Penrice Soda Pty Ltd v Vittorio Di Blase And Penrice Soda Pty Ltd v Ross And Evonne Pritchard (Number One) - [2009] SAWC 12

Wardens Court of South Australia
(District Court Administrative and Disciplinary Division)
PENRICE SODA PTY LTD v VITTORIO DI BLASE AND PENRICE SODA PTY LTD v ROSS AND EVONNE PRITCHARD (NUMBER ONE)
[2009] SAWC 12
Judgment of Senior Warden Cannon
25 October 2006
MINING LAW
Exempt land. Preliminary Ruling

PENRICE SODA PTY LTD v VITTORIO DI BLASE AND PENRICE SODA PTY LTD v ROSS AND EVONNE PRITCHARD (NUMBER ONE)
[2009] SAWC 12

These are parallel applications for removal of exemptions from land. This is a preliminary judgment in both matters. The hearing commenced with a view on site at Penrice near Angaston with evidence on the second day. It had been anticipated that Mr Pritchard would not be able to attend on the second day and he did not. Mrs Pritchard thought she would be able to attend but apparently she was indisposed and was not able to attend. The background facts are set out in an affidavit of 20 June 2006 sworn by Gilbert Calaby the General Manager of the Mining Major Projects of Penrice Soda Products Pty Ltd. He gave evidence confirming information in that affidavit and providing additional information. I accept him as a witness of truth. I have received the evidence and on the basis set out in transcript will now proceed to deliver this initial ruling. If Mr & Mrs Pritchard wish to clarify any of these matters, call additional evidence or contradict any of the factual evidence on which these preliminary rulings are based I shall give them the opportunity to do so. They shall also have an opportunity to make further submissions on any aspect of this ruling and consequential matters. I have asked for the evidence to be transcribed and that will be made available as soon as possible. I have proceeded on this basis because the facts are not in dispute.
I make these findings of facts on the balance of probabilities. The applicant is a wholly owned subsidiary of Penrice Soda Holdings Ltd ACN 109 193 419. In this judgment I refer to the applicant and its parent company collectively as Penrice. There is no need for me to differentiate between them. Penrice mines the Angaston quarry. The Angaston Quarry exploits a very significant limestone and marble resource at Penrice near Angaston. The resource was originally laid down on the seabed and has been tilted at 90 degrees to the result that it is a long narrow resource continuing to depth. It runs in a north south orientation. The desired quality resource does not extend substantial north or south of the existing quarry. The quarry has been mined since 1951. The commencement of mining predates the Mining Act 1971. Penrice purchased the mine from ICI in about 1989. It is located on two private mines, private mine 120 and private mine 86 which adjoin each other. Penrice owns the freehold title of the land within private mine 120. The freehold title of the land within private mine 86 is owned by the Barossa Council and Penrice is the lessee of that land, which lease was most recently renewed on the 1 September 1997 for 25 years.
This is the largest marble and limestone mine in South Australia and provides soda ash for the production of glass containers and in particular wine bottles, washing powder and sodium bicarbonate for animal feed, food and pharmaceuticals. Product is also provided for the manufacture of specialist white cement at Angaston and cement at the plant in Osborne. Aggregate and rubble is also sold to the construction industry for landscaping, fill, road base and other uses. This is an important resource. Fifty or so people are permanently employed on site. No doubt a great deal of additional employment is generated in off site and ancillary activities. I have already noted that it supplies feedstock to other significant industries. Penrice has done forward planning for the future mining of the resource. I have noted that the resource does not extend sideways nor is it available north or south. The only ability to continue to exploit it lies at depth. An inexorable logic of open cut quarrying at increasing depth is to increase the width at the top of the quarry. This requires the removal of substantial overburden. In 1999 Penrice commenced a program of stripping overburden from the Eastern side of the resource and deposited it on a parcel of land to the East of the quarry. The evidence is that this was done in the belief that the area where the overburden was deposited was within the private mine. There is no reason to doubt that evidence. In fact that belief was incorrect. It was deposited on land owned by Penrice but a substantial part of the overburden was deposited on land not within the private mine nor in any current mining tenement. Importantly for this case substantial tonnage of the overburden has been deposited on land within 400 metres the dwelling houses of Mr Di Biase and Mr & Mrs Pritchard. Exhibit P2 usefully sets out the title position, the position of the overburden and the exempt land. There is no doubt that the depositing of overburden is part of the mining operation. A mining operation is not permitted on exempt land.
The mistake about the extent of the private mine boundaries came to attention as part of a due diligent process in 2005. Penrice then obtained a Miscellaneous Purpose Licence under the Mining Act 1971 to give it a tenement on which it could deposit overburden. It approached the landowners to seek a waiver of the exempt status of the land. Mr & Mrs Pritchard and Mr Di Biase declined to agree to a waiver of exemption. The applications before me are for a declaration that the exempt land that falls within the Miscellaneous Purpose Licence should cease to be exempt land and to fix conditions and any amount of compensation that should be paid.
The Law
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]:
(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.”
[2] Ibid. Vol.1, p.490
In the Second Reading Speech in the Legislative Council, The Hon. A.F. Kneebone (Minister of Lands) said[3]:
“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.”
[3] Ibid. Vol.2, p.2159
The Act makes provision for the compensation of landowners and environmental concerns. The Hon. A.F. Kneebone said[4]:
“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.”
[4] Ibid. Vol.2, p.2159-2161
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.s 7-9).
“The leading case in this area is my own decision in McDonald v. Monaghan and French (1989) Warden’s Court Report SA pps 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 land owner 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 (pps124,125):
‘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.
The Imposition and Disturbance
Mr Di Biase has owned this property since 1960. He lives there with his wife. He is now retired. I note that across the road from him and closer to the mine is a household property that was owned by Mr & Mr Fettner. They sold it to Penrice. They remained in possession until they departed due to age and health considerations.
The quarry was in operation when Mr Di Biase bought his property. The house is nicely situated at the lower end of the block. The access drive way faces towards the mine site. A veranda across one side of the property and the front bedrooms face towards the north east and enjoy a handsome view of gently undulating paddocks with some occasional housing and development. The view from the lounge and the kitchen is away from the quarry. Behind the house the block rises towards the southwest. From the top of the rise to the southwest the block used to enjoy a view into the Barossa Valley towards Nuriootpa. That view was across the top of the quarry, which even though it is a pit, would have been some imposition upon the otherwise bucolic beauty of the scene. This view was not visible from any part of the house where it is presently situated. It has been put in evidence that some people were interested in purchasing the property to demolish the house and build on top of the hill to enjoy the alternative view that I have just mentioned. I have heard a little about planning restrictions. It might have been possible to obtain approval to demolish house and build one on top of the hill enjoying the additional view across the quarry as well as the view that the existing house enjoys. My assessment is that this possibility is highly speculative. Whoever designed and built the existing house chose well and it is sited so as to maximise the scenic aspects available from this particular block of land. I am not convinced that any substantial, compensation lies for the loss of opportunity to build a house on the top of the hill and enjoy a view across the quarry into the Barossa Valley towards Nuriootpa. However, it is clear that the hill of over burden is close to Mr Di Biase’s property and although not in immediate aspect from the main views from the house, it is ever present and increasing. Once rehabilitated it will be a wooded hill beside them. Until then it is an imposition.

As far as Mr & Mrs Pritchard are concerned even though they are further from the quarry and the build up of overburden, they can directly see it from the front of their house. It is a greater visual imposition on them.
Mr Di Biase’s evidence was that he had no substantial problems or complaints with the quarry until about 10 years ago. His complaints have arisen from the issue of the deposit of the overburden in close proximity to his house. I accept he is genuine in this. He produced correspondence with the Local Member of Parliament from 10 years ago complaining about the noise and imposition occasioned by the deposit of the overburden. His complaints have been pursued without success since the deposit of overburden commenced. The company thought that the complaints about the deposit of overburden had no legal basis until the exempt status of the land became apparent.
For my purpose in this preliminary ruling I need to decide whether I can construct a set of conditions and compensation that are sufficient to permit removal of the exemption. I note the long standing, and continuing existence of the quarry outside the exempt land. This imposes noise, dust and visual impositions on the exempt owners already. The quarry is an important economic contributor to the local and State economy. My view showed that the site is well managed and appropriate efforts are made to minimise blasting disturbance, dust and other impositions. It is expected that dust will be further reduced by the construction of a shed over the main crusher.
Much of the dumping of overburden has already occurred. It is expected that it will be necessary to raise it an additional 20 metres. The dumping of overburden is relentless. On average to do the work over 90 trucks carrying 60 tonnes per week day will be needed for another seven years. The trucks make noise when they reverse and more when they dump their 60 tonne loads. Bulldozers make noise and dust when they move this. Conditions can be imposed to reduce the impact of this. A perimeter mound can be raised to contain dust and noise. Some time limits when overburden can be dumped can be imposed. My finding is that no conditions will remove all the impact on the exempt owners. However, in my finding the circumstance of the long existence of the mine and all the other matters I have identified, including the building of the shed over the crusher, lead to the view that a mixture of conditions and compensation can be fixed that are sufficient to remove the exemptions and permit the dumping of overburden to proceed.
I do not have sufficient information to fix those conditions and compensation today. I need to have more detail of the number of trucks that will dump spoil and discuss what conditions of timing and other matters can be imposed to lessen their impact on the exempt owners. I shall need measurements of the sound that the dumping and bulldozing imposes on the exempt owners to assess compensation. I shall need more information about the imposition has already been caused to them. The imposition from the historic dumping on the exempt land will need to be compensated as well as the future imposition.
Mr and Mrs Pritchard need time to review the evidence I heard on the last occasion in their absence.
I shall fix further date to attend to those matters.