NSW Coal Compensation Board v Nardell Colliery P/L

The NSW Coal Compensation Board appealed a decision of the NSW Coal Compensation Review Tribunal concerning the assessment of compensation payable to Nardell Colliery Pty Ltd. The dispute arose from legislative amendments that affected Nardell's entitlements under a lease, leading to a claim for compensation for the loss of those entitlements. The appeal raised questions regarding the methodology used by the Tribunal to assess damages, the quantum of those assessments, and whether the Tribunal was bound to make a "just and equitable" finding for the loss of specific entitlements.

The Court was required to determine the appropriate methodology for assessing compensation for the loss of coal entitlements, specifically considering whether a "but for" causation test was sufficient and how to approach the assessment of "just and equitable" compensation. The Court also had to consider the application of the principles established in *Malec v. J.C. Hutton Pty. Limited* to the assessment of compensation in this context, particularly in light of the specific provisions within the relevant compensation arrangements.

The Court reasoned that compensation should be approached on the basis of Nardell being compensated for the loss of its coal on 1 January 1982, rather than for the refusal of an application for restoration. It clarified that while the *Malec* approach, which considers degrees of probability, is generally applicable, the return to an entity that exploits the lost asset can be a reliable guide. However, the Court found that the compensation arrangements, particularly concerning the calculation of "t", did not require a *Malec* approach, instead relying on actual tonnage won and best estimates for future extraction. The Court also noted that the 1997 Arrangements allowed for a "just and equitable" determination of factor "r", moving beyond a fixed amount.

The appeal was allowed in part, with the Tribunal's determination of the quantification of factors "r" and "e" being quashed. The parties were directed to agree on the quantification of these factors or submit alternative written proposals to the Court within 14 days. The appeal was otherwise dismissed, and the first respondent was ordered to pay the appellant's costs for instituting the appeal and preparing the appeal books, with each party bearing its own costs for other aspects of the appeal.