Bowman v NSW Coal Compensation Review Tribunal and NSW Coal Compensation Board

[2003] NSWSC 568

CITATION:	Bowman & Ors v NSW Coal Compensation Review Tribunal and NSW Coal Compensation Board [2003] NSWSC 568
HEARING DATE(S):	04/06/03
JUDGMENT DATE:	26 June 2003
JURISDICTION:	Common Law Division
JUDGMENT OF:	Cripps AJ
DECISION:	1. The decision of the Tribunal is quashed and the matter remitted to the Tribunal for redetermination of the plaintiff's claim, together with the remaining wayleave claims, according to law.; 2. The defendant to pay the plaintiff's costs
CATCHWORDS:	Coal Acquisition Act 1981 - wayleave entitlement - compensation claim
LEGISLATION CITED:	Coal Acquisition Act 1981 s 5 s 6 Coal Mining Act 1973 Coal Acquisition (Compensation) Arrangements 1985 Coal Acquisition (Transitional Provisions) Regulation The Coal Mining (Amendment) Act 1981 cl 4 Coal Mining (Amendment) Act 1981 Regulation
CASES CITED:	Battern Pooll v Kennedy [1907] 1 Ch 256 Buchanan Borehole Collieries v NSW Coal Compensation Tribunal (5 August 1997, unreported)
PARTIES :	Bowman & Ors v New South Wales Coal Compensation Review Tribunal and New South Wales Coal Compensation Board
FILE NUMBER(S):	SC 30090/02
COUNSEL:	J C Sheahan SC, D Hogin-Doran - Plaintiff N Perram - Defendant
SOLICITORS:	McConnell Jaffray - Plaintiff I V Knight, Crown Solicitors - Defendant

- 10 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

CRIPPS AJ

26 JUNE 2003

30090/02 - Bowman & Ors v New South Wales Coal Compensation Review Tribunal and New South Wales Coal Compensation Board

JUDGMENT

1 HIS HONOUR: On 2 September 2002 the New South Wales Compensation Review Tribunal (the Tribunal) upheld a determination of the Coal Compensation Board (the Board) made on 16 February 2001. The Tribunal refused the plaintiff an entitlement to compensation for pecuniary loss which it claimed to have suffered consequent upon the expropriation of coal by the New South Wales Parliament in January 1982 – the pecuniary loss being referable to the previous right to wayleave rent.

2 The plaintiff is one of a partnership of four all of whom made a claim for compensation on the same basis. It is agreed by all the partners and the Board that the outcome of the present review will determine the relevant entitlement of all others. Their entitlement to wayleave rent arises under cl 3 of a deed dated 29 May 1975 (the Deed). The Deed refers to “the partners” and a reference by me to the plaintiff is a reference to the partners.

The legislation

3 On 1 January 1982 by force of s 5 of the Coal Acquisition Act 1981 (“CAA”) Parliament expropriated all privately owned coal in New South Wales and vested it in the Crown. Section 5 of the CAA provides;

“ All coal that, but for this Act, would be vested in -
(a) an instrumentality or agency of the Crown; or
(b) any person other than the Crown,
is vested in the Crown freed and discharged from all trusts leases licences obligations estates interests and contracts”.

“Coal” is defined to mean “coal within the meaning of the Coal Mining Act 1973, that is in its natural state on or below the surface of any land to which the legislative power of the State extends”.

4 Section 6 of the CAA provided;

“(1) The Governor may make arrangements –
(a) For the determination of the cases, if any, in which compensation is to be payable as a result of the enactment of this Act; and
(b) If there are any such cases - for the determination of the amount and method of payment of such compensation
(2) Except in the cases, if any, and to the extent determined under subsection (1), compensation is not payable as a result of the enactment of this Act”.

5 In 1985 the Governor proclaimed the Coal Acquisition (Compensation) Arrangements 1985 (“the Arrangements”). Provision was made for the establishment of the Board and for a regime for the making of claims for compensation. It also provided for appeals to the Tribunal from decisions of the Board.

6 Clause 9(2) of “the Arrangements” provides;

“9(1) …
(2) Where a person claims to have sustained pecuniary loss which is directly attributable to the discharge of any trust, lease, licence, obligation, estate, interest or contract by virtue of the operation of s 5 of the Coal Acquisition Act 1981 and the loss is not one in respect of which a claim could be made under clause 10 or 11, the person is eligible to make a claim under clause 12”.

7 Clause 12 prescribes the manner of making a claim for compensation.

8 Clause 22 provides as follows;

“(1) Where, in the case of a claim made under clause 12 the Compensation Board is satisfied that:
(a) the claimant is an eligible person to whom that clause applies and has sustained pecuniary loss which is directly attributable to the discharge of any trust, lease, licence, obligation, estate, interest or contract by virtue of the operation of section 5 of the Coal Acquisition Act 1981, and
(b) having regard to all the circumstances of the case, it would be just and equitable for the claimant to be paid compensation in respect of that loss,
the Board may determine an amount of compensation to be paid to the claimant, not exceeding the amount of that loss.
(2) …”

9 The Coal Mining (Amendment) Act 1981 amended the Coal Mining Act 1973. It contained Savings and Transitional Provisions. Under the heading “certain payments to cease” in the Savings and Transitional Provisions clause 4 provided:

“4(1) To the extent to which any lease agreement or other instrument in force immediately before the appointed day provided for the payment of rent or royalty in respect of coal other than coal vested in or reserved to the Crown, the lease, agreement or other instrument ceases on and from that day to have any force or effect.
(2) Except to the extent provided by subclause (1), a lease agreement or other instrument referred to in that subclause continues in force on and after the appointed day until -
(a) The Minister, by instrument in writing served on the parties to the lease, agreement or other instrument otherwise directs; or
(b) a coal lease is granted in respect of the coal to which the lease or other instrument would have related if the Coal Acquisition Act1981 , had not been enacted,
whichever first occurs.”

10 On 30 April 1982 the Coal Mining (Amendment) Act 1981 Regulation was published in the Government Gazette. Of relevance to the submissions made on behalf of the Board is cl 4 which provides:

“4.(1) Where an authorisation to mine was in force under the principal act (the Coal Mining Act 1973) immediately before the appointed day, the person who, immediately before that day was the registered holder thereof shall be deemed to have been granted a coal lease under that Act, as amended by the Coal Mining (Amendment) Act 1981, over the land to which the authorisation to mine related on the terms and conditions specified in subclause (2) and for the period specified in clause 7.
(2) Subject to subclause (3) under the terms and conditions specified in this subclause in relation to a coal lease deemed by subclause (1) to have been granted are:
(a) Subject to paragraph (b) – terms and conditions that, subject to clause 7, are the same as those upon which the authorisation to mine referred to in subclause (1) was granted; or
(b) Where the Minister at any time by order in writing served on the registered holder of the lease specifies that the terms and conditions to which, pursuant to paragraph (a), the lease is subject are varied or added to in a manner specified in the order – those terms and conditions are so varied or added to.
(3) …”

History

11 On 24 March 1971 the plaintiff transferred the fee simple of the subject land to Archerfield Estates Pty Limited (the “Estates”) but reserved to himself “ all mines and minerals of whatsoever nature lying therein or thereunder” together with an entitlement “to enter upon all or any part of the land to search for and mine etc and to “carry away the said mine and minerals in under or upon any adjoining lands” of the plaintiff. (In fact the coal and associated rights were initially reserved by Deed of Agreement dated 31 December 1920).

12 On 29 May 1975 the plaintiff, the Estates and Buchanan Borehole Collieries (“BBC”) entered into the Deed.

13 Under the deed the plaintiff and Estates consented to BBC making an application under s 21(1) of the Coal Mining Act 1973 for the grant of an authorisation to allow it to prospect in and under the land of the plaintiff and the Estates for coal.

14 Under the deed the BBC covenanted to pay Estates a surface rent on the actual area used and fenced by it (clause 3(a)) and to pay the plaintiff “royalty on the annual tonnage of saleable coal won from the lands on a stake basis”.

15 Clause 3(c) of the deed provided for the payment by the company of wayleave rent. BBC covenanted “to pay the (plaintiff) a wayleave rent of 05cents per tonne of raw coal which shall be conveyed from any adjoining mines or lands through the said lands or any part thereof …”. The claim of the plaintiff before the Board, the Tribunal and this Court is that the effect of the legislation referred to above was to discharge the obligation of BBC to pay wayleave rent and to entitle the plaintiff to a claim for compensation pursuant to cl 9(2) of the Arrangement referred to above.

16 On 2 April 1982 Estates sold its freehold title to BBC, but not the mines minerals and right to enter and mine previously reserved.

17 Wayleave payment first became due and payable and was paid in June 1978. The last payment was made in December 1981.

18 After 1 January 1982 coal from adjoining mines was conveyed through the subject land but no wayleave was paid for the reason, as advanced by BBC in a letter dated 4 February 1982, that, by operation of the CAA it was no longer under any obligation to make payments.

19 The Board refused the plaintiff’s claim and the Tribunal upheld the decision of the Board but not for reasons advanced by it.

20 The Board was not satisfied that the plaintiff had suffered a “pecuniary loss” within the meaning of cl 9(2) of the Arrangements. It seems it was also of the opinion that the wayleave entitlement did not terminate on 1 January 1982 but on 2 April 1982 as a result of the sale of the “freehold title” to the Estates referred to above. The Board also decided that any obligation to the plaintiff was not relevantly a pecuniary obligation but arose out of a “personal covenant”.

21 The Board’s reasons were not adopted by the Tribunal.

22 The Board had expressed the opinion that the Deed was not relevantly a “lease agreement or other instrument in force immediately before the appointed date” because the wayleave rent was not relevantly “rent or royalty in respect of coal”. That conclusion derived from the definition of “coal” in the CAA and cognate legislation.

23 The Tribunal rejected the Board’s determination concerning this matter and held that by operation of cl 3(b) of the Deed (pursuant to which BBC came under an obligation to pay royalty for coal mined) was relevantly a “lease agreement or other instrument in force immediately before the appointed day” which provided for “rental or royalty in respect of coal” (see cl 4(1) and (2) of Schedule 2 to the Coal Mining (Amendment) Act 1991).

24 However, the Tribunal was not satisfied that cl 3(c) was relevantly a “lease agreement or other instrument in force immediately before the appointed day” which “provided for the payment of rent or royalty in respect of coal” because the coal referred to in the clause is not coal in its natural state but is coal that has been mined.

25 The Tribunal sought to distinguish a decision of the Court of Appeal in Buchanan Borehole Collieries v NSW Coal Compensation Tribunal (5 August 1997, unreported) on the ground that in that case the Court of Appeal was concerned with coal left in “land unmined” to provide support for passages through which the wayleave coal was transported whereas in the present case, the coal was extracted by open-cut method.

26 The plaintiff adopts the reasons and conclusions of the Tribunal insofar as it rejected the reasons and conclusions of the Board. The plaintiff contends, however, that the reasons advanced by the Tribunal why the claim must be rejected fly in the face of Buchanan.

27 If I understand the Board’s submission correctly it is that the Tribunal was correct in its conclusion denying compensation (albeit for the wrong reasons) and that Buchanan is distinguishable but, if not, it was a decision per incuriam because the Court of Appeal’s attention was not drawn to the fact that there could be no lease of the coal, the subject of the wayleave, because mined coals cannot be the subject of a lease in cl 4(2) of Schedule 2 to the Coal Mining (Amendment) Act 1981.

28 One issue in Buchanan was whether a wayleave entitlement had been extinguished by the expropriation legislation so that the claimant obtained a relevant benefit within the meaning of 17C of the Arrangements authorising a reduction of the amount claimed as compensation.

29 Briefly the facts in Buchanan were that on 22 September 1970 Mrs Nicholls leased to Buchanan for twenty years the mines and coal in and under her land. Later she transferred the land to Buchanan subject to the coal lease and reserving to herself the coal and minerals. Later and before the appointed day she transferred the coal to Comleroi subject to the coal lease. The coal lease provided for the payment of wayleave rent which was in terms not dissimilar to cl 3(c) of the Deed. Clause 7 provided that “the lessee shall pay a wayleave rent or royalty of one cent for every tonne of coal and other minerals produced from any mines not hereby demised which is led or carried by underground workings through or under the said lands or any part thereof under the authority of these presence.”

30 The Court of Appeal rejected the submission (not unlike the one relied on by the Board in the present case) that the wayleave obligation had been extinguished independently of the CCA by merger of estates. The Court held that Mrs Nicholls clearly intended to keep the coal lease alive as did the plaintiff in the present case.

31 It was also submitted that the wayleave was of necessity through airspace and airspace was not part of the coal or other minerals reserved to Mrs Nicholls but was part of the fee simple transferred to Buchanan. That submission was rejected on the authority of Battern Pooll v Kennedy [1907] 1 Ch 256 that the demise of “all the mines” included existing underground workings notwithstanding all winnable coal had been removed.

32 The Court of Appeal set out the following reasons which were essential to its decision:

“This Court decided in NSW Coal Compensation Board v NSW Coal Compensation Tribunal (40035/96, 29/7/97, unreported) (and Bloomfield Collieries case) that the Acquisition Act and associated legislation discharged the private coal lease there in question on 30 April 1982. The reasoning and decision in that case are directly applicable and established that the obligation to pay the wayleave royalty under cl 7 terminated on 30 April 1982. The wayleave royalty was not a royalty in respect of “coal” within cl 4(1) of Schedule 2 of the Coal Mining (Amendment) Act . The coal there referred to was coal as defined by the Coal Mining Act 1973, that is coal in its natural state on or below the surface of the land. The coal on which the wayleave royalty was payable was mined coal. The obligation in cl 7 therefore was not determined by cl 4(1) but continued in force under cl 4(2) until discharged on 30 April 1982 pursuant to cl 4(2)(b) on the grant of a Crown lease of the coal pursuant to the Coal Acquisition (Transitional Provisions) Regulation 1982. The reasoning and decision of the Bloomfield Collieries case established that the company derived a benefit within both limbs of of cl 17C”.

33 It is submitted by the Board that the Court of Appeal’s attention was not drawn to the fact that there could be no lease of the coal the subject of the wayleave because mined coal cannot be the subject of a coal lease and hence the obligation (correctly identified) to pay wayleave continued on and beyond 30 April 1982.

34 In the context of this ferociously complex legislation I am not prepared to conclude that the decision of the Court of Appeal was per incuriam, aas is conceded. The passage quoted above was essential reasoning towards the conclusion the Court reached. It is not the function of the Court at first instance to address perceived error in the Court of Appeal. It is for the Court of Appeal to determine whether its decision is to be no longer followed or qualified.

35 In this case, as in Buchanan the coal that was the subject of the wayleave obligation was coal in its natural state in or on any adjoined or mining lands. Moreover as has been submitted by the plaintiff the Tribunal’s apparent view that the wayleave obligation that was discharged in Buchanan was referable only to the coal remaining in supporting structures was not, in fact, the case.

36 On the authority of Buchanan the wayleave obligation in cl 3(c) was not discharged by operation of 4(1) of Schedule 2 to the Coal Mining (Amendment) Act 1981 - because of the definition of “coal”. The Board submits that cl 4(2)(a) did not operate to discharge the obligation because there had been no instrument in writing. Furthermore it submitted that although a coal lease was granted pursuant to the provisions of the Coal Acquisitions (Transitional Provisions) Regulation 1982 it was not a lease of coal the subject of wayleave. In my opinion that submission is contrary to the essential reasoning in Buchanan and I reject it.

37 The Board has also submitted that the Tribunal was wrong in rejecting the Board’s submission that cl 3(c) was a personal covenant “having no proprietary aspect to it”. That was because, the Board submits, that BBC was obliged to pay wayleave regardless of who owned the coal carried across the plaintiff’s land. It was submitted that the reservation only reserved to the plaintiff a right to remove their own coal whereas the wayleave applies to all coal.

38 As it would seem to me that submission is also contrary to Buchanan.

39 The Board has also submitted that by operation of cl 4(1) and (2) of the Coal Acquisition (Transitional Provisions) Regulation the authorisation of BBC was deemed to be a “coal lease” in the same terms as the previous authorisation because cl 1 of the earlier authorisation specifically required compliance with the Deed. However the terms of the Deed the provisions of which were said to continue the wayleave obligation were excluded, in my opinion, by cl 4(3)(b) of the Regulation.

Conclusion

40 1. The decision of the Tribunal is quashed and the matter remitted to the Tribunal for redetermination of the plaintiff’s claim, together with the remaining wayleave claims, according to law.

2. The defendant to pay the plaintiff’s costs.

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Last Modified: 07/04/2003