effect to the beneficial intention of the transitional provisions is to be preferred. There are two or more parties to disputes, and s 50 of the LRT Act is clearly advantageous to a losing party while s 34 of the Land Court Act offers a costs regime more favourable to the successful party. It seems preferable to give effect to the regime in place when the proceedings commenced. For that reason, the argument that effectively denies any work to s 50, should be rejected and s 50 of the LRT Act applies with respect to the costs applications in these proceedings.”
[4] [2009] QLAC 0001.
[5] Although the proceedings in Sykes were instituted pursuant to the Petroleum Act 1923 and not the Mineral Resources Act 1989 as in the case at hand, there is no relevant distinction between the proceedings insofar as this issue is concerned.
After the Land Appeal Court’s decision in Sykes was brought to the attention of the parties, ChongHerr accepted as a proposition of law that the applicable section for determining costs in this matter is s.50 of the LRT Act. As regards Titan, although the Land Appeal Court’s decision in Sykes was noted, it was submitted that Sykes could be distinguished in the current circumstances. In written submissions of 19 March 2009, Mr Fisher for Titan had this to say:[6]
“Nevertheless, the Applicant argues that Sykes is distinguishable because (1) the Applicant argues it does not apply where a Land and Resources Tribunal costs regime operates to strip a litigant of the operation and effect of a more beneficial cost regime in the Land Court under its constituent statute, and (2) the cost regime under the Land and Resources Tribunal Act 1999 is substantive, not procedural, thus obviating the application of the argument that section 50 of the Land and Resources Tribunal Act 1999 needs to do some work (see Sykes at [28]). In fact, the argument might be made that the Queensland Parliament intended for cost issues under transferred proceedings to be dealt with under the Land Court Act 2000 instead of the Land and Resources Tribunal Act 1999 because this is consistent with the philosophy behind the transfer of jurisdiction from the Land and Resources Tribunal to the Land Court for the Land Court to use the Land Court Act 2000 to determine cost questions. This is particularly so where the President of the Land Court has not made any directions or orders under section 91 of the Land Court Act 2000 relating to costs of the proceedings in MRAA 118/2007 as it was commenced in the Land and Resources Tribunal.”
[6] At para 15 of his submissions.
First impressions may suggest that there is some merit in Titan’s argument, particularly with respect to the operation of s.91 of the Land Court Act. However, a close examination of the decision at first instance in Sykes shows that this is not the case.[7]
[7] It should further be noted that I was the Member who had carriage of the Sykes matter both as a Deputy President of the Land and Resources Tribunal and subsequently as a Member of the Land Court with respect to all aspects of the proceedings at first instance, save for some initial phases of the Sykes matter in the Land and Resources Tribunal which are not relevant to the current considerations.
All relevant orders at or about the time of transferral of the Sykes matter from the Land and Resources Tribunal to the Land Court and subsequently whilst the matter was handled by the Land Court at first instance were made by myself and not the President of the Land Court. Accordingly, the distinction raised by Mr Fisher as regards the operation of s.91 of the Land Court Act in the Sykes matter, as compared to the matter, at hand are without foundation.
There is no doubt that, as a single member of the Land Court, I am duty bound to follow all relevant precedents of the Land Appeal Court. I am in no doubt that the Land Appeal Court decision in Sykes sits squarely with the situation I am currently confronted with. Accordingly, applying Sykes, the relevant provision for determining costs in the applications currently before me is s.50 of the LRT Act.
Special circumstances
Section 50 of the LRT Act provides as follows:
50 Costs
(1) Each party to a proceeding before the tribunal must bear the party’s own costs for the proceeding.
(2) However, the tribunal may award costs in a proceeding if the tribunal considers, in the special circumstances of the proceeding, an award of costs is appropriate.
Examples of possible special circumstances—
1The proceeding was started merely to delay or obstruct.
2The proceeding, or a part of the proceeding, has been frivolous or vexatious.
(3) If costs are awarded by the tribunal under subsection (2), the amount of the costs is to be the amount the tribunal considers reasonable.
It is immediately apparent that the normal procedure for the LRT Act is that each party to a proceeding is to bear their own costs. This situation applies unless the Tribunal[8] considers that there are special circumstances.
[8] Or, in this case, the Land Court.
Both Titan and ChongHerr have considered the various authorities relating to special circumstances warranting an award for costs and, by applying those authorities, have attempted to show why special circumstances exist in the current circumstances. They both go on to state that the conduct of the other has been such that, special circumstances having been established, costs should be awarded on an indemnity basis. Indeed, were one to read the submissions of either Titan or ChongHerr without reference to the other’s submissions, then in isolation each party could be seen as having made a strong case for a favourable award for costs to be made.
As I observed in my substantive decision, both parties had some measure of success.[9] I understand that neither Titan nor ChongHerr instituted any appeal to the Land Appeal Court against the decision. Using colloquial terms, it is apparent that both sides consider that they essentially “won” the litigation, and that the other side “lost”. Having reviewed all aspects of my decision of 24 December 2008, I do not depart from my view there stated that both parties had some degree of success in the litigation. By necessary implication, both parties also had some degree of failure in the litigation.
[9] See Titan v ChongHerr [2008] QLC 235 at [177].
In circumstances such as this, it would seem that the only rational decision open to me would be to order that there be no order as to costs. However, the argument as to costs is further confused by the fact that ChongHerr has revealed, by affidavit evidence filed with its submissions, that it had made an offer to settle to Titan. In ChongHerr’s view, the terms of that offer to settle were more favourable to Titan than the ultimate decision of the Court. This, argues ChongHerr, is a strong argument in favour of an award for costs on an indemnity basis against Titan.
The offer to settle
The solicitors for ChongHerr have provided the Court with useful tables setting out the amounts allowed for in the offer to settle as compared to the amounts allowed in the decision, as well as the orders sought by the respective parties and the decision with respect to each such claim. ChongHerr contends that “the main thrust of Titan’s claim (being its claim to damages of $6.816M on the basis of “unjust enrichment” or restitution) failed for want of jurisdiction”.[10] Titan counters by saying that its claim for restitution/unjust enrichment was pleaded in the alternative and that it was substantially successful with respect to what it says was the main cornerstone of its claims, being the ownership of certain sandstone at Zacks Quarry. Again, in this regard Titan was only partly successful as it was held to be the owner of certain stockpiles of sandstone at Zacks Quarry, while ChongHerr was found to be the owner of other sandstone stockpiles.
[10] See submissions on behalf of the respondent of 13 February 2009 para 11(a).
Although the proceeding paragraph gives the impression that the solicitors for ChongHerr have put forward good reasons to support an award of costs in their client’s favour, in my view a direct comparative analysis of the amounts allowed in the decision compared to the amounts offered by their client to Titan in the offer to settle do not properly disclose the full nature of the dispute between the parties and the subsequent context in which the offer to settle must be viewed. I have carefully read the material provided by ChongHerr in support of its application for costs, and in particular the correspondence exhibited to the affidavit of Mr Meadmore of 30 January 2009. That correspondence clearly shows the nature of the dispute as between Titan and ChongHerr. Much of the contentions set out in the correspondence revolve around two issues, being the removal by Titan of plant and equipment owned by Titan which remained at Zacks Quarry after Titan ceased all operations at Zacks Quarry; and the various proposals for the removal by Titan of stockpiled sandstone from Zacks Quarry.
With respect to the issue of plant and equipment belonging to Titan remaining at Zacks Quarry after Titan ceased operations, the decision of 24 December 2008 clearly favoured ChongHerr. However, as regards the removal by Titan of stockpiled sandstone from Zacks Quarry in the future, it is clear that ChongHerr was not prepared, including by its offer to settle, to allow Titan any more than ten business days to remove such sandstone, whilst Titan steadfastly maintained that such a timeframe proposed by ChongHerr was commercially unrealistic given the amount of sandstone contained in the stockpiles. In this specific regard, the decision of 24 December 2008 was favourable to Titan, in that a period of four months was allowed for Titan to remove sandstone from certain stockpiles. I have no doubt that Titan views this part of the decision as being a matter of major substance found in its favour.
It should of course also be noted that ChongHerr by its counterclaim sought an order that Titan pay the sum of $1,026,270 to ChongHerr by way of an account of profit. ChongHerr was unsuccessful in that claim.
In light of my comments above, in my view neither Titan nor ChongHerr have been able to establish special circumstances which would be sufficient to allow an award of costs in their favour pursuant to s.50 of the LRT Act, let alone an award of indemnity costs. Accordingly, as regards the substantive hearing of this matter, in my view there should be no order as to costs.
Reserved costs
In addition to the substantive hearing of this matter, there were a number of interlocutory steps taken by the parties. I note in particular the application by ChongHerr for removal of a caveat lodged by Titan.[11] In that decision, the Land and Resources Tribunal ordered that the costs of and incidental to the application be reserved until the final determination of the substantive application and counterclaim. It is now necessary to deal with those costs. Mr Fisher for Titan in his submissions of 30 January 2009 contends that the decision of the Tribunal was, in effect, a successful application by Titan to amend its caveat.[12]
[11] See Titan Sandstone Pty Ltd v ChongHerr Investments Pty Ltd [2007] QLRT 123.
[12] See para 21 of submissions.
Once again, in my view a proper reading of the Tribunal decision of 24 August 2007 regarding the caveat shows that both sides were partially successful. I see no need to repeat further any of the reasons for decision set out in relation to that application. Clearly, in my view, given my reasoning with respect to the substantive determination of the claim and counterclaim, and applying the provisions of s.50 of the LRT Act as regards whether or not special circumstances exist, I consider it appropriate to make no award of costs with respect to any reserved costs in the proceedings.
Security for costs
In addition to its application for costs, Titan also seeks an order by the Court that the respondent repay the sum of $10,000 paid by way of security for costs.[13]
[13] See submissions by Mr Fisher for Titan of 13 February 2009 at para 18.
I note from the affidavit of Mr Meadmore of 13 February 2009 that Titan has not made any payment to ChongHerr with respect to orders [9], [10] and [11] dated 24 December 2008.[14] I also note that, as at 13 February 2009, Titan had not made certain payments to ChongHerr that flow as a result of order no. 4 of the orders dated 24 December 2008. Titan has not put any evidence before me to contradict any of the evidence provided by ChongHerr in this regard.
[14] See affidavit of Mr Meadmore para 3.
In the circumstances it would appear that, despite the orders of the Court made on 24 December 2008, dispute between Titan and ChongHerr, directly related to the Court’s orders, continues. In the circumstances, I am not prepared to make any order at this stage for repayment of the security for costs.
The Court is mindful that both parties in this litigation have expended substantial sums on costs throughout these proceedings. It is to be hoped that the parties can now reach agreement as to the satisfaction of the orders made on 24 December 2008, as well as agreement as to orders relating to the payment of the security for costs. Should the parties jointly present to the Court written consent orders in this regard, the Court would of course give consideration to making any such orders without any further appearance or submissions being required by either party. However, should the parties remain at loggerheads as has been the case throughout these proceedings, then I consider it appropriate for Titan to bring a formal application before the Court seeking repayment of the security for costs.
Orders
Consistent with the above, I make the following orders:
1.There be no order as to costs with respect to either the substantive hearing of the application by Titan; the counterclaim by ChongHerr; or any interlocutory or other applications with respect thereto, including reserved costs.
2.The court declines, at this time, to make any order for the repayment by ChongHerr to Titan of the security for costs.
PA SMITH
MEMBER OF THE LAND COURT
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