Selge, B Nominees Pty Ltd v Wagener, C
[2000] SAWC 1
•7 July 2000
WARDENS COURT OF SOUTH AUSTRALIA
B. SELGE NOMINEES PTY LTD v COLIN WAGENER
of Mr Cannon Senior Warden
7 July 2000
| Plaintor: B. SELGE NOMINEES PTY LTD : MR COLE Hearing Date/s: 22.3.00; 12.4.00; 8.5.00; 14.6.00; 28-30.6.00 File No/s: DCAAT 82/2000 |
EXEMPT LAND - PROPOSED SLATE QUARRY, CONDITIONS WILL NOT REMOVE INTERFERENCE
IN THE CIRCUMSTANCES COMPENSATION NOT FIXED, EXEMPTION NOT REMOVED
COSTS
WHEN PARTY/PARTY COSTS APPLICABLE SCALE APPLICABLE
B. SELGE NOMINEES PTY LTD v. COLIN WAGENER
Senior Warden Cannon
Civil
This is an application under s 9 of the Mining Act 1971 for me to make an order under ss (3)(b) determining compensation to be paid by the mining operator to the land owner and under ss (3)(a) for me to impose terms and conditions upon which the proposed mining operation can proceed. The applicant company B. Selge Nominees Pty Ltd has sought to determine the issue of the removal of the exemption prior to obtaining a lease and having an approved developmental plan for the operation of the mine. It has been criticised for that by Mr Wagener, the adjoining land owner, who has the benefit of the exemption. I allowed the case to proceed on that basis. It is really a chicken and an egg situation. From the miner’s point of view it is scarcely worth proceeding down the fairly complicated path of obtaining a mining lease if it is all to be of no avail due to the land being exempt. On the other hand, had the miner proceeded down that path, greater detail of the proposed quarry would have been available for me to assess. In the event, I am satisfied that I have sufficient information about the proposed mining operation, to properly deal with the application.
I have heard from Mr Selge, the owner of the land on which the proposed mine will be situated and who is a Director authorised to speak on behalf of the applicant company. I heard from Mr Rito Calabrese who will operate the mine if it is allowed to proceed. For the respondents I heard from Mr Wagener, the land owner with the benefit of the exemption, Mr John Morgan, a valuer and Mr Barnes, an expert on quarries.
We had a view of the property at the commencement of the hearing. Mr Wagener lives in a substantial and attractive house close to Ridgetop Road. He purchased that with his late wife for about $230,000 in 1988. They fell in love with the property. Although there is a quarry to the north of the property, the Wistow Slate Quarry, it is far enough away that it does not have any impact on him. He does not hear it. It does not cause him dust. The trucks from the quarry do not use Ridgetop Road. There is little traffic on Ridgetop Road which services some six houses up the road from his property. From the view I agree that the existing quarry has no obvious impact on Mr Wagener’s property.
His house, as the Ridgetop Road name implies, is on the top of a ridge. Some 150 or so metres to the west-south-west of the house, the land falls away steeply into a valley owned by Mr Selge. On the steeply falling land there is outcropping rock known as Wistow slate and probably a graywacke or metamorphosed sandstone. Strictly speaking it is not a slate. The cleavage lines are not from sedimentary deposition of the stone, but from the processes of metamorphosis of what was originally a sandstone type of rock. This description of the stone came from Mr Barnes.
The mining proposal
If this mine goes ahead it is Mr Selge’s intention to do it in the name of the company plaintor which is a trustee company. He has a proposed agreement with Mr Calabrese whereby Mr Selge’s company will obtain the mining title at its expense and then Mr Calabrese will do the mining at no expense to Mr Selge’s company, in return for 5% of the value of quarried material recovered. This will change an unproductive part of Mr.Selge’s land into an income earning asset for the eventual benefit of his children. Mr Calabrese is a well qualified stonemason and has worked in and around quarries since he migrated to Australia in 1968. He operated the Wistow Slate Quarry in 1979 and has been involved in quarries at Willunga, Queensland and Tasmania. He has been bankrupt, but he says not as a result of quarrying activities, but because of an off-shore loan
The mining proposal is that there be a moderate sized slate quarry on the steeply falling face. All of the quarry would be within the 400 metre radius of exempt land that surrounds Mr Wagener’s house. The quarry would be the south-south-west of the house. I have substantial evidence of wind directions. Wind will come from the direction of the proposed quarry towards the house for up to about a third of the time in winter and less than that in summer. This is relevant to issues of dust, noise and fumes which will be exacerbated with a wind from the proposed quarry.
The detail of the proposed quarry is as yet poorly developed. It was suggested that the miner would be willing to develop the quarry from the bottom. If it did this it would be out of sight entirely from the house. I have heard from Mr Barnes. I accept his expertise in relation to quarries. It follows from his evidence that if this quarry is to be developed in a proper way it will be necessary to cut an initial face about half way up the steeply falling land. If development commences at the base then inevitably the amount of rock that can be recovered will quickly be exhausted and then it will be necessary to do that which should be done first. That is, cut a face half way up the steeply falling land. It is therefore inevitable that mining will occur in the top half of the steeply falling land.
The mining will involve a substantial initial program of the use of explosives to initially create the face. It is then expected that explosives will only need to be used about every six to eight months. Mr Barnes had some scepticism about that. He makes the point that because the lie of the cleavage planes is perpendicular to the face of the hill the amount of rock that can be blasted each time and percentage that will be damaged would be greater than if the cleavage lines ran parallel to the front face of the hill. The benefit of course, is that the quarry face will be relatively stable. When explosives occur, the defined intention by Mr Calabrese will be to drill some thirteen shot holes with about twenty kilos of nitropril in each. The drilling itself will involve drill rigs with a fairly tall mast which will be clearly visible from the house. When blasting occurs there will be an air shock wave that will shake the windows of the house. There may be a ground wave which will shake the house, although the extent of that is not predictable due to the lack of knowledge of the geological sub-strata. The blast has the potential to hurl rock into the air and on Mr Barnes evidence, which I accept, an occasion of fragments of rock landing in the vicinity of his house is almost inevitable.
Although the splitting and stacking of the recovered slate will be done by hand, the initial movement and sorting of the blasted rock will be by a Caterpillar front-end loader. Roads will need to be constructed to access the quarry face and provision made for the removal of waste material. In addition to the front-end loader, there will be movements by a heavy dump truck and occasional access by semi-trailers to remove processed slate. Mr Calabrese stated an intention to prepare five pallets of finished stone a day at about two tonnes weight each, although it is said that production may rise to 100 tonnes a week. He would normally expect to work from 7.30am to 4.00pm and start earlier in summer. I have some information as to the noise of this machinery. I refer to Mr Selge’s noise measurements. At the view Mr Selge rang someone and we were told that, by arrangement, a machinery operator used the proposed Caterpillar front-end loader driving it into some rock at full revs. When this occurred the sound of the motor was audible. At the time the Caterpillar crawler was right at the very bottom of the hill. It was audible but not noisy. At the time there was a fresh and extremely cold west-south-west wind blowing which caused substantial background noise. Accepting this demonstration at face value, it established that although not overwhelmingly loud, the working of machinery within the quarry would be clearly audible from the house, although perhaps not so if one was inside the house with closed windows..
I could impose conditions to minimise the impact of the proposed quarry by requiring the access to be from the bottom of the hill. With all conditions that I can conceive the proposed quarry will remain a substantial imposition upon Mr. Wagener’s enjoyment of his freehold. The blasting although only occasional after the initial campaign will be a major imposition, shaking his property and with the real chance of a risk of injury if he tries to enjoys his garden when something goes wrong. The heavy machinery will be a regular reminder of the quarry. When the wind blows towards him the noise will be worse, and there will be some diesel fumes and the real likelihood of dust. He and potential purchasers if he decides to sell, will have the psychological effect of the adjoining quarry.
I heard from John Morgan, a valuer. There is little property that is sold in the vicinity that gives much guidance. Accordingly, there must be some caution as to the accuracy of the valuation that he has given. The value of the land may be uncontroversial, but just adding his value of improvements to it may not give a fair representation of what a purchaser would pay. As to diminution of value, if the quarry was not visible and not audible he agreed that the diminution of value would be less. However, for reasons that become clear I will not need to draw conclusions from this opinion evidence.
The law
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) 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. Amatec 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 Wagener 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 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. 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.
In this case I have identified that whatever conditions are imposed some interference with Mr Wagener’s enjoyment of his property will remain. The blasting, although only occasional after the initial campaign, will be a major imposition, shaking his property by air wave and possibly by the ground wave. There is the real chance of a risk of injury if he tries to enjoys his garden when something goes wrong. The sound of heavy machinery will be a regular reminder of the quarry. When the wind blows towards him the noise will be worse, and there will be some diesel fumes and the real likelihood of dust. He, and potential purchasers if he decides to sell, will have the psychological effect of the adjoining quarry.
This case is different from the others I have set out above. I distinguish this from Amatek v. Gifford and Williams because quarrying is a much more intrusive method of mining than mining for sand which essentially is just picking it up with a front-end loader. In contrast, quarrying requires the use of explosives and the movement of rock. I distinguish it from Gambier Earthmovers v Rhondda Truscott because the quarry there was already in existence and again blasting was not required.
I also identify that the evidence here is that the rock to be removed is common and appears in many places between Wistow in a band through to the coast. The opportunity to quarry this stone in this particular place is not a unique opportunity. The community will not be deprived of the benefit of a valuable mining project if the exemption is not removed. This is a contrast to S.X. Holdings Ltd v Riddle where the project was unusual and potentially had substantial economic benefits for the Port Pirie community. That substantial economic benefit to the larger community was a relevant factor in my ruling that the miner had to offer in effect to relocate the freehold owner.
Mr Wagener’s house is substantial, well maintained and attractively placed, albeit in a windy spot. The views are idyllic and peaceful. He is attached to it, it being the place he last moved to with his late wife. Mr Wagener is not seeking compensation, nor does he wish to move. In my finding the balance of these circumstances are such that I should not remove the exemption.
I note that after I completed the trial and final submissions Mr Selge wrote to me and intimated that his company no longer intended to mine whilst Mr Wagener is a resident of the house. I take this as a conciliatory gesture towards his neighbour and commend him for that. However having finished the hearing it is appropriate for me to deliver this judgment notwithstanding that intimation. I record that I had written the draft to the effect of this published judgment prior to receiving the letter from Mr Selge. I shall hand this to the parties and once they have had an opportunity to read it I shall hear them in relation to costs.
Costs
As to costs this is my ruling. Firstly, there is a general principal as to costs. Most courts, and in this instance the Warden's Court, as a general rule, award costs to the successful party against the unsuccessful party. In civil matters (and increasingly in criminal matters) the rationale behind that is that where a party is successful in asserting a right against another and it is shown that the defence of it was for some reason inadequate, the party should not only be successful in asserting its right but compensated for the cost of so doing. The reverse is equally the case. If someone without a right falsely asserts it then the party who sensibly defended itself against the falsely asserted right should be compensated for the costs of so doing. That's the general rule in the Warden's Court, as in any other court. However there are matters that are an exception to the general rule.
The Warden's Court has several jurisdictions where it deals with equally legitimate but competing and coincident rights that are inconsistent with each other. Using a broad brush I describe the rights of an owner to enjoy the surface of the land, the residence on the land and other aspects of ownership competing with the rights of a miner to access valuable mineral resources, extractive stone and other minerals to be mined that may be under the surface. It is in the nature of things that to access minerals by mining will interfere with the legitimate rights of the owner. In these cases the general rule that costs follow the event needs to be qualified. This is a case where one person is right and one person wrong. This is a difficult exercise of balancing and attempting to achieve a satisfactory exercise of mutually coincident rights that clash with each other. It is for that reason that in cases of the nature of this application, that is dealing with the problem of exempt land, and equally other applications involving the sort of conflict I have identified between an owner and a miner, the court will be cautious about awarding costs to either side. It will not follow automatically in these cases that the successful party will have costs against the other.
I have referred to various cases in my judgment that I have handed out to the parties. In those, generally, costs have not been awarded. In the most recent case of Gambier Earth Movers Pty Ltd v Rhondda Truscott, Warden Gurry did award costs in that instance to a miner against a land owner whose objections in his view were unreasonable. I have mentioned that the circumstances there are distinguishable from this case and I have distinguished it.
Mr Cole seeks costs in this case of the action against Mr Selge. I note that on 8 May when this case came on, Mr Selge was criticised for trying to deal with this aspect before he went through the mining approval process. I found that there was nothing untoward in that. I went on to observe that (page 2):
'I see nothing premature in this application, but it is an inevitable consequence of it being made that sufficient definition of the mining proposal is necessary to allow the owners to mount their objections to it. I don't think either party can be critisized about the conduct of this at the moment '.
It's my ruling here that all the pre-trial skirmishing in this case should not be subject to a cost order adverse to Mr Selge. Indeed, although he lost the case, at the end of the day, the actual arguments raised against him in several of those pre-trial applications was found to be without merit by me. I am not going to award costs for Mr Selge but neither should he pay for that pre-trial activity.
In relation to the trial itself it is my finding that had Mr Selge undertaken more investigation of the exact mining method, that the sort of evidence that I heard from Mr Barnes would have become apparent and it might have made this trial easier or unnecessary.
What has happened here is that the land owner has been forced to call mining expertise to show what is likely from the mine. I have upheld the effect of that evidence. In that circumstance a substantial amount of the time spent on the trial should be compensated in costs in favour of the land owner, but not all of it.
I then finally think about the scale for taxation. Generally in this court it has been regarded as historically attached to the District Court and the District Court scale generally has been applied. Wardens these days are magistrates specially appointed. I find that in most cases the scale will be 90% of the Supreme Court scale, which is the scale for complex actions in the Magistrates Court and very close to, if not equal to, the District Court scale. This is of general guidance only. At the end of each case the issue of costs is a matter of the exercise of judicial discretion.
I am not going to put this to taxation. The parties, Mr Cole and Mr Selge, would never agree and I don't infer that as a criticism of either of them but just a statement of fact.
The trial started with a view on the Wednesday and came back for evidence on that day, the next day and finished at lunch on Friday and then there is today. I am going to notionally allow for Mr Cole some of the time for trial, for the reasons set out above. I will allow him costs in favour of the land owner for legal fees of $1,500. I will allow a witness fee for Mr Barnes of $990. As for Mr Morgan, his fee may be in accordance with the practice in his industry. I agree with Mr Selge's comment in part. I don't adopt them in full but in part I think the valuation evidence was not as good as it may have been in this particular case. This is not a general attack on Mr Morgan but in the circumstances I shall cut something off his fee. I allow him $1,500 rather than the amount he is claiming. I award costs and disbursements in favour of the defendant in his favour in the total sum of $3,990.
I can’t let a comment of Mr Selge’s go by unremarked. I add for completeness the matter commenced in March and is now finalised on 7 July and although this may seem lengthy to Mr Selge, he will find no other court I suspect in this country that can deal with a matter of this complexity in this period of time.
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