Queensland Judgments
Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 6)[2017] QLC 57

Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 6)[2017] QLC 57

LAND COURT OF QUEENSLAND

CITATION:

Citigold Corporation Limited v Department of Environment and Heritage Protection (No. 6) [2017] QLC 57

PARTIES:

Citigold Corporation Limited

(appellant)

 

v

 

Chief Executive, Department of Environment and Heritage Protection

(respondent)

FILE NO/s:

EPA055-15

DIVISION:

General Division

PROCEEDING:

Applications for costs

DELIVERED ON:

29 November 2017

DELIVERED AT:

Brisbane

HEARD ON:

Submissions closed 18 April 2017

HEARD AT:

Heard on the papers

MEMBER:

PA Smith

ORDER/S:

  1. The appellant’s application for costs, including its application for certain costs on an indemnity basis, is dismissed.
  2. The respondent’s application for costs, including its application for certain costs on an indemnity basis, is dismissed.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – Where court made a decision on an appeal as to the amount of financial assurance to be provided by the appellant – where both the appellant and the respondent seek their costs of the appeal – where both the appellant and the respondent seek part of their costs on an indemnity basis

City of Brisbane Town Planning Act 1964, s 31

Land and Resources Tribunal Act 1999, s 50

Land Court Act 2000, s 34

BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd (2009) 30 QLCR 140

BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd (No. 2) (2009) 30 QLCR 173

Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 5) [2016] QLC 62

Starr v Appleton [2009] QLC 102

Titan Sandstone Pty Ltd v ChongHerr Investments Pty Ltd [2009] QLC 47

Wyatt v Albert Shire Council [1986] 1 Qd R 486

APPEARANCES:

K McIntyre of Counsel, instructed by Holding Redlich for the appellant

JT Dillon of Counsel, instructed by Litigation Unit, Department of Environment and Heritage Protection for the respondent

Introduction

  1. [1]
    On 31 October 2016 I allowed an appeal as to the amount of financial assurance to be paid by the appellant to the respondent. The decision was complex and lengthy.[1] Each party now seeks costs orders in their favour, including that some of the costs be assessed on an indemnity basis.
  1. [2]
    Both parties supported their applications for costs by affidavit evidence and written submissions. The applications were heard on the papers.

General Principles

  1. [3]
    It is not in dispute in this matter that section 34 of the Land Court Act 2000 is the source of the court’s power to make orders as to costs. Section 34(1) confers a discretion on the court to order costs in a proceeding as it considers appropriate. Section 34(2) goes on to state that, if the court does not make an order under s 34(1), each party to the proceeding must bear their own costs.
  1. [4]
    As the Land Appeal Court said in BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd,[2] the Land Court has a discretion to award costs unconfined except in so far as the subject matter and scope of the legislation does so; the discretion must be exercised judicially and in accordance with established principles and factors relevant to the litigation; and a significant factor influencing the exercise of the discretion to award costs is the outcome of the litigation.
  1. [5]
    In BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd (No. 2)[3] the Land Appeal Court observed that the Local Government Court’s power to award costs under s 31(1) City of Brisbane Town Planning Act 1964 “as it thinks fit” was similar to the Land Court’s power to award costs under s 34 “as it considers appropriate”. Hence relevant legal authorities relating to costs decisions under s 31(1) such as Wyatt v Albert Shire Council[4] can be relied upon to guide the Land Court in exercising its discretion whether to award costs under s 34.
  1. [6]
    Referring specifically to Wyatt, the Land Appeal Court went on at [6] in BHP (No. 2) to observe:

“The discretion is not to be exercised arbitrarily, but judicially, that is, for reasons that can be considered or justified. Resort may be had to any settled practice of a court but a purported exercise of discretion which fails because the mind is closed to relevant considerations through a rigid adherence to preconceptions is an error of law. Thus an approach that required exceptional circumstances to be established before such a wide discretion is exercised is likely to be incorrect. Similarly it would not be right to start with the preconception that costs follow the event. The Court also said that it would be wrong to attempt to lay down rules governing the exercise of the discretion and each case should be governed by its circumstances.”

  1. [7]
    In addition, I note the comments of then Member Keim SC when assessing costs in relation to an unsuccessful rehearing application of a mining compensation determination. The learned Member said:

“It follows from the authorities cited that a number of principles apply to the discretion created by s.34 of the Act. They include the following:

  1. (a)
    Costs are in the discretion of the Court.
  1. (b)
    The discretion must be exercised judicially. That is, it must not be exercised by reference to matters which are irrelevant or in an arbitrary manner.
  1. (c)
    Success in the litigation and the degree of success of one party or another is a consideration to which considerable weight must be given.
  1. (d)
    The nature of the parties to the litigation and the nature of the representation utilised are relevant factors.
  1. (e)
    The reasonableness or otherwise of the conduct of parties to the litigation is a relevant factor.
  1. (f)
    An order that a party pay the costs of another party is not for the purposes of punishment. Rather, it is intended to indemnify the beneficiary of the order for the expenses incurred in the litigation.”[5]

The Parties contentions

  1. [8]
    Routinely, costs applications are heard and disposed of by this and other courts and tribunals following little, if any, additional evidence and concise submissions. This, however, is not one of those cases. The appellant relies on a lengthy affidavit (127 paragraphs) with 28 exhibits attached including a CD-ROM of material. The appellant’s submissions are 106 paragraphs long, and their reply submissions 169 paragraphs.
  1. [9]
    The respondent has relied on eight affidavits to support the application for costs. The respondent’s submissions are 92 paragraphs long and the submissions in reply 65 paragraphs.
  1. [10]
    The orders sought by the appellant are as follows: [6]

“1. The Respondent pay the Appellant’s costs of and incidental to the proceedings from the commencement of the proceedings until 4 March 2016 on the standard basis.

  1. The Respondent pay the Appellant’s costs of and incidental to the proceedings from 5 March 2016 to the conclusion of the proceedings (excepting the costs application) on the indemnity basis.
  2. The Respondent pay the Appellant’s costs of the application on the standard basis.

Alternatively:

  1. The respondent pay the appellant’s costs of and incidental to the proceedings on the standard basis.”
  1. [11]
    The appellant has provided an Executive Summary of the submissions in support of the proposed orders as follows:

“6. Given that:

  1. (a)
    the appeal was necessary because the Respondent had (effectively) failed to give reasons for the Original Decision;
  1. (b)
    the practical result of the proceeding was that the Appellant succeeded in demonstrating that the amount of financial assurance required to be paid by it was significantly less than the amount originally decided by the Respondent;
  1. (c)
    had it not appealed, the Appellant would have been required to pay some $7 million more in financial assurance than the amount determined by the Court to be necessary under the EP Act;
  1. (d)
    the scope of the appeal was broader (and the hearing made longer with expert evidence needing to be called) because of the Respondent’s fundamental mistaken view of the law, i.e. that the precautionary principal was a relevant matter to have regard to when deciding the amount of financial assurance; and
  1. (e)
    none of the costs of the proceeding from 5 March 2016 (including an additional 5 day hearing) would have been incurred but for the Respondent introducing a new Financial Assurance Guideline immediately after the close of evidence;
  1. (f)
    the Respondent and its legal representatives knew (or ought to have known) that the new Financial Assurance Guideline would be introduced shortly after the December 2015 hearing (i.e. before the Court made its decision) and would become the guideline which the Court would be required to have regard to;
  1. (g)
    during the course of the proceedings, at least one of the respondent’s legal representatives was involved in drafting a key change to the Version 3 Guideline which had the effect of stifling a part of the case advanced by the Appellant.

it is appropriate that the Respondent pay the Appellant’s costs up until 4 March 2016 on the standard basis and, from that date (excluding the costs application), on the indemnity basis.

  1. It is also appropriate that the Respondent pay the Appellant’s costs of this application.
  1. The Appellant submits that the circumstances of the proceeding are such – including, in particular, the Respondent drafting a new Financial Assurance Guideline which appears to have been amended with the Appellant and the facts in these proceedings directly in mind – that it would not be appropriate that the Appellant bear its own costs.”[7]
  1. [12]
    The respondent expresses the orders it seeks this way:[8]

“90. In the circumstances, the Court should dismiss the Appellant’s application and order the Appellant to pay the Respondent’s costs of the proceeding and the costs application on a standard basis.

  1. Further, or alternatively and at the least, the Court should order the Appellant to pay the Respondent’s cost:
  1. (a)
    in respect of Mr Christopher Towsey’s evidence on an indemnity or alternatively, a standard basis;
  1. (b)
    in relation to the appellant’s notification and late abandonment of experts in the course of the re-opened hearing on an indemnity or alternatively, standard basis.
  1. Alternatively, both parties’ applications should be dismissed and no order should be made as to costs.”
  1. [13]
    The respondent’s position is clearly set out at paragraphs [33] to [36] of its submissions:

“33. The Court ultimately determined financial assurance in the amount of $5,368,801.00 was payable.

  1. Although that amount is approximately half of that which was calculated by the Respondent’s expert, and sought by the Respondent, it reflects:
  1. (a)
    a 10 fold, or 1000 percent, increase over the financial assurance amount of $534,016.00 (excluding GST) calculated in the appellants 2014-2016 plan of operations and relied upon by the Appellant as its primary case;
  1. (b)
    a substantial increase in the amount of financial assurance of $4,834,785.00 as compared to the $534,016.00 (excluding GST) calculated in the Appellant’s 2014-2016 plan of operations; and
  1. (c)
    more fundamentally, a significant advancement in ensuring adequate that security exists to protect and rehabilitate the environment from the harm caused by the activities carried out by the Appellant under its environmental authority.
  1. Other matters which are relevant to the exercise of the discretion in favour of the Respondent include:
  1. (a)
    The interests of the Appellant, which is authorized by its environmental authority to carry out mining operations which cause environmental harm for commercial gain.
  1. (b)
    The public interest in the State holding sufficient financial assurance to ensure that the environment is protected consistently with the object of the Environmental Protection Act 1994 (“ the EP Act”), as set out in s 3, and s 4(6)(b) & (d).
  1. (c)
    The important public purpose of financial assurance, which is to secure compliance with the conditions of an environmental authority, and provide the State with sufficient security to prevent environmental harm or complete an environmental authority holder’s rehabilitation obligations: EP Act, s 292(1)(b).
  1. (d)
    The fact that the State derives no personal benefit from holding the financial assurance. The assurance may only be held as security for compliance with the environmental authority and remediation or rehabilitation requirements: EP Act s 292(1). If the assurance is not put to that purpose, the EP Act provides for its return: s 292(3); s 305.
  1. (e)
    The conduct of the Appellant and the delays in the matter proceeding to hearing, with respect to both the current, and past appeals, which had the effect of allowing the Appellant to maintain a lesser financial assurance amount for a significant period of time.
  1. (f)
    The conduct of the Appellant in relying upon the evidence and calculations of Mr Towsey in the 2014-2016 plan of operations instead of its own independent expert evidence, as detailed below.
  1. (g)
    The conduct of the Appellant in notifying four additional experts, and then abandoning them at a late stage in the proceeding, as detailed below.
  1. (h)
    The conduct of the Appellant in relying upon extensive new testing evidence in the course of the re-opening. The testing was carried out in May 2016, after the re-opening was granted. The testing could and should have been carried out prior to the first hearing and the first joint expert process commencing, as it was equally relevant to Version 2 of the guideline. The extensive new evidence significantly extended the time necessary for the rehearing and the costs involved.
  1. The respondent has achieved substantial success in that the amount of financial assurance required has increased by $4,834,785.00.”

Determination

  1. [14]
    An earlier draft of my decision was lengthy, examining all of the factual and legal elements of the respective cases of the appellant and respondent in forensic detail. On reflection, however, I have decided that a simpler approach is justified in determining these applications.
  1. [15]
    When all is said and done, the arguments of both the appellant and the respondent can be summarised thus: we were successful in our case, and the actions of our opponent were so unjustified, at least in part, that an order for payment of costs (in part) on an indemnity basis is warranted.
  1. [16]
    The costs applications in these matters remind me of the costs applications I considered in Titan Sandstone Pty Ltd v ChongHerr Investments Pty Ltd.[9] In Titan, each party was so convinced as to the worthiness of their own position, and the unreasonable conduct of the other side, that they each sought orders for indemnity costs against each other.[10]
  1. [17]
    In Titan, I had to say:

“[12] As I observed in my substantive decision, both parties had some measure of success. I understand that neither Titan nor ChongHerr instituted any appeal to the Land Appeal Court against the decision. Using colloquial terms, it is apparent that both sides consider that they essentially “won” the litigation, and that the other side “lost”. Having reviewed all aspects of my decision of 24 December 2008, I do not depart from my view there stated that both parties had some degree of success in the litigation.

[13] In circumstances such as this, it would seem that the only rational decision open to me would be to order that there be no order as to costs.”

  1. [18]
    Although the Court in Titan ordered that there be no order as to costs, it must be remembered that the governing legislation in that case was s 50 of the Land and Resources Tribunal Act 1999 and not s 34 of the Land Court Act 2000.
  1. [19]
    The appropriate question to ask at this point is what, then, was the true outcome of the substantive hearing in the case at hand?
  1. [20]
    The appellant, as per its relevant Plan of Operations, calculated the Financial Assurance payable to the respondent in the amount of $587,000 including GST, or $534,016 excluding GST.[11] This was the primary position put by the appellant at the conclusion of the hearing.
  1. [21]
    The appellant had two alternative positions. Both positions were framed by specific reference to the appellant’s expert, Mr Thompson. The first alternate positon was that the Financial Assurance should be fixed in the sum of $2,324,288 on the basis of infrastructure agreements being applicable. The second alternate position called for a Financial Assurance of $4,439,958 on the basis that the infrastructure agreements were not applicable.
  1. [22]
    For its part, the respondent determined the amount of Financial Assurance payable in the sum of $11,372,465. It confirmed that amount following an internal review. At the conclusion of the hearing the respondent contended for Financial Assurance in the amount of $10,728,653 as calculated by its expert, Mr Anderson.
  1. [23]
    The amount of Financial Assurance as determined by the Land Court was $5,368,801. This of course meant that the appeal was allowed and the decision of the respondent set aside.
  1. [24]
    At first blush, therefore, the order of the Court allowing the appeal supports the appellant’s contention that it was successful on the appeal. However, as the submissions show, there are many ways to measure success in this matter.
  1. [25]
    As the respondent points out, the Court’s determination was about ten times the amount contended for by the appellant and only half of that contended for by the respondent. Looked at that way, the respondent was more successful than the appellant. However, the situation reverses when the highest alternate amount contended for by the appellant is compared to the amount contended for by the respondent. Looked at that way, the appellant was successful as the alternate amount of $4,439,958 was within about 25% of the determined amount, whereas the respondent’s amount missed the mark by some 100%.
  1. [26]
    As part of the orders made on various occasions for stays, the appellant was ordered to make a financial assurance of $1,000,0000 to the respondent, effectively doubling the amount of financial assurance held by the respondent. This sum was calculated in a preliminary way but in particular noting the fact that some of the appellants mining operations were undertaken on unallocated state land (USL) and there was no infrastructure agreement between the State as holder of the USL and Citigold as regards the infrastructure on the USL. Despite warnings by the Court, the appellant nethertheless continued with its primary submission[12] that the financial assurance should be the lowest sum it contended for, which was of course approximately $5,000,000 short of the Court’s determination. Of course, the original determination of the respondent, importantly being the amount appealed against, was approximately $6,000,000 higher than the Court’s determination, and even the final sum contended for by the respondent was still approximately $5,400,000 above the Court’s determination. Looked at this way, both parties were off the mark by about $5,000,000. This supports a determination that there be no order as to costs.
  1. [27]
    Of course the appellant contends that its alternate positions as to the amount of financial assurance were closer to that as determined by the Court, being approximately $3,000,000 and $1,000,000 short respectively. The appellant though, in my view, cannot escape the fact that it fought hard for the lowest possible determination of financial assurance even in circumstances where its own expert arrived at figures which, at the best case as put by the appellant, was $3,000,000 short of the determination.
  1. [28]
    Leaving to one side at this stage the arguments as regards indemnity costs, in my view both the appellant and the respondent were only partially successful in their respective cases. Put another way, they were each as unsuccessful as the other with their respective propositions.
  1. [29]
    Of course, as discussed earlier in these reasons, the relative success or failure of the parties is not determinative of the question of costs in the Land Court, although this is clearly a factor to be taken into account in exercising my discretion.
  1. [30]
    It is appropriate at this point to consider the applications for indemnity costs. Dealing first with the appellant, its contention is that costs incurred by it after 5 March 2016 only arose as a consequence of the coming into force of Guideline 3. It was certainly common ground between the parties that this Court was bound to take into account Guideline 3, and not Guideline 2, in making its determination on the appeal, and that all of the evidence at the hearing prior to 5 March 2016 had been considered in light of guideline 2.
  1. [31]
    Although there is of course a very close relationship between the respondent and the making of Guideline 3, that in itself is not in my opinion sufficient to warrant an award of indemnity costs as sought by the appellant. The appellant however takes its argument further by contending in effect that part of the reason for the coming in to effect of Guideline 3 was these very proceedings. Given the nature of a change to Guideline 3 over Guideline 2 relating to infrastructure agreements which were of course a primary focus of these proceedings, it is understandable that the appellant had its suspicions as to the motives of the respondent. However, mere suspicions are not sufficient. Given the affidavit evidence put forward by the respondent, the appellant has not been able to raise its suspicions in this regard to anything like established facts. Its application for indemnity costs must fail.
  1. [32]
    The respondent seeks indemnity costs with respect to Mr Towsey’s evidence, and in relation to the appellant’s late notification that it would not be relying upon certain nominated experts at the rehearing despite having earlier notified that it was intending to rely upon such expert evidence.
  1. [33]
    As dealt with in the Court’s reasoning in the substantive matter, the circumstances surrounding Mr Towsey’s evidence were rather peculiar. To begin with, the appellant relied on Mr Towsey and filed a substantial affidavit containing numerous exhibits. However, early in the hearing, the appellant decided to only rely on one exhibit from Mr Towsey’s affidavit and not to rely upon any of Mr Towsey’s other evidence or exhibits, only for that position to change again. Those circumstances were certainly unusual from my observations of the hearing and based on the evidence and the submissions. The way the appellant sought to rely upon Mr Towsey’s evidence changed in light of the way the proceedings and hearing unfolded, due to the stance taken on various issues by both parties. Though unusual, I am not satisfied that the appellant’s actions as regards Mr Towsey’s evidence gives rise to an award of indemnity costs. A compelling feature is that the respondent was not in any way taken by surprise by the evidence of Mr Towsey, as his affidavit was filed a considerable time prior to the commencement of the hearing.
  1. [34]
    That leaves for consideration the question of the appellant’s notification of certain experts to provide expert evidence and then its abandonment of that position. I completely understand why the respondent took steps to engage certain experts in light of the appellant’s notification of the experts that it intended to seek expert evidence from.
  1. [35]
    There was however nothing stopping the respondent from proceeding with the expert evidence that it had engaged even though the appellant was no longer relying upon its notified experts. That was a tactical decision made by the respondent. To my mind, the actions of the appellant are certainly questionable. In my view, they can however properly be classified as tactical in nature and not of such a nature as to enliven a claim for indemnity costs. A good case may be able to be made for the appellant to pay the respondents costs on the standard basis relating to the appellant’s actions of notifying experts and then abandoning that notification, but then again the rehearing only came about, and thus the need to notify additional experts, as a result of the introduction of Guideline 3, a matter entirely outside of the control of the appellant, and at the very least certainly within the knowledge (including the ramifications to this hearing) of at the very least the entity of the respondent even if not within the knowledge of those officers of the respondent directly involved with this proceeding. Taking all factors into consideration, I am not persuaded to make any award for costs, on an indemnity basis or otherwise, with respect to the appellant’s actions as regards the nomination and subsequent abandonment of additional expert witnesses.
  1. [36]
    Taking all factors with respect to both applications for costs into account, in my view the most appropriate course to adopt is to dismiss both applications and make no order as to costs in the proceedings.

ORDERS:

  1. The appellant’s application for costs, including its application for certain costs on an indemnity basis, is dismissed.
  2. The respondent’s application for costs, including its application for certain costs on an indemnity basis, is dismissed.

PA SMITH

MEMBER OF THE LAND COURT

Footnotes

[1]  See Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 5) [2016] QLC 62.

[2]  (2009) 30 QLCR 140, para [15].

[3]  (2009) 30 QLCR 173, para [6].

[4]  [1986] 1 Qd R 486.

[5] Starr v Appleton [2009] QLC 102, para [21].

[6]  Appellant’s submissions, paras [105] – [106].

[7]  Appellant’s submissions, paras [6] – [8].

[8]  Respondent’s submissions, paras [90] – [92].

[9]  [2009] QLC 47.

[10]  Ibid, para [2].

[11]  Ultimately, all references to the amount of Financial Assurance were expressed excl. GST. All further references in this decision will be to exclude GST amounts.

[12]  Although it appeared to have abandoned this position earlier in the hearing.

Close

Editorial Notes

  • Published Case Name:

    Citigold Corporation Limited v Department of Environment and Heritage Protection (No. 6)

  • Shortened Case Name:

    Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 6)

  • MNC:

    [2017] QLC 57

  • Court:

    QLC

  • Judge(s):

    Member Smith

  • Date:

    29 Nov 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
BHP Queensland Coal Investments Pty Ltd v Cherwell Creek Coal Pty Ltd (No 2) (2009) 30 QLCR 173
2 citations
Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 5) [2016] QLC 62
2 citations
Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd (2009) 30 QLCR 140
2 citations
Re Seidler [1986] 1 Qd R 486
2 citations
Starr v Appleton [2009] QLC 102
2 citations
Titan Sandstone Pty Ltd v ChongHerr Investments Pty Ltd [2009] QLC 47
3 citations

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.