High Court of Australia orders that New Acland's applications for mining leases and an amended environmental authority be referred back to the Land Court for rehearing

In brief

The case of Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd [2021] HCA 2 has a protracted litigation history, which culminated in a decision by the High Court of Australia allowing an appeal by Oakey Coal Action Alliance Inc (OCAA) against a decision of the Queensland Court of Appeal, and ordering, inter alia, that applications made by New Acland Coal Pty Ltd (New Acland) under the Mineral Resources Act 1989 (Qld) (MRA) and the Environmental Protection Act 1994 (Qld) (EPA) be referred back to the Land Court of Queensland for rehearing. 

This article discusses the following:

• Relevant facts and circumstances – We briefly discuss the relevant facts and circumstances giving rise to New Acland's applications and the proceedings. 

• First Land Court decision and appeal – We briefly discuss the Land Court's initial decision recommending that New Acland's applications be refused, and the Queensland Supreme Court's decision on appeal to set aside the Land Court's recommendations.  

• Second Land Court decision and appeal – We briefly discuss the Land Court's second decision to approve the applications, and the concurrent proceedings in the Court of Appeal regarding an appeal against the Supreme Court's decision. 

• High Court's decision – We discuss the High Court's consideration of the Court of Appeal's decision, and its decision to remit the proceedings back to the Land Court.  

Relevant facts and circumstances

New Acland operates an open cut coal mine in Acland, a township near Oakey on the Darling Downs in Queensland which has been operating for almost 20 years. New Acland sought to expand the mine, and applied for additional mining leases (see section 232 of the MRA) (MRA Application) and an amendment to an existing environmental authority (see section 232 of the EPA) (EPA Application) to facilitate that expansion. 

The applications were met with numerous objectors, one of which was from OCAA, which represented a group of farmers and other community members on the Darling Downs. 

The making of the applications triggered a referral to the Land Court as follows:

• In relation to the MRA Application, to make a recommendation to the Minister for Natural Resources, Mines and Energy about whether the application ought to be granted or rejected in whole or in part (see section 269 of the MRA).  

• In relation to the EPA Application, to make a recommendation to the Chief Executive of the Department of Environment and Science (Chief Executive) about whether the application ought to be approved with or without conditions, or refused (see section 185 of the EPA). 

The statutory regime required the Minister and the Chief Executive to make a decision in respect of the MRA Application and the EPA Application, respectively, upon receiving the Land Court's recommendation (see section 271A of the MRA; section 194 of the EPA). 

The progress of the proceedings through the Courts is discussed below, and a summary is set out in Figure 1.

Figure 1 – Litigation history 

First Land Court decision and appeal

The proceedings were heard and determined in the Land Court over almost 100 days (First Land Court Decision). New Acland and OCAA were parties to each of the proceedings. 

The First Land Court Decision is summarised as follows:

• The applications gave rise to numerous issues, including economic need, air quality and dust, noise, transport and roads, climate change, flora and fauna, land values, land use and soils, intergenerational equity, community and the social environment, heritage, groundwater, and surface water. 

• The First Land Court Decision made numerous findings in favour of New Acland, including that the mine would likely provide significant economic benefit, and that many of the issues would not result in adverse impacts that could not be appropriately managed (see New Acland Coal Pty Ltd v Ashman & Ors and Chief Executive, Department of Environment and Heritage Protection (No. 4) [2017] QLC 24).

• Despite these favourable findings, the First Land Court Decision recommended that both applications be refused on the basis of unacceptable impacts associated with noise, groundwater, and intergenerational equity. 

New Acland applied for judicial review to the Supreme Court, alleging that the First Land Court Decision was affected by apprehended bias and errors of law. Before the judicial review applications were heard, the Chief Executive refused the EPA Application on the basis of the First Land Court Decision. 

The Supreme Court concluded as follows (see New Acland Coal Pty Ltd v Smith (No 2) [2018] QSC 119):

• The recommendations made in the First Land Court Decision were not affected by apprehended bias.

• The recommendations were affected by errors of law in respect of the three issues which led the Land Court to make the recommendation to refuse the applications. 

• Orders be made setting aside the First Land Court Decision and the refusal by the Chief Executive, and referring the proceedings back to the Land Court. 

• The orders referring the proceedings back to the Land Court be qualified by the requirement that "the parties before the Land Court are bound by, and the Land Court is directed to proceed on the basis of, the findings and conclusions reached" by Member Smith in the First Land Court Decision, and the factual findings made in respect of noise. 

The Supreme Court gave the following reason for the order referred to in the last dot point above (at [37]):

“It would be entirely inimical to the interests of justice to permit the parties to avoid the binding effect of the findings and conclusions already reached by the Land Court, after a full hearing, which are not tainted in any way by the outcome of this judicial review proceeding.”

Second Land Court decision and appeal

The proceedings were reheard in the Land Court, and the applications were approved subject to conditions concerning noise (Second Land Court Decision) (see New Acland Coal Pty Ltd v Ashman & Ors (No 7) [2018] QLC 41). Following the Second Land Court Decision, a delegate of the Chief Executive granted the EPA Application (but no decision had yet been made in respect of the MRA Application).

Shortly before the rehearing commenced, OCAA filed an appeal against the Supreme Court's orders. New Acland cross-appealed, asserting that the Supreme Court had erred in finding that the First Land Court Decision was not affected by apprehended bias. Neither party sought a stay of the Supreme Court's orders pending the outcome of the appeal and cross appeal.

The Court of Appeal concluded as follows (see Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd & Ors [2019] QCA 184; (2019) 2 QR 271; (2019) 242 LGERA 309 and Oakey Coal Alliance Inc v New Acland Coal Pty Ltd & Ors [2019] QCA 238; (2019) 2 QR 312):

• The appeal be dismissed and the cross appeal be allowed. 

• A fair-minded lay observer might reasonably conclude that the First Land Court Decision was affected by apprehended bias as a result of the comments made by the Member following media reports about delays in the hearing and determining the proceedings. 

• The findings of the Supreme Court that the First Land Court Decision was affected by errors of law was correct. 

• There would be no utility in setting aside the Supreme Court's orders because the orders had already been dispensed by the Second Land Court Decision and that it was "not open for this court in this appeal to interfere with the orders made" in the Second Land Court Decision (at [18]). 

• The orders were limited to a declaration that the First Land Court Decision failed to observe procedural fairness, and OCAA pay New Acland's costs of the appeal and cross appeal. 

High Court's decision

OCAA applied for special leave to the High Court from the judgment of the Court of Appeal. The key issue to be determined by the High Court was whether the Second Land Court Decision could be regarded as a "legal nullity" such that no legal consequences could flow from it.  

The issue arose from OCAA's contention that the Second Land Court Decision was affected by the same apprehended bias that the Court of Appeal found affected the First Land Court Decision. New Acland accepted that contention, but argued that the Second Land Court Decision was still binding. 

The High Court judged that the Second Land Court Decision was a nullity and did not have legal consequences. In so judging, the High Court stated as follows:

• The source of power for the Supreme Court's orders is section 30(1) of the Judicial Review Act 1991 (Qld). The discretionary power of this provision is wide, and is intended to "'allow flexibility in the framing of orders so that the issues properly raised in the review proceedings can be disposed of'…" (at [40]).

• However, "the power does not extend to authorise a decision-maker to proceed in a manner inconsistent with the statute that governs the making of the decision referred back for further consideration"; nor does it authorise the making of an order that is not necessary to do "justice according to law" (at [41]).

• The Second Land Court Decision occurred "in the purported exercise of the statutory jurisdictions conferred on the Land Court under the MRA and the EPA." (at [42]). 

• "The force and effect of [the Second Land Court Decision] therefore depend on whether the recommendations comply with the express and implied conditions of the exercise of the statutory jurisdictions conferred on the Land Court under the MRA and the EPA." (at [44]). 

• The Land Court, having been established by legislation as a court, was bound to observe procedural fairness in the exercise of its jurisdiction (at [47]). Failure to comply with this condition renders any order the Land Court makes in the performance of its function lacking in legal force, irrespective of whether the order is set aside (at [48]). 

• Accepting that the Second Land Court Decision was also affected by apprehended bias, it therefore also failed to comply with a condition of the exercise of its jurisdiction, and it was therefore a legal nullity (at [49]). 

New Acland asserted that although the Second Land Court Decision was a nullity, "the mere fact of the existence of [the Second Land Court Decision] is enough to meet the statutory preconditions to the making by the Minister of the ultimate decision to grant or refuse New Acland's applications…" (at [50]).

In rejecting that assertion, the High Court majority referred to the relevant provisions of the MRA and the EPA and to the following statement of the High Court in Forrest & Forrest Pty Ltd v Wilson [2017] HCA 30; (2017) CLR 510 [our emphasis]:

"[64] ...When a statute that provides for the disposition of interests in the resources of a State 'prescribes a mode of exercise of the statutory power, that mode must be followed and observed'...The statutory conditions regulating the making of a grant must be observed. A grant will be effective if the regime is complied with, but not otherwise..."

The High Court majority concluded that an implied statutory condition under both the MRA and EPA for the exercise of power was the observance of procedural fairness. As a result of the decision being affected by apprehended bias, that implied statutory condition could not be said to have been satisfied and therefore the Chief Executive's decision was invalid. 

Conclusion

The High Court judged that it was appropriate to make an order setting aside the qualified order of the Supreme Court and substituting it with an order referring the applications back to the Land Court for full reconsideration. 

The High Court also judged that the new decision of the Chief Executive, having been based on the recommendations in the Second Land Court Decision, could and should also be set aside.