Alton, Fowler & Teusner v Maximus Resources Pty Ltd (Number One) - [2009] SAWC 14

WARDENS COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
ALTON, FOWLER & TEUSNER v MAXIMUS RESOURCES PTY LTD (NUMBER ONE)
[2009] SAWC 14
Judgment of Senior Warden Dr Cannon
4 July 2008
MINING LAW
Exempt land - objections to entry - conditions and compensation

ALTON, FOWLER & TEUSNER v MAXIMUS RESOURCES PTY LTD (NUMBER ONE)
[2009] SAWC 14

In this judgment findings are made on the balance of probabilities. The onus is on the party needing to prove a fact to make their case. On 5 June 2008, I gave an extempore ruling on the preliminary point that Maximus Resources Ltd (in this judgment called Maximus) has no legal basis to give a notice of entry. I commence with that ruling.
I note this history. There was an exploration licence EL2786 which was granted to Flinders Diamonds Ltd (in this judgment called Flinders) on 11 January 2001 for a year. That has been renewed from time to time and although I do not have detail of the renewals, it cannot have been renewed beyond 10 January 2006 because the Mining Act 1971 (called in this judgment the Act) limits the term of exploration licences to a maximum of five years, as indeed did the EL itself.
There was an agreement between Flinders, the EL holders, and Maximus in relation to exploration on the area within that exploration licence and other exploration licences. That agreement first found expression in a letter of 21 April 2005, which is part of Exhibit P1. That letter is subject to the Minister’s consent. Consent was not obtained. Accordingly that letter had no legal effect to transfer any rights in the licence from Flinders to Maximus.
There was then an agreement, which was executed on 29 July 2005. It has a later commencement date defined in clause 2.21. I have no information as to the actual commencement date in accordance with that definition. That agreement is also subject to ministerial consent. Clause 2.1.3 says that:
If the minister’s consent is required and not obtained within 120 days from the date of this agreement, this agreement shall be at an end.
I take the ‘date of the agreement’ to be the date when it signed rather than the commencement date. The Minister’s consent was not obtained until 15 November 2005. I take the consent under a stamp of the Director of Mines, signed by the Manager Land Access, in accordance with delegated ministerial powers and functions at perhaps slightly more than face value, to be the consent of the Minister.
Time passed. EL3534 was granted to Flinders and commenced on 30 March 2006. At all times relevant to the dealings with these parties, Maximus has proceeded as if it had lawful authority to exercise the rights set out in that agreement of 29 July 2005. Notice of entry was given to Mr Fowler on or about 3 October 2007 and the other parties here at about that time. A deed of confirmation and amendment was signed between Flinders and Maximus on or about 21 January 2008. That refers back to the agreement of 29 July 2005. In the introduction it says at clause B that:
Flinders and Maximus wish to confirm that in addition to the mining tenements listed in schedule 1 of the agreement, on and with effect from the date of execution of the agreement, the agreement applied and continues to apply to any exploration licence, mining lease or other mining interest created in substitution for those tenements or affecting any addition, amendment, extension or variation of those tenements.
It further notes that the deed is a variation in accordance with clause 10 of the original agreement.
Without that deed of confirmation and amendment, there was a strong argument that the present EL was not covered by the original agreement, particularly since that agreement expressed itself to be the entire agreement which, at clause 10.7.2, said:
The parties exclude all terms implied by law, where possible.
The question is whether the agreement of confirmation and amendment now encompasses the existing EL. The land covered in the old EL 2786, and the new EL 3534, is the same definition of land.
It might be a nice point between Flinders and Maximus, if they wanted to have the argument, as to whether the new EL is any of ‘a substitution for the previous EL or affected an addition, amendment, extension, or variation of that existing tenement.’ (Clause B)
It’s been pointed out - and I agree, that I am not here to decide a dispute between Flinders and Maximus as to their contractual rights. I am here to resolve a dispute and adjudicate on the dispute between landowners and a miner.
The issue, as a preliminary point, is whether Maximus is a miner authorised to operate under EL 3534. In doing so, I note that at the time when the notices of entry were given, the deed of confirmation and amendment had not been signed.
It is my finding that as between Maximus and Flinders, Maximus always had the authority of Flinders to undertake the work on this EL 3534, in respect of all minerals, except diamonds, as the agreement and the subsequent confirmation makes clear. It is regrettable that they have not kept their internal paperwork in an ideal state. But Maximus, I find, in giving the notice of entry, was a mining operator under EL 3534.
In relation to the waiver of exemption, part of the grounds of objection to entry was the exempt status of the land and it has been clear that this case has always been joined, including the issue of whether the exemption should be removed.
Finally, I note that an issue of prejudice has been raised. It will be argued - and I accept the argument for this purpose, at face value, that Mr Teusner has suffered prejudice because he has been disrupted in his ability to manage the land in a way that he would like to. That prejudice is not increased by the ruling I am making here and so does not affect whether or not I should make the ruling.
The ruling I make is that Maximus is entitled to proceed, in these proceedings before me, for me to adjudicate both on the objection to the notice of entry and the application to remove the exempt status of the land. That completes the ruling made on 5 June 2008.
I now turn to the substantive issues. What is proposed at the moment is a drilling program of 17 holes, which was originally set out in the particulars filed by Maximus on 15 February 2008 and marked as Exhibit P1. The aerial photo at page 9 shows their proposed location and relationship to dwellings and other matters giving rise to exemption. The view on 20 May 2008 and subsequent evidence led to some modification of these particulars. At the view, it was agreed that Mr Scott Duncombe attend on Mr Teusner’s property with a GPS and peg the sites of the proposed drill holes, taking into account the terrain and other factors. It was acknowledged that the final drilling program if permitted might change according to the success or otherwise of the drilling. As a result he attended on 22 May 2008 and filed an affidavit of 2 June 2008 showing the results, and with annexure B showing a new aerial photo with the exempt areas marked in relation to the proposed drill holes. The basis of this information is the GPS and the assumption that it has been properly related to the aerial photo. I accept that for these purposes.
Section 9(1)(d) of the Act makes exempt from mining operations the following land:
(d)     and that is situated—
(i)    within 400 metres of a building or structure used as a place of residence (except a building or structure of a class excluded by regulation from the ambit of this paragraph); or
(ii)    within 150 metres of—
(A)    a building or structure, with a value of $200 or more, used for an industrial or commercial purpose; or
(B)     a spring, well, reservoir or dam,
I note at the outset that the creek on Mr Teusner’s property is spring fed, and that a neighbour, Mr Bourne, draws water from a hole alongside the creek bed. It is clear that parts of the creek qualify as a spring within 150 metres of the proposed drilling. There is a large pond on Mr Alton’s property adjoining a bend in the road, near to where his access track joins the road. This is not noted on the map. I have not inspected Mr Alton’s pond in detail. I proceed for now, but without finally determining the issue, on the basis that it is a spring, reservoir or dam. As such about half the proposed holes are within the exemption that arises.
From the evidence, the disruption that would be caused by the proposed drilling program, falls under three main categories; disruption to stock, disruption to amenity of residential properties and risks to the ground water. I shall deal with each in turn.
Disruption to stock
Mr Teusner has about 30 hectares disposed as two paddocks, the smaller of about 12 hectares is the area where the drilling is proposed. He runs 180 breeding ewes and expects each to lamb. The sheep are shy and due to the noise will not graze in proximity to the drilling. In his view, the whole of that paddock will be lost to grazing whilst drilling occurs. He alternates the grazing between two paddocks so they will not do so well and the 180 lambs will not realise as good a price at market. The ewes are lambing now and he will sell the lambs at Christmas. Depending on the market they would normally realise $80 - $100 each.
The drilling will require benching to make pads for the drill to be relatively level. Based on the affidavit of Mr Duncombe of 2 June 2008, five will need significant earthworks of depth of half to one metre. In every drilled area the topsoil will be stripped and replaced at the end and sown with appropriate plants for rehabilitation. The first part of the drilling is by an RC method that forces air down an outer tube, which drives the drilled material and any underground water up through the middle tube. There will need to be several sumps of approximately 6 x 6 x 2 metres, lined with plastic to store the water, which will be removed by a contractor. Heavy machinery will access the site and this will cause compaction and disturbance along the access tracks. All this will require rehabilitation. It could take more than one season to satisfactorily complete the rehabilitation.
Mr Teusner has recently put lime and super at a cost of $10,000 for the whole property, about half on this area. He was going to sow pasture this year. The benefit of this will largely be lost by the time he can sow the pasture. The cost of lime and super is rising steeply. I accept that he will as a consequence lose some condition on his ewes and lambs this year and to a lesser extent, for one later year.
He is concerned about the quality of his ground water. He has permanent all year round spring fed good quality water. Land is only valuable if it has access to water. I shall deal with that issue separately.
The machinery will be an eyesore and noisy. He is concerned that there will be no weed control in the fenced off area and the potential to introduce weeds.
Mr Fowler has the neighbouring property. His dam is close to the boundary where the drilling will occur. The noise may also disrupt his stock.
There will be some disturbance to stock on Mr Alton’s property adjoining Deloraine Road.
Disruption to the amenity of residential properties
There will be noise from the excavator whilst it does the benching and digs the sumps. Mr Duncombe’s evidence is that each pad will be dug in about half an hour. It may take longer if rock is encountered, as appears likely for some pads. Then the RC drill will then commence. The RC drill uses air pressure to beat against the rock and for the first 10-15, metres which will take up to half an hour, it is very noisy. I do not have specific evidence as to Db ratings. As it reaches depth, the noise of the drill is muffled leaving the compressor as the main source of noise. It can drill about 100 metres per day and may do more. Between a hundred and a hundred and fifty metres, the drill may need a booster compressor, which makes additional noise. For greater depth a diamond drill is used and that makes noise comparable to a truck engine. It will do 20-25 metres per shift. The holes will be of different depth up to 350 metres depending on what is discovered. Hay bales will be used as barriers to absorb noise. Later there will be earthmoving machinery to restore the land. There will be trucks and other vehicles accessing the site.
In addition to the noise there will be dust and a substantial visual impact of the machinery and the scars to the land, which will last until restoration is complete and maybe even then, some minor residual reminders in the long term, even when the land is restored to full productivity. There will be the intrusion of workers in an otherwise rural landscape.
This will be particularly intrusive for Mr and Mrs Fowler. She has health issues noted in a medical report and the effect on her will weigh on Mr Fowler as well. Their property is high up the valley and the proposed drilling is lower in the valley and all on exempt land within 400 metres of their house. The closest will be 100 metres from their house. The front of the house faces down the valley, directly overlooking the proposed drilling. They live permanently on the property and neither has work or other commitments that take them away.
Mr Alton and his family’s house is on a prominent site across the valley. Although the frontal aspect does not directly face the proposed drilling, it will be clearly visible from the residence. On the basis of Mr Duncombe’s evidence, all but four of the proposed holes will be within 400 metres of the house. He was not closely questioned about this and I rule that the measurement of 400 metres must be from the closest part of the main structure of the house, not the centre of the house. Based on the plan annexed to Mr Duncombe’s affidavit, I note that the closest would be about 200 metres from the house. Mr Alton and his family are mostly absent from the property during weekdays.
Risk to the water table
I note the information provided by Mr Duncombe about bores in the vicinity. This shows that the quality, quantity and depth of water is variable. This indicates that the water table has local variation and that little is known about the local characteristics of it in the location of the proposed drilling. What is clear is that there is permanent water on each of Mr Teusner’s, Mr Fowler’s and Mr Alton’s dams. I am told by Mr Duncombe that his experience in the Adelaide Hills region is that the conduct of exploration drilling of his sort, has had no negative impact on the surrounding groundwater. I mean no disrespect when I place little weight on that. His experience is only for one year and three months, he disclosed no particular expertise in hydrology and as I have noted, the evidence of the hydrology of this area indicates it is highly variable, so absent a clear basis I cannot see how one can credibly extrapolate general experience in the Adelaide Hills to this particular land. However, in support of that view, I note Mr Maddock’s evidence (p.84), that because of the fractured nature of the rock in the Adelaide Hills, perched water is unlikely.
There is some reassurance to be had from the fact that there are already existing diggings to a depth of the order of 180 metres so that if there was a particular risk of draining a perched water table or cross contamination of water tables then to that depth that might have already occurred. I note that where mineralisation occurs Maximus like to line the drill hole with PVC piping to make later geophysical work possible (p.84). This might be desirable in any event down to the first layer of impervious rock to protect the ground water. Maximus should make inquiries as to the best methods to guarantee no damage to the aquifers and take them.
Each of the landholders have permanent water on their land. Mr Teusner’s land has the spring fed creek, Mr Fowler’s dam is spring fed and Mr Alton’s dam as marked and also the soak/pond by the road are all within 150 metres of some of the drilling. There is an undefined and probably low risk of some disruption to the water table.
The Law
I quote my summary of the law in Penrice Soda v Di Biase and Pritchard (no.1), Wardens Court 25 October 2006, paras.5-26.
I had a quite complicated series of cases involving in exempt land in the matter of Southern Titanium NL v Heidrich & others, Wardens Court 8 April 2004. I repeat from those cases (with some editing) a summary of the relevant law.
The intended purpose of the Act
In dealing with similar cases in the past I have interpreted the Act in the context that it was intended to encourage mining. This is clear from the Second Reading Speeches and debates in both the House of Assembly and Legislative Council on the passage of the Bill that became the Act[1].
[1] Parliamentary Debates South Australia 1971-72, Vol.1-3, 40^th Parliament, 2^nd session.
In the Second Reading Speech in the House of Assembly, The Hon. G.R. Broomhill said[2]:
[2] Ibid. Vol.1, p.490
(presently there is), ‘an anomalous situation in which by historical accident some freehold land (probably as much as half) is mineral land and the opportunity for mineral discovery is available on it, whereas other freehold land is subject to procedures that are inhibiting and unsatisfactory.’
In the Second Reading Speech in the Legislative Council, The Hon. A.F. Kneebone (Minister of Lands) said[3]:
[3] Ibid. Vol.2, p.2159
It is the policy in all industrialized countries to encourage exploration and mining by providing access to potentially mineralised areas notwithstanding the surface rights thereto.
The proposal has the effect of placing all freehold land throughout the State on an equal footing regardless of historical mineral ownership.
The proposal will enable the Crown to grant mineral exploration rights over areas of land with are presently excluded from effective investigation.
The Act makes provision for the compensation of landowners and environmental concerns. The Hon. A.F. Kneebone said[4]:
[4] Ibid. Vol.2, p.2159-2161
… it is also considered that the transition and compensation arrangements are equitable to all concerned.
The Bill goes to great lengths to ensure that the current climate in the community regarding the conservation of the environment is fully accommodated in respect of mining.
A mining lease requires the payment of rent to the owner of the land, requires the payment of royalty, and is subject to such conditions as may be appropriate and specified in the lease in respect of damage to the land, restoration, compensation etc.
Some land is exempt from the operation of the Act. Land within 400 metres of places of residence under section 9 of the Mining Act 1971 (SA) is exempt land. An exemption can be removed by agreement with the landowner, or by order of the appropriate court, which can be this court up to a monetary limit on compensation of $150,000.
I accept that each of the Landowner(s) is an owner, as defined by s.6 of the Act, and entitled to an exemption within 400 metres of their dwelling houses under s. 9 of the Act.
An exemption can be removed by agreement or by court order of compensation and upon conditions:
(9)(3) Where
(a)the person who has the benefit of an exemption under this section, by agreement with a mining operator, waives the exemption; or
(b)the appropriate court, on the application of a mining operator, determines compensation to be paid by the mining operator to the person or persons who have the benefit of the exemption,
the land shall cease to be exempt land, but the exemption shall revive upon completion of the mining operations in respect of which the agreement or determination was made or at such earlier time as may be stipulated in that agreement or determination.
(3a) An agreement or determination under subsection (3) may be made upon such terms and conditions as the parties or the appropriate court thinks fit.
I summarised the law in relation to exempt land in B. Selge Nominees Pty Ltd v Colin Wegener (July 2000) Wardens Court Report SA p.3. In that case I refused to remove the exempt status of the land. I repeat my summary of the law in that case (at pp.7-9).
The leading case in this area is my own decision in McDonald v. Monaghan and French (1989) Warden’s Court Report SA pp.26-27. In that I point out that different considerations lie to removal of exemptions than in the provisions in part 9 of the Act dealing with conflicts between normal ownership of the land and mining. I said this:
Without reviewing the authorities in detail, it is the basic thrust of part 9 of the Act that mining shall proceed unless there is substantial hardship to a land owner and even then, the Warden’s Court has power to mitigate or compensate such hardship by imposing conditions or applying monetary compensation for such hardship.
The situation with exempt land must be somewhat different to that. The legislation recognised that ownership (as defined by the Mining Act 1991) combined with dwelling houses and other uses, set out in s.9 shall be sufficient cause to exempt such land from mining. We should only remove such exemption if conditions can be imposed to ensure that the mining will not constitute an unreasonable imposition on the enjoyment of the proprietor’s estate in and use of the land or alternatively if it is an unreasonable imposition that adequate financial compensation is possible for any such imposition.
Cases such as this will involve a review of any potential interference with the benefits that the landowner enjoys from his title and activities and whether conditions can successfully remove any such interference. If that is not possible the next stage will be to assess monetary compensation and whether that can be adequate compensation for any interference that cannot be removed by appropriate conditions. In an extreme case a miner may be able to proceed if he pays sufficient compensation, in the case of a dwelling house, to relocate the owner in a like dwelling house for the period of the mining, with appropriate attention to accruing capital gain and such other aspects of ownership. Even then there may be circumstances where the particular dwelling house has such unusual attributes that no monetary compensation is sufficient and in that event the court should not remove the exemption. For example a unique heritage property may be so unusual it is impossible to replace by monetary compensation. I only mention these aspects since there are several potential applications of this type and some general guidelines are appropriate. Each case shall of course be determined on its merits and from the decision in each case a set of more detailed guidelines will become clear.
In S.X. Holdings Ltd v. Riddle and others (1990) Warden’s Court Reports SA p.69 at p.106, I said this:
The first step is to review the potential impositions on the use of the land as a dwelling house and whether the conditions can remove such impositions. The second step is to assess the monetary compensation that may be adequate to compensate for any imposition that can not be removed by appropriate conditions. In an extreme case where neither conditions nor financial compensation can solve the problem of any unreasonable imposition mining may still proceed if the miner pays sufficient to remove the land owner to a new location in a similar dwelling house. There may be some dwelling houses which are so unique that even this may not be adequate compensation.
In that case which involved the establishment of a rare earth extraction and processing plant dealing with radioactive material it was my finding that (pp.124.125):
In view of the fact that all the impositions upon the occupants of the dwelling houses can not be removed by conditions and those that can not be removed are so difficult to quantify in monetary terms it is my view that this is one of those circumstances where to remove the exemption the miner should be required to offer to remove the land owners by purchasing their premises. Those dwelling houses are not so unique as to preclude this option.
In Amatek Ltd trading as Rocla Quarry Products v.Gifford and Williams (1994) Warden’s Court Reports SA, p.67, I dealt with a proposed sand mind within 400 metres of dwelling houses. In that case I imposed conditions to minimise the impact on the house owners. I found this (p.74):
There will remain a significant impact on the enjoyment by the owners of the amenity of their property. On the evidence, in addition to the disruption of their personal enjoyment, it is undeniable that they will suffer a loss in the capital value of their land during the period of the mining. Amatek make the point, and I accept it, that once the mining is completed the amenity will return to its present state and then the owner will receive a capital benefit, presumably of the like order of the diminution. However that is not the point. The point is that these present owners enjoy a statutory exemption from mining within the 400 metres of their dwelling house and if I allow it to proceed that mining will reduce the capital value of their property. They should be compensated for that and if that results in a later windfall either to them or to a purchaser from them so be it. The loss in capital value is a real loss whether or not it is realised by sale.
In that case, I ordered that the exemption could be removed upon compliance with the conditions set out in the development program and payment of a valuer’s assessment of the diminution of value.
Most recently in this line of cases, Warden Gurry had occasion to rule in the matter of Gambier Earth Movers Pty Ltd v Rhondda Truscott (1999) Warden’s Court reports SA 29. In that case Warden Gurry removed part of an exemption to allow the extension of an existing limestone quarry. I note in that case the quarry was in existence and had been for many years and although quarrying was involved the first removal of rock was by ripping rather than explosives.
Mr Cole for Mr Wegener has urged that the tenor of these authorities gives too much encouragement to miners and is at risk of encouraging too many applications to remove exemption. I know of all the cases in the Warden’s Court. Since the decision in Monaghan v. French, the above cases and the one I am dealing with presently, are the sum total of all contested cases. In addition, I am aware of two other cases where the parties have agreed to terms and conditions. The purpose of the Mining Act 1971 (SA) is to encourage mining and the Warden’s Court should allow mining to occur where it can be done so, having proper regard to the rights of owners of the land in the terms of ownership defined by the Mining Act 1971 (SA). Section 9 specifically deals with the imposition of the conditions and payment of compensation and to give it meaning, the court must consider proper ways of removing the exemptions from mining in s.9 to allow mining to occur. I see no reasons to resile from the approach in the authorities set out above.
However, as I stated in Monaghan and French, each case will depend on its particular circumstances. These are difficult cases involving attempts to reconcile competing interests and rights to the same area of land. The factors the court will take into account in dealing with these will depend on the unique circumstances of each case and the general principles that can be extracted will develop as different circumstances arise.
The ‘appropriate court’ is defined in s.6 to mean:
(c) if proceedings do not involve a monetary claim, or a claim for more than $150,000- the Warden’s Court;
I have jurisdiction in each of these matters to fix conditions, at large, and to make monetary awards of up to $150,000 in relation to each applicant and separate awards up to that limit. It may be that I can fix conditions that have financial consequences, which are properly construed as conditions rather than an award in respect of a monetary claim. It follows that the total monetary effect of the conditions and monetary sums I award might exceed $150,000 and I might still be the ‘appropriate court’.
My task is to consider the mining proposal and its potential impositions on the use of the exempt land and whether the conditions can remove such impositions. I then need to assess monetary compensation that may be adequate to compensate for any imposition that cannot be removed by appropriate conditions. Once having done that, I need to decide whether the combination of conditions and compensation is sufficient to allow the removal of the exemption.

In this case there are coincident exemptions. Exemptions exist for different purposes according to the interest to be protected. There is nothing in the use of the sheds to preclude the mining operation that is proposed. The risk to wells dams and springs is uncertain, but on the balance of probabilities, is low and may be lessened by casing the holes to the first impervious rock. The imposition on the freehold residences will be high and cannot be removed by conditions. The two residences are above the proposed drilling sites so shielding will not stop the noise and there will be the intrusion on privacy, noise and visual insult.
In view of the fact that this mining operation will not exceed six months, will involve a disturbance to the land that can be rehabilitated and has an indeterminate but probably low risk of disturbance to the ground water, it is my finding that a combination of conditions and compensation can be sufficient to allow for the removal of the exemptions.
Mr Teusner’s position is different. His rights come as an objection to entry and to drilling. The test for objection to entry is that to engage the jurisdiction of the court this must be shown: (s.58A(5) of the Act)
(5) If the court is satisfied on the hearing of an objection that the conduct of the mining operations on the land would be likely to result in substantial hardship or substantial damage to the land,
and for objection to the use of declared equipment this must be shown: s.59(6) of the Act)
(6) In any proceedings under this section, the objector must establish that the use of declared equipment upon the land would be likely to result in severe or unjustified hardship or substantial damage to the land.
The drill and excavators are declared equipment. I do not try to distinguish between substantial and severe or unjustified hardship. I find that this mining operation and use of declared equipment will result in both and also in a substantial damage to the land. Mr Teusner is entitled to the benefit of conditions to minimise the detriment and injury. He is entitled to compensation under s.61 for any ‘economic loss, hardship or inconvenience’ suffered as a result of the mining operation.
I shall impose one set of conditions for the removal of the exemptions in relation to Mr Fowler and Mr Alton and as conditions of entry and use of declared equipment in relation to Mr Teusner. I shall return to issues of compensation after fixing conditions.
I note concerns have been raised about damage to public roads and risks to the water catchment. The relevant parties who may have an interest in those matters are not part of this litigation and I limit myself to the matters between the parties here joined.
Conditions
I permit access over Mr Teusner’s land with the required declared equipment to undertake the drilling program of 17 RC and diamond drill holes described in the particulars (Exhibit P1) of the evidence of Mr Maddocks and clarified by the evidence of Mr Duncombe, including the rehabilitation works (called ‘the exploratory drilling works’). I note that the actual location of the drill holes may vary but any proposal to increase the number of drill holes or to substantially change their location will require the leave of the court. The land where the exploratory drilling works is to occur and the access track is to cease to be exempt land in respect of all exemptions only for the purpose of the exploratory drilling works. The permission to enter with declared equipment and the removal of exemptions is subject to the limitations in this order and the strict compliance by Maximus with the terms of this order. I give liberty to apply if it is alleged that there is a breach of this order. Nothing in this order or these findings implies any future permission or removal of exemptions for other mining operations.
CONDITIONS
Maximus:
1.        Will complete the exploratory drilling works within six months of this order.
2.        Will liaise with Mr Teusner to use the most suitable access route and minimise inconvenience to Mr Teusner in farming operations on his property, while ensuring that the works are conducted while Maximus has access to equipment and contractors.
3.        Will give Mr Teusner, Mr Fowler and Mr Alton (embraced individually and collectively as the context requires by the term ‘the Landowner(s)’) no less than three days’ notice of its intention to carry out the exploratory drilling works on Mr Teusner’s property.
4.        Will only conduct exploratory drilling works on Monday to Saturday inclusive, between the hours of 7am and 5pm.
5.        Will leave gates in the same position as they find them.
6.        Within limits imposed by operational practicality and safety, will facilitate access by Mr Teusner and his stock, to the area affected by exploratory drilling works.
7.        Will comply with the requirements of the Mining Act 1971 (SA), the Mines and Works Inspections Act 1920 (SA), the conditions of the Exploration Licence, any approval to carry out mining operations, and any other legislation, regulations, licences or government codes of conduct affecting its activities on the Landowner(s) land;
8.        Will ensure continuity of Mr Fowler’s power supply and Mr Bourne’s water supply and in the event of any interruption to them caused by Maximus, immediately arrange for alternative services sufficient for their needs, whilst Maximus promptly reinstates the usual supplies.
9.        Will provide sufficient fencing to sufficiently isolate the exploratory drilling works to allow the grazing of stock to continue successfully and without undue risk to stock and people and, at or before, the end of the exploratory drilling works to remove any such fencing.
10.      Will reinstate any damaged fencing and gates as quickly as possible after any damage occurs.
11.      Will rehabilitate any land compacted or disturbed by exploratory drilling works to at least its productivity prior to the mining operation and where possible improve it by appropriate measures such as:
a.      Removing and replacing the topsoil and subsoil in such manner as to ensure minimal loss of the topsoil, maintenance of soil structure and organic carbon and to ensure there is no bad clay closer to the surface than prior to the mining operation;
b.      Taking all necessary steps to prevent loss of rehabilitated soil, including, where necessary, planting and watering a cover crop;
c.       Remedying any compaction of the soil.
12.      Will take sufficient profiles to establish the contoured form of Mr Teusner’s land before the exploratory drilling works and return the Teusner’s land to the original contoured form after the soil had settled.
13.      Will use best guarantee to protect all aquifers and in any event ensure there is no lesser quality nor quantity of water available to the Landowner(s) during or after the mining operations and:
a.      Take two samples from of any one existing spring on the Landowner(s) land that the Landowner(s) nominates and give one sample to the Landowner(s) and test the quality of water in the other sample and make the results available to the Landowner(s).
b.      Upon damaging or reducing any water supply from any nominated bore immediately make an alternative supply of similar quality and not less quantity available and reinstate the original as soon as reasonably practicable after the damage reduction occurred.
14.      Will keep current with a reputable insurer, at its sole cost, a public risk insurance policy in respect of the exploratory drilling works to cover the liability of Maximus and the Landowner(s) in which the limit of public risk (being the amount which may be paid arising out of any single claim) shall be not less than $50 million and which shall include all provisions as are normally contained in insurance policies for public risk.
15.      Will indemnify, and keep indemnified, the Landowner(s) from and against any liability, expenses and costs arising out of any claim made against the Landowner(s) by any third party for loss or damage suffered by that party arising out of the conduct by Maximus of the exploratory drilling works.
16.      Will ensure no weeds or diseases are introduced to Mr Teusner’s land, survey the area covered by the exploratory drilling works and access tracks for weeds and diseases before and after the exploratory drilling works and co-operate with Mr Teusner to control weeds.
17.      Will:
a.      Ensure dust and noise generation are minimised and buffered to the extent reasonably possible;
b.      Take reasonable precautions to minimise the risk of starting fire, including only bringing diesel powered vehicles onto the land and have the ability to extinguish fire;
c.      Not permit dogs or firearms on the Landowner(s) land;
d.      Not permit groundwater, oil, fuel, chemicals or other pollution to escape onto the land;
e.      Pay any sum due directly or consequentially under these conditions when they fall due.
18.      Will not conduct exploratory drilling works Christmas Day.
19.      Will if Maximus deals with its interest in the exploration licence or is taken over advise the party with whom it is dealing of these orders and upon such dealing being agreed shall forthwith advise the Landowner(s) of the identity of the party and its interest.
The Landowner(s)
20.      Will permit Maximus free and undisturbed access to the area subject to the exploratory drilling program to exercise its rights under the Exploration Licence, and the Mining Act 1971(SA) in accordance with and to the extent permitted by this order.
21.      Permit Maximus at its sole cost and expense, to erect or construct such fences around the work area as Maximus may reasonably require.
All parties:
22. Will conduct their relationships in the utmost good faith to work co-operatively to achieve the best progress for the exploratory drilling works, the least possible disruption of the farming business and the best possible rehabilitation of the land.
23.      If all agree in writing, may vary these terms in which event, the varied terms shall be promptly filed by Maximus at the Wardens Court. The variation is subject to acceptance by the court.
Compensation
The drilling will be a substantial visual imposition for each day that the exploratory drilling works continue, and a substantial noise and privacy intrusion for each day whilst work is being done with the possibility of dust and exhaust smells as well. This will be most serious for Mr and Mrs Fowler and a particular intrusion for Mrs Fowler. Due to the greater distance the intrusions will be less but still significant for Mr Alton and his family. Mr Teusner has different inconvenience as a landowner rather than being able to claim on account of a residential exemption.
In Southern Titanium I ordered a payment to residential landowners of $2,000 per week indexed for inflation for so long as the noise exceeded WHO guidelines in the bedrooms of the houses. That was on the basis of a 24 hour per day operation but was an order made four years ago so inflation would make that a notionally higher award now. Here the exploratory drilling works are proposed to occur from 7am to 5pm Monday to Saturday. There is a down time cost of not using a rig of $4,500 per day so Maximus prefers a six rather than a five day week. It is of course difficult to calculate the value of the cost of intrusion and loss of amenity, but the intrusion and loss of amenity will be great. For each day that declared equipment is in on site within 400 metres of Mr Fowler’s dwelling house and operating for any part of that day he is entitled to $300 and if it is on site within 400 metres and not operating $100 per day (including Sundays).
Mr Alton’s inconvenience is less. His residence is further away. This will reduce the noise and other disturbance substantially compared to Mr Fowler. During weekdays he is often at work. Some of the compensation is for actual disturbance. For each day that declared equipment is on site within 400 metres of Alton’s dwelling house and operating for any part of that day, he is entitled to $100 and if it is on site within 400 metres and not operating $30 per day (including Sundays). The amounts for Mr Fowler and Mr Alton include loss of amenity and disturbance to stock.
I considered the possibility of requiring a bond, but I have decided that the better course is to require payments of the amounts owing as the work progresses. Maximus must send each Wednesday by post to each of Mr Fowler and Mr Alton, a statement of the amount owing, in accordance with this judgment for the previous Monday to Sunday inclusive and payment of that amount.
In relation to Mr Teusner, his loss is first for loss of grazing. At pp.48-50 in Southern Titanium I discussed alternative ways of calculating this. I prefer a method of calculating a notional agistment of the number of Dry Sheep Equivalent (DSE) stock that could graze the area where stock are prevented from grazing x the agistment rate in that area x the period of disturbance. This is a market-determined rate and is easy and certain to calculate. I do not have that information, but if I have another one of these cases I should hope the miner will proceed on that basis. An alternative is to calculate the profit per sheep and apply that on a proportionate basis to the area lost to mining. There is some dispute over the area that will be lost to grazing and I do not have the calculation of the gross margin per DSE. The best calculation on the evidence I have is that the lambs will lose some condition and this will reflect in price which is anticipated at a rate of $80-$100 per head. He expects a full complement of 180 lambs. Any loss of sale price at the margin is a direct loss of profit. I allow a 10% loss at market on an assumed price of $90. 10% x 180 x $90 = $1,620. He anticipates some loss for future years due to delay in rehabilitation and the loss of opportunity to sow pasture where he has placed lime and super. I allow a 5% loss the following year that is a further $810. In Southern Titanium, I also allowed landowners a loss of amenity $100 per hectare actually disturbed, to cover other aspects of intrusion not separately calculated. In current prices I should allow that at $110. I do not have an exact calculation of the land disturbed, but allowing for the pads, stored soil, sumps and access tracks, it would be less than two hectares. I allow 2 x $110 = $220. This only applies to the actual landowner. I have already allowed for such factors in the compensation for the claims for exemption by Mr Fowler and Mr Alton. Thus for Mr Teusner, I allow $1,620 + $810 + $220 = $2,650. That is to be paid within one month of the commencement of the exploratory drilling program. This covers all losses unless he suffers actual loss of stock. As for the concerns about water I have separately provided conditions in relation to that. It is my intention that such payments be net of GST and if that aspect needs clarification I give liberty to apply.
In relation to submissions concerning the high quality of Mr Alton’s house and diminution of the value of all affected properties, I am not convinced that the exploratory drilling program will affect that. If it reveals a commercial deposit the issue of value will be part of opposition to further mining and another application. If it does not reveal a commercial deposit, then the landowners will have the benefit of being able to advise prospective purchasers of that fact. As interest in mining increases that may be a benefit not a loss. No compensation on this account is appropriate for this work.
I shall publish these reasons to the parties by mail on Friday 4 July 2008. I give liberty to apply.