Australia: Costs in the context of matters with a long history: Chief Executive, DERM v Australis Mining Operations Qld Pty Ltd & Anor

Last Updated: 2 September 2016
Article by Olivia Williamson

Take home points

Initial discouragement of the course of action which ultimately resolves a proceeding may be considered unfortunate, but it does not necessarily constitute conduct that is vexatious.

Where a matter has an unusually long history, the Court will have regard to when an offer that is capable of acceptance to bring an end to the proceeding actually arises. Conduct will not necessarily be vexatious or cause delay in circumstances where the offer doesn't arise until a later point in time.

The Court's consideration of the former section 457(2) of the Sustainable Planning Act 2009 (SPA) in this case remains relevant as the costs powers in the incoming Planning Act 2016 mirror the regime at that time - that is, the ordinarily rule that each party bear its own costs unless a section 457(2) circumstance exists and the Court exercises the discretion conferred by section 457(2) to order costs.

Analysis of the case

This matter concerned an application for costs arising out of an originating application proceeding instituted by the then Department of Environment and Resource Management (Department) pursuant to section 505 of the Environmental Protection Act 1994, seeking orders requiring rehabilitation works at the site of a discontinued sapphire mine.

The originating application was filed on 23 December 2009. The proceeding was ultimately discontinued by the Department on 20 May 2015 after a third party obtained rights to reopen the mine, subject to obligations with respect to rehabilitation.

The respondent sought to recover their costs under section 457(2)(a),(b) and (i) of the Sustainable Planning Act 2009 (SPA). Because the proceeding was commenced in December 2009, the costs application was pursuant to the former section 457(2) of the SPA.

The essential underlying complaint was the Department's decision to continue to prosecute the proceeding instead of adopting the alternative, and ultimately successful, avenue towards a resolution based on a third party taking responsibility for the mining and rehabilitation of the site. The respondent's submissions summarised the alleged bases for a costs order under the sub-headings of 'delay', 'a more efficient way to deal with rehabilitation', 'rejection of offers', 'funding the rehabilitation' and 'hardship'.

A history of the proceedings is as follows:

23 December 2009 Originating Application filed
November 2010 Hearing of the application and delivery of written submissions
December 2010 Reply submissions delivered by the parties and respondents granted leave to re-open their case to tender further evidence
February 2011 Further evidence heard and further written submissions delivered
April & June 2011 Matter adjourned pending outcome of Land Court proceedings relating to applications for mining lease on the site and on an adjoining site
25 July 2013 Land Court recommends grant of mining leases - [2013] QLC 46
20 December 2013 Land Court determines compensation payable for mining leases - [2013] QLC 68
20 May 2015 Leave granted to discontinue
1 June 2015 Costs application filed

In the course of the hearing on 11 February 2011, there were two courses reasonably open to deal with the prospect that the land might be mined again and become subject to new rehabilitation responsibilities (thereby affecting the utility of ordering rehabilitation in the meantime). The first (urged by the Department) was to determine, by judgment, the substantive issues and then consider suspending the operation of any rehabilitation order. The second was to adjourn the further hearing to permit time for the mining lease application to progress (a course that might potentially render consideration and determination of the contested substantive issues unnecessary). The fact that the matter took the latter course did not alter that the Department was contending for the matter to proceed to judgment.In dismissing the application for costs in reasons published on 29 July 2016, His Honour Judge Rackemann made the following observations:

  • The mining lease process took longer than anticipated as the issue of a lease over the site became the subject of Land Court proceedings.
  • None of the above suggests that there was any lack of merit in the Department's case at the time the proceeding was instituted or at the time of the hearing.
  • In relation to the respondent's contention that the Department did not, at least initially, respond positively to the suggestion of pursuing the prospect of resolution on the basis of responsibility for rehabilitation being taken over by a third party (which the respondent said resulted in the Department continuing the proceeding primarily to delay, vexatiousness and not properly discharging its responsibilities in the proceeding), His Honour held that this is not a case where the Department attempted to elongate the subject proceeding. Indeed, it urged the Court to proceed to judgment. The Court was not prepared to infer that the Department intentionally continued the subject proceeding to prevent the third party from assuming responsibility for site rehabilitation.
  • At the time the hearing proceeded, there was no offer then capable of acceptance to bring an immediate end to the proceeding. While it was unfortunate that the third party was discouraged from making its application, that does not constitute that the subject proceeding, or part of it, as vexatious.
  • The utility of the present proceeding was not extinguished until a later point in time.

Taking all the above into account, the Court considered that sections 457(2)(a),(b) or (i) were not engaged and it was therefore not appropriate to order the applicant to pay the respondent's costs.

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