Ivanhoe Coal Pty Ltd v TransGrid

[2000] NSWLEC 40

Land and Environment Court

of New South Wales

CITATION:	Ivanhoe Coal Pty Ltd v TransGrid [2000] NSWLEC 40
PARTIES:	APPLICANT: Ivanhoe Coal Pty Ltd RESPONDENT: TransGrid
FILE NUMBER(S):	30276 of 1999
CORAM:	Talbot J
KEY ISSUES:	Compensation - Construction & Interpretation - Jurisdiction :- Construction & Interpretation:- mistake in amending Act - the approach to construction - test for reading words into or omitting words from legislation Jurisdiction:- claim purporting to be made under Land Acquisition (Just Terms Compensation) Act 1991 properly construed as claim under Public Works Act 1912 Compensation:- claim required to be referred to arbitration under Public Works Act 1912 - not a claim under Land Acquisition (Just Terms Compensation) Act 1991
LEGISLATION CITED:	Land Acquisition (Just Terms Compensation) Act 1991 s 3, s 58, s 59(f) Commercial Arbitration Act 1984 Public Works Act 1912 s 39, s 40, s 141, s 142, s 145
CASES CITED:	Bermingham v Corrective Services Commission (NSW) (1988) 15 NSWLR 292; Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1980-81) 147 CLR 297; Seaford Court Estates Pty Ltd v Asher [1949] 2 KB 481; Thompson v Goold and Co [1910] AC 409; Tokyo Mart Pty Ltd v Campbell and Anor (1988) 15 NSWLR 275; Wentworth Securities Limited and Anor v Jones [1980] AC 74
DATES OF HEARING:	29/02/2000
DATE OF JUDGMENT:	03/08/2000
LEGAL REPRESENTATIVES:	APPLICANT: Mr A Robertson SC SOLICITORS: Phillips Fox RESPONDENT: Mr D Ryan SC SOLICITORS: Middletons Moore & Bevins

JUDGMENT:

IN THE LAND AND Matter No. 30276 of 1999
ENVIRONMENT COURT Coram: Talbot J
OF NEW SOUTH WALES Decision Date: 8 March 2000

Ivanhoe Coal Pty Ltd
Applicant

v
TransGrid

Respondent

REASONS FOR JUDGMENT


1. By an Amended Application Class 3, the applicant, Ivanhoe Coal Pty Ltd has appealed to this Court against the rejection of its claim for compensation made to TransGrid pursuant to s 39, within Div 2, Pt 3 of the Land Acquisition (Just Terms Compensation) Act 1991 (“the Just Terms Act”).

2. The claim for compensation is made by the applicant as registered proprietor of coal bearing lands over which transmission lines originating at the Mt Piper Power Station have been built. It is alleged that the electrical effects of the transmission lines render it practically impossible to mine 95 per cent of the coal reserves for health and safety reasons. It is alleged this means the mine operated by the applicant is not viable. Ivanhoe claims the value of the minerals not taken or purchased by TransGrid which cannot be obtained by reason of making or constructing and maintaining the authorised work.

3. The claim relies on s 145 of the Public Works Act 1912 (“the PW Act”) which provides as follows:-

(1) The Constructing Authority shall from time to time pay the owner, lessee, or occupier of any such mines, lying on both sides of the authorised work:


(a) all such additional expenses and losses as such owner, lessee, or occupier incurs by reason of the severance of the lands lying over such mines by the authorised work, or of the continuous working of such mines being interrupted as aforesaid, or by reason of the same being worked in such manner and under such restrictions, as not to prejudice or injure the railway, and

(b) for any minerals not taken or purchased by the Constructing Authority which cannot be obtained by reason of making or constructing and maintaining the authorised work.

(2) If any dispute or question arises between the Constructing Authority and such owner, lessee or occupier as aforesaid, touching the amount of such losses or expenses, the same shall be settled by arbitration as hereinbefore mentioned.


4. Prior to the amendment of the PW Act pursuant to Sch 1 of the Just Terms Act in 1991, there was provision in Pt VII Div 2 for the appointment of arbitrators to settle any question of disputed compensation authorised or directed by the PW Act.

5. The consequence of the amendments in 1991, which repealed Pt VII Div 2, is that the words “by arbitration as hereinbefore mentioned” in s 145(2) no longer have a direct reference elsewhere in the PW Act.

6. Schedule 1 to the Just Terms Act replaced specific reference to Div 2 of Pt VII in the PW Act with a reference to the Just Terms Act.

7. The respondent, TransGrid, has filed a Notice of Motion seeking a declaration that the Court has no jurisdiction over it in respect of the subject matter of the proceedings.

8. Both parties agree that a settlement by arbitration “as hereinbefore mentioned” pursuant to s 145(2) of the PW Act cannot be achieved following the repeal of Div 2 of Pt VII of the Act.

9. The applicant contends that the subsection should be read as if it was amended in the same way as s 142(4), namely, to incorporate a reference to the Just Terms Act. The respondent’s contention is that the words “as hereinbefore mentioned” should now be treated as surplusage and that the provisions of the Commercial Arbitration Act 1984 apply pursuant to s 3(4).

The approach to construction of the legislation

10. The first question that must be asked is whether there is some ambiguity or obscurity and if there is, to determine the intention of Parliament. As Denning LJ put the question in Seaford Court Estates Pty Ltd v Asher [1949] 2 KB 481 at 499:-

A judge should ask himself the question: If the makers of the Act had themselves come across this ruck in the texture of it, how would they have straightened it out?


11. The approach taken by the High Court in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1980-1981) 147 CLR 297 was not quite so robust as the approach taken by His Lordship.

12. In the latter case, Stephen J pointed out how it was possible for the Court both to recognise the nature of the draftsperson’s error and to identify it as an error and to trace the process by which the provision had become an anachronism.

13. Where the meaning of the words in the legislation is clear and unambiguous, generally speaking, they are to be given effect. However, as Gibbs CJ pointed out at 304 in Cooper Brookes, there are cases where the result of giving words their ordinary meaning may be so irrational that the Court is forced to the conclusion that the draftsperson has made a mistake and that the canons of construction are not so rigid as to prevent a realistic solution.

14. In Thompson v Goold and Co [1910] AC 409, Lord Mersey said at 420:-

It is a strong thing to read into an Act of parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do.

15. After referring to s 33 of the Interpretation Act 1987 which directs the Court to give legislation the construction which promotes its purpose or object, McHugh JA (as he then was), in Bermingham v Corrective Services Commission (NSW) (1988) 15 NSWLR 292 at 302 re-endorsed what the Court had done in Tokyo Mart Pty Ltd v Campbell and Anor (1988) 15 NSWLR 275 and applied the principles formulated by Lord Diplock in Wentworth Securities Limited and Anor v Jones [1980] AC 74 at 105-106, concerning the circumstances in which a Court may read words into a legislative provision to give effect to its purpose as follows:-

First, the court must know the mischief with which the Act was dealing. Secondly, the court must be satisfied that by inadvertence Parliament has overlooked an eventuality which must be dealt with if the purpose of the Act is to be achieved. Thirdly, the court must be able to state with certainty what words Parliament would have used to overcome the omission if its attention had been drawn to the defect.


The competing arguments of the parties

16. Relying on the rest reiterated by McHugh JA in Bermingham, the applicant proposed the following in its written submissions:-

38. Ivanhoe submits that these conditions are fulfilled in the present case. First, it is clear that the [JT Act] was enacted to introduce uniformity into the dispute resolution procedure to be followed in cases such as the present. Secondly, it is apparent that the draftsman and Parliament have by inadvertence overlooked, and so omitted to deal with, the amendment of section 145(2) of the PWA to achieve the intended uniformity. Thirdly, it is possible to state with certainty the words that would have been inserted by the draftsman and approved by Parliament had their attention been drawn to the omission before the Bill passed into law. That is, the inclusion in Schedule 1 of the [JT Act] of amendment of section 145(2) of the PWA to omit the words “arbitration as herein before mentioned” and insert instead “the Land Acquisition (Just Terms Compensation) Act 1991”.


17. In oral argument, Mr Robertson SC suggested that the same result could be achieved by deleting the words “by arbitration” and leaving the words “as hereinbefore mentioned” in s 145(2) because the immediately preceding sections in Div 4 of Pt VIII of the PW Act deal with land containing minerals and refer to mines as well as the Just Terms Act.

18. Schedule 1 of the Just Terms Act omitted Div 2 and Pt VII from s 142(4) and instead inserted a reference to the Just Terms Act. Subsection (10) was added to s 141 to equate a reference to a notification of the taking of land in s 141, to an acquisition notice under the Just Terms Act. The methods of acquisition of land within Pt V of the PW Act were repealed together with s 39 and s 40. Sections 39 and 40 were replaced with a scheme whereby acquisition of land for authorised works or public works takes place in accordance with the Just Terms Act.

19. Mr Robertson submits that the draftsperson’s error can be explained by an apparent breakdown of the mechanical process undertaken when the legislation was amended. According to Mr Robertson, the PW Act would have been combed for any reference to Div 2 of Pt VII of the Act. Because s 145 did not contain the specific words, it was overlooked.

20. On the other hand, Mr Ryan SC submitted on behalf of TransGrid that because the PW Act originally distinguished a claim under s 145 as being suitable only for reference to arbitration, then it would be consistent to maintain that approach following the repeal of Pt VII of the PW Act. This, he says, would be a logical approach given that s 145 of the PW Act does not involve acquisition of land and that procedurally, such a claim cannot arise through a notice of acquisition, which provides the necessary platform for an entitlement to compensation pursuant to Div 1 Pt 3 of the Just Terms Act.

21. Mr Robertson’s response is that the amendment to s 142 of the PW Act shows that the legislature does not consider the Just Terms Act to be confined solely to an acquisition of land.

The purposive approach

22. Section 142 deals with the situation where a miner is desirous of working within 40 yards from the boundary of any authorised work, and the constructing authority and the miner are unable to agree as to the amount of compensation in the event that the working of the mine is likely to damage the authorised work. If the constructing authority is willing to make compensation, then the owner of the mine shall not work or get such minerals. As already noted above, s 142(4) originally required that the dispute about compensation be settled as in other cases of disputed compensation, namely, as provided in Div 2 of Pt VII of the PW Act.

23. The relevant distinction between the subject matter of s 142 and s 145 is that s 142 deals with the amount of compensation “for such mines or any part thereof” whereas in s 145(2) any dispute or question to be settled by arbitration is “touching the amount of such losses or expenses”. Section 145(1)(b), somewhat inconsistently, does not deal with loss or expenses in terms. It refers only to the constructing authority being required to pay the owner for any minerals not taken or purchased by the constructing authority and which cannot be obtained by reason of making, constructing and maintaining the authorised work.

24. In contrast to s 145, by prohibiting the working or getting of minerals s 142 essentially creates a situation that can be equated to the compulsory acquisition of land. That could explain why the draftsperson decided to provide in subsection (4) that the amount of compensation shall be settled “as in other cases of disputed compensation as provided in the Land Acquisition (Just Terms Compensation) Act 1991”.

25. Although s 142 and s 145 are textually related by the use of the word “such” to identify the mines in s 145, the catalyst for any payment to the owner of the mine is distinguishable. Section 145(1)(a) speaks in terms of additional expenses and losses incurred by reason of severance or interruption of the continuous working of the mine, rather than the actual loss of land itself. Section 145(1)(b) deals with loss arising from the inability to recover the minerals in circumstances where they are not taken or deemed to be taken by the authority.

26. The Just Terms Act is an Act relating to the acquisition of land, the object in s 3(1)(b) being, to ensure compensation on just terms for the owners of land that is acquired. The effect of s 142(4) is to deem, for the purposes of the Just Terms Act, that the mine, or part thereof, has been acquired.

27. Where there has been no acquisition of land or minerals, it will not be appropriate to deal with any claim for compensation under the Just Terms Act. Even if the claim for additional expenses and losses may in terms, be likened to financial costs reasonably incurred (or that might reasonably be incurred) as a consequence of constructing and maintaining the authorised work, nevertheless s 59(f) of the Just Terms Act, which deals with a claim of that sort as a loss attributable to disturbance, refers to those costs as being “a direct and natural consequence of the acquisition”.

28. Equally, s 58 of the Just Terms Act, which defines “loss attributable to severance”, deals with the amount of any reduction in the market value of other land. The loss in market value of land is determined in a manner quite distinct from the process required by s 145 to determine the payment due to the owner of the mine.

29. The Court is satisfied that the draftsperson would have appreciated that a claim made pursuant to s 145 of the PW Act was not a matter appropriate for a claim under the Just Terms Act.

30. Firstly, the mischief with which the amending Act was dealing was to replace the existing scheme for payment of compensation where land was the subject of a compulsory acquisition under the PW Act. In my opinion s 145 would not have been regarded as being part of that scheme.

31. Secondly, the eventuality which Parliament overlooked, presumably by inadvertence, was that the provisions in Div 2 of Pt VII, allowing the settlement of claims by arbitration, were repealed.

32. The scheme of the PW Act was that claims under s 145 would be dealt with by arbitration. When the amendments were made in 1991, the Commercial Arbitration Act 1984 was in force and made express provision for any arbitration provided for in any other Act.

33. In order to overcome the absence of the arbitration provisions within Div 2 of Pt VII of the PW Act I am certain that if attention had been drawn to the provision in s 145(2), the draftsperson would have deleted the words “as hereinbefore mentioned” from s 145(2). The effect would have been that the amount of the losses or expenses referred to in subsection (1)(a) and (b) would be settled by arbitration in accordance with the Commercial Arbitration Act.

The jurisdiction of the Court to entertain the applicant’s claim

34. This Court has no jurisdiction to hear any matter arising directly under the PW Act or the Commercial Arbitration Act.

35. The subject matter of the proceedings is the claim made by the applicant on 25 October 1999 and subsequent correspondence. There is a reference to the PW Act and although not stated specifically the claim for compensation is couched in language which makes it clear the claim arises pursuant to s 145.

36. The Amended Application Class 3 lodged by Ivanhoe in these proceedings is therefore not one that can arise under the Just Terms Act.

37. There being no claim which can be maintained pursuant to the Just Terms Act, the Amended Application Class 3, in its present form, does not attract the jurisdiction of this Court.

38. The Court is not able to make a declaration in class 3 proceedings as the Notice of Motion contemplates. However, the Court can make a finding which has the same effect.

39. The question raised by the Notice of Motion is determined by a finding that the Court has no jurisdiction over the respondent, TransGrid, in respect of the subject matter of the claim for compensation which Ivanhoe purports to make pursuant to the Land Acquisition (Just Terms Compensation) Act 1991.

40. The question of costs is reserved.