Sykes v Queensland Gas Company & Anor [2009] QCA 163

Judgment (197 paragraphs)

[1]

REAL PROPERTY - CROWN LANDS - QUEENSLAND - SPECIAL GRANTS AND SPECIAL LEASES - where applicant held leases under the Petroleum Act 1923 (Qld) - where leases expired upon applicant's failure to comply with statutory provisions - where applicant alleged that the Minister's actions implicitly acknowledged the leases existed - whether leases were revived as a result of the alleged ministerial acknowledgment - whether executive actions inconsistent with governing statute can override the statute

[2]

ADMINISTRATIVE LAW - JUDICIAL REVIEW - REVIEWABLE DECISIONS AND CONDUCT - REVIEW OF PARTICULAR DECISION - where applicant argued that the Court and the Courts below were unable to interfere with a decision of the executive on the basis of the separation of powers - whether such decisions were reviewable by the Court

[3]

District Court of Queensland Act 1967 (Qld), s 118(3)

[4]

Land Court Act 2000 (Qld), s 34, s 74, s 91(2)

[5]

Land and Resources Tribunal Act 1999 (Qld), s 50

[6]

Petroleum Act 1923 (Qld), s 31, s 31A, s 34, s 40C, s 44, s 45, s 48, s 80T

[7]

Petroleum and Gas (Production and Safety) Act 2004 (Qld), s 116

[8]

Cudgen Rutile (No 2) Ltd v Chalk (1974) 4 ALR 438; [1975] AC 520, followed

[9]

Galvin v Forests Commission of Victoria [1939] VicLawRp 42; [1939] VLR 284, applied

[10]

Jackman v Dandenong Sewerage Authority (No 2) (1967) 20 LGRA 413, applied

[11]

Maxwell v Murphy (1957) 96 CLR 261; [1957] HCA 7, applied

[12]

New South Wales v Bardolph (1934) 52 CLR 455; [1934] HCA 74, followed

[13]

Pearson v Thuringowa City Council [2006] 1 Qd R 416; [2005] QCA 310, applied

[14]

Pickering v McArthur [2005] QCA 294, applied

[15]

G Sheahan for the respondent, Minister for Mines and Energy

[16]

Crown Law for the respondent, Minister for Mines and Energy

[17]

[1] THE COURT: There are six applications before the Court for leave to appeal from decisions of the Land Appeal Court. They are:

[18]

Applications in which Queensland Gas Company Limited is the respondent:

[19]

CA 11613/08 Application for leave to appeal against the decision of the Land Appeal Court of 10 November 2008 to dismiss two appeals made to that Court from decisions of Mr Smith of the Land Court

[20]

(Application for leave to appeal: FIPB Volume 2 of the 2nd respondent, p 179

[21]

Draft notice of appeal: Volume 2 of the 2nd respondent, p 274)

[22]

CA 12868/08 Application for leave to appeal against orders of the Land Appeal Court dated 11 November 2008 by which it ordered applicant to pay the costs of the two abovementioned appeals

[23]

(Application for leave to appeal: FIPB Volume 2 of the 2nd respondent, p 222

[24]

Draft notice of appeal: Volume 2 of the 2nd respondent, p 266)

[25]

CA 2092/09 Application for leave to appeal against an order of the Land Appeal Court dated 12 February 2009 dismissing an appeal from the Land Court requiring Mr Sykes to pay 50% of QGC's costs of the first instance proceedings

[26]

(Application for leave to appeal: FIPB Volume 2 of the 2nd respondent, p 288

[27]

Draft notice of appeal: Volume 2 of the 2nd respondent 308)

[28]

CA 2090/09 Application for leave to appeal against an order of the Land Appeal Court dated 12 February 2009[1] dismissing an appeal from a decision of the Land Court assessing the quantum of costs payable by the applicant to QGC.

[29]

(Application for leave to appeal: FIPB Volume 2 of the 2nd respondent, p 286

[30]

Draft notice of appeal: Volume 2 of the 2nd respondent 308)

[31]

Applications in which the Minister for Mines and Energy is the respondent:

[32]

CA 11626/08 Application for leave to appeal against the same orders of the Land Appeal Court which are the subject of CA 11613/08 above

[33]

(Application for leave to appeal: FIPB of the 1st respondent, p 1

[34]

Draft notice of appeal: FIPB Volume 2 of the respondent QGC, p 209)

[35]

CA 12867/08 Application for leave to appeal against the same orders of the Land Appeal Court which are the subject of CA 12868/08 above

[36]

(Application for leave to appeal: FIPB of the 1st respondent, p 33

[37]

Draft notice of appeal: FIPB Volume 2 of the 2nd respondent, p 262)

[38]

[2] In order to understand the nature of the applications and the issues to be determined, it is desirable to set out something of the history of the litigation pursued by the applicant. The notices of appeal upon which the applicant proposes to rely should his applications succeed, do not challenge findings of fact in the reasons of the Land Appeal Court delivered on 10 November 2008. Accordingly, it is expedient that the following narrative be extracted from those reasons.

[39]

[3] The applicant, Mr Sykes, is an economic petroleum geologist who has been involved in petroleum exploration in the Surat Basin south-east of Miles since the 1960s. XLX NL, a company controlled by the applicant, obtained an Authority to Prospect and ultimately two leases, Petroleum Leases 72 and 73 ("PL72 and PL73"), within the area formerly covered by the Authority to Prospect. The term of each lease was five years from 27 April 1995. XLX transferred its interests in the leases to the applicant by a transfer executed in May 1996 and approved in April 1996.

[40]

[4] The applicant applied to the Department of Mines and Energy on 22 December 1999 to renew the leases for a term of five years commencing on 26 April 2000. On 17 February 2000 the Department advised the applicant of the statutory requirements for renewal contained in ss 45 and 48 of the Petroleum Act 1923 (Qld) ("the Act") and requested further information. The applicant provided further information in a letter of 28 February 2000. There was no action on the applications by the Department.

[41]

[5] The five year term of each lease expired on 26 April 2000. On 4 August 2004 the applicant wrote to the Department requesting a renewal of the leases for a further five years commencing on 27 April 2005. The applicant continued to pay and the Department continued to accept rent for the leases.

[42]

[6] The Department responded to the applicant's renewal applications on 21 March 2006 advising that they were currently being assessed pursuant to s 45 of the Act to determine whether they complied with the requirements for renewal. The applicant was asked to provide a written submission detailing how he had substantially complied with the terms and conditions of the leases and why they should be renewed.

[43]

[7] In a letter of 28 March 2006 from the applicant to the Department, he denied that he had failed to comply with any production, development or reporting requirements. He claimed that the expenditure requirements of the leases had been met and suggested that depreciation on the value of his improvements on the leases would be expenditure for the purposes of the expenditure requirements.

[44]

[8] The Minister for Mines and Energy advised the applicant by letter dated 17 November 2006 of his intention to take non-compliance action under s 80T of the Act to cancel the leases because of the applicant's failure to comply with the terms and conditions of the leases and the provisions of the Act. The applicant was invited to make submissions to the Department.

[45]

[9] The applicant responded to the Minister's letter by a letter dated 21 November 2006 which addressed each of the matters raised by the Minister. He argued that commercial production had occurred, referring to production activity carried out after 26 April 2000 by entities other than XLX. He claimed that he had already undertaken his development work and did not need, necessarily, to do any more. He stated that both leases had "shut in developed" status, as each contained a development hole capable of production. He continued to deny that he had not complied with the requirements of the Act.

[46]

[10] In a letter of 30 March 2007 the Minister advised the applicant that he had not provided substantive reasons to refute the grounds of the contemplated

[47]

non-compliance action and that he was cancelling the leases in accordance with s 80Y of the Act. The letter advised that the decision did not take effect until the end of the appeal period and that if the applicant wished to appeal he could do so by filing a notice with the Land and Resources Tribunal. This letter from the Minister loomed large in the Land Court and Land Appeal Court proceedings and is central to the arguments advanced in this Court by the applicant in support of his contention that the lease remained in existence after 26 April 2000.

[48]

[11] Queensland Gas Company Limited (QGC) commenced drilling a well on 19 January 2001 on what became Petroleum Lease 179. On 14 June 2002 it commenced drilling a well on what became Petroleum Lease 201. Those works therefore occurred after 26 April 2000, the date on which the Land Court and the Land Appeal Court held that the leases PL72 and PL73 had expired.

[49]

[12] The applicant commenced proceedings PGC 86/2007 in the Land and Resources Tribunal on 18 April 2007.

[50]

[13] On 13 December 2006 the applicant commenced proceedings in the Supreme Court against QGC seeking orders that it rename its wells and claiming that QGC's wells were tapping into the reservoir which underlay PL72. Those proceedings were ordered to be struck out on 8 March 2007 on the grounds that the amended statement of claim was vexatious and demonstrated no reasonable cause of action.

[51]

[14] The applicant commenced fresh proceedings in the Supreme Court against QGC on 12 March 2007 claiming payment to him, at the spot price of gas, for the gas which came or was likely to come from the part of the reservoir which was alleged to be under PL72 and an injunction restraining QGC from producing gas from PL201. That statement of claim was struck out and the proceedings were stayed on 15 June 2007. The stay was granted pending determination of the dispute between the applicant and the State of Queensland in the Land and Resources Tribunal concerning the applicant's entitlement to PL72. There were appeals from both of the Supreme Court decisions. They were dismissed by the Court of Appeal on 24 August 2007. Before those appeals were heard, the applicant commenced another proceeding against QGC in the Land and Resources Tribunal pursuant to s 116 of the Petroleum and Gas (Production and Safety) Act 2004 (Qld), in which he alleged that he had title to gas produced from PL201 and sought consequential orders.

[52]

[15] In relevant respects the jurisdiction of the Land and Resources Tribunal was transferred to the Land Court on 21 September 2007 and after that date the proceedings commenced in the Tribunal were continued in the Land Court.

[53]

[16] On 11 October 2007 the Land Court, by consent, ordered a trial of the following question:

[54]

"Whether or not at any time after 26 April 2000 the applicant had subsisting tenure or the right to tenure in the area the subject of petroleum Lease No 72 and 73."

[55]

[17] A hearing in respect of the preliminary issue took place on 26, 27 and 28 November 2007. Before the Land Court gave its decision, the applicant applied to the Court for summary judgment in the proceedings or, alternatively, for an order that there be a new trial to determine the preliminary question. That application was dismissed with costs on 19 December 2007 and the applicant appealed from that decision to the Land Appeal Court. The application for summary judgment was based on the Minister's letter of 30 March 2007. The applicant asserted in his notice of appeal to the Land Appeal Court that neither of the respondents had any evidence in the hearing of the preliminary question which would "alter, change, modify, delete from or add to" the Minister's letter. He contended that, as a result, the separate question did not arise and that the trial of that question was aborted and void and could not be of legal effect. The effect of the Minister's letter was also one of the principal issues, from the applicant's perspective, on the hearing of the preliminary question.

[56]

[18] On 23 April 2008 the Land Court held that the applicant had no subsisting tenure or right to tenure in the leases after 26 April 2000 and ordered that proceedings PGC 86/2007 and PGC 114/2007 be dismissed.

[57]

[19] The applicant appealed from that decision to the Land Appeal Court. That appeal was also dismissed by the Land Appeal Court on 10 November 2008.

[58]

[20] On 6 June 2008 the Land Court ordered the applicant to pay 50 per cent of QGC's costs of Land Court proceedings 114/2007. The applicant appealed against that order to the Land Appeal Court. On 25 August 2008 the Land Court ordered the applicant to pay QGC's assessed costs of Land Court proceedings 114/2007 in the sum of $82,463 and the applicant appealed against that order.

[59]

[21] The Land Appeal Court ordered on 11 November 2008 that the applicant pay QGC's costs of the appeals against the Land Court's orders of 19 December 2007 and 23 April 2008.

[60]

[22] On 12 February 2009 the Land Appeal Court dismissed appeals against the Land Court's orders that the applicant pay 50 per cent of QGC's costs of Land Court proceedings 114/2007 fixed in the sum of $82,463 and the applicant was ordered to pay QGC's costs of the appeals.

[61]

[23] On 6 March 2009 the Land Appeal Court set aside orders which it made on 12 February 2009. It remade orders to the same effect and further ordered that the costs be assessed by an officer of the Supreme Court and that the order be made an order of the Supreme Court which may be enforced in the Supreme Court.

[62]

Principles and provisions governing appeals from the Land Appeal Court

[63]

[24] Section 74 of the Land Court Act 2000 (Qld) provides:

[64]

"(1) A party to a proceeding in the Land Appeal Court may appeal a decision of the Land Appeal Court to the Court of Appeal on the ground -

[65]

(a) of error or mistake in law on the part of the Land Appeal Court; or

[66]

(b) that the Land Appeal Court had no jurisdiction to make the decision; or

[67]

[68]

(2) However, the party may appeal only with the leave of the Court of Appeal or a judge of appeal."

[69]

[25] Generally, leave to appeal is granted only where there are substantial prospects of success and the error of law is of sufficient importance to justify the grant of leave.[2]

[70]

[26] In relation to s 118(3) of the District Court of Queensland Act 1967 (Qld), a provision generally analogous to s 74, Keane JA, with whose reasons the other members of the Court agreed, said in Pickering v McArthur:[3]

[71]

"Leave will usually be granted only where an appeal is necessary to correct a substantial injustice to the applicant, and there is a reasonable argument that there is an error to be corrected." (footnotes deleted)

[72]

[27] The rationale for this approach was explained by Keane JA, with whose reasons the other members of the Court agreed in Pearson v Thuringowa City Council[4] that the statutory restriction on appeals to this Court

[73]

"serves the purpose of ensuring that this Court's time is not taken up with appeals where no identifiable error or injustice can be articulated by those litigants whose arguments have already been fully considered at two judicial hearings."

[74]

[28] McPherson JA, in his separate reasons, observed:[5]

[75]

"In making it a statutory requirement ... that a further and third appeal be permitted only with leave of this Court, Parliament plainly intended that the discretion conferred by that provision should be favourably exercised only where there was some substantial reason for admitting such an appeal."

[76]

[29] The grounds of appeal which the applicant intends to rely on if successful on his applications for leave to appeal were formulated in different ways in different documents put before the court on the appeal. It is now proposed to state what is understood to be the substance of each ground and to consider its merits.

[77]

Ground 1: As the judicial power could not alter the instructions given to it by the executive power, the separate question was invalid and could not be consented to by the applicant. The separate question should have been:

[78]

"Whether the Minister of Mines and Energy was entitled to exercise his executive discretion, as set out in his letter to the appellant of 30 March 2007 to request a review of his decision to cancel the appellant's petroleum leases. If the Minister's decision was confirmed it would become operative as from the date of the Tribunal's decision." (footnotes deleted)

[79]

[30] The applicant's contentions are that the letters of 17 November 2006 and 30 March 2007 from the Minister acknowledged the existence of the leases and that this binds the State of Queensland. This acknowledgment, it appears to be contended, has the result that the Minister is unable to argue that the leases terminated on 26 April 2000 on the conclusion of their five year terms. But the point which was particularly urged was that by his letter of 17 November 2006 the Minister had decided to proceed in relation to the leases in the manner stated in the letter. That was an executive decision and, by virtue of the separation of powers doctrine, the decision was not subject to challenge in the courts.

[80]

[31] The Land Appeal Court held that the letters were written in a mistaken belief that the applicant was the holder of leases. It concluded that as the leases had not been renewed in the manner specified in the Act they had expired. In his oral submissions, the applicant did not assert that the leases had been renewed. He submitted that they had been held in "abeyance" or "held over" on the expiration of their respective terms.

[81]

[32] There is a long established principle, expressed by Rich J in New South Wales v Bardolph as follows:[6]

[82]

"When the administration of particular functions of Government is regulated by statute and the regulation expressly or impliedly touches the power of contracting, all statutory conditions must be observed and the power no doubt is no wider than the statute contemplates."

[83]

[33] Another established principle, which has the same or a similar rationale, is that the Crown cannot contract for the disposal of any interest in Crown lands "unless under and in accordance with power to that effect conferred by statute."[7] After referring to the above passage from the reasons of Rich J in New South Wales v Bardolph, it was said in the judgment of the Privy Council in Cudgen Rutile (No 2) Ltd v Chalk, that:

[84]

"It follows as a logical consequence that when a statute regulating the disposal of Crown lands, or of an interest in them, prescribes a mode of exercise of the statutory power, that mode must be followed and observed".

[85]

[34] Because of these principles anything the Minister or departmental officers may or may not have done in respect of the leases which were contrary of the requirements of the Act was incapable of bringing the leases back into existence after the expiration of their terms.

[86]

[35] As may be expected, the leases contained provisions relating to their renewal and the Act made provision for the renewal of leases.

[87]

"WHEREAS XLX NL in Our State of Queensland, in pursuance of the provisions of the Petroleum Act 1923 (hereinafter referred to as "the said Act"), is now entitled to a lease of the land described in the Schedule endorsed on these presents for the term of Five years from the Twenty-seventh day of April, 1995 (with the entitlement to renew the same for a term no longer than the period nominated as hereinafter provided) at the rent and upon the payment of royalty hereinafter mentioned and with, under and subject to the reservations and conditions hereinafter contained and the rights, powers, privileges, terms, conditions, provisions, exceptions, restrictions, reservations, and provisos in the said Act or any Acts amending the same and in the Regulations made or to be made thereunder ...We, in pursuance of the said Act do hereby for Us, Our Heirs and Successors, demise and lease unto the said XLX NL (hereinafter with its successors in title designated "the lessee") and its lawful assigns all that parcel of land described in the Schedule endorsed on these presents (hereinafter referred to as "the demised land") to hold the same unto the lessee and its lawful assigns for and during the term of Five years to be computed from the Twenty-seventh day of April, 1995 (with the entitlement to renew the same for a term no longer than the period nominated; subject however in the case of any and each renewal to the laws in force at the date of such renewal relating to the amount and payment of royalties on petroleum and the amount and payment of rent with respect to the demised land) ... and with, under and subject to the rights, powers, privileges, terms, conditions, provisions, exceptions, restrictions, reservations, and provisos referred to, contained or prescribed by the said Act or any Acts amending the said or any Regulations made or which may hereafter be made under the said : Yielding and paying unto Us, Our Heirs and Successors a royalty ...

[88]

(i) That the lessee shall work the demised land in accordance with recognised good oilfield practice and in compliance with the said Act, unless exemption or partial exemption granted in such manner as may be prescribed;

[89]

(ii) That the lessee shall comply with the provisions of the said Act;

[90]

(iii) That the lessee shall use the demised land bona fide exclusively for the purpose for which it is demised and in accordance with the said Act, unless prevented from so doing by circumstances beyond its power and control;

[91]

(iv) That the lessee shall not assign, transfer, sublet, mortgage, or make the subject of any trust the lease or the land or any part thereof otherwise than in accordance with the said Act;

[92]

[37] Section 31 of the Act,[8] in the form in which it existed on 23 June 1994 provided:

[93]

(a) be in the form prescribed, with such variations as the Governor in Council may in special cases approve; and

[94]

(b) confer upon the lessee the exclusive right to prospect for, mine, extract, recover, remove, and dispose of all petroleum in or under the land demised, with the right to construct and maintain thereon all works buildings plant waterways (including any pipelines for conveying water) roads pipelines reservoirs tanks pumping stations and other structures necessary to the full enjoyment thereof; and

[95]

(c) be for a term no longer than the period nominated (with reasons for the nomination) by the applicant as an appropriate term for producing in an economically viable way the petroleum from the fields within the land the subject of the lease."

[96]

[38] Section 31A of the Act,[9] in the form in which it existed on 23 June 1994 provided:

[97]

31A.(1) The lessee of a lease who has substantially complied with this Act, and the terms and conditions of the lease, in relation to that lease, at the expiration of the lease, is entitled, subject to subsection (2), to a renewal of the lease.

[98]

(2) A lessee referred to in subsection (1), before the expiration of the lease, is to -

[99]

(a) declare whether deposits of petroleum, that the lessee believes on reasonable grounds to be payable, exist within the land the subject of the lease; and

[100]

(b) lodge with the Minister a proposed program for producing petroleum from any field within the land.

[101]

(3) The renewed lease must be for a term no longer than the period nominated (with reasons for the nomination) by the lessee as an appropriate term for producing in an economically viable way the petroleum from the fields within the land the subject of the lease.

[102]

(4) The law relating to the amount and payment of royalties and of rent in force at the time of renewal applies to the renewed lease."

[103]

[39] Endorsed on each lease was a notation certifying that an assignment of a 100 per cent interest in the lease from XLX NL to the applicant was approved on 15 April 1996.

[104]

[40] By the date on which the five year term of each lease had expired s 31A had been renumbered as s 45. It will be seen from the terms of the leases that they were granted subject to the provisions of the Act.[10]

[105]

[41] Section 31A(1) and (2) link entitlement to renewal of a lease to substantial compliance with the Act and the terms and conditions of the lease. The Land Court held that the applicant "not expended the required amounts on a program of drilling, nor sought an exemption from the Minister." That finding is not disputed except to the extent that the applicant's migration of gas argument might bear on it. The argument will be discussed shortly.

[106]

[42] The Land Court held that, in consequence of these findings, the applicant "did not substantially comply with the provisions of the Petroleum Act or the terms of the lease(s)." Nothing brought forward by the applicant on this appeal cast any doubt on the correctness of these conclusions.

[107]

[43] The expenditure requirement for the leases is to be found in s 34 of the Act. The section[11] relevantly provides:

[108]

(1) The lessee shall each year expend on the lease in respect of drilling for petroleum or such other work as the Minister may in writing approve a total sum of money calculated at the rate of $1 550 per square kilometre for each square kilometre or part thereof contained in the lease.

[109]

(1A) The total sum is to be reduced by the value at the wellhead, as agreed or determined under section 40C, of all petroleum produced from the lease in the year.

[110]

(1C) The Minister may grant exemption in writing from the requirements of subsection (1) for such period and under such conditions as the Minister may fix."

[111]

[44] The Land Court calculated that s 34 required a total expenditure over the five year term of the leases of $142,600 on PL72 and $47,352.50 on PL73.

[112]

[45] The applicant's migration of gas point is to this effect. The leases are over a large subterranean reservoir of gas which extends under QGC's wells on its petroleum leases 179 and 201. Gas extracted from any well which taps the reservoir, due to the ability of gas to migrate within the reservoir, can be regarded as "petroleum produced from" the applicant's leases. It is then argued, by reference to s 34(1A) that the expenditure requirement in respect of the leases is to be reduced by the value at the well head of gas extracted from any well within the reservoir irrespective of its proximity to the applicant's leases and the title to the leases on which it is located.

[113]

[46] Before expenditure required under s 34(1) could be reduced by operation s 34(1A) "the value at the wellhead ... of all petroleum produced from the lease in the year" would need to be "agreed or determined under section 40C". There is no evidence of any such agreement or determination.

[114]

[47] It is also an improbable construction of s 34(1A) to interpret "petroleum produced from the lease" as encompassing petroleum extracted from other leases under different ownership as long as the petroleum comes from a reservoir which underlies the first mentioned lease. As a practical matter, it is highly unlikely that if leases above the same very large reservoir were granted to different lessees, as the applicant claims to be the case in respect of the subject leases, it would have been the legislative intention that extraction from any one lease would result in a reduction or extinguishment of the expenditure requirements for all the other leases by application of s 34(1A).

[115]

[48] Another and insuperable obstacle to the success of the argument is that, although raised at first instance, it was not pursued there or on appeal in the Land Appeal Court. Plainly, it is a matter capable of being addressed by evidence and QGC led no evidence on the point. It was not appropriate for it to have done so having regard to the issues before the Land Court.

[116]

[49] At first instance, before the Land Appeal Court and before this Court, the applicant did not mount any arguments based on estoppel. Any such arguments would have faced obvious difficulties having regard to Bardolph's case and the authorities referred to earlier concerning disposal of interests in Crown land. [12]

[117]

[50] There is no substance in that part of the applicant's argument which attempts to invoke the separation of powers. The contention was dealt with by the Land Appeal Court in its reasons and it is not desirable that it be dignified by extensive reasons. As the submissions of behalf of the respondent QGC point out the doctrine of separation of powers has no application to a tribunal created by State legislation.[13] But even if the doctrine was capable of application to the Land Court and the Land Appeal Court there would be no factual basis for its application. Those courts relevantly determined that the leases had not been renewed as there had not been compliance with the statutory requirements for their renewal. The courts did not in any way infringe the doctrine by performing or transgressing upon an executive function.

[118]

Ground 2 - The applicant's request for summary judgment was wrongly dismissed by the Land Court

[119]

[51] As the application was made when the decision of the Land Court was pending on matters which, when determined, would also determine the questions arising on the applicant's summary judgment application, there was no sensible course other than that taken by Land Court. There is nothing in this contention. Nor is there any substance in the applicant's suggestion that the Land Court had no power under its rules to order the separate determination of an issue in proceedings.

[120]

[52] The Land Court Rules 2000 (Qld) make no express provision for the trial of preliminary issues or separate questions. However, by virtue of rule 4(1) of the Land Court Rules the Uniform Civil Procedure Rules apply where the Land Court Rules do not provide for a matter in relation to a proceeding the court. Also s 32J(6) of the Land Court Act 2000 (Qld) provides, in effect, that the practice and procedure of the Supreme Court applies to the extent that "the practice and procedure of the Land Court" is not provided for in the Land Court Rules.

[121]

Ground 3 - The applicant was subjected to unfair cross-examination at first instance relating to an ASIC form which purported to state the asset position of XLX NL

[122]

[53] The point was considered by the Land Appeal Court[14] which found that it lacked substance. No error is detectable in the Land Appeal Court's reasons in this regard and it is inappropriate to spend further time in discussing the ground as it has no bearing on the applicant's ultimate rights and entitlements in respect of the leases. No error of law on the part of the Land Appeal Court was identified.

[123]

[54] It was alleged also that this matter went to costs as "no costs should be awarded to QGC for engaging in illegal activities to try to entrap the applicant by using a document shown by counsel to the applicant in the trial, when the second page clearly was in conflict with what was put to the applicant in court ...". The point has no material bearing on the applicant's costs arguments. Also, in the scheme of things, the costs involved in the matter of which the applicant complains would be negligible.

[124]

Ground 4 - In earlier Supreme Court proceedings QGC accepted the relevance of pressure tests from the applicant's well. It was prevented by this course of conduct from seeking determination of the preliminary question of the continued existence of the two leases

[125]

[55] The earlier proceedings were concerned with the adequacy of the applicant's Statement of Claim. They stood to be determined on the sufficiency and appropriateness of the content of the allegations in the Statement of Claim. There was no issue concerning any issues which QGC may or may not raise in other proceedings. There can be no estoppel and no res judicata. There is no substance in the point.

[126]

[56] The applicant complains that senior counsel for QGC charged for conferring with junior counsel in relation to the preparation of a Statement of Issues ("the response") prepared on the direction of the Land Court. Senior Counsel's tax invoice of 28 November 2007 contained these entries:

[127]

Preparation of Response in consultation with Mr Kelly of counsel (day) $5,000

[128]

[57] Documentation showed that junior counsel did not charge a fee for preparation of the response on 29 October and 30 October. That gave rise to the contention by the applicant that senior counsel did not carry out the work shown in the above entries in his tax invoice.

[129]

[58] Counsel for QGC pointed out in their submissions that QGC's solicitor's itemised Bill of Costs shows that both senior and junior counsel were working on the subject matter on the days in question; senior counsel was recorded as dealing with the solicitors on both 29 and 30 October; junior counsel is recorded as dealing with the solicitors on 30 October.

[130]

[59] It does not follow from the fee note that it implicitly asserted that senior counsel spent the day in consultation with junior counsel or even that the two were together physically for any part of either day. Having regard to the complexities of the matter neither the Land Court nor the Land Appeal Court was prepared to infer that the fee note did not accurately record the work done. The question was a factual one. There is no reason to suppose that it was decided incorrectly. In any event this ground is not in respect of an error or mistake of law on the part of the Land Appeal Court.

[131]

Ground 6 - The Land Appeal Court erred in not setting aside the decision of the Land Court requiring the applicant to pay 50 per cent of QGC's costs of the first instance proceedings.

[132]

[60] The applicant complains that the decision of the Land Court requiring him to pay 50 per cent of QGC's costs on the first instance proceedings was based on the evidence of QGC's solicitors that he had spent some 20 hours on an in depth analysis of QGC's costs. The applicant submits that nowhere in the solicitor's accounts is there a charge for this.

[133]

[61] He points to the following passage in an affidavit sworn by Mr Kimmins of the firm acting for QGC.

[134]

"I have carried out a high level assessment of QGC's party and party costs of PGC 00114/2007. The process of reviewing my files in detail and preparing the draft submissions took in excess of 18 hours. As a result of my review I estimate that in excess of 50 % of QGC's costs have arisen due to Mr Sykes' unreasonable conduct as identified in QGC's submissions on costs. Adopting a conservative approach QGC seeks an order that Mr Sykes pay 50 % of its costs of and incidental to PGC 00114/2007 to be assessed on the standard basis.' (emphasis added)"

[135]

[62] As appears from the above passage Mr Kimmins swore that his assessment occurred in the course of his review of his files and the preparation of draft submissions. In its reasons of 12 February 2009 the Land Appeal Court,[15] referring to the applicant's complaint that the 50 per cent determination of the Land Court was arbitrary, observed that "[t]here was evidence which supported the application of a percentage of that order..." The Court noted that "the learned member was in the best position to assess whether or not [the applicant's] behaviour was unreasonable and, if so, by how much that behaviour prolonged the determination of the preliminary question." The Land Appeal Court was obviously correct. The Land Court had before it Mr Kimmins' reasoned assessment but it would have needed no such evidence. The learned member who conducted the first instance hearing was himself able to assess the extent to which the hearing had been extended by unreasonable conduct on the part of the applicant. He was also able to form his own appreciation of the extent to which pre-trial matters had increased costs unnecessarily. Again, no error or mistake of law on the part of the Land Appeal Court has been identified in respect of this ground. The costs assessment by the learned Land Court member was made in the exercise of his discretion and it has not been shown that the exercise of the discretion miscarried.

[136]

Ground 7 - In assessing the extent to which costs were increased in the first instance proceedings by the applicant's unreasonable conduct the Land Court failed to have due regard to the applicant's accounting qualifications and Mr Kimmins' lack of such qualifications

[137]

[63] The applicant submits that the proportion of costs "referrable to any such conduct could not be over 25 per cent to have a chance of being arithmetically right..." It will be apparent enough from the ground itself that it is unlikely that in determining this ground the Land Appeal Court could make an error or mistake in law. No such error or mistake has been revealed.

[138]

[64] The applicant performed his assessment in relation to the trial itself. The unreasonable behaviour on the part of the applicant complained of by QGC related to matters before trial as well as conduct on the trial. Such matters included:

[139]

(a) the applicant's unfortunate summary judgment application;

[140]

(b) the applicant's conduct with respect to the applications for the determination of a preliminary point;

[141]

[142]

(d) raising points which were hopeless and destined to fail.

[143]

[65] There is no reason to suppose that the Land Court member did not take pre-trial conduct into account. This ground is addressed by the Land Appeal Court as "Ground 21". No error in the Land Appeal Court's reasoning was identified.

[144]

[66] Before leaving the question of costs, reference should be made to the basis on which the Land Appeal Court determined what statutory criteria were relevant to the award of costs because that Court's approach was, with respect, erroneous. The error has no significance to the outcome of the applications for leave to appeal because the error worked in the applicant's favour. The matter is mentioned only because the same question may arise in other cases which are similar, in this respect, to the applicant's. The principle adopted by the Land Appeal Court should be corrected lest it form a precedent for those other cases.

[145]

[67] The Land Court and Other Legislation Amendment Act 2007 (Qld) ("the amending Act") transferred the jurisdiction of the Land and Resources Tribunal ("LRT") to the Land Court (with an exception irrelevant to present purposes). Section 91 of the Land Court Act 2000 ("LC Act") was inserted by the amending Act. It applies to a proceeding started in the LRT before 29 August 2007, the commencement date of the amending Act, which had not been finally disposed of by that date and which would have been started in the Land Court if commenced after 29 August 2007.

[146]

[68] Accordingly, the section applied to the applicant's proceeding in the LRT. Section 91 (2) provides:

[147]

"The Land Court has jurisdiction to finish a proceeding to which the section applies and for that purpose -

[148]

(a) the proceeding is a proceeding in the Land Court

[149]

[69] Section 34 of the LC Act provides:

[150]

(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.

[151]

(2) If the Court does not make an order under subsection (1), each party to the proceeding must bear (its) own costs..."

[152]

[70] Section 50 of the Land and Resources Tribunal Act 1999 ("LRT Act") provided for a regime for the costs of proceedings in the LRT. That section was in these terms:

[153]

"(1) Each party to a proceeding before the tribunal must bear the party's own costs for the proceeding.

[154]

(2) However, the tribunal may award costs in a proceeding if the tribunal considers, in special circumstances ... an award of costs is appropriate.

[155]

(3) If costs are awarded by the tribunal under subsection (2), the amount of the costs is to be the amount the tribunal considers reasonable."

[156]

[71] On 6 June 2008 the Land Court ordered the applicant to pay half of the second respondent's costs of the proceedings in the Land Court and on 25 August 2008 fixed the costs payable under the previous order in the sum of $82,463.

[157]

[72] Both in the Land Court and the Land Appeal Court which heard an appeal from those costs orders there was debate as to whether the appropriate statutory basis for awarding costs was s 34 of the LC Act or s 50 of the LRT Act. The Land Court thought s 34 was the appropriate source of jurisdiction but made its order by reference to the criteria set out in s 50 of the LRT Act. The Land Appeal Court thought this approach correct in fact but that s 50 regulated the exercise of discretion to make an order for costs. The Court said:

[158]

"[26] The present matter is no longer a proceeding before the LRT. As a consequence of the amendments in 2007 the jurisdiction of the LRT to hear and determine certain matters ... was transferred to the Land Court...

[159]

[27] There is an argument that since there is no longer 'a proceeding before the tribunal' there is no role for s 50. On the other hand, when proposing the merger of the LRT's jurisdiction into the Land Court, the legislature was concerned to protect the rights and interests of parties to existing matters in the LRT ... . Although this ... refers to procedural matters, s 20 of the Acts Interpretation Act 1954, whilst not directly applicable, suggests an approach which would support the retention of rights in the absence of express words to the contrary.

[160]

[28] A construction of the amendments which best gives effect to the beneficial intention of the transitional provisions is to be preferred. There are two or more parties to disputes, and s 50 of the LRT Act is clearly advantageous to a losing party while s 34 of the Land Court Act offers a costs regime more favourable to the successful party. It seems preferable to give effect to the regime in place when the proceedings commenced. For that reason, the argument that effectively denies any work to s 50, should be rejected and s 50 of the LRT Act applies with respect to the costs applications in these proceedings .... "

[161]

[73] The Land Appeal Court expressed its opinion without reference to any authority save for an oblique reference to s 20 of the Acts Interpretation Act. There is authority, and it points to the opposite conclusion. Before going to it, it is appropriate to refer to s 20, the only relevant part of which appears to be subsection (2)(c) which provides that the repeal or amendment of an Act does not:

[162]

"affect a right, privilege or liability acquired, accrued or incurred under the Act."

[163]

[74] As the Land Appeal Court correctly recognised, on and from the commencement of the amending Act, the applicant's proceeding became a proceeding in the Land Court and the provisions of the LC Act, including s 34, governed the jurisdiction and procedures of the Land Court. The effect of the amending Act was to alter the law regulating the making of orders for costs in proceedings transferred from the LRT to the Land Court. Thereafter the applicant's proceeding was one in the Land Court and was subject to, inter alia, s 34.

[164]

[75] There is a presumption, which the Courts recognise, that legislation is not intended to have retrospective effects. The presumption is rebuttable and will be displaced by "some clear statement to the contrary" as it is put in Statutory Interpretation in Australia 3rd ed by Pearce and Geddes (para 10.1). The presumption, as well as being rebuttable, allows for exceptions. One concerns statutes, the subject matter of which is procedure. The distinction was adverted to in Maxwell v Murphy [1957] HCA 7; (1957) 96 CLR 261 which concerned an amendment to an Act allowing the relatives of deceased workers to recover damages for the negligently-caused death of the worker. The legislation initially allowed such a claim to be brought within 12 months of the death. An amendment extended the time to six years. A widow who had not commenced proceedings within the year was held to have lost her fight to sue and could not bring an action even though less than six years had passed since the death.

[165]

"The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. But, given rights and liabilities fixed by reference to past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption. Changes made in practice and procedure are applied to proceedings to enforce rights and liabilities, or for that matter to vindicate an immunity or privilege, notwithstanding that before the change in the law was made the accrual or establishment of the rights, liabilities, immunity or privilege, was complete and rested on events or transactions that were otherwise past and closed."

[166]

"The established rule (against retrospectivity) ... is subject to an established exception. It is said not to apply to 'statutes dealing with procedure' .... . The exception like the rule, has been stated in various forms. In Wright v Hale ... Channell B said:- 'In dealing with Acts of Parliament which have the effect of taking away rights of action, we ought not to construe them as having a retrospective operation, unless it appears clearly that such was the intention of the legislature; but the case is different where the Act merely regulates practice and procedure' .... . A consideration of the cases generally cited in this connexion has led me to think that the distinction is probably best stated by saying that it is between statutes which create or modify or abolish substantive rights or liabilities on the one hand and statutes which deal with the pursuit of remedies on the other hand. ... In the latter class of case there is no such presumption: on the contrary, the presumption is that the enactment applies in all proceedings commenced after it became law, and it may be right to construe it as applying even in proceedings commenced before it became law."

[167]

[78] The categorisation of the subject matter of legislation as affecting substantive rights or questions of procedure only is not always easy. However, changes to the power of a Court to award costs have consistently been held to be changes in procedure and to operate retrospectively. In Galvin v Forests Commission of Victoria [1939] VicLawRp 42; [1939] VLR 284 a change was made to Workers' Compensation legislation at a time when an injured worker was pursuing a claim for compensation. Eight days before the Board determined his claim an amending Act conferred on the Board for the first time power to award costs which it did not have when the claim was commenced. The question whether the Board had power to order costs when it made its decision was answered affirmatively by the Full Court. The Court said (297-8):

[168]

"Unless (the amendment) be held not to be retrospective and, therefore, not to affect pending proceedings, it plainly gives the Board power to award costs. Two cases of high authority decide that legislation giving or regulating a power to award costs is retrospective, in that it affects not substantive rights but merely procedure ... . The distinction is well-established (see Maxwell on The Interpretation of Statutes)".

[169]

[79] The reference was to the 8th edition of Maxwell. The 12th edition says (222-224):

[170]

"The presumption against retrospective construction has no application to enactments which affect only the procedure and practice of the courts. No person has a vested right in any course of procedure, but only the right of prosecution or defence in the manner prescribed for the time being, by or for the court in which he sues, and if an Act of Parliament alters that mode of procedure, he can only proceed according to the altered mode.

[171]

Statutes affecting costs are of a procedural nature for the purposes of the rules about retrospectivity. Section 34 of the Common Law Procedure Act 1860, which deprived a plaintiff ... of costs if he recovered... less than £5 ... was held to apply to actions begun before the Act had come into operation but tried afterwards, and a similar effect was given to section 10 of the County Courts Act 1867 which dealt with orders for security for costs in county court actions."

[172]

[80] The cases referred to as examples were Wright v Hale [1860] EngR 1191; (1860) 30 LJ Ex 40 and Kimbray v Draper (1868) LR 3 QB 160.

[173]

[81] The same view of the law was taken in Jackman v Dandenong Sewerage Authority (No 2) (1967) 20 LGRA 413. The claim was one for compensation on a resumption. The relevant Act was changed after the claim was started but before adjudication. The change introduced a formula which removed "from the Tribunal any discretion" as to costs and directed what order should be made in defined circumstances. Barber J said (415):

[174]

"Where the general rule is that a statute changing the law will not be given retrospective effect in the absence of the clearest language demanding such an interpretation, there is a well-recognized exception in regard to statutes affecting procedure or costs merely, which are always retrospective unless the opposite effect is clearly stated. There is no vested right in procedure or costs ... . The weight of authority is so great that it is impossible at this date to question the rule".

[175]

[82] Both cases were referred to with apparent approval by Basten JA (with whom Allsop P and Ipp JA agreed) in Diver v Neal [2009] NSWCA 54 at [75]. They also seem to have been approved by Phillips JA (with whom Ormiston JA agreed) in Civic Workers Plus Pty Ltd v Hill [2000] VSCA 61; [2000] 1 VR 640 at [32].

[176]

[83] Section 20(2)(c) of the Acts Interpretation Act does not affect the authorities. It is clearly concerned with substantive rights or liabilities and says nothing about changes to procedure which do not, as the cases explain, give rise to such rights as are protected by the section.

[177]

[84] For the above reasons the applications for leave to appeal should be dismissed.

[178]

[85] The respondent Minister for Mines and Energy does not seek costs. The respondent QGC seeks its costs on the indemnity basis. That application is not without merit.

[179]

[86] Some of the applicant's grounds were plainly unarguable and, on most of them, the applicant had the benefit of the Land Appeal Court's lucid reasons. Nevertheless, the conclusion we have reached is that indemnity costs should not be awarded.

[180]

[87] The approach to costs by the respondent Minister implicitly acknowledged that the applicant had a justifiable sense of grievance. The questions of the continued existence of the applicant's leases and his rights and remedies in respect of them are ones which he could not be criticised for pursuing. They lay at the heart of the litigation.

[181]

[88] The applicant, like many litigants-in-person, tended to get distracted by false and peripheral issues. But we do not consider that his pursuit of his central contentions was unreasonable to the extent that would justify an order for costs on the indemnity basis. This is not a case in which the most significant points were bereft of a framework on which to hang an argument.

[182]

[89] It is relevant that, in meeting most of the issues raised on the applications, the respondents would have been able to rely heavily on the submissions to the Land Appeal Court and the reasons of that Court.

[183]

[90] One area, however, in which the applicant's conduct increased costs unreasonably was in his proliferation of applications, notices of appeal and documents in support of his many applications. That should be taken into account in the costs order but not in such a way as to increase the costs of any costs assessment unnecessarily.

[184]

[91] Accordingly, it is ordered that the applicant pay the respondent, Queensland Gas Company Limited's costs of and incidental to the applications for leave to appeal on the standard basis, save that such respondent's costs of and incidental to the preparation and perusal of the record and its supplementation be on the indemnity basis.

[185]

[1] Order made on 6 March 2009 setting aside orders made on 12 February 2009 and remaking orders to the same effect and ordering that costs be assessed.

[186]

[2] Townsville CC & Anor v Dpt of Main Roads [2005] QCA 226 at [2], [68]; Melville & Ors v Townsville CC [2003] QCA 456 at [24]; and Redland SC v Edgarange P/L [2009] QCA 16 at [14], [77].

[187]

[3] [2005] QCA 294 at [3].

[188]

[4] [2005] QCA 310 at [14].

[189]

[5] [2005] QCA 310 at [1].

[190]

[7] Cudgen Rutile (No 2) Ltd v Chalk (PC) [1975] AC 520 at 533.

[191]

[8] Renumbered as s 44.

[192]

[9] Amended and renumbered as s 45.

[193]

[10] Petroleum Act 1923 (Qld) s 28 as in force on 27 April 1995.

[194]

[12] See also Attorney-General (NSW) v Quin (1990) 170 CLR 1; Attorney-General v Municipal Council of Sydney [1919] NSWStRp 73; (1919) 20 SR (NSW) 46 at 58 and Sutherland Shire Council v James [1963] SR (NSW) 273 at 278, 279.

[195]

[13] Fardon v Attorney-General for the State of Queensland [2004] HCA 46; (2004) 223 CLR 575 at 598-599; Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51 at 65, 77, 92, 103, 104 and 132; and Gypsy Jokers Motorcycle Club Inc v Commissioner of Police [2007] WASCA 49 at [79] -[80].

[196]

[14] Sykes v Minister for Mines and Energy and Queensland Gas Company Limited [2008] QLAC 0201 at [78] and [84].

[197]

[15] [2009] QLAC 1 at [35].

At a glance

Court

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Catchwords

Source

Catchwords

Judgment (197 paragraphs)

Parties

Legislation Cited (9)

Cases Cited (6)