In brief

The case of Swan v Santos GLNG Pty Ltd & Ors [2019] QCA 6 concerned an appeal to the Queensland Court of Appeal against an order of the Planning and Environment Court which had dismissed the Applicant’s claim for an injunction under the Environmental Protection Act 1994 (EP Act) and an award of costs against the Respondent, Santos GLNG Pty Ltd (Santos).

Background

The Applicant owned two agricultural lots near Moura, Central Queensland, being Lot 12 which was named “Inala”, and Lot 3 which was named “Mulawa”. Both lots were primarily used for grazing cattle and the operation of a cattle stud. The Applicant’s father was the previous owner of the land. By way of deed dated 21 June 2011, the Applicant’s father covenanted to grant an option for an easement to Santos to allow for the construction and maintenance of a 420km gas pipeline. The pipeline was for the transportation of liquified natural gas from the Surat and Bowen Coal Basins in Central Queensland to Curtis Island near Gladstone for export.

Part of the pipeline had been built over the Applicant's land. The easements granted to Santos provided for a right of way which was 30 metres in width and an adjacent working space which was 10 metres in width. Both the right of way and the working space were to allow for the construction and maintenance of the pipeline. Environmental authorities were granted to Santos in November 2011 and March 2015 which approved the construction of the pipeline under a petroleum licence. Santos' contractor, Saipem Australia Pty Ltd was commissioned to design, supply and construct the pipeline. Construction of the pipeline commenced in early 2013 and was completed in late 2014.

Alleged contravention of a condition of the Environmental Authority

The Applicant alleged that Santos had contravened the conditions of its environmental authority during the construction of the pipeline. Section 430 of the EP Act states that it is an offence for a person who is the holder of, or is acting under an environmental authority, to contravene, or wilfully contravene a condition of an environmental authority.

Santos was responsible for ensuring that its contractor ("another person" under section 431(2) of the EP Act) had complied with the conditions of the environmental authority granted. It is a defence for the holder of an environmental authority to prove that they had issued appropriate instructions and used all reasonable precautions to ensure compliance with the conditions; that the offence was committed without the holder's knowledge; and that the holder could not by the exercise of reasonable diligence have stopped the commission of the offence: section 431(4) of the EP Act.

Expert reports and affidavits

Section 505(1) of the EP Act relevantly states that a proceeding may be brought before the Planning and Environment Court to order a remedy or restrain an offence, or a threatened or anticipated offence against the EP Act to which the Planning and Environment Court may make orders which it considers appropriate. In May 2015, the Applicant sought a declaration from the Planning and Environment Court that Santos was in contravention of its environmental authority.

The Applicant had retained an expert to conduct a preliminary review of the pipeline who, in a report dated 18 August 2015, recommended that a revised rehabilitation management plan be produced. Santos also retained an expert, who, in a report dated 1 October 2015 (Santos' Expert Report), assessed the soils and vegetation cover at 12 locations in six transects along the pipeline and identified parts of the right of way which required rectification with regard to soil, land surface and weed management, but concluded that the rehabilitation management plan had ultimately met the conditions imposed under Santos' environmental authority.

The Applicant swore an affidavit stating their dissatisfaction with the rehabilitation works undertaken by Santos' contractors. An employee of Santos swore an affidavit to the effect that although Santos had been willing to undertake the rehabilitation, Santos' contractors were unable to do so due to the Applicant's refusal to allow Santos' contractors onto their land to undertake the rehabilitation works. In a subsequent report, the Applicant's expert concluded that despite the recent works, areas of the property had not yet been appropriately rehabilitated.

In May 2016, the Planning and Environment Court gave directions for a joint expert report to be issued by the experts who agreed on the following matters: that no soil rehabilitation exercise could result in a "replica" of the undisturbed soil project; that the success of rehabilitation is measured by ground cover, the areas of subsidence and pasture availability; and that the monitoring and ongoing repair provisions detailed in Santos' Expert Report should continue.

Notwithstanding this, the Applicant argued that the remediation undertaken by Santos had failed to meet the conditions required of the environmental authority. Santos contended that the remediation works it had already undertaken were substantially in accordance with the conditions of the environmental authority and that the area would be returned to a suitable condition within two seasons time. The Applicant sought orders under section 505 of the Act in the following terms:

  • that Santos cause an independent investigation to be undertaken at its own cost in order to identify any contraventions of its environmental authority and the measures to be taken to remedy those contraventions;

  • that Santos remedy the contraventions;

  • that the Court make orders as may seem just to remedy the contraventions;

  • that Santos pay the Applicant's costs in the proceedings where it may seem just having regard to all the circumstances. 

Planning and Environment Court's Decision

The Planning and Environment Court refused to grant the Applicant's Orders on the following grounds:

  • an order seeking to appoint an independent expert to identify the "spatial extent" of an alleged contravention in addition to identifying the remediation works required lacked sufficient certainty;

  • that such an order would require the Court to concede its jurisdiction to a lay person (independent expert) to identify any offences and the measures to remedy those alleged offences;

  • the orders would have required the Court's supervision in circumstances which were inappropriate;

  • that the Applicant had failed to establish any of the alleged offences under section 430 or section 431 of the EP Act.

The Planning and Environment Court ordered that the Applicant pay Santos' costs in the proceedings to be assessed on the standard basis, or as agreed.

Application for leave to appeal

On appeal, the Applicant contended that the decision of the Planning and Environment Court contained errors of law. However, the Court of Appeal rejected the Applicant's contention that the Planning and Environment Court had failed to exercise the discretion bestowed on it under section 505(5) of the EP Act to make orders to remedy or restrain offences against the EP Act and that the Court had taken irrelevant considerations into account in arriving at its decision. The Court of Appeal held that the Applicant had failed to show that the Planning and Environment Court had fallen into error.

Proposed costs appeal

The Applicant also sought leave to appeal the costs decision of the Planning and Environment Court. Section 457(1) of the Sustainable Planning Act 2009 (SPA) provides that the costs of a proceeding are to be assessed at the discretion of the Court such that the discretion conferred is "an open one" which must be exercised judicially having regard to the relevant circumstances (see Cox v Brisbane City Council (No 2) [2014] QPELR 92; [2013] QPEC 78 at [2]-[3]).

In determining costs orders, the court may have regard to "the relative success of the parties in the proceeding" (see section 457(2)(a) of the SPA). The Court of Appeal held that:

  • the Planning and Environment Court had rightfully observed the Applicant was wholly unsuccessful in proving the serious allegations made against Santos;

  • the Planning and Environment Court was also entitled to have regard to "whether a party commenced or participated in the proceeding without reasonable prospects of success" (see section 457(2)(d) of the SPA);

  • the Applicant had not only failed to establish that Santos had breached its environmental authority but also that the Applicant had failed to properly particularise their case; the orders sought would have invited the Planning and Environment Court to concede its jurisdiction; and Santos had made reasonable endeavours to remediate the site following the previous orders of the Planning and Environment Court made in November 2015.

No case submission and exercise of the costs discretion

The Court of Appeal held in favour of the Applicant that the Planning and Environment Court had failed to properly exercise its statutory discretion under the SPA with respect to ruling against the no case submission put forward by Santos on the fourth day of the trial. The effect of this was that the Applicant was prejudiced in persisting with a modified form of the orders which they had originally sought. The Court of Appeal set aside the costs order made in the Planning and Environment Court, instead making orders that the Applicant pay Santos' costs from 16 June 2016 onwards.

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2019.

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