McDowall v Reynolds[2017] QLC 8

LAND COURT OF QUEENSLAND

Background

1. [1]
   This is the decision in respect of an application by the respondent that the applicant should pay the respondents’ costs relating to a matter which was referred to this Court by the Mining Registrar at Mareeba. The referral was for determination of the compensation which was payable in respect of an application to renew a mining lease (ML5402).

2. [2]
   The mining lease is located within the Mareeba Mining District and is held by Mr Donald Keith McDowall. The subject lot is located on land owned by Mr John Keith Reynolds.

3. [3]
   Mr Donald Keith McDowall is the holder of the mining lease which was originally granted in 1974 for a period of 16 years and has subsequently been renewed.

4. [4]
   In the past the compensation which was determined in respect of the mining lease was a sum of less than $2,000 per annum.

5. [5]
   An important feature of the background to the determination of compensation in the present case was that over time the highest and best use of the land had changed. In the past it could be regarded only as being relatively unusable rural land but, because of the impact of the sale of an adjoining lot as a rural lifestyle property possessing exceptional views, the landowner successfully contended before me that I should assess the compensation payable on the basis that the presence of the mining lease on the subject land prevented the sale of the land as a rural lifestyle block possessing exceptional views.

6. [6]
   At the hearing of this matter Mr Reynolds was represented by Mr Dean Morzone of counsel and Mr McDowall was represented by his son Lee Richard Albert McDowall.

7. [7]
   Mr Reynolds himself gave evidence and also called an expert valuer, Mr Teves, who had prepared two reports which became exhibits before the Court.

8. [8]
   The applicant called no expert evidence but did give evidence himself.

9. [9]
   The evidence of Mr Teves was that the presence of the mining lease effectively rendered the property worthless.

10. [10]
    Mr Teves prepared an alternative report which contended for compensation in the sum of $490,000.

11. [11]
    Ultimately I reached the view that compensation should be contemplated in the way contended by Mr Teves and Mr Reynolds but that any compensation calculated should be reduced by the rental revenue which might be achieved in respect of the balance of the land not burdened by the mining lease.

12. [12]
    The valuer, Mr Teves, had contended that compensation for the 21-year period ought be assessed at $490,000 which produced an annual figure of $23,333 but it should also be recognised that the annual rental on the property of $7,000 must be offset against the loss from the mining lease.

13. [13]
    I concluded that the compensation payable was $17,930 which was calculated using a base figure of $23,300 from which the rental income of $7,000 was deducted and to which the s 281(4)(e) Mineral Resources Act 1989 (MRA) figure of $1,630 was to be added.

14. [14]
    That figure was dramatically higher than the figure contended for by Mr McDowall, who in one document delivered to the Court, contended:^[1]

“Now, having very poor access and an idle mineral lease, I state no compensation is payable to J.K. Reynolds.”

15. [15]
    In a later document dated 17 February 2012 the respondent, Mr McDowall, acknowledged that some compensation is due but says it is “pending the determination of the land court.”^[2]

16. [16]
    In his final submissions the respondent, Mr McDowall, advanced various calculations for the determination of compensation, including figures of $4.13 payable for the loss of productive land on which to grow sugarcane or, alternatively, between $247.50 and $330 for compensation for the loss of productive land, no compensation payable for reducing the capacity to graze cattle on the subject property, no compensation for administrative costs incurred by Mr Reynolds to check on compliance with lease conditions, no compensation for dust nuisance, and no compensation for potential loss of income from the rental of the farmhouse. It was difficult to otherwise comprehend many of the points raised by Mr McDowall in his final submissions and it was noteworthy that, ultimately, he did not contend for any particular figure in respect of compensation.

The costs decision

17. [17]
    In the light of the matters set out in the background above, the landowner, Mr Reynolds, subsequent to receiving the decision, made an application for costs. Orders were made that submissions in that regard be provided by the parties and it was agreed that the matter would be determined on the papers.

18. [18]
    Submissions together with a list of authorities were received from the respondent, Mr Reynolds, on 28 August 2015 and from the applicant Mr McDowall on 18 September 2015. The respondent filed a reply on 27 September 2015.

19. [19]
    In his submissions the respondent sought payment of his costs of and incidental to the hearing of this matter in the sum of $28,600.

20. [20]
    That sum was calculated having regard to the following table:

21. [21]
    The respondent, although this was not explicitly stated in its submissions, was seeking that its costs ought be paid on an indemnity basis, although, in the final paragraph of its submissions it submitted in the alternative that costs ought be paid on the standard basis.

22. [22]
    The source of this Court’s power to award costs in the determination relating to compensation payable pursuant to the MRA is to be found in s 281 of the MRA. Section 281(5) provides:

1. “(5)
   In any case the Land Court may determine the amounts and the terms, conditions and times when payments aggregating the total compensation payable shall be payable.

3. (6)
   An amount of compensation decided by agreement between the parties, or by the Land Court, is binding on the parties and the parties’ personal representatives, successors and assigns.”

23. [23]
    Section 281(7) of the MRA provides that, “The Land Court shall give written notice of its determination to all parties and may make such order as to costs between the parties to the determination as it thinks fit.”

24. [24]
    That provision is, to some extent, reinforced by the provisions of s 34(1) of the Land Court Act 2000 which provides:

“34  Costs

3. (1)
   Subject to the provisions of this or another Act to the contrary, the Land Court may order costs for a proceeding in the court as it considers appropriate.”

25. [25]
    The awarding of costs is a purely discretionary matter and no statutory guidance is provided in respect of that matter. Each case depends on its own particular facts and circumstances.

26. [26]
    The decision of the Land Appeal Court in Anson Holdings^[3] had to consider the circumstances in which the Land Appeal Court ought be moved to make an order for costs against a party to proceedings before it.

27. [27]
    In that case an appellant against an order that it should pay a first respondent’s costs of and incidental to an appeal contended that there should be no order as to costs on a number of grounds.

28. [28]
    Included in those grounds was the proposition that:^[4]

“the Land Court and the Land Appeal Court have demonstrated a longstanding approach recognizing the desirability of maintaining easy access to the Land Court in revenue appeals.  This has been extended to water licences – Dawson v Chief Executive, Department of Natural Resources and Mines.  That approach should be extended to mining applications because the grant of a mining lease could be at least as significant to a landowner’s property and rights as a water licence decision.  On the basis of such an approach, the parties should bear their own costs.”

29. [29]
    The Land Appeal Court in the Anson decision pointed to the large number of decisions of the Land Court and The Land Appeal Court in which it has been held that the discretion given to the Land Court by s 34 of the Act is complete and that discretion with respect to costs is not vetted by any preconceived rules or principles other than that the discretion is to be exercised judicially.^[5]

30. [30]
    The Land Appeal Court in the Anson decision also referred to the then more recent decision in PT Limited & Westfield Management Limited^[6] in which decision the Land Appeal Court emphasised that where the Land Court has given discretion to order the payment of costs the court ought not be bound by any presumptive rule or principle although the court was not excluded from resorting to settled practice.^[7]

31. [31]
    In the Anson decision the Land Appeal Court said as follows:^[8]

“The Court [i.e. the Land Court] recognized that there may be any number of factors which a court vested with general jurisdiction to award costs might entertain – one such factor is the outcome of litigation; another might be the overall purpose of the legislation. The Court said that it is entirely in accordance with the proper exercise of the discretion to award costs to give effect to the matters expressed in Bowden, but those observations should not be read as imposing a gloss on the legislation mandating when the discretion ought be exercised or not exercised. Ordinarily costs are not awarded to punish the unsuccessful parties. Costs are intended to compensate the successful party against the expense which he or she has incurred by reason of the legal proceedings.”

32. [32]
    Then later in their decision the Land Appeal Court observed:^[9]

“When exercising the discretion under s.34(1) with respect to mining lease applications, it is legitimate for the court to take into account the fact that the landholder who objects to the grant of a mining lease is exercising a statutory right to object, in circumstances where the grant of a mining lease could lead to an unwelcome intrusion on to the landowner’s property. Clearly, landholders who face having their way of life and operations on their land changed, sometimes dramatically, through mining activities in many respects beyond their control, should not be discouraged from pursuing proper concerns in an appropriate manner before both this Court and the Land Court. Similarly the conduct of the miner in the objection and appeal process is relevant.”

33. [33]
    In the present case, as commented upon above, the highest and best use of the land had changed during the lifetime of the extant lease. It had changed from being a purely rural situation to one where changed residential town planning and market factors had created the situation where the land achieved that status of a rural lifestyle block with significant beneficial views.

34. [34]
    That change in the circumstance of the land itself led to a situation where the land owner successfully argued that it was entitled to a much more significant financial contribution for the effective loss of the use of the land for the period of the mining lease, effectively equivalent to a resumption.

35. [35]
    Against that, the miner, confronted by a contention that the compensation payments for retention of the lease should be significantly increased to reflect the changed context of the land, sought the comfort of this court making a determination about what the actual compensation should be.

36. [36]
    I do not regard that aspect of the conduct of the miner as being unreasonable.

37. [37]
    Neither, of course, was the conduct of the land owner in seeking to achieve compensation which more properly reflected the potential loss to the landowner occasioned by the presence of a mining lease which burdened his land and interfered with his capacity to make use of that rural lifestyle opportunity.

38. [38]
    The applicant submits in his written submissions that the court ought to approach this case mindful that some cases constitute what is colloquially referred to as “test case proceedings”. In making that submission the applicant drew the court’s attention to the observations of Member Smith in his citing with approval the observation of President MacDonald in Xstrata Coal (Queensland) Pty Ltd,^[10] where her Honour said:^[11]

“the proceeding determined and clarified important issues of law affecting the community generally and the proceedings have affected the development of the law generally which should reduce the need for future litigations. As such they have the character of test case proceedings.”

39. [39]
    In its submissions the applicant said as follows:^[12]

“In the present case, the Respondent relied on valuation evidence based on the potential of the property as a “Rural / Residential Lifestyle Property”. This issue has only “emerged in the recent past”. It is therefore a point that is not previously been tested, and it is submitted that the applicants should be given the benefit of the doubt with respect to the prospect of costs order being made against him, in the light of the ‘test case’ status.”

40. [40]
    I do not accept that this case was in the sense in which the term is generally used a “test case”. The valuation evidence of Mr Teves was available to the applicant prior to the hearing of this matter and the applicant chose to call no evidence at all in respect to the valuation or the use of the land.

41. [41]
    The existence of the sale relied upon by Mr Teves was well publicised and susceptible to detailed checking by the applicant but that opportunity was not grasped by the applicant.

42. [42]
    It was also submitted by the applicant that the fact that the applicant chose to be self-represented, in circumstances where the respondent engaged a legal representative including counsel, weighs against any proposition that the applicant ought to be ordered to pay costs. No proper justification is provided in respect of that assertion.

43. [43]
    The applicant was at all times prior to the hearing of this matter aware that it was confronted by a submission that the highest and best use of the land had changed over time.

44. [44]
    There was no attempt by the applicant to address that issue and the applicant maintained the position that any compensation payable should be of a relatively minor amount.

45. [45]
    In particular, the applicant chose not to engage the services of a valuer in circumstances where it was glaringly obvious that for any real chance of success such evidence would need to be put before the court in a cogent form.

46. [46]
    Ultimately, of course, I found that the amount payable was of a quite significant sum.

47. [47]
    Against that, however, is the fact that the respondent maintained a claim for a number of grounds upon which he ultimately failed including remedial works, lost area for cane production and consequent loss of income, extra costs of cleaning because of dust nuisance, and administrative costs alleged to be likely to be incurred because of the need for regular inspections.

48. [48]
    In summary, I am of the view that it was entirely reasonable for each of the parties in this matter to rely upon the court to unravel the opposing contentions with respect to an appropriate figure for compensation and I am mindful that on each side of this matter there were allegations and contentions raised by the parties in respect of which each failed at the hearing before me.

49. [49]
    In all of the circumstances of this case I can find no proper basis for making an award of costs, even one which is apportioned with respect to areas in which the respondent was ultimately successful, and so the only order I feel able to make is that I dismiss the application for costs with the consequence that each party will have to bear their own costs of this proceeding.

WL COCHRANE

MEMBER OF THE LAND COURT