Southern Titanium Nl v Heidrich
[2004] SAWC 2
•31 May 2004
WARDENS COURT OF SOUTH AUSTRALIA
SOUTHERN TITANIUM NL V HEIDRICH AND OTHERS
Supplementary reasons of Dr A.J. Cannon, Senior Warden
31 May 2004
| : SOUTHERN TITANIUM NL Hearing Date/s: 31 May 2004 File No/s: 246, 302, 306, 353, 372, 395, 604, 605, 613, 614, 646, 647, 648, 649, 650, 651, 652, 653 AND 654 OF 2003 |
Southern Titanium NL v Heidrich and Others
Dr A.J. Cannon, Senior Warden
Some additional issues have been raised that are consequential upon the need for me to provide fairly detailed minutes of order. I have had further submissions on those and I now publish final minutes of order. It is appropriated for me to give some brief reasons in explanation of those that were not agreed.
Bad Clay: I was asked to amend this to also cover excessive salinity. I do not have sufficient information to be prescriptive as to this topic especially bearing in mind that some salt in clay would quite quickly wash out of the topsoil layer. I have added this to the definition of “Bad Clay”: “STNL shall also take into account expert advice of other factors that may make clay unsuitable for mixing with topsoil.”
End Date: The Landowners ask me to hold the company to the proposed mining schedule. STNL seeks no time limits on when it might mine and a maximum of 15 years. I now give reasons for prescribing an end date. The mining operations proposed here will start some 3-4 years hence on Mrs Merton’s property and successively on the others until the last on Mrs and Mr Berger’s property in 10-11 years time. The mining will be an imposition and waiting for it is itself an imposition. It limits what landowners can do on the property in the vicinity of the mining. For example they are effectively limited in placing farming infrastructure on the area to be mined. They are entitled to some certainty in relation to when it will occur. Requiring mining to commence will provide some certainty to the later properties because they will see the effect of the operation, not just be talking about it. It would be an unfair imposition to leave this hanging over the Landowners’ heads for 15, or even less years, not even knowing whether it will happen at all. On the other hand STNL point out that economic conditions and changing techniques may slow the rate of mining and the possibility of finding alternative more attractive deposits may change the sequence. Once having secured the ability to mine it seeks to have flexibility in when it mines. In balancing these conflicting interests I order that mining be complete within 5 years of the first planned commencement date in the schedule submitted at the commencement of these trials: ie for Mrs Merton that is within 5 years of 3-4years or within 8 years. For Mrs and Mr Berger that is within 15 years. To fit with the normal financial year I shall order the time starts to run from 1 July 2004.
Rehabilitation of ML 6137: I have changed this to refer to different soil types. I have made this obligation subject to access to do this being granted. I note that Mrs and Mr Heidrich seek to use access for this purpose as a bargaining chip to negotiate a change of what is agreed between them and STNL for the first lease. That is not before me. However, in the matters that are before me, it is in everyone’s interest that the ability to rehabilitate is proved on the first mining lease. Mr and Mrs Heidrich are parties to the proceedings that are before me, which does give me power to order access to their other land for that purpose. In the orders made for Mr and Mrs Heidrich and their company KRH Malleeview Pty Ltd I will order that they permit access to their land for the purpose of testing crop yields after mining on ML 6137.
Fuel and oils: I have included clause 1.16 to cover this issue.
Crop testing: I have left the extent of this to the Field Crop Expert. As requested I have allowed for fallow years after mining. To provide a finite number of years for the testing to be complete I have required at least 3 crops to be sown within 5 years (clause 2.8 and see clause 1.9.c)). I have clarified that if the comparative yield testing shows a loss of more than 10% compensation for the loss will be paid until it is remedied.
Total water usage: I have been asked not to cap the total water use at the higher volume of 4,292ML per annum proposed by STNL. The water modelling was initially for a lower use of water and then extrapolated to the higher use of 4,292ML of water per annum. The effect of increased salination to and exhaustion of the aquifer are important issues to the freehold interest in the medium term and without evidence of the effect of water usage beyond 4,292ML pa I have no basis upon which to permit water usage beyond that level. I make the higher level of proposed water use a maximum.
Quiet enjoyment of the ML (clause 2.5): It was suggested that I add words emphasising the need for this to occur on a co-operative basis. I agree with the idea but from a drafting point of view this is sufficiently expressed in clause 3.
Numbering: I noticed the inconvenience caused by separate numbering systems for the Conditions and the Compensation so I have renumbered the Compensation clauses to follow consecutively.
In an actual loss calculation I have included the need to take into account hail or other relevant insurance (clause 9.2 a)
I have proceeded on the basis that the Greiger matter is settled. If it is not I shall make orders in relation to it.
The Bond: I note the submission from PIRSA that the bond under the lease is not to secure any obligations that I impose. STNL accepts that I can make it a condition that the Minister require a Rehabilitation bond that in the opinion of the Minister is sufficient. I do so. In addition the parties and the Director of Mines accept that I have jurisdiction to impose a bond or require payment into court of a sufficient sum to secure performance of the conditions and compensation I have required. Payment into court is the most effective way of securing this. I have imposed conditions to that effect. The sum is calculated the following way. There will be a total loss of crop on the disturbed area for the year of mining. If the subsequent loss of yield is 10% it is to be paid for the three years of testing plus 20 times for compensation, a loss of 23x10/100=2.3. I shall work with the standard rate of $185 indexed because in principle that average yield notionally allowed for every year regardless of drought is a fair starting point to secure the obligations under these orders. At a practical level it is the only figure I have. The starting point then for the bond is a factor of the total loss for the year of mining plus security for the possibility of future loss of yield: 1+2.3=3.3x$185=$610.50. In addition there is the balance of the amenity payment of $75 ($100 less $25 paid in advance- Compensation clause 11) which gives a base bond calculation of $685.50 per hectare of the Disturbed Area. I round this to $700 per hectare to allow for agistment. The bond will need adjustment where a depression or mound is permitted and where a principle residence is permitted. Mounds and depressions are estimated to occupy 2 hectares and where they are permitted I shall add 2 hectares to the estimated Disturbed Area. For a principal place of residence I take the estimate of time (Mr Hazelwood: 78 days, and Mrs and Mr Berger: 78 days, say 11 weeks) and multiply it by $2000 per week. I see no need to provide security for the obligation to provide alternative accommodation for other non principle residences. Substantial infrastructure will be affected by the mining operation on Mrs and Mr Berger’s property and Mr Rohrlach. Mr Rohrlach has a higher risk of disease than do others. To secure those obligations I have added a broad axe security for each of those of $50,000. I note STNL’s submission that the bond under the Mining Lease covers the issue of infrastructure. That may be so but, as I have noted elsewhere my work in relation to exempt land and compensation for entry is separate from the lease and it is appropriate that I secure it separately. This is particularly so since PIRSA has made it clear that the Minister will not make any bond the Minister requires available for the obligations that I impose.
I have made the Bond repayable once items it secures are paid and in full after 6 years if no order is made, to allow for any extended period of comparative testing if there are fallow years.
Mr Rohrlach: I shall add to the generic clause 1.15 reference to an appropriate expert to develop a preventative program for disease entry. In relation to the bore I have noted that Mr Rohrlach’s existing rights to water can be used in ensuring legal access to an alternative bore. I have noted that the field crop expert will need to be one for potatoes and that the value of the potatoes Mr Rohrlach grows needs to take into account their value as seed potatoes for Langhorne Creek. The other special clauses previously suggested by me have been adopted. As for scrub on the property NW of Mr Rohrlach’s land I shall include a condition requiring revegetation of that.
I have included the same clause for Mr Hazelwood to address his concerns over the scrub adjoining the racecourse.
Costs: I refer to previous decisions. Costs are a matter of discretion. The usual rule applies to cases where a right is asserted and either upheld on the proven facts, or not upheld and the case dismissed and costs follow that result. That usual rule has problems of application to cases such as this where the court is finding a way to reconcile legitimate competing rights. There are problems of principle, because both parties may be in the right and problems of practice because there may be no clear victor. The exercise of the discretion as to costs in cases such as this needs careful consideration. In this case the STNL’s has established that it is an appropriate case for the exemption to be removed and the number of cases that it settled indicate that its generic offer was adequate for many, even allowing for the possibility of pressure of cost risks and other matters not known to me. STNL seeks to call evidence on the reasonableness of its approach before any cost order is made against it. The landowners in the cases before me have established principled objections to the generic offers and the conditions and compensation I have ordered are different from the generic offers. Both parties have been vindicated in bringing the matter to court and for an important and complicated project such as this the public interest may have been served by the public airing of the issues surrounding it. In the matters before me the first mining is not expected to commence before 3 to 4 years and the last 10 to 11 years. This is an unusual project to be conducted over many properties for many years. It would be normal to expect that the owners in the cases before me could have waited to see the actual mining operation and with the benefit of that decide whether to sign away the exemption on terms that may have been offered by the company. The need to decide these issues now, and under short time constraints was to serve the interests of STNL, and in particular to assure its potential financiers. I do not criticise it for that but it gives a powerful argument for me to allow the landowners who wanted to proceed with caution to exercise their rights to have the matter determined in court without expense to them. In the hearing STNL was well resourced. I have noted how useful it was for me to have at least one lawyer appearing for a landowner, especially Mr Amey who is experienced in the jurisdiction. Although his representation was specific to his client, having him at the bar table advantaged all the Landowners and it advantaged me. It provided a legally qualified opposition to STNL. If all the landowners had been unrepresented it would have been more difficult for me to conduct the trial and to have appeared neutral in it. In providing a fair process it also advantaged STNL in establishing a basis for a long term good relationship. Had the proceedings appeared unfair due to all the landowners being unrepresented the result would have less credible.
The fact that STNL has attempted to negotiate and inform the community in good faith does not alter these reasons that lead me to suggest I should make modest cost orders in favour of the landowners. I am reluctant to countenance any further evidence so I intimate my view as to costs. If STNL wish to bring evidence to convince me to a different view I shall hear what they wish to bring and if it may be relevant I shall give them the opportunity.
As to the parties’ personal expense the long held view of courts is that they are not properly the matter of compensatory cost orders. The parties can be awarded costs of attending to hear and give evidence. I reserved the issue of the sign on fee of $1,500, which STNL offered to the landowners, as part of this cost issue. I would order the sum of $1,500 be paid to each of the Landowners in the proceedings for me as full compensation for all their cost not otherwise ordered. I should allow the Landowners the reasonable costs of obtaining and calling experts who were accepted as experts and gave evidence. I should allow Mr Amey’s counsel fees at a reasonable rate and a modest getting up fee. Otherwise I should leave each party to pay its own costs.
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