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- Unreported Judgment
Deimel v Phelps & Anor (No. 2) QLC 21
LAND COURT OF QUEENSLAND
Deimel v Phelps & Anor (No 2)  QLC 21
Mark Harry Phelps and Christine Phelps
Applications for costs
12 April 2019
Submissions closed 8 March 2019
Heard on the papers
As regards both MLA 100140 (MRA369-17) and EPM 25185 (MRA150-18):
PROCEDURE – COSTS – JURISDICTION – where the Land Court made determinations as to compensation for resource tenures – where s 34 of the Land Court Act 2000 applies – where s 281(7) of the Mineral Resources Act 1989 applies – where the considerations under both statutes are essentially the same – where the Land Court has a discretion – where the respondents claim costs of professional fees as outlays
Land Court Act 2000, s 34
Mineral and Energy Resources (Common Provisions) Act 2014, s 97
Mineral Resources Act 1989, s 281(7)
BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd (2009) 30 QLCR 140;  QLAC 5, followed
BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd (No 2) 30 QLCR 173;  QLAC 8, followed
Deimel v Phelps & Anor  QLC 4, cited
Starr v Appleton  QLC 102, followed
Wyatt v Albert Shire Council  1 Qd R 486; (1986) 61 LGRA 116;  QPLR 409, followed
W Deimel, the applicant (self-represented)
M Phelps, a respondent (self-represented), for the respondents
- On 6 February 2019, I delivered my decisions on two closely related matters before the Court involving the same parties. Mr Deimel (the applicant in each matter), who conducts mining operations, sought determinations of compensation payable to Mr and Mrs Phelps (the respondents in each matter) with respect to two mining tenures.
- The first file before the Court (MRA369-17) relates to Mining Lease Application 100140 (MLA 100140). The applicant sought a determination of compensation payable to the respondents in order to allow MLA 100140 to be granted.
- The second file, MRA150-18, relates to an already granted exploration permit for minerals (EPM 25185) where the applicant sought a determination of compensation payable to the respondents in order to allow advanced activities under EPM 25185 to occur.
- The respondents in each matter now make applications for costs. The applications were heard on the papers.
- The first question to address is whether s 34 of the Land Court Act 2000 (LCA) is the source of the Court’s power to make orders as to costs in these matters. This is an important consideration, given that s 34(1) states that the section is subject to the provisions of that Act or another Act to the contrary.
- Put simply, if other legislation makes specific reference to orders that may be made as to costs, that legislation prevails over s 34. Compensation with respect to advanced activities on EPM 25185 was determined under the Mineral and Energy Resources (Common Provisions) Act 2014 (the MERCP). In particular, s 97 of the MERCP sets out the power of the Court to make certain orders. Neither s 97, nor any other relevant part of the MERCP, makes any reference to legal costs of proceedings. Accordingly, s 34 of the LCA applies with respect to MRA150-18.
- The situation is however different with respect to MLA 100140. Compensation with respect to MLA 100140 was determined pursuant to s 281 of the Mineral Resources Act 1989 (the MRA). By s 281(7), the Land Court is given power to make such order as to costs between the parties to the determination as it thinks fit. Accordingly, as there is a specific power as to costs contained within the MRA, s 34 of the LCA does not apply for MRA369-17.
- It is necessary in determining these applications to therefore consider s 34 of the LCA with respect to the EPM matter, and s 281(7) of the MRA with respect to the MLA matter.
- Turning first to s 34 of the LCA, subsection (1) confers a discretion on the Land 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.
- As the Land Appeal Court said in BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd, 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.
- In BHP Queensland Coal Investments Pty Ltd & Ors v Cherwell Creek Coal Pty Ltd (No 2), the Land Appeal Court observed that the Local Government Court’s power to award costs under s 31(1) of the 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 can be relied upon to guide the Land Court in exercising its discretion whether to award costs under s 34.
- Referring specifically to Wyatt, the Land Appeal Court went on at  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.”
- 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:
- (a)Costs are in the discretion of the Court.
- (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.
- (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.
- (d)The nature of the parties to the litigation and the nature of the representation utilised are relevant factors.
- (e)The reasonableness or otherwise of the conduct of parties to the litigation is a relevant factor.
- (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.”
- I now turn to consider s 281(7) of the MRA. It is to be noted that this section uses identical wording to that considered in Wyatt. That is, the Court is to make such order as to costs “as it thinks fit”. Therefore, applying the same logic as that of the Land Appeal Court in BHP (No 2), essentially the same considerations are to be taken into account by the Land Court when determining an application for costs under MRA s 281(7) as s 34 of the LCA.
Submissions by the parties
- The respondents point out that independent valuation evidence formed the basis of the evidence used in the determination of compensation for both MRA369-17 and MRA150-18. Not only was an independent expert valuation report provided to the Court and to the applicant in both matters, the expert witness, Mr Cameron, gave evidence and was cross-examined at the hearing.
- The respondents also submit that it was necessary for them to obtain legal advice to better understand the legal process relating to these matters.
- The respondents further say that every effort was made to minimise professional costs in this process, while at the same time presenting the Court with independent expert evidence. In the view of the respondents, it is impossible for a lay person to provide the expert evidence required by the Land Court unless professional advice is obtained.
- It should be noted at this point that the respondents are only seeking to recover professional outlays incurred by them with respect to valuation and solicitor costs. They have provided invoices from Mr Cameron’s firm in the sums of $2,750 for the valuation report and $770 for Mr Cameron’s time giving evidence before the Court, making a total of $3,520. They have also provided an itemised invoice from Creevey Russell Lawyers in the sum of $1,650.
- The respondents claim the total sum of $5,170 for costs by way of outlays.
- The applicant submits that both cases may have been resolved at a very early stage in the negotiations had the respondents taken into proper account the information presented to them both by himself and available through the relevant State government department. The applicant relies on reasoning set out in my decision on compensation wherein I refused to make provision for the legal and valuation costs as a claimed head of compensation under either the MRA or the MERCP.
- In addition, the applicant notes that certain aspects of the evidence of Mr Cameron, both orally and in his valuation report, were not accepted by the Court. In these circumstances, the applicant does not consider it appropriate that he should be forced to pay for the cost of such report or evidence.
- The applicant is also critical of the invoice provided by Creevey Russell Lawyers. In his view of the schedule of events set out in the invoice, he claims that no meaningful results were arrived at due to the early termination of the lawyer’s contract.
- The applicant seeks that there be no order as to costs in either matter.
- To begin with, the respondents are correct in only seeking recovery of outlays. As they were not legally represented at the hearing of this matter, they are unable to recover general costs as to their time attending Court for the hearing, et cetera. I am, however, prepared to consider the respondents’ claims for outlays.
- As I pointed out in my earlier decision in these matters, legal and valuation costs did not form part of the heads of compensation payable under the MRA, and therefore, they did not feature as a head of compensation in that determination. Although legal and valuation costs were recoverable under certain circumstances as part of the negotiation process in the MERCP, the respondents incurred such costs too late in the process to recover same as a head of damage. Insofar as the applicant has pointed this out in his submissions, he is correct. The applicant has, however, failed to grasp that there is a distinction between recovery of legal and valuation fees as a head of compensation and recovery of outlays by way of costs under s 34 of the LCA or s 281(7) of the MRA.
- The applicant has correctly pointed to certain criticisms that I made of the evidence of Mr Cameron. However, what the applicant has failed to have proper regard to is that substantial parts of Mr Cameron’s evidence were relied on by the Court and formed part of the critical evidence taken into account in determining compensation in both matters. There is absolutely no doubt that the task of the Court to make determinations of compensation in both matters was significantly enhanced by the evidence of Mr Cameron, despite its shortcomings in some regards.
- It is also relevant to note that the determinations that I made in both matters are somewhat distant to the submissions made, and evidence given, as to compensation by the applicant and the respondents. As regards the applicant’s submissions, the final determinations were much higher than that proposed by the applicant; as regards the respondents submissions, the final determinations were significantly lower than that proposed by the respondents.
- The Court recognises the significant expense that parties may incur in presenting expert evidence to the Court. However, the Court also recognises the great benefit that it often receives by having placed before it independent expert evidence in general and, as regards compensation matters, expert valuation evidence in particular.
- In the case at hand, while it is true that the valuation evidence came late in the process after negotiations had essentially concluded, the Court, nonetheless, obtained assistance by having such evidence before it. Due to the rejection of part of the valuation evidence by the Court, and also because of the circumstances surrounding the very late engagement by the respondents of Mr Cameron, and taking into account the fact that the final determinations of compensation fell between the contentions made by the applicant and the respondents, this is an appropriate case where each party should bear half the cost of the expert valuation evidence and report. I accept the invoices made by Mr Cameron’s firm as reasonable. Accordingly, it is appropriate that each party pay $1,760 for Mr Cameron’s report and time giving evidence.
- It follows that the applicant should pay to the respondents the sum of $1,760 for the respondents’ outlays on the expert valuation report and evidence. It must be emphasised that this amount represents a single payment for such outlays in both matters.
- I now turn to the claim for outlays for legal expenses. I have carefully considered the invoice submitted in this regard. It is abundantly clear to me that a large number of the itemised claims could appropriately be classified as solicitor and own client costs. I agree with the applicant that such costs are not recoverable.
- I also agree with the applicant that it is not just in these matters for the applicant to bear the legal costs incurred by the respondents in circumstances where the solicitors were not engaged by the respondents at the hearing, nor at any of the earlier negotiations. The solicitors were engaged for only a brief period after the bulk of negotiations had taken place and before the matters proceeded to hearing.
- In all the circumstances, I do not consider it appropriate to make any order as to the payment of the respondents’ outlays with respect to their solicitors’ fees.
- I allow the applications for costs by the respondent, and fix such costs in the total sum of $1,760 for both matters. To remove any doubt in the event that there is dispute between the parties as to the payment of costs, 50% of the sum of $1,760 is deemed to be with respect to MLA 100140 (MRA369-17) and 50% of the sum of $1,760 is deemed to be costs with respect to EPM 25185 (MRA150-18).
- The applicant is to pay the total sum of $1,760 to the respondents within 30 days of the handing down of this decision.
As regards both MLA 100140 (MRA369-17) and EPM 25185 (MRA150-18):
- The applications by the respondent for costs are allowed.
- The applicant is ordered to pay the respondents the total sum of One Thousand Seven Hundred and Sixty Dollars ($1,760) for costs with respect to both matters.
- To remove any doubt, should there be dispute between the parties as to the payment of costs, 50% of the sum of One Thousand Seven Hundred and Sixty Dollars ($1,760) is deemed to be with respect to MLA 100140 (MRA369-17) and 50% of the sum of One Thousand Seven Hundred and Sixty Dollars ($1,760) is deemed to be costs with respect to EPM 25185 (MRA150-18).
- The applicant is to pay the total sum of One Thousand Seven Hundred and Sixty Dollars ($1,760) to the respondents within thirty (30) days of the handing down of this decision.
MEMBER OF THE LAND COURT
- Published Case Name:
Deimel v Phelps & Anor (No. 2)
- Shortened Case Name:
Deimel v Phelps & Anor (No. 2)
 QLC 21
12 Apr 2019