Land and Environment Court New South Wales Medium Neutral Citation: Lightning Ridge Miners Association Limited v Slack-Smith & Anor (No 2) [2013] NSWLEC 1083 Hearing dates: On the papers Decision date: 17 May 2013 Jurisdiction: Class 8 Before: Moore SC Decision: (1)The respondents are to pay the applicant's costs as agreed or assessed (including in costs incurred by the applicant arising out of consideration of the question of costs). Catchwords: Costs Legislation Cited: Mining Act 1992 Uniform Civil Procedure Rules 2005 Cases Cited: Lightning Ridge Miners Association Limited v Slack-Smith & Anor [2013] NSWLEC 1063 Category: Costs Parties: Lightning Ridge Miners Association Limited (Applicant) Ross and Genise Slack-Smith (Respondents) Representation: Moore & Co (Applicant) Hetherington Exploration & Mining Title Services (Respondent) Mr L Moore (solicitor) (Applicant) Mr R Hetherington (agent) (Respondents) File Number(s): 81132 of 2012 Judgment 1SENIOR COMMISSIONER: "Muttabun" is a Western Lands Lease grazing property located some distance to the south-west of Lightning Ridge. It also has extensive opal mining activities on it. A dispute arose between the Lightning Ridge Miners Association (the Association) and the landholders of "Muttabun" as to whether or not a feature on portion of the land (this portion being subject to a Mining Lease Application by the Association) constituted a significant improvement for the purposes of the Mining Act 1992 (the Act). This dispute was determined, in favour of the Association (see Lightning Ridge Miners Association Limited v Slack-Smith & Anor [2013] NSWLEC 1063). 2As that decision noted, the Association sought an order for its costs in the event that it was, as in fact it was, successful in the proceedings. At the commencement of my consideration of the question of costs, I observe that it is long settled that costs are to be compensatory for the successful party and are not punitive of the unsuccessful one. 3The principal decision said, on the question of costs (after noting that the Association sought such an order), the following: 69 As the Chief Judge's delegation to me is pursuant to s 42 (and not s 36) of the Land and Environment Court Act 1979, I have and may exercise the functions of the Court. The exclusion contained in R3.10 of the Land and Environment Court Rules 2007 (the Rules) preventing Commissioners from making general costs orders for matters in Classes 1, 2 and 3 does not apply to proceedings in Class 8 and I am vested with the general costs ordering power under s 98 of the Civil Procedure Act 2005. 70 As the restrictions in R 3.7 of the Rules on making costs orders does not apply to Class 8 proceedings, R 42.1 of the Uniform Civil Procedure Rules 2005 creates the presumption that costs follow the event. 71 As there was no detailed argument about costs during the hearing, I propose to order that the respondents pay the applicant's cost as agreed or assessed unless, within 14 days of the date of the orders below, the respondents lodge a notice in writing with the Court, addressed to me, that the wish to be heard as to why there is some reason that some other costs order should be made. 4As consequence, the second of the orders in the principal proceedings reflected that which was proposed in (71) of the decision. In light of that provision, on 29 April, Mr Hetherington, the agent for the landholders, gave notice in writing that the landholders wished to be heard on the question of costs. 5That notice incorporated a short outline of the reasons why Mr Hetherington said an alternative costs order should be made. A copy of that letter was provided to Mr. Moore, solicitor for the Association. Mr Moore responded the following day (with a copy provided to Mr Hetherington). The reply attached the Association's preliminary submissions on costs. 6To permit the question of costs to be considered appropriately, the Registrar, at my request, wrote to the representatives of the parties on 1 May setting a timetable for the provision of further written submissions on costs and providing an opportunity for either party to indicate that they wished to be heard, orally, on this question. 7Pursuant to the timetable, Mr Hetherington provided further written submissions on 10 May - the terms of which made it clear, by necessary inference, that the landholders did not wish to be heard orally on the question of costs. 8On 13 May, Mr Moore provided a further submission on costs in response to Mr Hetherington's further submission. Mr Moore indicated, expressly, that the applicant did not wish to be heard orally on this question. 9The primary submission on behalf of the landholders is that the function I exercised in making a determination of the nature required in the principal proceedings was that of exercising an administrative function rather than a judicial one. 10In the alternative, Mr Hetherington's submission was, if the function was not administrative but was judicial, that the circumstances of the case should engage the discretion in r 42.1 of the Uniform Civil Procedure Rules 2005 and that I should form the view that some other order (other than costs following the event) should be made. His submission is that each party should bear their own costs. 11In the initial submissions made on behalf of the landholders, Mr Hetherington wrote: It is considered fair to advise that in Warden's Courts in certain other jurisdictions, these Courts distinguish between administrative and judicial functions of the Warden's Court, even though when discharging administrative functions, the warden is still required to judicially. Rightly or wrongly, after having regard to similar decisions on the former New South Wales Warden's Court, the writer (after noting that Section 62(1)(c) was specifically omitted from Section 293(1)(w) of the Act) took the view that a determination in respect of anything identified in a claim as being a significant improvement, is an administrative function, rather than a judicial function, and each party would carry their respective costs. 12In his initial submission, Mr Moore highlighted the distinction between the process in the former s 62(6) of the Act where the role of the Warden was to carry out an entirely different function compared to the present jurisdiction vested in the Court by s 62(6A) of the Act to determine the matters in dispute. 13The provisions of the former s 62(6) was in the following terms: Any dispute as to whether or not subsection (1) applies in any particular case is to be referred to a warden for inquiry and report and is to be decided by the Minister on the basis of the warden's report. 14The now operative s 62(6A) is in the following terms: If a dispute arises as to whether or not subsection (1) applies in a particular case, any party to the dispute may apply to the Land and Environment Court for a determination of the matter. 15The change is a significant one as it makes it clear that there is a distinct difference between the functions that were carried out by the Warden's Court under the former legislative scheme and the determinative jurisdiction bestowed on the Court under the new legislative scheme (introduced following the abolition of the role of the Mining Warden and vesting of the judicial functions of the Warden's Court in this Court). 16As part of that process, the former administrative function contained in s 62(6) was converted to a determinative function by the provisions of s 62(6A). It is that transformation that renders the function of the Court a judicial rather than an administrative one. 17With respect to the question of whether or not, in the exercise of the judicial function pursuant to s 62(6A) of the Act in determining if the aspect of the land in contention in these proceedings was a significant improvement, the landholders produced and filed, in their written material, a wide range of material setting out their concerns about a deed entered into between one of the landholders and the Association at the time a Mineral Claim over the identical parcel of land to that in the Mining Lease Application was transferred from that landholder to the Association. 18In this respect, Mr Hetherington's submission on costs says: It was initially submitted that the Respondents' rights in respect to Section 62(1)(c) of the Act were especially important in this case, where the terms of a Deed (which was subsequently ruled to be outside the matter before the Court) caused the landholder not to make a claim in relation of the significant improvement at the date the Mineral Claim for mining was applied for, yet the terms of any Mining Lease granted in satisfaction of the current Mining Lease Application for mining purposes only, if granted, takes away rights to mine the Mineral Claim previously given by the Deed. For the complex reasons noted above, the Respondents incurred some considerable cost to diligently prepare the material submitted to the Court... 19During the course of the proceedings leading to the determination made pursuant to s 62(6A), it was clearly indicated [as is noted in the principal decision at (21) to (23)] that matters relating to the deed were entirely outside the determinative process required to be undertaken to enable a conclusion to be reached as to whether or not a feature on the land was a significant improvement. Importantly, on any proper reading of the relevant provisions of the Act, any matters relating to this deed were not (and could not be) relevant to my s 62(6A) determination. 20What is set out above, together with other material set out in Mr Hetherington's submissions, is put in support of the proposition that the general rule of costs following the event should be set aside and an order that each party should pay their own costs should be made in substitution therefore. 21It is also relevant to note that, in Mr Hetherington's summary, in his second submission on costs, he says, amongst other things: Whether the Court might consider it was acting in an administrative function or a judicial function, the Respondent landholders would not be before the court but to the existence of a significant improvement at the "relevant date" and the Association making an application over the landholders land for a Mining Lease for mining purposes (only) which, if granted, takes away the Respondents' rights to mine the former Mineral Claim, being rights previously given by a deed with the same LRMA. In other words, if the Respondents are now to be denied the right to previously given by Deed with the LRMA, which caused the Respondents not to make a claim of the existence of a significant improvement at the "relevant date" the Mineral Claim was granted, the Act specifically provides for the Respondents to a claim that a significant improvement existed at the "relevant date" in respect of the Mining Lease Application. That said, questions relating to the Deed may now need to be heard and determined pursuant to ss 293(1)(g) or (s) of the Act. 22The respondents' concerns about the deed (a matter outside the enquiry in the principal proceedings) is also a matter entirely irrelevant on the question of costs as matters relating to the deed cannot be engaged in any consideration of the issues that fall within the limited factual matrix requiring determination pursuant to s 62(6A) of the Act. Mr Hetherington's repeated reliance on the impact on this deed continues to misconceive the fundamentally restricted nature of the task triggered by s 62(6A). 23Mr. Hetherington also submitted, with respect to the conduct in the proceedings by the landholders: All times, the Respondents have caused no unreasonable delays up to and in the conduct of the determination by the Court. The Respondents have not been tardy or delayed proceedings, nor have the Respondents acted unreasonably in circumstances leading up to or in the conduct of the determination. Indeed, the Respondents have incurred costs to provide all the information it had available to assist the Court in determining whether or not a significant improvement existed at the "relevant date". The Respondents have always acted efficiently and diligently with a view to enabling the Court to properly determine this matter. At no time have the Respondents taken any actions that would cause the Applicants to incur inappropriate or unnecessary costs. On the contrary, both parties sought to resolve this question without the need for the Court's determination. Further and as previously stated, the claim has been made by the Respondents in accordance with the Act and not for any improper purpose, nor was the claim vexatious or frivolous. 24No submission has been made on behalf of the Association that there has been any inappropriate conduct in the proceedings of the nature discussed by Mr Hetherington in the extract from his submissions set out immediately above. 25Conduct of the nature above described is not a matter going to the question of whether it will be appropriate to make an ordinary costs order (that is that costs should be awarded on an "as agreed or possessed basis"), but would be relevant to respond to any submission that costs should be awarded on the more onerous indemnity basis. 26As set out in the extract from the principal judgement earlier, I am vested with the functions of the Court on the questions of costs in these proceedings. As Mr Moore correctly observed in part of the first element of his initial submission on costs, made on 30 April 2013: * Costs are in the discretion of the court * The discretion must be exercised judicially * Costs generally follow the event unless there is material to justify contrary order. 27As earlier observed, despite Mr Hetherington's valiant attempts to show why the discretion under r 42.1 should be exercised to order that each party bear their own costs, the following summarises what I consider to be the determinative matters that persuade me that there is no rational basis upon which such a discretion should be exercised in these proceedings: * The determination to be made pursuant to s 62 of the Act was the exercise of a judicial function; * Although it may accept that the landholders went to considerable effort to provide as wide a range of materials as possible that they considered appropriate for my consideration during the course of the proceedings, a significant volume of that material was entirely outside the limited scope of the proceedings; * Costs are compensatory for the successful party and are not punitive of the unsuccessful one; and * Neither party acted in any fashion that could remotely be considered to be inappropriate or disentitling in any consideration of what costs orders could be made. 28In reaching this conclusion, I have also considered (although this matter was not raised by Mr Hetherington) the question of whether there was any proper basis on which I could depart from the r 42.1 presumption on costs as a consequence of this being the first instance in which this Court (as distinct from the Warden's Court) had considered the principal question of whether or not something was a significant improvement for the purposes of s 62 of the Act. 29I have carefully considered whether the novelty of this position could, in itself, provide a reason for departure from the cost presumption in r 42.1. I have concluded that it does not as, in future, should further matters of this nature come before the Court, each matter will need to be determined on the facts and circumstances of each new case. These proceedings, whilst they may provide some guidance as to the process that might be followed in the conduct of such an investigation, does not provide any precedent for the outcome of such determinations. Order 30As a consequence, the order of the Court is: (1)The respondents are to pay the applicant's costs as agreed or assessed (including in costs incurred by the applicant arising out of consideration of the question of costs). Tim Moore Senior Commissioner DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 May 2013