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Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No. 6)[2017] QLAC 1

Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No. 6)[2017] QLAC 1

LAND APPEAL COURT OF QUEENSLAND

CITATION:

Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No. 6) [2017] QLAC 1

PARTIES:

CHERWELL CREEK COAL PTY LTD
(ACN 063 763 002)

(appellant)

v

BHP QUEENSLAND COAL INVESTMENTS PTY LTD (ACN 098 876 825), QCT RESOURCES PTY LTD (ACN 010 808 705), BHP COAL PTY LTD
(ACN 010 595 721), QCT MINING PTY LTD
(ACN 010 487 840), MITSUBISHI DEVELOPMENT PTY LTD (ACN 009 779 873), QCT INVESTMENT PTY LTD (ACN 010 487 831) AND UMAL CONSOLIDATED PTY LTD (ACN 000 767 386)

(respondents)

FILE NO/S:

LAC001-17
LAC002-17

DIVISION:

Land Appeal Court of Queensland

PROCEEDING:

Appeal

ORIGINATING COURT:

Land Court of Queensland, Brisbane

DELIVERED ON:

20 September 2017

DELIVERED AT:

Brisbane

HEARING DATE:

15 May 2017

THE COURT:

Dalton J

Mr W L Cochrane, Member of the Land Court

Mr W A Isdale, Member of the Land Court

ORDERS:

  1. Grant leave to adduce further evidence;
  2. Dismiss appeal number LAC001-17, and
  3. Allow appeal number LAC002-17 and order that BMA pay the costs thrown away by reason of its having leave to file the amended defence dated 30 November 2016, such costs not to be assessed until after the trial and determination of Proceeding MRA1332‑08;
  4. Grant leave to the parties to make written submissions as to costs of the appeal within 14 days of the delivery of this judgment.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – INTERFERENCE WITH DISCRETION OF COURT BELOW – IN GENERAL – WRONG PRINCIPLE – PARTICULAR CASES – DECISION AFFECTING PLEADINGS – where the respondents’ amended defence was filed 26 days after the date ordered – where the primary judge allowed the respondents’ application for an extension of time to file the amended defence – where the primary judge refused the appellant’s application to strike out the amendments to the defence – whether the primary judge acted on a wrong principle or misapplied the correct principle – whether the primary judge failed to have any or adequate regard to material considerations – whether the primary judge made some error in exercising the discretion

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – APPEALS AS TO COSTS – RELEVANT PRINCIPLES – WHERE WRONG EXERCISE OF DISCRETION – where the respondents’ amended defence was filed 26 days after the date ordered – where the primary judge allowed the respondents’ application for an extension of time to file the amended defence – where the primary judge accepted that the appellant would suffer wasted costs in consequence of the grant of an extension of time – where the primary judge reserved the question of the appellant’s wasted costs until after the trial – whether the primary judge made some error in exercising the discretion

Mineral Resources Act 1989 (Qld), s 281, s 334ZJ

Mineral Resources (Peak Downs Mine) Amendment Act 2008 (Qld)

Uniform Civil Procedure Rules 1999 (Qld), r 171

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, applied

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, applied

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, cited

House v The King (1936) 55 CLR 499, applied

McDowall v Reynolds [2015] QLC 32, cited

Wills v Minerva Coal Pty Ltd (No 2) (1998) 19 QLCR 297, cited

Xstrata Coal Qld Pty Ltd & Ors v Keys & Ors (2013) 34 QLCR 186, cited

COUNSEL:

G J Gibson QC, with J K Chapple, for the appellant

S Doyle QC, with A Stumer, for the respondents

SOLICITORS:

Holding Redlich for the appellant

Allens for the respondents

  1. [1]
    DALTON J:  This is an appeal from orders made by the President of the Land Court on 17 February 2017.  Her orders extended time for filing an amended defence; refused an application to strike out the amendments to the defence; vacated trial dates and listed the matter for directions.  There is also a separate appeal against the order which the President made reserving costs thrown away by the amendments to the defence.  The decisions below were procedural and involved exercising discretion in a matter which the President is supervising as it proceeds through the Land Court.  The difficulty in successfully challenging such a decision is considerable.[1]  The principles in Aon Risk Services Australia Ltd v Australian National University[2] apply, and were accepted as applying, by the President, below.
  2. [2]
    The President described the litigation in the Land Court as follows:

“[7]  Cherwell Creek claims compensation from [the respondent companies (BMA)] under s 334ZJ of the Mineral Resources Act 1989 (‘MRA’). That section sits in a special purpose part of the MRA introduced by what the parties refer to as the Amending Act,[3] which came in to force in May 2008.

[8] The Amending Act brought to an end what was then a lengthy dispute between the parties about their eligibility for mining and associated rights over land owned by BMA near its Peak Downs Mine.

[9] Before the Amending Act commenced, Cherwell Creek and BMA held overlapping and apparently inconsistent resource tenures. Cherwell Creek held an exploration permit (EPC545). It had also applied for a mineral development licence over the land (MDLA364). BMA held a special lease over the same area. The Amending Act determined the matter in BMA’s favour, while providing Cherwell Creek a limited opportunity to claim compensation from BMA for its loss of opportunity to commercialise the MDLA364 coal resource.

[10] To make out its claim, Cherwell Creek must persuade the Court that compensation is payable. In deciding whether it is, and in what amount, the Court must consider the likelihood of a hypothetical proposition: that, but for the Amending Act, Cherwell Creek would have been able to commercialise the MDLA364 coal resource, having regard to factors including:

  1. (a)
    the likely extent and quality of the MDLA364 coal resource;
  1. (b)
    the likely mineability of the MDLA364 coal resource;
  1. (c)
    the likely market for any coal mined from the MDLA364 coal resource;
  1. (d)
    the likely life of a mine for the MDLA364 coal resource;
  1. (e)
    the likely coal revenue generated from the MDLA364 coal resource;
  1. (f)
    the likely coal revenue generation costs;
  1. (g)
    the likelihood of a mining lease, appropriate for Cherwell Creek to commercialise the MDLA364 coal resource, being granted under this Act;

Note—

See sections 269(4) and 271 for matters that the Land Court and Minister take into account in dealing with an application for the grant of a mining lease.

  1. (h)
    any other relevant matter.[4]

…”

Progress of this Proceeding

  1. [3]
    The President notes at paragraph [12] of her judgment below that the parties agreed from the outset that there would be pleadings in this proceeding.  Despite the fact that neither the Land Court Act 2000, Rules, or Practice Directions make any provision for pleadings, it seems to me impossible to conduct a case of the complexity of this case without pleadings.  Much of the background difficulty in supervising this case results from the fact that, even though the parties have proceeded on the basis that there would be pleadings, in reality it has been the expert reports which have identified, and continue to identify, the issues and in effect drive the litigation.
  2. [4]
    The originating application in this proceeding is dated 8 August 2008.  It made a claim for compensation in an amount to be determined by the Land Court pursuant to (then) s 722G of the Mineral Resources Act 1989 (the Act).  Annexed to this claim were nine pages said to contain the “facts, circumstances and other relevant matters” on which the application was based.  Compared to a pleading, this annexure was sketchy. 
  3. [5]
    The annexure to the claim pleaded the fact of the Amending Act and that but for it, “the applicant would have applied for and been issued with a mining lease in respect of the coal contained within MDLA364.”  It continued that because of the Amending Act, Cherwell Creek lost its opportunity to commercialise the MDLA364 coal resource by mining and selling the coal or, alternatively, by selling its interest in the tenement.  The rest of the annexure was largely concerned with describing the scope and extent of the coal resource Cherwell Creek contended was contained in MDLA364 and calculating the likely price it said it would have obtained for that coal.  It was said that the cost of producing and selling the coal would be the subject of expert evidence, but would have been approximately $75 per tonne.  A list of the types of expenses necessary to produce and sell the coal was provided. 
  4. [6]
    The scheme of the Act is that someone with ambitions to own a mining lease must first hold an exploration permit.  By s 179 of the Act it is necessary to hold an exploration permit in order to be granted a mineral development licence.  The holder of a mineral development licence can be granted a mining lease.  Cherwell Creek’s claim for compensation is premised on the fact that it held an exploration permit and would have been granted first a mineral development licence, and then a mining lease.
  5. [7]
    In the original annexure, it was pleaded that Cherwell Creek would have complied with all conditions of the mineral development licence and all requirements of the Act in order to obtain a mining lease.  That is expanded somewhat at paragraphs 15 and 16 of the annexure wherein it is said that Cherwell Creek would have been granted the mining lease inter alia because there were no “applications for or holders of any exploration permits or mineral development licences over the area comprised within the mining lease”; the operations for the mining lease would have “conformed with sound land use management”, and the mining lease was “an appropriate use of the land”.  These factors, it is said, would have caused the Land Court to have recommended to the Minister that the application for the mining lease be granted, and that the Minister would have recommended to the Governor in Council that the mining lease be granted.
  6. [8]
    A defence was filed responding to Annexure A on 13 October 2008.  BMA disputed that Cherwell Creek would have been granted MDLA364 and said that its mineral development licence application had been rejected by the Minister on 15 April 2008.  Separately, it pled that EPC545 had not been validly granted in 1994, and not been validly renewed in 2003, so that no mineral development licence or mining lease could, or would, have been granted to the applicant.  In support of this plea it said that the 1994 grant of EPC545 was invalid either because the delegate who granted it did not exercise his power pursuant to the instrument of delegation, or alternatively because the delegate ought to have referred the application for grant of EPC545 to the Director General or Minister for various reasons which are particularised.  It followed that there was no power to renew EPC545 in 2003, and consequently there was no power to grant MDLA364.  Alternatively it followed that the Land Court, considering these matters, would not have recommended to the Minister that a mining lease be granted; nor would the Minister have granted such a lease.
  7. [9]
    Particulars of both Annexure A and the defence were delivered in 2009 and an amended defence was filed on 28 August 2009.  There was a reply and amended reply filed in 2009 and 2010.  None of these documents touched on matters relevant to the issues raised on this appeal.  An amended Annexure A was delivered on 17 December 2012 pursuant to directions.  The amendments concerned the quantum of compensation.
  8. [10]
    Cherwell Creek filed a second amended Annexure A on 18 December 2015.  This document essentially re-pleaded the claim in its entirety and is in the form of a conventional pleading.  A fourth pleading was delivered on 6 May 2016.  The amendments in this version are less substantial and relate only to the calculation of the quantum of the claim.
  9. [11]
    The parties, and the Member managing this case, accepted that pleadings should be amended after expert reports were obtained.  This was accepted by the appellant’s counsel below – t 1-44.  Indeed it is clear from the transcripts of the review hearings that the views of the experts were driving the case, rather than a conventional approach in which expert opinion is sought within a framework established by pleadings.[5]
  10. [12]
    The Amending Act provided that if Cherwell Creek was to make an application for compensation it was to be made within three months, and this might be some valid reason why Annexure A, as initially filed, was sketchy.  However it does not explain the delay between that time and December 2015.  The fact is that it was not until 18 December 2015 that Cherwell Creek filed a pleading which articulated its claim in an appropriately detailed manner.  The amended defence filed on 30 November 2016 contains the note on its first page that it entirely replaces the amended defence filed on 28 August 2009.  Having regard to the fact that the second amended Annexure A filed on 18 December 2015 entirely re-pleads the preceding two versions of Annexure A, this is not surprising.
  11. [13]
    Most unusually, in these circumstances, the Member supervising this matter made an order on 5 December 2014 setting it down for trial.  That is, well before the parties obtained their expert reports and well before the issues were properly articulated by Cherwell Creek in its pleading.  The trial was set for four months starting in March 2017.  The trial date allocation was prompted by the Member attempting to case manage the matter, not the parties.[6]  At the time trial dates were allocated, the parties were not able to say how long the trial would take, or when they would be ready for trial.[7] 
  12. [14]
    Several review hearings later, on 19 April 2016, a timetable was set to squeeze all remaining interlocutory steps into the time remaining before trial.  The Member, and both parties, expressed serious reservations about whether these steps could be accommodated in the time available or whether the trial dates ought be vacated.[8]  The directions made on 19 April 2016 included: applicant to file and serve a further amended pleading by 6 May 2016; respondent to file and serve its expert reports as to the resource contained in MDLA364 by 28 October 2016, and respondent to file and serve an amended defence by 4 November 2016.  There was discussion about whether amendments to the defence would be substantial, and clearly that was a possibility.[9]  BMA filed an amended defence on 30 November 2016.  This was 26 days after the date provided by the directions.
  13. [15]
    Cherwell Creek’s protestations that the amendments to the defence of 30 November 2016 ought not to be allowed because they were late must be viewed in this context.
  14. [16]
    The other important context to Cherwell Creek’s complaints on appeal is that Cherwell Creek’s position, before the President below, was that even if BMA was not given leave to file its amended defence, the trial could not proceed on the dates allocated to it, and could not proceed until the second half of 2017.  It was not the President’s allowing the amended defence to be filed that meant that the trial dates had to be vacated – see [79] of the judgment below, and see Appeal Transcript t 1-40.  Indeed, when one looks at the draft order submitted by Cherwell Creek below, one can see the considerable work which was needed before this matter could be tried, all of which was quite independent of BMA amending its defence.

Extension of Time to File Amended Defence

  1. [17]
    Just in relation to this ground of appeal, Cherwell Creek made 26 separate complaints as to the exercise of the President’s discretion.  I deal with these in turn, by reference to paragraph 4 of the Notice of Appeal. 
  2. [18]
    Paragraphs 4(h)(i) and (ii) complain that the President did not consider “adequately or at all” that the amended defence was due on 4 November 2016 and not filed on that date.
  3. [19]
    The complaint that the President did not consider this at all should not have been made.  She plainly did; paragraphs [11]-[22] of her judgment are devoted to considering whether or not the direction to deliver the defence could be varied, or whether BMA needed to seek leave because it had not complied with the directions made on 19 April 2016.  Later in the judgment when considering whether or not the amendments delayed a fair trial of the proceedings, the President again turned to that issue – [70]ff. 
  4. [20]
    Her Honour considered the delay in complying with the direction of 19 April 2016, and concluded, against BMA, that it could have “at least” flagged the issues it raised by way of amended defence earlier than the date upon which it did deliver the amended defence.  She considered the evidence put before her by BMA as to when it recognised the issues which are the subject of the amendments, and the steps it then took to investigate and articulate them.  She described the delay as unfortunate.  Nonetheless she considered it out-weighed by other matters, such as the fact that, with the consent of both parties, the case had progressed through the Land Court on the basis that expert reports would precede pleadings, and the unusual approach taken to allocating trial dates.  She considered the difficulties inherent in the timetable set on 19 April 2016 which allowed an amended defence to be filed only four months before a trial, in the context of litigation which had been running for six years before that.  She also considered the fact that it would be necessary, whether or not amendments were allowed, to vacate the trial dates.
  5. [21]
    Having regard to all these matters, there is no error demonstrated in terms of paragraph 4(h) of the Notice of Appeal.  Her Honour weighed relevant matters appropriately and was clearly well aware that the delay in filing the amended defence took it outside the period limited by directions in April 2016. 
  6. [22]
    Nor can it be said in my view that there is anything in the point raised at paragraph 4(j) of the Notice of Appeal in which it is alleged that the President gave weight or undue weight to the fact that the amended defence was only 26 days late, according to the 19 April 2016 direction.  Indeed that ground of appeal sits uneasily not only with the substance of her Honour’s reasons, but with the statements of counsel for Cherwell Creek on appeal:

“It has not been Cherwell Creek’s intention to prevent BMA filing a – an amended defence, albeit late.  The 26 days is of no particular consequence in itself.” – Appeal Transcript 1-5.

  1. [23]
    At paragraph 4(k) of the Notice of Appeal, it is said that the President failed to recognise that by reason of BMA having missed the 4 November 2016 date for filing an amended defence, her discretion was at large and she could consider all the consequences and implications of the respondents having missed that date, not just consequences which were confined to a delay of 26 days.  In my view it is perfectly plain in the discussion under the heading, “Do the Amendments Delay the Fair Trial of the Proceedings?” in the judgment below, that the President did consider the question of delay at large, and in particular considered the very relevant matter of how the amendments would delay any trial of the matter.
  2. [24]
    Grounds of appeal at paragraphs 4(l), (m), (n) and (o) complain that the President failed to have regard to the fact that, were the amendments to the defence not allowed, a trial could have taken place from July 2017 but, if the amendments were allowed, a trial was likely to be delayed by a period of eight, or alternatively, 13 months.  It is said that the President failed to consider this, and the potential financial or other consequences to Cherwell Creek of such a delay.  At paragraph [79] of the judgment below the President said:

“One final aspect of delay should be mentioned.  The parties were asked to propose directions for the further conduct of the matter, dealing, alternatively, with the Amended Defence being allowed, or not.  Cherwell Creek’s proposed directions, assuming BMA could not file its Amended Defence, assume the trial cannot proceed until the second half of 2017.  The trial could not have proceeded as listed and the delay attributable to the amendments is some five months less than the 13 months Cherwell Creek asserted.”

  1. [25]
    The President clearly understood that allowing the amendments to the defence would result in eight months’ delay of the trial, on Cherwell Creek’s view of things (as revealed in its proposed directions). 
  2. [26]
    Her Honour then went on to consider, at paragraphs [81]-[84] below, the financial cost of Cherwell Creek’s responding to the amendments which she assessed as “considerable” and “substantial”.  The President understood that this substantial cost would include new expenditure but also be attributable to wasted expenditure.  Quite correctly she worked on the basis that the exact costs would be difficult to determine until after a trial.  Clearly enough the President also understood that payment of costs did not necessarily entitle a party to procedural relief – [80] – that is, matters other than costs are relevant to these questions.  At [87]-[88] her Honour balanced the “prejudice to Cherwell Creek by delay of the trial and additional or wasted costs” against prejudice to BMA if the real issues in dispute were not determined at a trial.  She came to the conclusion that “it would inappropriate to hold out BMA from pleading matters which are central to the claim.  The prejudice to Cherwell Creek must be viewed in the context of the proceedings as a whole and can be somewhat ameliorated by orders about costs.”  In my view, error is not shown as alleged at grounds 4(l)-(o) of the Notice of Appeal.
  3. [27]
    Similarly, paragraphs 4(s), (t) and (x) complain that the President did not have “any or adequate regard” to the substantial prejudice to Cherwell Creek in terms of costs and consequences in terms of the future conduct of the proceeding if the amendments were allowed.  Again it is very difficult to see how lawyers could properly complain that the President did not have any regard to these matters.  Particularly when paragraph 49 of the written submissions filed on this appeal by Cherwell Creek says:

“Her Honour thereby recognised that Cherwell Creek would be prejudiced by an extension of time to raise the Caval Ridge Mine allegations.  Her description, ‘substantial’ was apt to describe both the prejudice resulting to Cherwell Creek from the additional and wasted expenditure, and from the lengthy further delay to the trial of the proceeding.”

  1. [28]
    That paragraph was the concluding paragraph in a section of the submissions which acknowledged that her Honour noted and accepted Cherwell Creek’s argument about incurring new costs; wasting past costs, and delay in a trial as consequences were the amended defence allowed. 
  2. [29]
    Turning to the alternative contention that her Honour did not give adequate weight to these matters, no error is demonstrated.  As discussed above, her Honour appropriately recognised and weighed these matters in an orthodox exercise of discretion.
  3. [30]
    Associated with these grounds of appeal are those at paragraphs 4(y) and (z): that the President failed to recognise that a costs order would not necessarily address all the prejudice likely to be suffered by Cherwell Creek, and erred in concluding that BMA’s assertion that it was “good for any costs order” was a consideration of significance in the exercise of her discretion. 
  4. [31]
    As to the first of these complaints, nothing was raised either before the President below, or on appeal, other than those matters already discussed above – wasted costs, extra costs and delay in achieving a trial date – as being prejudice suffered by Cherwell Creek as a consequence of allowing the amendments.  The types of prejudice identified below, and on appeal, were the types of prejudice which can be compensated by costs orders.  While her Honour recognised that a party was not entitled to procedural relief merely upon its promise to pay costs – [80] of the judgment below – the ability of BMA to meet a costs order was, as the President recognised, a weighty consideration in the exercise of her discretion on the facts of this case.  There is no error demonstrated.
  5. [32]
    At paragraphs 4(f) and (g) of the Notice of Appeal, it was contended that the President erred because she approached the exercise of her discretion on the basis that the April order giving leave to amend did not constrain the nature of the amendments, or alternatively, that she gave undue weight to this.  The April order did not constrain the nature of the amendments, and her Honour was right to approach the matter that way.  In the context where both parties had proceeded, and case management had proceeded, on the basis that the parties’ cases could not be fully or finally articulated until expert reports were received, it was a necessary corollary that substantial amendments might be made pursuant to the leave granted in April.  There is no error demonstrated.
  6. [33]
    To understand the rest of the complaints about the President’s decision to allow BMA to file its amended defence, it is necessary to understand more about three issues raised by the amended defence: the JR Issue, the Prospective Use Issue, and the Special Loss Issue. 
  7. [34]
    The JR Issue.  Cherwell Creek’s application for compensation has at all times contained an allegation that it would have applied for, and been issued with, a mining lease.  In the third and fourth versions of the pleading, it pleads in a more detailed way how it says the grant of a mining lease would have come about.  This series of allegations begins at paragraph 4(a) of the pleading with the allegation that in about May 2008 Cherwell Creek would have been granted mineral development licence 364. 
  8. [35]
    The amended defence contains pleas similar to those in the original defence that MDLA364 would have been rejected by the Minister, and that EPC545 was not validly granted in 1994, and thus not validly renewed in 2003.  The consequence is pleaded to be that without a valid EPC, no mineral development licence could, or would, have been granted to Cherwell Creek.  The particulars of why the grant of EPC545 in 1994, and renewal in 2003, were invalid are similar to those which were originally pleaded (flawed delegation process; unusual circumstances or sensitive political nature requiring referral to Director General or Minister). 
  9. [36]
    In addition, the amended defence pleads that in 2003 BMA challenged the grant of EPC545 in judicial review proceedings in the Supreme Court.  It is pleaded that, were it not for the Amending Act, BMA would have pursued those proceedings and obtained an order quashing or setting aside the renewal of EPC545.  As the President concluded below, the effect of this change to the pleading is less substantial than it might at first appear, for BMA has undertaken to confine its case as to the judicial review proceedings to reliance upon the same matters raised elsewhere in the Land Court proceedings, ie., the invalid delegation and unusual circumstances or sensitive political nature mentioned above – see [27] of the President’s reasons below. 
  10. [37]
    The Prospective Use Issue.  The second of the contentious amendments is raised in defence to the pleaded proposition that Cherwell Creek would have been granted a mining lease.  From the initial version of its claim in Annexure A, Cherwell Creek has always pleaded that it would have been granted a mining lease because the Land Court would have recommended to the Minister that a mining lease be granted, and the Minister would have recommended this to the Governor in Council.  That remains Cherwell Creek’s case – see paragraphs 6, 7 and 8 of the current pleading.  However, it is only since the pleading delivered on 18 December 2015 that the hypothetical events which Cherwell Creek says would have occurred between its being granted a mineral development licence and the Land Court’s making a recommendation to the Minister have been pleaded in any detail – see paragraphs 4 and 5 of the current pleading. 
  11. [38]
    BMA denies that a mining lease would have been granted by the Court or the Minister on various grounds, one of which is that Cherwell Creek would not have been able to demonstrate the economic viability of a mine in respect of the coal lying under the area of MDLA364.  The reason is pleaded to be that by May 2008, BMA had identified the area of MDLA364 as the best place for the infrastructure for a proposed mine of its own: Caval Ridge Mine.  It is pleaded that this infrastructure was the most appropriate and economic use for that land because, if BMA did not use the land contained in MDLA364 for the infrastructure, it would have had to place the infrastructure on Mining Lease 1775, thereby sterilising over 52 million tonnes of coking coal, which in turn would have meant a loss of royalties to the State approaching an amount of $400 million. 
  12. [39]
    The Special Loss Issue.  The third area of contention raised by the amended defence is conceptually related to the Prospective Use Issue.  The pleading is that any mining lease over the area comprised in MDLA364 would have extended over BMA’s freehold land.  The pleading proceeds to the effect that therefore, no mining lease would have been granted to Cherwell Creek without an amount of compensation being paid to BMA as the owner of the freehold.  BMA pleads that the compensation would have included its loss of the use of the land for infrastructure for the Caval Ridge Mine and consequent sterilisation of coal resource in Mining Lease 1775.  It is said that the total compensation would have exceeded $180 million and thus rendered any mining lease operated by Cherwell Creek on the area of MDLA364 uneconomic.
  13. [40]
    I return to the remaining subparagraphs of paragraph 4 of the Notice of Appeal.  Some of these concern the President’s appreciation of the merits of the Prospective Use Issue and the Special Loss Issue.  Subparagraphs (a) and (b) contend that the President erred in holding these issues were reasonably arguable (without considering Cherwell Creek’s submissions to the contrary), and erred because she exercised her discretion on the basis that, unless she found these issues were “self-evidently groundless”, their merits were irrelevant.  Subparagraphs (c) and (d) are not expressed to be in the alternative to subparagraphs (a) and (b), but they must be, for they complain that the President exercised her discretion on the basis of a conclusion that the amendments raised important issues, and that she gave undue weight to that conclusion and specifically that she thought the conclusion sufficient to outweigh “other countervailing considerations”.  In that same vein, it was contended at subparagraph (r), that the President failed to have any, or any adequate, regard to the deficiencies which Cherwell Creek identified in BMA’s expert report supporting the Special Loss Issue.  This became relevant to the merits of the claim pleaded, because the report is pleaded to contain the particulars of the calculation of loss.
  14. [41]
    It may be accepted that the merits of any case sought to be made by amendment are relevant to a consideration of whether that amendment ought be allowed.  On BMA’s application before the President for an extension of time in which to amend its defence, Cherwell Creek cross-applied to strike out the amendments which BMA sought to make to its defence.  The merits of the contentious amendments are considered by the President in this context – [44]-[59] below.  It was in this context that her Honour found the contentious amendments were not unarguable and therefore ought not be struck out – [59] below.  This conclusion preceded her Honour’s weighing of discretionary matters as to whether or not to allow the amendments, and I think it is clear that the President’s conclusions about the merits of the issues raised by the amendments were part of her discretionary exercise of judgment to extend time for the filing of the defence.  At paragraph [86] of the judgment below she refers to the importance of ensuring that the real issues in the case are decided; at paragraph [89] of the judgment below she describes the Prospective Use Issue as “fundamental” to the matters which the Court will consider at trial, and at [90] she describes the Special Loss Issue as relating “to an important factor for the claim”. 
  15. [42]
    It ought not to have been alleged that the President did not have any regard to the deficiencies identified by Cherwell Creek in the expert report relied on by BMA as supporting the Special Loss Issue.  The President clearly did have regard to that set of arguments – paragraphs [48]-[56] of the judgment below. 
  16. [43]
    In my view, her Honour did not err in having regard to the merits of the claim sought to be raised by the contentious amendments.  I note that the written submissions filed on behalf of the appellant, which extended well beyond the regulation 10 pages, did not agitate this point as part of the argument that the President erred in allowing the amendment.  Nor was this pursued orally.  Arguments about the merits were confined to the strike out application.  The same approach was taken below; paragraphs 88-107 of written submissions, and t 1-65ff in oral argument.  That is, neither in this Court, or below, was there an argument that even if the new contentions were “not unarguable”, and so should not be struck out, they were sufficiently lacking in merit that leave should not be granted to amend to add them.  Indeed, paragraph 37(h) of the appellant’s written submissions before the President reads to the effect that in considering whether to allow the amendments the President should consider whether they “raise an arguable case”.
  17. [44]
    The points of law regarding the interpretation of the Act, and the case law dealing with that Act, were discussed in the judgment below. Her Honour did not attempt to determine these points of law but, having found that they were not unarguable, took the view that they were matters for trial.  With respect, I wholeheartedly agree.  At the trial the facts of the matter will be elucidated.  The opinions of experts will have been explored and tested and it is far more appropriate that these points of law be determined then.  They are by no means straightforward, and may well rise or fall upon factual findings or expert evidence.
  18. [45]
    At paragraph 4(e) of the Notice of Appeal it was contended that the President erred in finding that Cherwell Creek was not taken by surprise, or ought not to have been taken by surprise, by the inclusion of the Prospective Use Issue and the Special Loss Issue in the amended defence.  Paragraphs 5 and 6 of the Notice of Appeal in effect particularise this complaint.
  19. [46]
    BMA’s original defence, filed on 13 October 2008, contended that the Minister “had accepted his Department’s recommendations and had rejected [Cherwell Creek’s] application” – paragraph 2(c).  The basis for this allegation was pleaded to be the statements made by the Minister in the Second Reading Speech which introduced the Amending Act.  At paragraph 3(b)(v) of the original defence it was pleaded, “further, the Minister would not have granted a mining lease in whole or in part to the applicant.”  Particulars of that allegation were provided on 24 April 2009.  They were to the effect that the Minister would have considered each of the matters in s 271(1) of the Act and “otherwise, the best particulars they can give until the completion of interlocutory steps are that it is to be inferred from the Minister’s Second Reading Speech that a Mining Lease would not have been granted in whole or in part”. 
  20. [47]
    The Second Reading Speech was made in May 2008.  It contained the following:

“…

The Peak Downs Coal Mine is a premium coking coal mine, producing nine million tonnes of coal per annum.  The total coal reserve size is 1,915 million tonnes.  The value of its exports last financial year was $1.28 billion and its coal royalty payments were $86.8 million.  As at June 2007, the mine had a work force of 1,085 employees and contractors.

…

BMA is proposing a major expansion of the Peak Downs Mine and the surrounding area.  It is investigating the feasibility of developing and constructing a new Greenfield mine in the northern part of Mining Lease 1775, to be known as the Caval Ridge Mine.

The Caval Ridge Mine could result in over 1200 construction-based jobs and 550 operational jobs and the construction of over $1 billion worth of infrastructure.

It might also result in up to a further 12 million tonnes of coal production per annum.  To put this into context, 12 million tonnes per annum is more than the current capacity of the Peak Downs Mine (which is nine million) and more than the combined annual production capabilities of the Millennium, Poitrel and Isaac Plains Mines.

…

The Government accepts that the land currently held by Cherwell Creek under Exploration Permit for Coal 545 and its application for Mineral Development License 364 is the optimal location for the infrastructure needed for the Caval Ridge Mine.

If BMA is unable to locate its expansion infrastructure off the mining lease and in this particular area, most of which I understand it owns freehold, the infrastructure would need to be placed within Mining Lease 1775.  This would be problematic firstly because operating costs would generally be significantly higher because of the geophysical features of the land.

Secondly, it would require the placement of infrastructure on top of reserves of premium hard coking coal.  BMA has suggested that approximately 52.5 million tonnes of coking coal would be sterilised by this, which could have a revenue value of approximately $2.2 billion and a royalty value to the State of approximately $146 million.

Thirdly, while BMA might be able to avoid sterilising some coal by progressively relocating its infrastructure, this would further increase operating costs and lastly, the placement of infrastructure on the eastern boundary would move the infrastructure closer to the Moranbah Township, which might require significant steps to be taken (and higher costs incurred) to reduce the noise, dust, vibration and visual impact on the local community and township.

…

In an attempt to resolve the dispute, the Department of Mines and Energy facilitated a mediation between the parties between February and September 2007.  The mediation was unsuccessful.  There appears to be no prospect of BMA and Cherwell Creek resolving their dispute on a commercial basis and it is for this reason that the Government has had to step in and make these decisions in the public interest.

Since the mediation, Cherwell Creek’s outstanding applications and all submissions received from both parties in relation to those submissions have been reviewed by a small multi-disciplinary team within the Department of Mines and Energy, comprising an experienced geologist, a coal mining engineer and a former senior mining registrar.

On the basis of that review, my Department has recommended to me that all of Cherwell Creek’s applications be rejected for the following reasons.

Cherwell Creek has had 131/2 years to prove up and develop any coal resource within the area of its exploration permit, but has been unable to do so.

In the past 131/2 years, Cherwell Creek has only drilled in the reporting years 1994, 2004, 2005 and possibly 2007.  While my Department is aware that Cherwell Creek proposed to drill in 2007, it has not yet had to report back to the Department and it is not known whether it did drill in 2007.

As far as the Department is currently aware, Cherwell Creek has only drilled in the area subject to the application for Mineral Development License 364.  This means that Cherwell Creek applied for Mineral Development License 366 over an area it had never drilled.

In the absence of any sizeable, economically viable coal resource, the most appropriate and economic use of the land subject to the application for Mineral Development License 366 is for the Peak Downs Mine’s current infrastructure.

Cherwell Creek has defined only a relatively small coal resource in the area subject to its application for Mineral Development License 364 which is at a very preliminary stage of assessment and which it is considered might only be marginally viable.

In the absence of any sizeable, economically viable coal resource, the most appropriate and economic use of the land subject to the application for Mineral Development License 364 is for infrastructure to support the Caval Ridge Mine.

I have accepted my Department’s recommendations to reject all four of Cherwell Creek’s current outstanding applications.

…

This will enable BMA to secure that land for its infrastructure.  This is arguably what was always intended when the Special Lease was granted back in the 1970s.

…” (my underlining)

  1. [48]
    The current contentious amendments are to the effect that, had Cherwell Creek applied for a mining lease, the Land Court and the Minister would not have granted it because doing so would mean that the infrastructure for the Caval Ridge Mine would need to be placed within BMA’s Mining Lease 1775, thus sterilising coal; causing loss of profit and royalties, and delaying production at the Caval Ridge Mine.  In effect, what was incorporated by reference to the Second Reading Speech in the particulars of 24 April 2009 is now, by virtue of the amendments, express in the pleading.  In my view the President was correct in concluding that Cherwell Creek was not taken by surprise by this inclusion – paragraph [34] of the judgment below.
  2. [49]
    While the Special Loss Issue is associated with the Prospective Use Issue, it had never been raised in the pleadings by Cherwell Creek or BMA before the contentious amendments to the defence of 30 November 2016.  Nonetheless, the issue was not new to either party.  BMA had raised it in opposition to both the renewal of EPC545 and Cherwell Creek’s application for MDL364. 
  3. [50]
    Against that background, it is somewhat surprising that both parties overlooked the issue as far as the pleadings in this matter are concerned.  Part of Cherwell Creek’s pleading is that it would have complied with the requirements of the Act for the grant of a mining lease.  Quite some detail of what that might include is pleaded, but not the payment of compensation to BMA.  Of course, it was not in Cherwell Creek’s interest to raise the Special Loss Issue in this matter.  However, payment of compensation to the land owner is one of the matters the Act requires as a condition of granting a mine lease, and Cherwell Creek have known since 2006[10] that BMA asserts that its losses arising from any grant of MDLA364 included the need to locate infrastructure on ML1775 and consequently to sterilise part of its own coal resource.  One of Cherwell Creek’s expert reports, that from Mr Knight, does raise the issue that Cherwell Creek would be required to compensate BMA if granted a mining lease over the area of MDLA364.  Mr Knight says that compensation should be assessed on the basis that the best use of the land was as pasture for cattle.  This report was given to BMA in 2015 even though Cherwell Creek’s pleadings still do not plead that to obtain a mining lease over the area of MDLA364 it would have paid compensation to the freehold owner, BMA.
  4. [51]
    Further, the Special Loss Issue, or its mirror image, has emerged in Cherwell Creek’s case, at least in the expert report of Dr Rudenno.[11]  He values MDLA364 at $132 million.  He relies on comparative sales, but as a check, relies partly upon the fact that BMA claimed a special value to it in the area of EPC545 when opposing Cherwell Creek’s renewal of that permit in 2006.  As discussed in Dr Rudenno’s report, BMA’s assessment of loss at that stage was $180 million, based upon its inability to use the area for infrastructure and the sterilisation of its own coal as a consequence.
  5. [52]
    It is difficult to understand why BMA had not raised the matter before 30 November 2016.  It apparently did not occur to the lawyers or those instructing them.  It was not until one of their experts brought the matter to the attention of the lawyers that the matter was articulated in the pleading.  The solicitor acting for BMA swore to this having been the case.[12]  The parties had proceeded on the basis that pleadings would not be finalised until expert reports had been obtained.  Directions made on 19 April 2016 for expert reports and pleadings put these steps very close before the trial dates.  It is obvious, with hindsight, how this situation has arisen.
  6. [53]
    The President was cognisant of the fact that the Special Loss Issue was relevant to issues which were already raised in the case:  Cherwell Creek’s willingness to comply with the provisions of the Act about paying compensation in order to obtain a mining lease, and (on Dr Rudenno’s report) the fair market value for the coal resource in MDL364 – [36], [43], [65] and [66] below. 
  7. [54]
    These matters were considered and weighed by the President in considering the submission that the Special Loss Issue had taken Cherwell Creek by surprise.  In fact, the President considered that the articulation of the issue in the Land Court proceedings did take Cherwell Creek by surprise – [43] below.  However, weighing this matter against the explanation for the late pleading; the likelihood that such an issue would emerge because of the way the case had proceeded and been managed, and the close connection between this issue and other issues in the litigation, the President concluded that the fact that Cherwell Creek was taken by surprise was not determinative of the outcome of the application to amend.  There is no error demonstrated; what is evident in the judgment below is a conventional and, with respect, perfectly sound exercise of discretion.
  8. [55]
    At paragraph 4(v) of the Notice of Appeal it was contended by Cherwell Creek that Dr Rudenno’s report did not raise the Special Loss Issue and was not relevant to the President’s consideration.  The President did not find that Dr Rudenno’s report did raise the Special Loss Issue, but found that it raised an issue closely connected with it.
  9. [56]
    It is further asserted at paragraph 4(v)(ii) of the Notice of Appeal that the President’s decision was based on a notion that BMA ought not be held out from raising the Special Loss Issue in response to Dr Rudenno’s report.  This mischaracterises the reasoning in the judgment below.  The President properly recognises the close connection between part of Dr Rudenno’s report and the Special Loss Issue.  There is nothing in paragraph 4(v) of the grounds of appeal.
  10. [57]
    Cherwell Creek complains at paragraph 4(i) of the Notice of Appeal that the President erred in finding BMA’s explanation for the delay in pleading the JR Issue, Prospective Use Issue and Special Loss Issue was adequate.  The explanation given for raising the Special Loss Issue late has already been discussed – [52] above.  I am not sure that the President did find the explanation adequate; I do not see this expressly in her judgment.  In fact at [64] the President is critical of BMA for failing to identify and plead the Special Loss Issue earlier.  She is generally critical of BMA’s delay – eg., [72].  However, BMA swore to an explanation which was not challenged, and was accepted as true,[13] on the application before the President, and which was the type of unfortunate result which the progress of the matter, and the directions made in it were likely to produce. 
  11. [58]
    Cherwell Creek agitates the point that BMA knew of the Special Loss Issue independently of its experts.  That is, to say that the parties agreed that pleadings would follow expert reports, does not explain why BMA did not raise the matter earlier; it did not need its expert to tell it about the point; it already knew.  This is correct, but needs to be seen in the context of the matters discussed at [50] and [54].  There is nothing to indicate that the President did not consider this in exercising her discretion – see [64] and [71] of the judgment below.  She was certainly cognisant of all the relevant facts.
  12. [59]
    As to the other two issues, their articulation in the pleading of 30 November 2016 is certainly more precise, and more in the form of a proper pleading, than their articulation in previous versions of the defence.  However, when the progress of pleadings is considered, one can understand why they were articulated precisely for the first time only on 30 November 2016.  There is no rule that a party cannot make a late amendment to a pleading unless it has a completely meritorious explanation for the delay.  The explanations here were understandable against the way the proceeding had been run by both parties, and supervised by the Court.  The explanations were relevant to an exercise of discretion; the President did consider them – [68]-[70] and [74]-[77].  In my view no error is shown in her consideration. 
  13. [60]
    Paragraphs 4(p) and (q) of the Notice of Appeal assert that the President failed to have any regard to the fact that BMA knew the facts now pleaded and had the opportunity to plead these matters earlier than it did.  Again, it is difficult to see how the assertion that the President failed to have any regard to these matters could properly be made.  The President clearly did have regard to these matters and weighed them, as I have discussed, at paragraphs 20 and [46]-[54] above.  Her Honour took into account that the Prospective Use Issue and the JR Issue had always been apparent on the pleadings, if not articulated in the most lawyerly fashion.  As just discussed, her Honour took some time to understand exactly how it was that the Special Loss Issue had escaped the notice of BMA’s lawyers until it emerged in the 30 November 2016 pleading.  Once again, her Honour weighed these matters in her discretion in an orthodox and, respectfully, sound manner.  Error is not demonstrated.
  14. [61]
    Lastly, so far as the exercise of discretion to allow the amended pleading dated 30 November 2016 is concerned, paragraphs 4(u) and (w) of the Notice of Appeal assert error on the part of the President in accepting BMA’s submission that it would not be necessary for Cherwell Creek’s mining engineer to consider and develop a mine plan for the coal resource within ML1775 as a result of the addition of the Special Loss Issue.  Unfortunately, once again these grounds of appeal are not based on an accurate statement of the findings below. 
  15. [62]
    At [81]-[84] of the judgment below the President discussed the parties’ differing contentions as to the additional cost to which Cherwell Creek would be put in responding to the contentious amendments.  Her Honour notes Cherwell Creek’s estimate at $2 million and eventually finds that it is difficult to determine the amount of additional and wasted costs.  That will be better done after trial.  Nonetheless her Honour accepted that there would be considerable cost consequences for both Cherwell Creek and BMA and remarked, “Even discounting Cherwell Creek’s assessment by 50%, the figure is substantial.” – [84].  In the course of that discussion about the quantum of additional and wasted costs, the President noted that Cherwell Creek contended its mining engineer would be required to develop a practical mine plan for the coal resource within ML1775 and that BMA did not accept that was necessary.  Her Honour did not decide that issue.  There is no basis for Cherwell Creek’s complaint in this regard.

Failure to Strike Out Contentious Parts of Amended Defence 30 November 2016

  1. [63]
    Paragraphs 1, 2 and 3 of the Notice of Appeal assert that the President erred in failing to strike out those parts of the 30 November defence which raised, respectively, the Special Loss Issue, the Prospective Use Issue and the JR Issue.  I will deal with each of these in turn.
  2. [64]
    The JR Issue.  It will be recalled that BMA contends that EPC545 was never valid – its grant in 1994 having been invalid, the decision to renew it in 2003 was also flawed.  Cherwell Creek responds that even if the initial grant and renewal of EPC545 were to have been set aside by the Supreme Court, it does not change the fact that at the time of the application for the mineral development licence it was the holder of an exploration permit.  It relies upon cases to the effect that it is very rare that an administrative act will be of no effect whatsoever, even if it is later declared to have been beyond power.  There are nice questions of law involved in this issue, and in particular its determination will involve a consideration of the cases dealing with the consequence of a finding that an administrative act was beyond power.  The question of what remedy the Supreme Court was likely to fashion in the 2003 judicial review proceedings will depend upon an understanding of the facts proved as to the initial grant of the exploration permit; its renewal, and the consequences of any order made.  In my view, the President was correct in concluding that these matters are best determined after a trial.  The President correctly understood that these were the parties’ positions – [44]-[46] below.  Her Honour was well aware of the stringent test which applies before a court will strike out a pleading at an interlocutory stage, thus denying a party the chance to try a case which is not on its face unarguable.[14] 
  3. [65]
    The Prospective Use Issue.  Cherwell Creek’s point about this issue is found at paragraph 2 of the Notice of Appeal.  It centres upon the fact that BMA did not have a mining lease, or a mining infrastructure lease, which would allow it to place infrastructure on the area of MDLA364.  It is said the President failed to address this submission and further erred by either not considering the merits of Cherwell Creek’s argument, beyond concluding that BMA’s claim was not groundless, or erred in thinking that BMA’s claim was sufficiently meritorious to warrant its determination at trial.  Presumably all three of these points were in the alternative, although they are not expressed to be in the Notice of Appeal.
  4. [66]
    It was quite wrong to assert that the President did not consider the issue.  At paragraph [57] of the judgment below she said:

“Finally, Cherwell Creek claims BMA is prevented from claiming special loss because it could not demonstrate it could have secured a mining lease for infrastructure purposes due to EPC545, held by Cherwell Creek. Whether EPC would have precluded BMA from becoming eligible to apply depends on at least two issues: firstly; the validity of EPC545, a live issue on the pleadings; and secondly, construction of the relevant provisions regarding eligibility. Again these are questions for trial.”

  1. [67]
    The claim that BMA would be granted the necessary licences and permissions to establish infrastructure associated with the Caval Ridge Mine on the area, or part of the area, comprised in MDLA364 could not possibly be regarded as without merit having regard to the fact that BMA owned the land; had Mining Lease 1775 on adjacent land; had Supreme Court proceedings on foot challenging the grant of EPC545, and having regard to the statements by the Minister in the Second Reading Speech extracted at [47] above.
  2. [68]
    Because the amended defence pleads that any compensation payable to BMA consequent on the grant of a mining lease to Cherwell Creek over the area of MDLA364 would have been in an amount of over $180 million as particularised by its expert Mr Eales,[15] Cherwell Creek attacked the expert report delivered by BMA’s expert Mr Eales on the applications below.  Mr Eales’ report was said to assume use of the area of MDLA364 by BMA from 2010, when that was not realistic having regard to BMA’s case about when Cherwell Creek would be denied a mining lease over the area of MDLA364.  I do not necessarily read Mr Eales’ report that way; see paragraph 50 of the report.  In any case, this is a factual matter which Cherwell Creek will no doubt advance at trial through cross‑examination, and perhaps through its own expert.
  3. [69]
    The President correctly recognised the test to be applied when an application to strike out a pleading was made – [59].  Cherwell Creek has not demonstrated that the judgment below shows error in this respect; to the contrary. 
  4. [70]
    Special Loss Issue.  BMA relies on s 281(3)(a)(vi) of the Act to claim that compensation in an amount of $180 million would have been due to it, had Cherwell Creek been granted a mining lease over the area of land on MDLA364.  Cherwell Creek submits that no compensation is payable pursuant to this section for prospective, as opposed to current, use of land.  The President noted that there are several single Member decisions of the Land Court which are against Cherwell Creek’s contention in this respect.[16] 
  5. [71]
    Cherwell Creek raises another argument, saying that s 281(4)(b) of the Act prohibits compensation being made for minerals on or under “the land concerned”.  There will be a question of statutory construction as to whether the land concerned is that comprised in MDLA364, or that comprised in Mining Lease 1775.  While recognising that this was a matter of statutory construction, the President thought it was a determination which was better made after a trial.  I agree, and I must say the view I have of the issue (without full argument, of course) is that BMA has a good arguable case.  There is also an arguable question in my view whether BMA is claiming “for any minerals” or is claiming economic loss.
  6. [72]
    Further, it was contended that BMA’s case, so far as it appeared in Mr Eales’ report, claimed the same loss twice.  This was said to be because Mr Eales determined the highest and best use of the freehold land which BMA owned as being for infrastructure for the Caval Ridge Mine and also assessed, in effect, the same matters to produce the special loss BMA claims.  BMA did not concede that its position was logically unsustainable.  However, it did make a submission that if it were wrong as to this, it would claim the two different calculations in the alternative.  I agree with the President that this matter ought to be determined after a trial.  The factual matters on which the expert opinions are based, and the experts’ reasoning, will be much clearer after a trial and cross-examination of experts for both sides.  Other criticisms which Cherwell Creek makes of Mr Eales’ methodology: failure to discount for contingencies, for example, are also best determined after a trial.
  7. [73]
    In all the circumstances, I think the President was correct not to determine these issues but to reserve them to the trial judge.  I think BMA certainly has an arguable case.

Application to Adduce Further Evidence on Appeal

  1. [74]
    Cherwell Creek applied to admit an affidavit which exhibited a request for particulars, and further and better particulars of the 30 November 2016 defence on the hearing of this appeal.  The request was dated 22 February 2017 and the particulars were dated 17 March 2017.  I would grant that leave, and also allow a responsive affidavit from the respondent which exhibits correspondence between the solicitors and directions which have been made below since the decision under appeal.  I now turn to consider the matters which Cherwell Creek urged upon the Court arising from this further material.
  2. [75]
    The JR Issue.  It will be recalled that the respondent took the position before the President that in its proceeding in the Land Court it would advance only those factual matters already pleaded at paragraphs 2(b)-(e) of the defence to contend that it would have been successful in the judicial review proceeding – see [36] above.  At paragraph 4(c) of the request, Cherwell Creek’s solicitors ask by what date BMA would have obtained an order quashing or setting aside the renewal of EPC545 in the judicial review proceedings.  The answer is that the respondent thought it likely that it would have obtained such an order between May 2008 and the end of 2009.  At paragraph 4(a) of the request, Cherwell Creek’s solicitors ask for every factual and legal allegation which BMA would have pursued in the judicial review proceedings.  Consistently with what the President was told below, the response to that was confined to the matters set out in paragraphs 2(b)-(e) of the defence. 
  3. [76]
    In that context, by paragraph 4(d) of the request, Cherwell Creek’s solicitors asked for particulars of the effect which an order quashing or setting aside the renewal of EPC545 would have had on the grant of MDLA364.  The answer to this request was that the effect of an order quashing or setting aside the renewal of EPC545 was that the Minister could not have, or alternatively would not have, granted the application for MDL364. 
  4. [77]
    The particulars continue, at paragraph 4(f), to say that if the Minister had already dealt with the application for MDL364 before the judicial review proceeding had concluded, and if in so dealing with the application for MDL364, the Minister had granted MDL364 to Cherwell Creek, BMA would have amended the application in the judicial review proceeding to seek an order that the grant of MDL364 to Cherwell Creek be quashed or set aside.  It is pleaded that the Supreme Court would have granted that order.
  5. [78]
    Cherwell Creek submitted to this Court that as a consequence of the further and better particulars which I deal with at [77] above, BMA would have to file a new pleading.  Further, it was submitted that BMA has departed from the basis on which it presented its case for an extension of time to file the amended defence of 30 November 2016 to the President.  It was said that these matters would influence this Court to take a different view of the application to amend the defence to add the JR Issue than the President took.
  6. [79]
    I do not accept these submissions on behalf of Cherwell Creek.  I cannot see the need for a new pleading.  BMA has not departed from the basis upon which it presented its case to the President below.  No new factual matters are being introduced into the case.  Nothing in this new material could sensibly be regarded as bringing about a different result to that which the President reached below.  This point was not fairly arguable in my view.
  7. [80]
    The Special Loss Issue.  The amended defence filed 30 November 2016 quantifies the compensation which BMA says Cherwell Creek would have been required to pay it in order to obtain a mining lease over the area of MDLA364 as exceeding $180 million – paragraph 11(c)(vi) of the defence.  The particulars in the defence are, “The Respondents will deliver an expert report assessing the compensation that would have been payable by the applicant to the Respondents.”  It was accepted that the report referred to in the particulars was Mr Eales’ report of 2 December 2016, discussed above. 
  8. [81]
    Paragraph 20 of the request for particulars asked BMA to specify each material fact in support of the allegation that the compensation would have exceeded $180 million, including a description of every item comprising that amount, and the method of calculation.  The response at paragraph 20 of the further and better particulars was that the respondents were reviewing the calculation of the compensation and were not able to provide further particulars until the completion of that review.  That remained the respondents’ position as at the time of the hearing of this appeal.
  9. [82]
    Cherwell Creek complains that at the hearing before the President BMA only relied on facts contained in Mr Eales’ report but it now anticipated that there were more or different facts.  With respect, that is not the only logical conclusion to be drawn from the response at paragraph 20 of the particulars.  It is equally possible that BMA will rely upon some of the facts in Mr Eales’ report but seek to confine them, or indeed recast them.  Further, the request asks for more details of matters in Mr Eales’ report.  A response that contains what is asked will not necessarily give rise to any legitimate complaint in Cherwell Creek.  In these circumstances there is nothing to cause this Court to come to a different conclusion than that reached by the President below as to BMA having an extension of time in which to file the amended defence of 30 November 2016.
  10. [83]
    The Prospective Use Issue.  At paragraph 14(f)(iii) of the amended defence filed 30 November 2016 it is pleaded that the grant of a mining lease to Cherwell Creek over the area of MDLA364 would have resulted in infrastructure for the Caval Ridge Mine being placed on Mining Lease 1775 with the results that: 52.5 million tonnes of coking coal in Mining Lease 1775 would have been sterilised; a profit of $178.4 million would have been lost to BMA; production of coal from the Caval Ridge Mine would have been delayed, and royalties of $392 million would have been lost to the State.  Paragraph 27 of the request for particulars asks, in a very detailed way, what items of infrastructure would have been located where; why it would have been necessary to place infrastructure within the boundaries of Mining Lease 1775; what coal would have been sterilised, and how the loss of profit, delay and royalties are calculated.  The response was that BMA was reviewing the allegations and not currently able to provide particulars.  The same situation obtained at the time of hearing this appeal.
  11. [84]
    Cherwell Creek submitted that this showed how erroneous it was for the President to have concluded that the Prospective Use Issue had been raised in the pleading from the outset.  Further, it was submitted that the response showed that, “BMA does not know whether it intends to rely on the facts pleaded in paragraph 14(f)(iii) of the Amended Defence”.  I do not accept either of those submissions.  They overstate the position to the point of inaccuracy.  There is nothing on the further material before this Court which would cause it to come to a different result in relation to the extension of time to plead the Prospective Use Issue.

Costs Decision

  1. [85]
    By a separate Notice of Appeal to this Court, Cherwell Creek challenged the decision of the President of 15 March 2017 reserving the question of costs thrown away by the amendments to the 30 November 2016 defence and the vacation of trial dates, to the Land Court Member hearing the trial.  This was a separate decision of the President delivered after a hearing on the papers.  The President made the following costs orders:

“1. The following are costs in the cause:

  1. (a)
    the costs of the Respondents’ application for an extension of time to file its amended defence; and
  1. (b)
    the costs of the Applicant’s application to strike out parts of the amended defence.
  1. The question of costs thrown away either by the amendments to the defence or the vacation of the trial dates is reserved.”
  1. [86]
    It is only the second of those orders which is challenged by Cherwell Creek.  So far as these costs were concerned the President said:

“Turning to costs thrown away, any prejudice Cherwell Creek has suffered can still be ameliorated by a costs order.  Cherwell Creek wants an order in its favour which is not enforceable until the conclusion of the proceedings.  If Cherwell Creek is, in fact, prejudiced by the amended defence or the trial dates being vacated, they will be in no worse position by an order reserving that question.  The Court will be in a better position to assess prejudice after the trial.” – [14]

  1. [87]
    Cherwell Creek’s point on appeal is that the President had, in her decision of 17 February 2017, accepted that Cherwell Creek would suffer some wasted costs in consequence of the extension of time granted to the respondents to file the amended defence, and it was wrong in those circumstances to hold that the question of who should pay the costs thrown away should be reserved until after the trial.
  2. [88]
    As to additional costs and wasted costs, the President said this at [84] of her judgment of 17 February 2017:

“It is difficult to determine the scale of additional and wasted costs at this stage of the proceedings. That is better done after trial. However, I accept there will be considerable cost consequences for both Cherwell Creek and BMA; some additional and some wasted. Even discounting Cherwell Creek’s assessment by 50%, the figure is substantial.”

  1. [89]
    Before the President, Cherwell Creek submitted that the appropriate costs order was, “BMA pay Cherwell Creek’s legal and expert costs thrown away as a result of the amendments [which] ought to be calculated following the trial and not be enforceable until that time”.[17]  It contends for the same order on appeal.
  2. [90]
    In my view the President’s discretion as to costs did miscarry.  She found that there would be costs wasted as a result of the late amendments to the defence.  The fact that no calculation of the amount of these wasted costs can sensibly be performed until after trial, does not mean that the question of BMA’s liability to pay the costs should not be determined now.  In my view Cherwell Creek should have an order in the terms it sought below.

Disposition

  1. [91]
    The orders I would make are:
  1. Grant leave to adduce further evidence;
  1. Dismiss appeal number LAC001-17, and
  1. Allow appeal number LAC002-17 and order that BMA pay the costs thrown away by reason of its having leave to file the amended defence dated 30 November 2016, such costs not to be assessed until after the trial and determination of Proceeding MRA1332-08;
  1. Grant leave to the parties to make written submissions as to costs of the appeal within 14 days of the delivery of this judgment.
  1. [92]
    MEMBER COCHRANE: I concur with the reasoning of Dalton J and the orders she proposed.
  2. [93]
    MEMBER ISDALE:  I agree with the reasons of Dalton J and with the orders proposed.

DALTON J

WL COCHRANE

MEMBER OF THE LAND COURT

WA ISDALE

MEMBER OF THE LAND COURT

Footnotes

[1]House v The King (1936) 55 CLR 499; Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170.

[2]  (2009) 239 CLR 175.

[3]Mineral Resources (Peak Downs Mine) Amendment Act 2008.

[4]  Section 334ZJ(5)(a)-(h) of the Mineral Resources Act 1989.

[5]  For example, Transcript 28 November 2014, tt 1-7, 1-8.

[6]  Transcript 28 November 2014, tt 1-6, 1-8, 1-10.

[7]  Transcript 28 November 2014, t 1-9.

[8]  Transcript hearing 19 April 2016, tt 1-3, 1-4, 1-5, 1-14.

[9]  Transcript hearing 19 April 2016, t 1-22.

[10]  The issue of compensation was raised, and quantified at $180 million, in BMA’s objection to Cherwell Creek being granted EPC545 in 2006.  Cherwell Creek’s solicitors also had notice of the claim in a letter copied to them in 2007.  These were exhibits 4 and 5 before the President.

[11]  15 February 2016.

[12]  Affidavit of Alana Maree Petty, 30 January 2017, paragraphs 13-25.

[13]  Transcript below, 10 February 2017, t 1-44.

[14]General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, and r 171(1)(a) UCPR 1999.

[15]  Paragraph 11(c)(vi).

[16]Wills v Minerva Coal Pty Ltd (No 2) (1998) 19 QLCR 297; ie, Xstrata Coal Qld Pty Ltd & Ors v Keys & Ors (2013) 34 QLCR 186 and McDowall v Reynolds [2015] QLC 32.

[17]  Written submissions, paragraph 8.

Close

Editorial Notes

  • Published Case Name:

    Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No. 6)

  • Shortened Case Name:

    Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No. 6)

  • MNC:

    [2017] QLAC 1

  • Court:

    QLAC

  • Judge(s):

    Dalton J, Member Cochrane, Member Isdale

  • Date:

    20 Sep 2017

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Adam P Brown Male Fashions Proprietary Limited v Phillip Morris Incorporated (1981) 148 C.L.R 170
2 citations
Jump To
Cite 1 - (1981) 148 C.L.R 170
Cite 2 - (1981) 148 C.L.R 170
Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175
2 citations
Jump To
Cite 1 - (2009) 239 CLR 175
Cite 2 - (2009) 239 CLR 175
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
2 citations
Jump To
Cite 1 - (1964) 112 CLR 125
Cite 2 - (1964) 112 CLR 125
House v The King (1936) 55 CLR 499
2 citations
Jump To
Cite 1 - (1936) 55 CLR 499
Cite 2 - (1936) 55 CLR 499
McDowall v Reynolds [2015] QLC 32
2 citations
Jump To
Cite 1 - [2015] QLC 32
Cite 2 - [2015] QLC 32
Wills v Minerva Coal Pty Ltd (No 2) (1998) 19 QLCR 297
2 citations
Jump To
Cite 1 - (1998) 19 QLCR 297
Cite 2 - (1998) 19 QLCR 297
Xstrata Coal Qld Pty Ltd & Ors v Keys & Ors (2013) 34 QLCR 186
2 citations
Jump To
Cite 1 - (2013) 34 QLCR 186
Cite 2 - (2013) 34 QLCR 186

Cases Citing

Case NameFull CitationFrequency
Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No 23) [2020] QLC 182 citations
Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No 25) [2020] QLC 222 citations
Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No 27) [2020] QLC 322 citations
1

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