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The Chief Executive administering the Environmental Protection Act 1994 v Baal Gammon Copper Pty Ltd & Anor (No.2)
 QPEC 49
PLANNING AND ENVIRONMENT COURT OF QUEENSLAND
The Chief Executive administering the Environmental Protection Act 1994 v Baal Gammon Copper Pty Ltd & Anor (No.2)  QPEC 49
THE CHIEF EXECUTIVE ADMINISTERING THE ENVIRONMENTAL PROTECTION ACT 1994
BAAL GAMMON COPPER PTY LTD (ABN 43 149 583 933)
DENIS WALTER REINHARDT
4010 of 2018
Planning and Environment Court
Application for costs
Planning and Environment Court of Queensland, Brisbane
18 September 2020
21 July 2020
Williamson QC DCJ
The matter be listed for review at 9:00am on 23 September 2020.
PLANNING AND ENVIRONMENT – APPLICATION – COSTS – where applicant’s amended application in pending proceeding to punish the respondents for contempt was dismissed - where respondents sought an order as to costs – whether application frivolous or vexatious – whether discretionary reasons to refuse order for costs – whether costs should be assessed on the indemnity basis.
Planning & Environment Court Act 2016, ss 59 and 60.
Uniform Civil Procedure Rules 1999, rr 72 and 371.
Bundaberg Regional Council v Lammi & Anor  QPELR 111
The Chief Executive administering the Environmental Protection Act 1994 v Baal Gammon Copper Pty Ltd & Anor  QPEC 28
Mudie v Gainriver (No.2)  2 Qd R 271
Sincere International Group Pty Ltd v Council of the City of Gold Coast (No.2)  QPEC 9;  QPELR 662
Mr J Horton QC and Mr J Dillon for the applicant
Mr S Russell (Sol) for the respondent
Department of Environment & Science
- On 1 June 2020, I dismissed the Chief Executive’s application in pending proceeding seeking orders punishing the respondents for contempt of an order dated 17 December 2018. My reasons for judgment (RFJ) were published the day the order was made.
- Upon the Chief Executive’s contempt application being dismissed, the respondents pressed for an order as to costs, assessed on the indemnity basis, or, alternatively, the standard basis. The respondents contend the power to make this order arises under s 60(1)(b) of the Planning and Environment Court Act 2016 (PECA), which states:
“(1) The P&E Court may make an order for costs for a P&E Court proceeding as it considers appropriate if a party has incurred costs in 1 or more of the following circumstances—
(b) the P&E Court considers the proceeding to have been frivolous or vexatious;…”
The P&E Court considers a proceeding was started or conducted without reasonable prospects of success.”
- The application for costs is opposed by the Chief Executive.
- Written submissions were filed on behalf of the Chief Executive. The submissions invite the court to dismiss the application having regard to a number of ‘preliminary issues’. The issues identified were as follows: (1) the application was not efficacious because the second respondent, who became bankrupt on 12 December 2019, could not give instructions to make the application; (2) leave had not been obtained by either respondent under r 72 of the Uniform Civil Procedure Rules 1999 to proceed with the application, which was required upon the second respondent becoming bankrupt; and (3) the trustee, in whom the action vests, was not (and should be) a party to the application.
- At the hearing of the application, Senior Counsel for the Chief Executive submitted there was no need to determine the preliminary issues given correspondence received from the trustee in bankruptcy. Armed with correspondence from the trustee, Mr Horton QC made the following submission on behalf of the Chief Executive:
“MR HORTON: I don’t need to trouble …your Honour with that, because, while we’ve been in court, the trustees have said they would abide the order of a court. We will undertake to file an affidavit with that email attached…. It was copied to Mr Russell, so he has it at the same time we have it. But your Honour will see from the email we provided to the trustee the up-to-date outlines, because we wanted to be sure, when they say …abide the order of the court, they know the contentions including that made in our oral outline.
MR HORTON: And they say they will abide the order of the court. For that reason, your Honour doesn’t need to be concerned with preliminary points about leave and so forth … because, to the extent they needed to be done and haven’t been, they are matters which your Honour can deal with, excuse, under rule 5 …of this court’s rules or under 371. It doesn’t matter for the moment. But the point is we, in light of what the trustees said…we can’t point to any prejudice or any risk in respect of the trustee not being present …or not having leave. The trustee’s fully aware of the arguments being made. And I’m sorry that’s such a late development….
HIS HONOUR: So, given the trustee’s intimation that it will abide the orders of the court, you say that completely deals with those preliminary issues.
MR HORTON: Yes, with full knowledge of what was being…contended… having the benefit of the parties’ outlines.”
- Whilst I have some misgivings about the preliminary issues raised, in light of unchallenged evidence before the court, I accept Mr Horton’s submission. It means the preliminary issues raised, even if established, do not preclude the court from determining the application for costs. This is because the alleged non-compliances founding the preliminary issues can, and should, be ‘excused’ under r 371(2)(d) of the Uniform Civil Procedure Rules 1999, assuming that is required. Under this rule, it can be declared that the respondents’ application for costs is effectual notwithstanding any non-compliances with the rules, particularly r 72. To the extent it is required, I will make such a declaration under r 371 for the reasons articulated by Mr Horton QC in his oral submissions, which are extracted above.
- This is not, however, the end of the matter. The Chief Executive maintains the respondents’ application for costs should be dismissed. The submissions advanced in this regard call for two issues to be examined, namely:
- (a)whether the contempt application was frivolous and/or vexatious? and
- (b)if the discretion to award costs is enlivened under s 60(1)(b) of PECA, whether the discretion should be exercised in the respondents’ favour?
- Before dealing with the above questions, it is necessary to repeat some of the background set out in the RFJ.
- On 17 December 2018, I made orders against the first and second respondent under s 506 of the Environmental Protection Act 1994 (EPA). The order made is attached to the RFJ and marked “A”. It required the respondents to take certain steps in relation to a contaminated pit at the Baal Gammon Copper Mine. As discussed in paragraphs  to  of the RFJ, the order comprises three components. First, paragraphs 1 to 6 required the first respondent to carry out prescribed interim measures. Second, paragraphs 7 to 12 required the first respondent to carry out prescribed final measures. Third, paragraph 13 required the second respondent to ensure the first respondent complied with paragraphs 1 to 12 of the order. At paragraph  of the RFJ, I held that the works required to be carried out pursuant to the order of 17 December 2018 were ‘substantial and technically challenging’.
- On 3 May 2019, an application in pending proceeding was filed on behalf of the respondents. The purpose of that application, which was ultimately withdrawn, was to obtain amendments to paragraphs 2(c) and 7 of the order of 17 December 2018. Affidavit material was filed in support of the application. Seemingly in response to this application, the Chief Executive filed an application, on 24 May 2019, seeking orders that the respondents be punished for contempt. The application alleged contempt with paragraphs 2(a), 6(a), 6(b), 6(c), 6(d), 7, 10, 11 and 13 of the order of 17 December 2018.
- Two important events occurred prior to the Chief Executive filing the contempt application on 24 May 2019. They are discussed in paragraphs  to  of the RFJ. In summary terms, by 24 May 2019: (1) the Department of Environment and Science interfered with the respondents’ ability to comply with paragraph 2(a) of the order by instructing a contractor to carry out particular works required under the order; and (2) a delegate of the Minister for the Department of Natural Resources, Mines and Energy decided to terminate a mining lease, which had the consequence that the respondents’ ability to access the relevant land, and carry out the works required under the order, was undeniably impeded.
- In respect of each alleged contempt, the Chief Executive was required to prove, beyond reasonable doubt, the elements identified in s 129(1)(a) of the District Court Act 1967. At paragraph  of the RFJ, I held this required the Chief Executive to: (1) prove the alleged non-compliances with the order; and (2) negative any ‘lawful excuse’.
- The respondents put ‘lawful excuse’ in issue. The Chief Executive was put on notice about this in clear terms on 16 July 2019. On that date, the respondents’ solicitors wrote to the Department of Environment and Science inviting the Chief Executive to withdraw the contempt application. In the letter of 16 July 2019, the Chief Executive and his legal representatives were:
- (a)referred to a draft outline that had been provided setting out the respondents’ submissions as to ‘lawful excuse’;
- (b)referred to three affidavits in support of the respondents’ lawful excuse, namely the affidavits sworn by the second respondent on 20 June 2019, 24 June 2019 and 25 June 2019; and
- (c)put on notice there was a serious question to be answered about the utility, and proper purpose, of the contempt application – in this regard the letter of 16 July 2019 stated, in part:
“Our clients contend that the various agencies of the State have acted with far too heavy a hand at least on and from 14 March 2019, when the State began what was obviously a careful campaign to deprive our clients of their interests in the Baal Gammon Mine and to prevent them from complying with the Order.
It is a matter of considerable concern that the State commenced contempt proceedings against our clients knowing that they had disabled them from complying with the Order…
Our clients believe that the State acted as it did, to block off the most realistic option for our clients to deal with the contempt application. That is, it is open to infer that the State wished to take a course which would prevent our clients from raising funds. The effect would be to prevent our clients from purging any contempt, so that the consequences of any successful application would have involved penalties, fines, forfeitures or imprisonment.
However, whatever may have been the state of knowledge of the relevant officers of the State prior to receipt of Mr Reinhardt’s Affidavit on 20 June 2019, they must now know that the Respondents had a lawful excuse for any non-compliance with the Order and that there was no reasonable prospect of securing any finding of contempt. However that may have been, the further prosecution of the proceedings must now be known to your client to be pointless.” (emphasis added)
- After a number of hearing days were consumed with objections to affidavit material, the hearing of the Chief Executive’s contempt application commenced, in substance, on 25 November 2019. Before the hearing commenced on this day, I raised three issues for Counsel appearing for the Chief Executive to address.
- I asked Counsel to assume the Chief Executive was successful in proving contempt beyond reasonable doubt, and to identify: (1) what, if any, was the prospect the proven contempt could be purged in light of the known circumstances; (2) how the application, if successful, could address the environmental impacts underlying the impetus for the order of 17 December 2018; and (3) the purpose achieved by punishing the respondents, by way of a fine, given their poor financial position and limited capacity to pay.
- In response to the matters raised, Counsel for the Chief Executive accepted that it was unlikely the alleged contempt could be purged. He also fairly acknowledged the contempt application would not advance the underlying intention to protect the environment. As to the imposition of penalty, Counsel for the Chief Executive accepted the imposition of a fine was likely to be problematic given the known financial circumstances of the respondents, as disclosed in the affidavit material.
- The hearing was completed on 26 November 2019. Shortly after that date, the Chief Executive filed an amended application in pending proceeding. The purpose of that document was to formalise the abandonment of an alleged contempt with paragraphs 10 and 11 of the order of 17 December 2018.
- After considering the extensive affidavit material filed in relation to the Chief Executive’s amended contempt application, I published my reasons dismissing the application on 1 June 2020. The RFJ disclose that the Chief Executive:
- (a)did not succeed in the contention that the respondents had to discharge the onus with respect to ‘lawful excuse’ (paragraph );
- (b)proved non-compliance with paragraph 2(a) of the order, but in a limited sense (paragraph );
- (c)did not negative the existence of a ‘lawful excuse’ in relation to the non-compliance with paragraph 2(a) of the order (paragraph );
- (d)failed to prove non-compliance with paragraphs 6(a), 6(b), 6(c) and 6(d) of the order (paragraph );
- (e)failed to negative the existence of a ‘lawful excuse’ in relation to the alleged non-compliance with paragraphs 6(a), 6(b), 6(c) and 6(d) of the order (paragraph );
- (f)proved non-compliance with paragraph 7 of the order (paragraph );
- (g)failed to negative the existence of a lawful excuse in relation to the alleged non-compliance with paragraph 7 of the order (paragraph );
- (h)failed to prove non-compliance with paragraph 13 of the order (paragraph ); and
- (i)failed to negative the existence of a lawful excuse in relation to the alleged non-compliance with paragraph 13 of the order (paragraph ).
- The lawful excuse point was dealt with at paragraphs  to  and  to  of the RFJ. I will not repeat what is said therein, save to say that the lawful excuse raised on behalf of the respondents was cogent, supported by evidence, and on any objective view of all of the evidence, was not negatived. The lawful excuse was founded, primarily, on the consequences flowing from the actions of two State government departments. The consequences were readily foreseeable. The Chief Executive, and the associated legal team, were aware of the relevant circumstances in this regard at the time the application for contempt was filed.
- No application for leave to appeal has been filed against the order made on 1 June 2020.
- Turning then to the issues to be determined, was the Chief Executive’s contempt application frivolous or vexatious?
- The onus lies with the respondents to prove this question is answered in the affirmative. It is a high standard to be met, and will turn on matters of fact and degree, including public policy considerations and the interests of justice. Something more than a mere lack of success must be shown.
- Against the background of the principles stated above, I am satisfied the question posed is answered in the affirmative. The contempt application was, in all of the circumstances, vexatious in the sense it was productive of serious and unjustified trouble and harassment. This is so because the application was pursued by the Chief Executive in circumstances where: (1) it was known in advance of the hearing that ‘lawful excuse’ was an issue to be determined; and (2) as the RFJ disclose, the existence of a lawful excuse was resisted on wholly unmeritorious grounds. The grounds relied upon by the Chief Executive in this regard are dealt with in the RFJ. The grounds did not engage with, or directly confront, the force of the lawful excuse advanced in the circumstances. This was problematic for the Chief Executive’s case, given it was required to exclude the existence of such an excuse beyond reasonable doubt. Having regard to all of the evidence, it should have been clear to the Chief Executive, and the associated legal team, that the lawful excuse raised could not be negatived beyond reasonable doubt. A submission to the contrary was, in my view, bound to fail.
- The difficulty is compounded once it is appreciated the respondents provided the Chief Executive with a draft set of submissions, and the evidence, to be relied upon with respect to the lawful excuse point. This is clear from the letter dated 16 July 2019, which included an invitation to withdraw the application. The invitation was glibly rejected by the Department of Environment and Science in correspondence dated 22 July 2019. The response does not articulate the Chief Executive’s reason for rejecting the offer. Nor does it identify the grounds relied upon to negative the lawful excuse beyond reasonable doubt.
- The absence of an explanation for the rejection of the offer to settle, either in the letter dated 22 July 2019, or by way of sworn affidavit material before me in this application, is telling. There is no evidence before me to establish the Chief Executive received advice as to the prospects of success of the contempt application. There is no evidence to suggest advice was received as to the acceptability, or otherwise, of the offer contained in the letter dated 16 July 2019.
- In concluding the contempt application is vexatious, I am cognisant it is in the public interest that non-compliance with court orders is pursued. I am also cognisant that the issue of lawful excuse is one about which an evaluative judgment is to be made. Reasonable minds may, and likely will, differ about the existence or otherwise of a lawful excuse. That said, neither of these propositions insulate the Chief Executive from criticism in this case. To succeed, the Chief Executive was required to negative a lawful excuse raised by the respondents. On the face of the evidence, I find it difficult to accept it was open to the Chief Executive, and the associated legal team, to conclude there were reasonable prospects this excuse could be negatived beyond reasonable doubt. The grounds relied upon to negative the excuse were, as I have said, wholly unmeritorious. It should have been clear to the Chief Executive, and the associated legal team, that it was not fairly arguable to suggest the lawful excuse was negatived beyond reasonable doubt. Such a submission was bound to fail having regard to the requisite standard of proof applicable to the application.
- I do accept that the difficulties faced by the Chief Executive in this application are diminished by reason that non-compliances were established with the order of 17 December 2018, and that the decision to terminate the mining lease was made by a Department other than the Department of Environment and Science. These matters do not, however, establish there was an overriding public interest to pursue the application for contempt in the circumstances here, which involved reliance upon wholly unmeritorious grounds to negative a compelling lawful excuse. The matters dealt with in paragraphs  and  also undermine the suggestion there was an overriding public interest point that required the application to be pursued.
- Mr Horton QC developed the ‘public interest’ point in his oral submissions. He submitted:
“In any event, all the actions pointed to were all ones in the public interest for two reasons: (1) because non-compliance with an order of the court should not ordinarily go without some sort of sanction, even if it be being called to account, whether one has a lawful excuse for not doing what one’s been ordered to do. That’s the public pursuit. And, second, in terms of …cancelling the mining lease, entering onto the land, those are both in the public interest. They’re both things directed to ensuring cessation of the harm that had been identified. We understand that cut across the contempt application. But, on one reasonable view, the fact one might do that shouldn’t stop a proper public purpose being pursued, if it’s directed to reduction mitigation of the harm that’s been identified. In any event, the motivation, we say, is the public interest.
They’re our submissions. We say that each of those is in the public interest. Something much more than mere lack of success hasn’t been shown. And the application being one for contempt, having found non-compliance with some of the orders of the court, is one which doesn’t enliven the high threshold of being a frivolous or vexatious action.”
- Three points can be made about the above submissions.
- First, as a general proposition, I accept it is in the public interest that non-compliance with an order of the court should not go without sanction. As has been recognised, the purpose of the sanction is two-fold: (1) to punish for past failure to comply; and (2) to coerce future compliance. This general position, however, needs to be considered in the circumstances of each case. Here, the matters in paragraphs  and  suggest the public interest was not advanced by pursuing non-compliance. Nor was it advanced by pursuing non-compliance that was explained by a lawful excuse. Accordingly, I do not accept the advancement of the ‘public interest’ insulates the Chief Executive from a finding that the decision to pursue the contempt application was vexatious in all of the circumstances.
- Second, the public interest associated with the cancellation of the mining lease can be accepted, but advancing that interest is, in my view, no answer to the issue to be examined here. The issue to be examined can be stated as: was it vexatious for the Chief Executive to persist with the contempt application? The motives of the Department of Natural Resources Energy and Mines for cancelling the mining lease do little, in my view, to resolve this question.
- Third, it was submitted that ‘more than a mere lack of success’ had not been demonstrated. I reject that submission. The contempt application was one, if considered fairly, and in the context of all of the evidence, that did not have reasonable prospects of success given: (1) the nature of the lawful excuse raised; (2) the requirement for that excuse to be negatived by the Chief Executive beyond reasonable doubt; and (3) the wholly unmeritorious grounds advanced on behalf of the Chief Executive to negative the lawful excuse. The utility of the application was also questionable given the matters discussed in paragraphs  and . The application should not have been pursued. To do so was, in my view, contrary to s 10(2) of PECA. I regard this, in the circumstances, as a symptom of vexatious conduct for the purpose of s 60(1)(b) of PECA.
- For the reasons given above, I am satisfied that the power to award costs is enlivened under s 60(1)(b) of PECA. The remaining issue to be determined is whether the discretion to award costs should be exercised in the respondents’ favour.
- I am satisfied there are persuasive discretionary reasons that favour an order as to costs. The most compelling is that the respondents invited the Chief Executive to withdraw the contempt application by letter dated 16 July 2019. That invitation was supported by cogent draft submissions and evidence. The invitation was glibly rejected by the Chief Executive’s legal representatives. It was rejected without explanation.
- To reject the offer to settle was, in all of the circumstances, imprudent. From the date of the rejection, the respondents were put to the expense of defending an application that was, in my view, vexatious.
- I would add, as I have already observed, there is a recognised public interest in ensuring compliance with court orders. Here, that public interest was not served by pursuing an application for which there was no contumelious disregard, and a lawful excuse. That pursuing the application was not required to advance the public interest is confirmed by the concessions made by Counsel for the Chief Executive on 25 November 2019, which are identified in paragraph  above. The concessions, taken collectively, invite this question: what was the utility of the application in terms of advancing the public interest? At its highest, the utility was limited to punishment for past non-compliance. That is not particularly persuasive once it is appreciated the non-compliances established were not in contumelious disregard of the order.
- In support of its position, the Chief Executive advanced a number of reasons why the discretion should not be exercised in favour of the respondents. More particularly, it was submitted the order should be refused because: (1) the respondents’ solicitors had not produced a costs agreement; (2) the contempt proceeding was in pursuit of the public interest; (3) the respondents’ solicitors could have protected themselves for the recovery of costs; (4) it was proper for the court to adjudicate the adequacy of the ‘lawful excuse’; and (5) the contempt application was never hopeless or without merit.
- I do not accept items (1) and (3) have any bearing on the exercise of the discretion.
- For the reasons given above, I do not accept the proposition advanced in item (2) is one that militates against an order for costs in the circumstances of this case.
- As to item (4), I accept, as a general proposition, it will be appropriate for the court to adjudicate the adequacy of a lawful excuse. It is, however, another thing for an applicant, such as the Chief Executive, to run a positive case resisting the adequacy of a lawful excuse on wholly unmeritorious grounds. To do so here was vexatious. It had the effect of putting the respondents to unjustified trouble and expense.
- For the reasons given above, I do not accept item (5).
- It does not, however, follow that the Chief Executive should pay all of the respondents’ costs of the application. The costs the subject of the order will be limited to those incurred by the respondents on, and from, 22 July 2019. This represents the day the respondents’ offer to withdraw the contempt application, with each party bearing their own costs, was imprudently rejected by the Chief Executive. Those costs are to exclude the costs of 16 August 2019. It was agreed between the parties that they would each bear their own costs of this day of the hearing.
- The respondents also seek an order that the costs be assessed on the indemnity basis.
- As I understand the submissions made on behalf of the respondents, it is said that three factors justify such an order, namely: (1) the application was commenced, and continued, in circumstances where the Chief Executive (properly advised) should have known it had no chance of success; (2) the nature of the application, being one seeking the imposition of a penalty, required careful consideration to be given to its commencement and continuation, at several points in the chronology, which did not occur; and (3) the Chief Executive imprudently refused to accept the offer in the open letter dated 16 July 2019.
- I accept the three reasons stated above have been established, but I do not accept they are sufficient to justify an order for indemnity costs. The underlying motive for the proceeding was to call the respondents to account for non-compliance with a court order. Non-compliance was established, albeit in a limited way. That non-compliance was established is sufficient to dispose of any suggestion that the conduct of the application falls into a category that would attract an indemnity costs order.
- For these reasons, I will hear from the parties as to the form of orders which are to reflect the following:
- the applicant pay the first and second respondents’ costs of the application filed on 24 May 2019, and amended on 27 November 2019;
- the costs for paragraph 1 be limited to those incurred on, and from, 22 July 2019, inclusive of the costs of this application;
- the costs for paragraph 1 exclude those agreed by the parties with respect to the hearing on 16 August 2019; and
- the respondents’ costs be assessed on the standard basis.
- The matter will be reviewed at 9am on 23 September 2020 for this purpose.
The Chief Executive administering the Environmental Protection Act 1994 v Baal Gammon Copper Pty Ltd & Anor  QPEC 28.
 T1-39/L30 – T1-40/L33.
 For example, the evidence establishes that the respondents had given their legal team instructions to pursue the costs of the application as early as 16 July 2019, some 5 months before the second respondent became bankrupt and was disqualified from acting as a director of the first respondent. There is no evidence to suggest the instructions given had been withdrawn after 12 December 2019.
 RFJ .
 Court doc #26.
 Court docs #27 and #30.
 Court doc #34.
 At paragraph  of the RFJ, I erroneously said the application was filed 24 June 2019, rather than 24 May 2019. Nothing turns on this.
 T1-2/L20 to T1-4/L25.
 T1-2/L27 and onwards.
 T1-3/ L8 and onwards.
Sincere International Group Pty Ltd v Council of the City of Gold Coast (No.2)  QPEC 9;  QPELR 662, .
Mudie v Gainriver Pty Ltd (No.2)  2 Qd R 271, 291 per Williams JA at .
Bundaberg Regional Council v Lammi & Anor  QPELR 111, .
 T1-44/L25 – 45.
- Published Case Name:
The Chief Executive administering the Environmental Protection Act 1994 v Baal Gammon Copper Pty Ltd & Anor (No.2)
- Shortened Case Name:
The Chief Executive administering the Environmental Protection Act 1994 v Baal Gammon Copper Pty Ltd & Anor (No.2)
 QPEC 49
Williamson QC DCJ
18 Sep 2020