In its interlocutory decision of 24 September 2009 in Caroona Coal Action Group Inc v Coal Mines Australia Pty Limited and Minister for Mineral Resources [2009] NSWLEC 165, the Land and Environment Court has clarified the circumstances in which a ‘maximum costs’ order in advance of the hearing of a case can be made under rule 42.4 of the Uniform Civil Procedure Rules 2005.
The applicant in the proceedings (the Action Group) is an incorporated association comprising some 80 per cent of the landowners affected by the coal exploration and proposed mining activities on the Liverpool Plains of Coal Mines Australia Pty Limited (CMA), a subsidiary of BHP Billiton. In the proceedings, the Action Group is challenging (on various grounds) the validity of an exploration licence granted on 12 April 2006 to CMA under the Mining Act 1992 (Cth) by the Minister for Natural Resources.
Early in the proceedings, the Action Group filed an application for an order that the costs payable by either party be limited to $34,000, pursuant to rule 42.4 of the Uniform Civil Procedure Rules 2005. The principal basis for the application was the ‘public interest nature of the proceedings’, based on the criteria set out by the Court of Appeal in Minister for Planning v Walker (No 2) [2008] NSWCA 334.
Chief Judge Brian Preston held that the critical question in granting or refusing such an order is ‘whether access to justice will be promoted or impeded’. Other factors—such as whether the litigation is of a ‘public interest’ nature and whether the applicant stands to benefit financially from a successful outcome—are relevant in answering the critical question, but are not ‘ends in themselves’.
In answering the ‘critical question’, it appears that a crucial element is whether or not the applicant will continue the proceedings if a maximum costs order is refused. The Action Group did not expressly claim that it would discontinue the proceedings if refused a maximum costs order and the court found, to the contrary, that the relevant landowners have a financial incentive to provide the applicant with financial resources to continue the litigation.
The court declined to make a maximum costs order at the current stage of the proceedings, principally on the basis that:
- careful case management such as the court was practising would help ensure a ‘just, quick and cheap’ resolution of the proceedings, and
- in any event, the evidence did not establish that the proceedings would be discontinued if a maximum costs order were not made.
Also, the court found that ‘disproportionality of costs’ had not been established as a ground for making the order. Submissions were made that the parties’ costs in the proceedings might be around a couple of hundred thousand dollars. But the court held that it had not been established that these costs were disproportionate to the issues in the proceedings which were, in the court’s view, important to the parties, to the mining industry and to the broader community.
The court expressly declined to rule on the question of whether the proceedings were to be characterised as being in the public interest. The court also reserved its right to make a maximum costs order at a later stage of the proceedings ‘if circumstances change’.
Judgment is currently reserved in the substantive proceedings.
This article was written by John Taberner, Consultant and Jason Johnston, Senior Associate, Sydney.
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