Mid-Western Regional Council v Peabody Pastoral Holdings Pty Ltd

Judgment 1LEEMING JA: This is an application for leave to appeal from a decision of Preston CJ of the Land and Environment Court on the costs of proceedings in Class 3 of the Land and Environment Court's jurisdiction which were commenced by the respondent (Peabody) against the applicant (Council) challenging the classification of rateable land owned by it as "mining - coal". 2There were three appeals under s 526 of the Local Government Act 1993 (the Act), one for each of three parcels of land of 10 hectares, 0.2 hectares (both of which Peabody contended should be residential) and 4,375 hectares (which Peabody contended should be farmland). The appeals were listed for hearing for eight days commencing 27 May 2013. 3On 23 May 2013 Council advised that it did not seek to defend its classification and on the following Monday 27 May 2013 declaratory orders were made by consent. 4There was a hearing on costs on 5 June 2013 and the primary judge delivered a judgment of 104 paragraphs on the following day. In accordance with r 3.7 of the Land and Environment Court Rules 2007, the Court could only make an order for costs if it formed the view that the making of an order for costs was fair and reasonable in the circumstances. The rule gives examples where a party has acted unreasonably by, for example, maintaining a defence which lacks reasonable prospects of success. 5Peabody had submitted that Council had acted unreasonably on a variety of bases, only one of which is the subject of challenge on this application for leave. Leave is required by reason of s 57(4)(f) of the Land and Environment Court Act 1979. 6There was evidence that the two smaller lots were zoned residential and were used for residential purposes but had been acquired by Peabody because of a requirement to do so where noise from its mine exceeded levels stated in the project approval. The larger property was used for farming but likewise was located close to two mining projects and would be affected by noise. 7Summarising the evidence, which was rather more detailed than I have set out above, his Honour identified at [59] five reasons underlying the Council's decision: "(a) the land is affected by noise from the Wilpinjong Coal Project mine; (b) the noise affected land is owned by Peabody which is a mining company or a subsidiary of a mining company; (c) the purpose for which Peabody acquired the land concerned the noise affectation by the mine; (d) conditions of the project approval for the mine required Peabody to acquire land affected by noise exceeding specified criteria if requested by the noise affected landowner; (e) even if the land was not used for a mining purpose, it was held for a mining purpose." 8His Honour found that none of the five reasons supported Council's decision to categorise the properties as "mining". It followed that Council did not have the legal or factual basis for its decision or its defence of the proceedings. 9In support of its application for leave, Council focusses attention on the fifth consideration and says that his Honour erred in the construction of s 517 of the Act and in particular in not applying the definition of "mine" in the Dictionary, or alternatively, that the Council did not unreasonably form the view it did as to the construction of the section. Indeed, Mr Coles QC submits that his Honour committed "a very basic error of law". Section 417(1) of the Act provides that land is to be categorised as "mining" "if it is a parcel with rateable land valued as one assessment and its dominant use is for a coal mine or a metalliferous mine". The Dictionary, which applies by reason of s 3, defines "mine" to mean "land, on or below the surface or partly on or partly below the surface, used or held for any mining purpose." 10In opposition to the grant of leave, Peabody relies on the authorities standing in the way of a hypothetical trial when the only question is one as to costs: see for example Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624. 11Those authorities in my opinion do not apply to the present application where the only issue was costs and where following, so far as it seems, relatively full argument on the facts and law the primary judge expressed a considered view on the question of construction. It is in many circumstances not necessary to determine substantive questions of fact or law when the only remaining issue is costs. 12However, it was necessary in order for his Honour to exercise the discretion under r 3.7 to resolve the submissions on fact and law that were made to him and, having done so, the fact that the occasion for the decision was a costs judgment does not engage the principles in Lai Qin for the purposes of this application for leave. I would not refuse leave on that basis. 13However, the construction of the Act was but one reason for the exercise of discretion against Council. The matters to which most of the reasons were directed were areas of fact amounting to what his Honour found to be unreasonable conduct on the part of Council. That was coupled with no persuasive explanation for the decision to "capitulate", in the sense that that term is used in the authorities, two working days before the eight day trial was listed to commence. The only explanation proffered by Council was that it needed to review Peabody's evidence, but that explanation was rejected by the primary judge and no submissions have been made seeking to challenge that rejection. 14Moreover, his Honour's construction of s 517 is not one that is clearly in error. Council points to the fact that s 517 is the only occasion in the Act where the defined term "mine" is employed. Mr Coles submits with some force that powerful considerations are needed to displace the prima facie operation of that definition. However, even where as in this Act defined terms are not expressed to apply subject to a contrary intention that is how the Act is to be read: see Cranbrook School v Woollahra Municipal Council [2006] NSWCA 155; (2006) 66 NSWLR 379 at [40]. As his Honour said at [83] a literal substitution of the defined term into s 517 (in accordance with the approach of McHugh J in Kelly v The Queen [2004] HCA 12; (2004) 218 CLR 216 at [103]) produces a nonsensical result. Moreover, there are other indications which his Honour has addressed with some care at [79]-[81] and [84]-[85] of his Honour's reasons. 15It is not appropriate where, as in this application for leave, the Court has not heard full argument on the question of construction, to express a concluded view on the correctness of his Honour's conclusion or his rejection of the submission that Council's construction was not unreasonable. It is sufficient to say that the prospects of ultimate success of an appeal, having regard to the unchallenged findings of unreasonableness together with the Council's challenge to the question of construction, are not sufficient to warrant a grant of leave. 16Further, in the absence of factual findings this present application in my view is an unsuitable vehicle for the grant of leave. For those reasons I propose that leave to appeal be refused. 17TOBIAS AJA: I agree with the order proposed by the presiding judge and with his reasons and would add the following observations. 18One issue not determined by the primary judge was the meaning of the expression, "held for any mining purpose" in the definition of "mine" in the Dictionary to the Act. Furthermore, once that meaning is determined a question of fact arises, also not determined by the primary judge as it was not necessary for him to do so, as to whether the facts of the matter fall in the determined meaning of that expression. It may well be that land is not "held" for a mining purpose unless it is the subject of a mining lease or at least a development consent for a mine. If that is the correct approach, and I express no concluded view upon it, then the subject parcels were not, with one relatively small exception, so held. 19Furthermore, even if leave was to be granted to agitate the question of construction advanced by the Council and it was successful thereon, it does not follow that the outcome, namely, that the Council should pay Peabody's costs at first instance, would be set aside by this Court. The matter would need to be remitted to the Land and Environment Court as this Court is confined to determining questions of law and cannot, generally speaking, determine questions of fact. 20Finally, I do not consider it appropriate that there should be a grant of leave in a case such as the present when there is no prospect on a remitter of the applicant achieving any final or substantive relief except on the question of costs. If the issue identified by the applicant is to be further explored by this Court, it should be ventilated in an appeal from a substantive determination of the issues where proper findings of fact have been made on the evidence in the light of which the relevant question of law can be determined. 21The present case, being one concerning costs only, is not in my view an appropriate vehicle in which to determine the question of construction which the applicant seeks to agitate. This is particularly so where, as Peabody submitted, the Council voluntarily abandoned and relinquished its opportunity to ventilate and vindicate its now preferred construction of the relevant section of the Act. In my view the Court should not entertain the Council's application to re-litigate substantive issues in such circumstances. 22LEEMING JA: I agree with the additional reasons of Tobias AJA. The order of the Court will be, leave to appeal refused. [Discussion as to costs] The order of the Court will be, application for leave to appeal refused with costs.