Finesky Holdings Pty Ltd v Minister For Transport For Western Australia

[2002] WASCA 206

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE FULL COURT (WA)

CITATION:   FINESKY HOLDINGS PTY LTD -v- MINISTER FOR TRANSPORT FOR WESTERN AUSTRALIA [2002] WASCA 206

CORAM:   WALLWORK J

STEYTLER J
PARKER J

HEARD:   16 MAY 2002

DELIVERED          :   2 AUGUST 2002

FILE NO/S:   FUL 70 of 2001

BETWEEN:   FINESKY HOLDINGS PTY LTD (ACN 072 669 580)

Appellant (Plaintiff)

AND

MINISTER FOR TRANSPORT FOR WESTERN AUSTRALIA
Respondent (Defendant)

Catchwords:

Mining lease - Grant of sub-lease - Whether effectual to pass interest in mining tenement prior to registration - Proper construction of reg 110 of Mining Regulations 1981 (WA)

Damages - Trespass and conversion - Encroachment by respondent's subcontractor into area of appellant's sub­lease - Unauthorised removal of limestone from limestone quarry - Appellant entitled to mine only limited quantity of limestone under sub­lease - Sufficient limestone remaining after unauthorised removal to satisfy appellant's entitlement - Whether appellant entitled to damages for conversion - Appropriate measure of damages in cases of wrongful use - Exceptions to compensatory principle discussed

Legislation:

Mining Act 1978 (WA), s 85(2)(b), s 82(1)(d), s 103A(1), s 116(2), s 119(2), s 119(4), s 121, s 122

Mining Regulations 1981 (WA), reg 110(1), reg 110(3)
Rules of the Supreme Court (WA), O 63 r 9
Real Property Act 1900 (NSW), s 41(1)

Transfer of Land Act 1893 (WA), s 58

Result:

Appeal dismissed

Category:    A

Representation:

Counsel:

Appellant (Plaintiff)        :     Mr J C Curthoys

Respondent (Defendant) :     Mr J A Thomson

Solicitors:

Appellant (Plaintiff)        :     Corrs Chambers Westgarth

Respondent (Defendant) :     State Crown Solicitor

Case(s) referred to in judgment(s):

Attorney‑General v Blake [2001] 1 AC 268

Barry v Heider (1914) 19 CLR 197

Bilambil‑Terranora Pty Ltd v Tweed Shire Council [1980] 1 NSWLR 465

Butler v The Egg and Egg Pulp Marketing Board (1966) 114 CLR 185

Claxton v Everingham (1884) 6 ALT 132

Gaba Formwork Contractors Pty Ltd v Turner Corporation Ltd (1993) 32 NSWLR 175

Haines v Bendall (1991) 172 CLR 60

In re Blue Bird Gold Mines NL (1942) 44 WALR 85

Inverugie Investments Ltd v Hackett [1995] 1 WLR 713

Knezevich v Mihalj, unreported; SCt of WA (Rowland J); Library No 5630; 23 November 1984

Penfold Wines Pty Ltd v Elliott (1946) 74 CLR 204

Roberts v Rodney District Council [2001] 2 NZLR 402

Stoke‑on‑Trent City Council v W & J Wass Ltd [1988] 1 WLR 1406

Strand Electric & Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246

Swordheath Properties Ltd v Tabet [1979] 1 WLR 285

Uren v John Fairfax & Sons Ltd (1966) 117 CLR 118

Case(s) also cited:

Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101

Arturi v Zupps Motors Pty Ltd (1980) 49 FLR 283

Bacon v O'Dea (1989) 25 FCR 495

Barnett v Earl of Guildford (1855) 11 Ex 19

Breen v Williams (1996) 186 CLR 71

Broken Hill Metals NL v Roberts, unreported; FCt SCt of WA; Library No 940431; 18 August 1994

Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64

Cubillo v Commonwealth (2001) 183 ALR 249

Daniels v Anderson (1995) 37 NSWLR 438

DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties [1980] 1 NSWLR 510

Ebbels v Rewell [1908] VLR 261

Electricity Meter Manufacturing Co Ltd v Manufacturers' Products Pty Ltd (1930) 30 SR (NSW) 422

Ellison v Vukicevic (1986) 7 NSWLR 104

Fyffes Group Ltd v Templeman [2000] 2 Lloyd's Rep 643

Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1

Gray v Motor Accident Commission (1998) 196 CLR 1

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41

Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157

In re United Merthyr Collieries Company (1872) LR 15 Eq 46

Jegon v Vivian (1871) LR 6 Ch App 742

Lamb v Cotogno (1987) 164 CLR 1

Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494

Martin v Porter (1839) 5 M & W 351; 151 ER 149

McKenzie v McDonald [1927] VLR 134

Mills v Stokman (1967) 116 CLR 61

Minister of State for the Interior v R T Company Pty Ltd (1962) 107 CLR 1

Ministry of Defence v Ashman [1993] 2 EGLR 102

Ministry of Defence v Thompson [1993] 2 EGLR 107

Ocean Accident & Guarantee Corporation Ltd v Ilford Gas Company [1905] 2 KB 493

Phillips v Homfray (1871) LR 6 Ch App 770

Pilmer v Duke Group Ltd (2001) 75 ALJR 1067

Re Calder; Ex parte Cable Sands (WA) Pty Ltd (1998) 20 WAR 343

Re Commissioner of Stamp Duties; Ex parte Henry [1963] NSWR 1079

Re Warden French; Ex parte Serpentine­Jarrahdale Ratepayers' Association (1994) 11 WAR 315

Sangora Holdings Pty Ltd v Dunstan (1996) 16 WAR 552

Sellars v Adelaide Petroleum NL (1994) 179 CLR 332

Sirr v Dwyer [1984] WAR 326

Sorna Pty Ltd v Flint (2000) 21 WAR 563

Swan Resources Ltd v Southern Pacific Hotel Corporation Energy Pty Ltd [1983] WAR 39

Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58

Wallis v Downard­Pickford (North Queensland) Pty Ltd (1994) 179 CLR 388

Warman International Ltd v Dwyer (1995) 182 CLR 544

Western Credits Pty Ltd v Dragan Motors Pty Ltd [1973] WAR 184

Westgold Resources NL v St George Bank Ltd (1998) 29 ACSR 396

Whitwham v Westminster Brymbo Coal & Coke Co [1896] 2 Ch 538

Wolfson v The Registrar­General of New South Wales (1934) 51 CLR 300

Wood v Morewood (1841) 3 QB 440

Yakamia Dairy Pty Ltd v Wood [1976] WAR 57

1. WALLWORK J:  I agree with the reasons for judgment of Steytler J and to the conclusions which his Honour has reached.

2. STEYTLER J:  This is an appeal and cross‑appeal against the decision of a Judge of this Court.

3. The issues giving rise to the appeal and cross‑appeal arose out of the construction of a breakwater and boat harbour at Exmouth in 1996 and 1997.  The breakwater and boat harbour were being built on behalf of the Western Australian Department of Transport ("the Department").  It contracted the work to a company known as Civcon Pty Ltd ("Civcon"), the directors and shareholders of which were Mr Frank Simunovich and Mr William Maloney.  The breakwater was made of limestone which was obtained from a quarry owned by the Western Australian government.

4. Civcon began to experience difficulty in extracting limestone of sufficient quality and quantity from the quarry.  It consequently sought approval from the Department to extend its quarrying activities to an area to the north‑west of the existing quarry site.  Approval to do so was given on 26 August 1996 but, on 13 September 1996, the Department terminated Civcon's services because of dissatisfaction with its performance and because a creditor had filed a petition to wind up that company.  The Department entered into a new contract with Thiess Contractors Pty Ltd ("Thiess") for the completion of the contract work.  Thiess subcontracted the operation of the quarry to a company known as PMR Quarries Pty Ltd, which traded under the name "WA Limestone".  Civcon is now in liquidation and has been so since October 1996.

5. Messrs Simunovich and Maloney purchased the appellant ("Finesky"), which was then a shelf company, on 1 April 1996.  They became its only directors and remained so until 31 October 1997, when Mr John Carr became a third director of the company.

6. Messrs Simunovich and Maloney knew that Alcoa of Australia Ltd ("Alcoa") held a mining lease, M08/6, to the north‑west of the quarry site.  This covered some 484 hectares of land.  No doubt being aware that quarrying activities were likely to extend in that direction, they entered into negotiations with Alcoa for a mining sub‑lease of an area of 25 hectares immediately adjacent to the boundary of the quarry.  The mining sub‑lease (2H/967) was agreed upon and executed on 9 December 1996.

1. Coincidentally, on that very day WA Limestone, without having sought or obtained permission from Finesky, began extracting limestone from the area covered by Finesky's sub‑lease.  It continued to do so until January 1997.

2. The sub‑lease was for a term of four years, with a right of renewal for a similar term.  It contained a condition precedent in the following terms:

   "2.CONDITION PRECEDENT

   It is a condition precedent of this Sublease that the Minister of Mines provides his prior written consent to the subleasing of part of the Lease, namely the Land to the Sublessee."

3. On 10 December 1996 the Minister for Mines consented to the sub‑lease "subject to the agreement being properly executed and assessed by the Department of State Taxation".  Assessment by the Department of State Taxation did not occur until 20 January 1997, on which date the sub‑lease was also registered.

4. Mr Simunovich, in the course of his evidence at the trial, said that he first suspected on 17 January 1997 that WA Limestone was quarrying limestone in Finesky's sub‑lease area.  He was then undertaking a survey of the quarry area.  However, there was also evidence from Mr Christopher Otto, a leading foreman employed by WA Limestone, that, during December 1996, he came upon a group of three men in a white Toyota landcruiser on the quarry site.  One of these was Mr Simunovich.  In the course of an ensuing confrontation Mr Simunovich said to Mr Otto, "We can get you kicked out of here."  The trial Judge drew an inference from this that Mr Simunovich was aware that he had authority to be there and to have Mr Otto removed.  His Honour consequently found that Mr Simunovich was aware of the encroachment from at least the time of his visit, being 19 December 1996, but deliberately chose not to tell any representative of the respondent of the fact of the incursion into the area of the sub‑lease.

5. I should add, in this respect, that the trial Judge found that Mr Simunovich was an unsatisfactory witness who was evasive, manipulative, less than frank and generally prepared to say whatever he thought would best advance his and Finesky's interests.  The trial Judge formed the "very firm impression" that Messrs Simunovich and Maloney were doing their utmost to encourage and maximise the Department's encroachment into the sub‑lease area and that "thereafter all the apparent business or operational planning and activity by … [Finesky] was directed, not to any genuine purpose of establishing a mining operation, but rather to creating an optimum situation for its claim against the … [respondent]".

6. The first day upon which Finesky demanded that operations in its sub‑lease area should cease was 20 January 1997.  By then quarrying operations had been completed and rehabilitation works were in progress.  WA Limestone left the area on 24 January 1997.

7. Finesky issued proceedings against the respondent on 20 May 1997.  It claimed damages, including exemplary damages.  It alleged that the respondent, by its agents, mined and carried away from its sub‑lease area 13,677 bank cubic metres of limestone rock, as a consequence of which it has suffered loss and damage.  Its claim for exemplary damages was based upon an allegation that the respondent's conduct was oppressive and arbitrary.

8. The respondent, in his defence, admitted that, between about 9 December 1996 and 20 January 1997, his subcontractor, WA Limestone, quarried limestone from part of Finesky's sub‑lease area. However, he pleaded (par 3(c)) that, under reg 110(3) of the Mining Regulations 1981, Finesky's agreement with Alcoa was not effectual to pass any estate or interest in mining lease 08/6 until that agreement was registered at the Department of Minerals and Energy, which occurred on 20 January 1997.  He also denied that Finesky had suffered any loss or damage.  He pleaded, in that respect (par 4(c)), that Finesky was, at all material times, unable lawfully to mine any limestone from the land the subject of its sub‑lease because:

   "A(i)       such land lies within 800 metres of at least 3 water bores; and

   (ii)the conditions of mining lease 08/6 with which … [Finesky] is obliged to comply include a condition prohibiting mining being carried out within 800 metres of any bore.

   B[Finesky] has not complied with relevant requirements of environmental protection, native title and mining legislation."

9. The respondent also pleaded, by way of an alternative defence, that, under its sub‑lease, Finesky was entitled to up to 100,000 tonnes of limestone lawfully mined from the sub‑lease area for every year during the term of the sub‑lease and that it could, had it wished to do so, have lawfully mined that quantity of limestone from the sub‑lease area.

10. So far as is presently relevant, the trial Judge first dealt with the respondent's contention that Finesky gained no right or interest under its sub‑lease until that sub‑lease was consented to by the Minister in writing and it was stamped and registered.  While the Minister's consent was, as I have said, given on 10 December 1996, the trial Judge found that, because it was expressed to be subject to assessment for stamp duty, it was not "in its terms … effective consent until that condition was complied with", which, as I have also said, took place on 20 January 1997.

11. Next, the trial Judge turned to consider the argument which had been mounted in respect of reg 110 of the Mining Regulations.  That regulation provides that:

    "Registration of dealings

    (1)Unless otherwise provided in the Act or these regulations, all dealings affecting a mining tenement shall be lodged for registration with the prescribed fee, at the office of the mining registrar or the Department at Perth.

    (2)The registration of all dealings shall be effected at the Department by an officer acting with the authority of the Minister.

    (3)No dealings shall be effectual to pass any estate or interest in a mining tenement or in any way to charge or encumber a mining tenement until registered in accordance with subregulation (2)."

12. The trial Judge found, in this respect (par 125), that, "notwithstanding … [Finesky's] rights to enter and mine were not to be enlivened until the Minister's consent was given and the condition precedent to its effect was met (on 20 January 1997), as a matter of construction the terms of the sub‑lease were such as to create an equitable interest in … [Finesky] from 9 December 1996". He also found (pars 140 to 144) that a dealing which creates an equitable interest in a mining tenement is a dealing "affecting" the tenement within the meaning of reg 110(1) and that an instrument having that effect is required by reg 110(1) to be registered and is, by virtue of reg 110(3), not effectual to pass any estate or interest in the tenement until so registered. Consequently, his Honour found, the sub‑lease was not effectual to pass any estate or interest in the Alcoa mining tenement to Finesky until 20 January 1997.

13. Next, although it was unnecessary for him to have done so, the trial Judge turned his attention to other contentions which had been advanced on behalf of the parties. The first of these was the respondent's contention that Finesky could not, in any event, lawfully have mined the limestone which had been removed on behalf of the Department. Section 85(2)(b) of the Mining Act 1978 ("the Act") provides that, subject to the Act, the lessee of a mining lease "owns all minerals lawfully mined from the land under the mining lease". The respondent's contention was, as I have said, that, because it was not in dispute that the entirety of the area in which encroachment occurred was within 800 metres of four production bores, the limestone from that area could not have been "lawfully mined" by Finesky. It was also not disputed that, at the material times, Finesky had not complied with relevant conditions and requirements relating to environment protection, native title and mining legislation. The respondent consequently contended that, for that reason too, Finesky could not have "lawfully mined" the land in question.

14. Finesky responded to that submission by arguing that the words "lawfully mined", in s 85(2)(b) of the Act, should not be given a wide meaning, as otherwise even a minor breach of the conditions of a mining lease would result in a miner losing all rights to minerals mined during the period the condition was not met. It also contended that, since the Department had obtained the necessary approvals (apart from Finesky's consent) to quarry the area, the logical inference was that Finesky could have done likewise.

15. The trial Judge considered that the submissions of both parties missed the point.  He said, in that respect (par 153):

    "The words 'under the mining lease' are important.  The words 'lawfully mined' may well not have the wide meaning suggested by the … [respondent] - not … [every] breach of condition (or failure to obtain an approval) would necessarily render the mining 'unlawful'.  That would no doubt depend upon the particular circumstances.  But whether that be so or not does not matter here.  That is because the ownership being referred to is ownership of minerals (lawfully) 'mined under the … lease'.  The plain meaning of the subsection is that the lessee owns minerals mined by the lessee (or the lessee's agents) in the exercise of the lessee's rights under the lease:  compare Sirr v Dwyer [1984] WAR 326. The mining of the limestone here was ex hypothesi not done in the purported exercise of any rights under the sublease.  Section 85(2) accordingly did not give rise to any rights of ownership of the limestone in … [Finesky]."

16. The trial Judge then turned to what he described as "the second broad ground" upon which the respondent had denied liability, being a ground to the effect that, if the sub‑lease did confer rights on Finesky prior to 20 January1997, Finesky had not shown that interference with the types of rights granted to it gave rise to any cause of action for damages at common law.

17. His Honour dealt, first, with the claim as it had been put in trespass.  He reached the following conclusions (pars 159 and 160):

    "Every unlawful entry by a person on land in the possession of another is an actionable trespass whether or not damage is shown.  A mistaken belief that the trespasser has a right of entry is not a defence:  Shattock v Devlin [1990] 2 NZLR 88, 113 ‑ 114. A person having the right of possession of land acquires possession of it in law by entry. When that occurs possession relates back to the time at which the right of entry accrued, and action may be taken for a trespass committed before the entry, the trespasser becoming a wrongdoer by relation back: "Halsbury's Laws of Australia", Vol 26, [415 ‑ 510] and cases there cited.

    [Finesky] accordingly acquired possession of the subleased land on 20 January 1997 and that related back to 9 December 1996.  Given the … [respondent] admits the encroachment and my finding that … [Finesky] was entitled to exclusive possession for mining purposes, … [Finesky] must be entitled to damages in trespass.  Whether or not an award would be more than nominal will depend upon proof of actual damage."

18. The trial Judge then turned to the claim in conversion.  He said, in that respect (par 162), that conversion involves the deliberate dealing with a chattel in a manner inconsistent with the rights of another, whereby the other is deprived of the use and possession of it (Penfold Wines Pty Ltd v Elliott (1946) 74 CLR 204; Claxton v Everingham (1884) 6 ALT 132). However, he said (par 166), the limestone which had been taken from the area covered by Finesky's sub‑lease was part of the realty until mined and only then became a chattel. He went on to say (ibid):

    "The limestone was mined before 20 January 1997 - that is, prior to any equitable interest in it passing to … [Finesky].  [Finesky] had no other rights of ownership in the limestone.  Nor, for the same reasons, did … [Finesky] have any right to immediate possession of the limestone prior to 20 January 1997.  It follows that … [Finesky's] claim in conversion of the limestone cannot be maintained."

19. Finally, the trial Judge turned to the question whether Finesky had suffered any loss or damage.

20. Finesky claimed damages upon the basis that, were it not for the respondent's wrongful conduct, it would have been able to quarry the limestone taken by the Department and would have sold it for use in paving, tiling, cladding and building products or for armourstone.  However, the respondent disputed that Finesky would ever have been able to quarry, or would have quarried, the limestone for any of these purposes.  Counsel for the respondent also submitted that there was, in any event, sufficient limestone still available to Finesky under the terms of its sub‑lease, after the quarrying which was conducted on behalf of the Department, in order to satisfy its entitlement under the sub‑lease.

1. The trial Judge first considered what was the appropriate measure of damages.  He concluded that it was "the market price of the extracted limestone at the quarry gate, less the cost of severance" (par 221).  He went on to say (par 236) that the question whether Finesky could have obtained environmental, Aboriginal Heritage, water resources or similar approvals was irrelevant, as was the fact (which his Honour found to be so) that the sub‑lease area contained more than enough limestone to meet the quantities that Finesky was entitled to take under the sub‑lease.  He was satisfied, in this last respect, that what was left in situ was far more than Finesky was entitled to take over the whole of the period of the sub‑lease.  He said (par 237) that, in considering the measure of damages to which he had referred, it was important to bear in mind that the "value" was that of the limestone to Finesky and not to the respondent.  He concluded (par 258) that the limestone had a total value of $51,879 but that the total cost of extraction would have been $34,586, giving a net value of $17,293.  His Honour said that, had he upheld the claim in conversion, he would have awarded Finesky that amount.

2. So far as the claim in trespass was concerned, the trial Judge said that he would make only a nominal award of damages in an amount of $1000.  This was so, he said, because the encroachment had been to only a small part of the sub‑lease area, there was more than enough limestone in that area to allow Finesky to take all that it was permitted to take and he was satisfied that Finesky had never had "an actual or genuine intention" to establish a quarry and mine it.  His Honour said that Finesky had no apparent realistic capacity to do so and in fact had not done so, notwithstanding that the sub‑lease had since expired (par 262).

3. Finally, the trial Judge said that there was no substance to Finesky's claim for exemplary damages.  He found, in that respect, that those in charge of the Exmouth project on behalf of the Department did not know of either the Alcoa lease or the sub‑lease to Finesky until 20 January 1997 and that, upon learning of the sub‑lease, they responded appropriately.

4. Finesky initially relied upon nine grounds of appeal, two of which (grounds 5 and 9) have since been abandoned.  The remaining grounds are as follows:

   "1The learned trial judge erred in fact in holding that the Appellant's 'rights to enter into possession of the sublease and mine limestone could not be exercised until the consent was obtained (which was 20 January 1997) although the term of the sublease ran from 9 December 1996' when in fact as the learned trial Judge found the Ministerial consent for the sublease had been obtained on 10 December 1996.

   2The learned trial judge erred in law in holding that the consent given on 10 December 1996 was not effective consent until the condition requiring assessment for stamp duty was complied with.

   3The learned trial judge erred in law in holding that Regulation 110(3) of the Mining Regulations has the effect at law that an instrument in writing creating an equitable interest in or affecting a mining tenement is not effectual to pass any estate or interest in such tenement until so registered.

   4The learned trial judge erred in law in holding that the Appellant's claim in conversion of the limestone could not be maintained before 20 January 1997.

   5…

   6The learned trial judge erred in law in holding that the Appellant was not entitled to damages by reason of the fact that it was financially unable to establish a quarry on the sublease at the relevant time.

   7The learned trial judge erred in law in holding that the value of the limestone to the Appellant, not to the Respondent, was the appropriate measure of compensation when the correct measure is the value of the extracted limestone at the quarry gate less the costs of extraction.

   8(a)       The learned trial judge erred in fact in failing to use the rate of $14.50 per tonne set down in the November 1999 contract with WA Limestone for the supply of limestone armour stone to repair damage to the Exmouth Breakwater when that rate was in fact the rate for limestone armour stone at the quarry gate.

   (b)The rate per tonne which should have been used by the learned trial judge in assessing damages was $14.50 per tonne less the costs of extraction of $2.00 per tonne being a net figure of $12.50 per tonne."

5. The respondent has lodged both a cross‑appeal and a notice of contention under O 63 r 9 of the Rules of the Supreme Court (WA). In his cross‑appeal he contends that the trial Judge erred in law in holding that Finesky was able, by virtue of the doctrine of trespass by relation, to maintain an action in trespass in respect of the respondent's entry into the sub‑lease area and that his Honour should have held that no such action could be maintained in respect of the respondent's entry prior to 20 January 1997. However, the cross‑appeal is conditional upon the appeal "being allowed on the ground that … [Finesky] is entitled to more than $1000 in damages for the Respondent's trespass".

6. In his notice of contention the respondent contends that the judgment of the trial Judge should be affirmed on various grounds other than those relied upon by him, one of which (to which I shall return later) is that his Honour should have found that the mining of limestone within the sub‑lease area on behalf of the respondent did not cause Finesky any loss or damage.

7. I propose first to deal with ground 3 of the grounds of appeal.

8. Regulation 110(3) of the Mining Regulations provides, in effect, that any unregistered dealing will be ineffectual to pass any estate or interest in a mining tenement. The word "dealing" is one of wide import and reg 110(1) requires the registration of all dealings "affecting" a mining tenement. A dealing which creates an equitable interest in a mining tenement, or which passes an equitable title to or in such a tenement, undoubtedly "affects" that tenement. It is consequently difficult to see why a dealing of that kind would not be caught by reg 110(3).

9. Counsel for Finesky sought to persuade us that the provisions of reg 110(3) should be read down in the way in which the High Court, in Barry v Heider (1914) 19 CLR 197, read down the similar provisions of s 41(1) of the Real Property Act 1900 (NSW). That section (which is in terms similar to s 58 of the Transfer of Land Act 1893 (WA)) reads, so far as is material, as follows:

   "No dealing, until registered in the manner provided by this Act, shall be effectual to pass any estate or interest in any land under the provisions of this Act, or to render such land liable as security for the payment of money, but upon the registration of any dealing in the manner provided by this Act, the estate or interest specified in such dealing shall pass, or as the case may be the land shall become liable as security …".

10. The Court held that the denial of effectiveness to an unregistered instrument, provided for by s 41(1), did not (to use the words of Isaacs J, at page 216) "touch whatever rights are behind it", with the result that equitable interests are still recognised and protected by the Courts notwithstanding the terms of that legislation.

11. A submission similar to that put to us in this respect was put to, and accepted by, Rowland J in Knezevich v Mihalj, unreported; SCt of WA (Rowland J); Library No 5630; 23 November 1984. His Honour there concluded that reg 110(3) should "be read down in the way in which the similar provision in the Torrens legislation was read down in Barry v Heider" (page 6).  In reaching that conclusion, Rowland J considered that there were provisions in the Mining Act 1978 which tended to support that "type of construction". He mentioned, as examples of provisions of this kind, sections 119(2) and 119(4), as well as those provisions of the Act which allow registration of caveats, being sections 121 and 122. Sections 119(2) and 119(4) then read as follows (s 119(4) having since been deleted by amendment):

    "(2)A legal or equitable interest in or affecting a mining tenement is not capable of being created, assigned, affected or dealt with, whether directly or indirectly, except by an instrument in writing signed by the person creating, assigning or otherwise dealing with the interest.

    …

    (4)An instrument by which a legal or equitable interest in or affecting a mining tenement is or may be created, assigned, affected or dealt with, whether directly or indirectly, so as to confer any beneficial interest in the mining tenement upon a country is of no force or effect until the instrument has been approved by the Minister."

12. Sections 121 and 122 made provision for the lodging, by any person claiming an interest in a mining tenement, of caveats forbidding the registration of any transfer or other instrument affecting the mining tenement or interest and also for the effect and duration of such caveats.

13. With great respect to Rowland J, I am unable, firstly, to accept that what was said in Barry v Heider, decided in the context of Torrens System title, provides any real guidance in the very different context of the provisions of the Mining Act.  Torrens legislation, which effects a scheme of title by registration, has, as one of its objectives, the prevention of the registration of equitable interests (although they may be protected by way of caveats), but the Mining Act and Mining Regulations, which merely require the registration of title, manifest no such intention.

14. I am also unable to accept that the terms of s 119(2) of the Act (or those of the former s 119(4) thereof) require any different construction of what I take to be the plain words of reg 110. As to s 119(2), the fact that an interest in or affecting a mining tenement can only be created, assigned, affected or dealt with by an instrument in writing seems to me to facilitate the registration of equitable instruments. As to s 119(4), the fact that instruments of the kind there referred to (including instruments creating or assigning equitable interests in or affecting a mining tenement) are to have no force or effect until approved by the Minister seems to me to lend little support to the proposition that equitable interests in mining tenements are not required to be registered. While it might be thought that instruments of the kind referred to which have not been approved by the Minister are unlikely to be registered, the section has the effect that, until approval is given, they are ineffectual even if they should be registered. That being so, this section is capable of being read consistently with what I take to be the plain meaning of reg 110.

15. Similarly, the existence of provisions facilitating the lodgment of caveats by persons claiming interests in mining tenements does not appear to me to require a reading down of the plain meaning of reg 110. Section 121 gives to a person "claiming" any interest in a mining tenement a right to lodge a caveat. The existence of a right of that kind in respect of a claimed interest is not, in my opinion, inconsistent with a requirement that all "dealings" affecting a tenement must be lodged for registration and that no "dealings" shall be effectual to pass any estate or interest in the tenement or to charge or encumber it until registered.

16. Moreover, there are other provisions of the Mining Act which seem to me to support the notion that equitable interests are required to be registered. So, for example, s 103A(1) of the Act provides, so far as is relevant, that:

    "(1)Where an instrument creating, assigning or surrendering a legal or equitable interest in a mining tenement … is required to be registered under this Act it shall be lodged for registration in such manner as may be prescribed in relation to an instrument of that kind …".

17. Further support is provided by s 116(2) of the Act, which underlines the importance of registration of all interests affecting a mining tenement. That section provides, relevantly, that:

    "Except in the case of fraud, a mining tenement granted or renewed under this Act shall not be impeached or defeasible by reason or on account of any informality or irregularity in the application or in the proceedings previous to the grant or renewal of that tenement and no person dealing with a registered holder of a mining tenement shall … be affected by notice, actual or constructive, of any unregistered trust or interest any rule of law or equity to the contrary notwithstanding, and the knowledge that any such unregistered trust or interest is in existence shall not of itself be imputed as fraud."

18. What I take to be the plain meaning of reg 110 is also supported by the decision of Dwyer J in In re Blue Bird Gold Mines NL (1942) 44 WALR 85. There, a company, which subsequently went into liquidation, executed a memorandum of charge over its mining leases in favour of a bank. It also deposited the leases with the bank. However, the charge was not registered. Section 82(1) of the Mining Act 1904 then provided that:

    "(1)A lessee or an applicant for a lease may, with the approval in writing of the Minister, or of an officer acting with the authority of the Minister, transfer, sub‑let, mortgage, encumber, or otherwise deal with the lease or application:

    But no transfer, sub‑lease, mortgage, encumbrance, or other instrument shall be effectual to pass any estate or interest in a lease or application for a lease, or in any way charge or encumber the same, until registered in accordance with this Act and the regulations."

19. Dwyer J held that this provision was sufficient to preclude the bank from "claiming as the holder of any interest in or security over the mining area or the buildings and structures thereon" (page 89).

20. Whilst Rowland J, in Knezevich, sought to distinguish that case upon the basis that the provisions of the 1978 Act to which his Honour referred (and which I have mentioned above) had not been contained in the 1904 Act, I have already expressed the opinion that those provisions do not support the construction put upon reg 110 by his Honour. Rowland J also mentioned that, whereas there was, under the 1904 Act, a statutory restriction against dealings without the approval in writing of the Minister or his authorised officer, no such restriction appeared in the 1978 Act (page 5). His Honour said, in this respect, that, while s 82 of the 1978 Act made it a condition of every mining lease that it would not be assigned without the prior written consent of the Minister, there was "no express statutory restriction" in that regard. With great respect, it seems to me that this kind of provision does amount to an express statutory restriction. Section 82(1)(d) of the Act requires every mining lease to be subject to a covenant by the lessee that the lessee will not "assign, underlet or part with possession of such land or any part thereof without the prior written consent of the Minister, or of an officer of the Department acting with the authority of the Minister".

21. I am consequently satisfied that reg 110 should be given its ordinary meaning, with the consequence that it had the effect that Finesky's sub‑lease was not effectual to pass any interest in Alcoa's mining tenement to it until such time as it was registered. I should add that Finesky did not challenge the validity of reg 110(3), notwithstanding that there has been some debate as regards the question whether or not that regulation is ultra vires (see C J Carr:  "Problems in Creation, Transfer and Registration of Legal and Equitable Interests in Mining and Petroleum Concessions in Western Australia with Recommendations for Legislative Reform" (1982) 4 AMPLA Journal 433 at 437).

22. This conclusion renders it unnecessary for me to consider grounds 1 and 2 of the grounds of appeal.

23. As to grounds 6, 7 and 8, which deal with issues of damages, it is, I think, necessary for me only to deal with ground 7, which addresses the appropriate measure of compensation, together with that ground of the notice of contention which is to the effect that Finesky has suffered no actual loss or damage arising out of the alleged invasion of its interest.

24. Finesky contends that the trial Judge was in error in holding that the value of the limestone to Finesky, and not to the respondent, was the appropriate measure of compensation.  It consequently contended, in effect, that the appropriate measure, in a case of this kind, is the defendant's gain rather than the plaintiff's loss.

25. On the face of it, this submission flies in the face of long accepted principles governing the assessment of damages for torts.  The general principle upon which compensatory damages are assessed in tortious actions is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as that in which it would have been had the tort not been committed (see, for example, Butler v The Egg and Egg Pulp Marketing Board (1966) 114 CLR 185 at 191 and Haines v Bendall (1991) 172 CLR 60 at 63), although the Court has, in appropriate cases, been prepared to award aggravated and/or exemplary damages (see Uren v John Fairfax & Sons Ltd (1966) 117 CLR 118 at 149 ‑ 150).

26. However, Finesky sought to support its submissions by reference to the case of Bilambil‑Terranora Pty Ltd v Tweed Shire Council [1980] 1 NSWLR 465. There, the appellant was the owner of land which had, some years before, been made the subject of quarrying operations. At the time at which the appellant acquired the property the defendant Council had been taking gravel from it for a period of eight years and had paid royalties to those who had previously been entitled to it. It continued to take gravel from the quarry after the appellant had acquired the title to the land. The appellant challenged its right to do so and issued proceedings alleging trespass and conversion. It claimed an injunction and damages. As was said by Mahoney JA (pages 488 ‑ 489), when a trespasser enters another's land, mines his minerals and takes them away, the trespasser is liable for damages in respect of the damage done to the land and in respect also of the conversion of the minerals, although care should be taken to avoid overlapping. In that case, no issue was raised as to damages for trespass as a separate item and the Court had consequently only to consider the claim for conversion. The basis for that claim lay in the principle that, when the mineral was severed from the land, it became a chattel which was the property of the landowner who became entitled to damages upon the defendant converting it to his own use (page 489, per Mahoney JA). Each of Reynolds JA and Mahoney JA held that the measure of the plaintiff's damage in conversion was the market value of the gravel. Samuels JA, on the other hand, held that the appropriate measure was the royalty which the plaintiff could have obtained for permitting the gravel to be taken.

27. Both Reynolds JA and Mahoney JA considered that it was irrelevant that the plaintiff had had no intention of operating the quarry as a vendor of gravel.  Mahoney JA (in a passage particularly relied upon by Finesky) said (at pages 494 ‑ 495):

    "(114)… [I]t is to be recalled that, if the plaintiff had intercepted the mineral at a point before sale, eg, at the entrance to the quarry, it would have been entitled to possession of it.  It would then have had something which it could have sold at the market value, subject to its obligation to make proper allowances to the defendant.  The financial position of the plaintiff should not be different, according to the accident of whether it intercepted the minerals in this way, or discovered their loss only after they had been sold by the defendant:  cf Jegon v Vivian (1871) LR 6 Ch App 742 at 760.

    (115)The result of the adoption of this method of arriving at damages for loss of minerals may result, in a sense, in a plaintiff recovering more than it might otherwise have received in respect of the minerals.  If the tort had not been committed, the likelihood may be that it would never have mined the minerals or received anything from them at all.  But such a result is not unprecedented.  Similar results may ensue where, eg, there is the waiver of a tort and the adoption of the advantageous act of the wrongdoer.  Whether the law of unjust enrichment forms part of Australian law as such, the influences which inform it are not without effect in our law."

1. There are other cases in which the Courts have, in situations in which the defendant had wrongfully used the plaintiff's property, been prepared to compensate the plaintiff regardless of whether or not it could show that it would have let the property to someone else, or even that it would otherwise have used the property itself and therefore regardless of whether it had suffered any actual loss as a result of the use of its property (see, for example, Swordheath Properties Ltd v Tabet [1979] 1 WLR 285 at 288; Inverugie Investments Ltd v Hackett [1995] 1 WLR 713 at 717; Attorney‑General v Blake [2001] 1 AC 268 at 278 ‑ 279 and Roberts v Rodney District Council [2001] 2 NZLR 402 at 407 ‑ 409).

2. Also, the Courts have, from time to time, been prepared to compensate a plaintiff for the detention by the defendant of its goods which it might otherwise have hired out for profit, upon the basis of the full market hiring charge, without any deduction for the possibility that the plaintiff might not have been able to find a lessee for the goods over the whole of the period of detention (see, for example, Strand Electric & Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246 and Gaba Formwork Contractors Pty Ltd v Turner Corporation Ltd (1993) 32 NSWLR 175.)

3. In Gaba Formwork Giles J was required to assess damages for detinue in respect of formwork materials which the owner would or might otherwise have hired out for reward.  His Honour held that it was unnecessary to show an available market in which the owner would have hired out the goods.  He said (page 188):

   "… [T]hat a degree of departure from the principle of compensatory damages applied in Butler v Egg and Egg Pulp Marketing Board is permissible in such circumstances is, I think, supported by the majority decision in Bilambil‑Terranora Pty Ltd v Tweed Shire Council.  In particular, that the influences which inform the law of unjust enrichment are not without effect in our law (to use the words of Mahoney JA in that case) has since been underlined by the recognition in the High Court that the basis of actions where the law imposes or imputes an obligation to make compensation for a benefit accepted is restitution:  Pavey and Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 227, 254‑257, 267; Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 at 673. In England the House of Lords has recently embraced unjust enrichment as the source of the obligation to repay stolen money: Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548."

4. The extent to which ordinary principles of compensatory damages are departed from in cases of the kind to which I have referred depends upon the individual circumstances of each case.  As was pointed out by Lord Lloyd of Berwick, who delivered the judgment of their Lordships in Inverugie Investments, at 717, whether or not such cases are an exception to the rule that damages in tort are compensatory depends how widely one defines the "loss" which the plaintiff has suffered. His Lordship also there mentioned, at 718, that, in Stoke‑on‑Trent City Council v W & J Wass Ltd [1988] 1 WLR 1406, Nicholls LJ had called the underlying principle in these cases the "user principle". He went on to say:

   "The plaintiff may not have suffered any actual loss by being deprived of the use of his property.  But under the user principle he is entitled to recover a reasonable rent for the wrongful use of his property by the trespasser.  Similarly, the trespasser may not have derived any actual benefit from the use of the property.  But under the user principle he is obliged to pay a reasonable rent for the use which he has enjoyed.  The principle need not be characterised as exclusively compensatory, or exclusively restitutionary; it combines elements of both."

5. This "user" principle was discussed by the House of Lords in Attorney‑General v Blake [2001] 1 AC 268. In that case Lord Nicholls (with whom Lord Goff and Lord Browne‑Wilkinson were in agreement) said (pages 278 ‑ 279):

   "So I turn to established, basic principles.  I shall first set the scene by noting how the court approaches the question of financial recompense for interference with rights of property.  As with breaches of contract, so with tort, the general principle regarding assessment of damages is that they are compensatory for loss or injury.  The general rule is that, in the oft quoted words of Lord Blackburn, the measure of damages is to be, as far as possible, that amount of money which will put the injured party in the same position he would have been in had he not sustained the wrong:  Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, 39. Damages are measured by the plaintiff's loss, not the defendant's gain. But the common law, pragmatic as ever, has long recognised that there are many commonplace situations where a strict application of this principle would not do justice between the parties. Then compensation for the wrong done to the plaintiff is measured by a different yardstick. A trespasser who enters another's land may cause the landowner no financial loss. In such a case damages are measured by the benefit received by the trespasser, namely, by his use of the land. The same principle is applied where the wrong consists of use of another's land for depositing waste, or by using a path across the land or using passages in an underground mine. In this type of case the damages recoverable will be, in short, the price a reasonable person would pay for the right of user: see Whitwham v Westminster Brymbo Coal and Coke Co [1896] 2 Ch 538, and the 'wayleave' cases such as Martin v Porter (1839) 5 M & W 351 and Jegon v Vivian (1871) LR 6 Ch App 742. A more recent example was the non‑removal of a floating dock, in Penarth Dock Engineering Co Ltd v Pounds [1963] 1 Lloyd's Rep 359.

   The same principle is applied to the wrongful detention of goods.  An instance is the much cited decision of the Court of Appeal in Strand Electric & Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246, concerning portable switchboards. But the principle has a distinguished ancestry. The Earl of Halsbury LC famously asked in The Mediana [1900] AC 113, 117, that if a person took away a chair from his room and kept it for 12 months, could anybody say you had a right to diminish the damages by showing that I did not usually sit in that chair, or that there were plenty of other chairs in the room? To the same effect was Lord Shaw's telling example in Watson, Laidlaw & Co Ltd v Pott, Cassels and Williamson (1914) 31 RPC 104, 119. It bears repetition:

   'If A, being a liveryman, keeps his horse standing idle in the stable, and B, against his wish or without his knowledge, rides or drives it out, it is no answer to A for B to say:  "Against what loss do you want to be restored?  I restore the horse.  There is no loss.  The horse is none the worse; it is the better for the exercise."'

   Lord Shaw prefaced this observation with a statement of general principle:

   'wherever an abstraction or invasion of property has occurred, then, unless such abstraction or invasion were to be sanctioned by law, the law ought to yield a recompense under the category or principle … either of price or of hire.'

   That was a patent infringement case.  The House of Lords held that damages should be assessed on the footing of a royalty for every infringing article.

   This principle is established and not controversial.  More difficult is the alignment of this measure of damages within the basic compensatory measure.  Recently there has been a move towards applying the label of restitution to awards of this character:  see, for instance, Ministry of Defence v Ashman [1993] 2 EGLR 102, 105 and Ministry of Defence v Thompson [1993] 2 EGLR 107. However that may be, these awards cannot be regarded as conforming to the strictly compensatory measure of damage for the injured person's loss unless loss is given a strained and artificial meaning. The reality is that the injured person's rights were invaded but, in financial terms, he suffered no loss. Nevertheless the common law has found a means to award him a sensibly calculated amount of money. Such awards are probably best regarded as an exception to the general rule."

6. Whatever may be the precise nature and limits of this exception to the rule, and regardless of whether or not damages in such cases might properly be regarded as restitutionary (as to which, see Roberts, at 408, per Barker J), it is difficult to see how the exception can be applied to the facts of this case. In each of the cases to which I have referred the property used was that of the party to whom an award of damages was made. That cannot be said in this case. Finesky was not the owner of any land. Nor was it entitled to all of the limestone located in the area of its sub‑lease. I have earlier mentioned that it was entitled only to a maximum of 100,000 tonnes of limestone for each year of the currency of its sub‑lease and that, on the undisputed finding of the trial Judge, the area

of the sub‑lease, even after it had been wrongfully mined, contained more than enough limestone to meet the quantities that Finesky was entitled to take over the whole of the period of the sub‑lease.  It could accordingly not be said to have had any title to the particular pieces of limestone which were taken.  I am consequently unable to accept that the principles expressed in the cases to which I have referred have any application to the circumstances of this case.  Finesky is therefore not entitled to compensation upon the basis advanced by it.  Nor has it demonstrated any other form of actual loss or damage.

1. It follows that I would dismiss the appeal.  That being so, it is unnecessary for me to consider the respondent's cross‑appeal which, as I have said, was conditional upon the appeal being allowed on the ground that Finesky is entitled to more than $1000 in damages for the respondent's trespass.

2. PARKER J:  For the reasons now published by Steytler J I agree that the appeal should be dismissed.