Stephen Brian Paddick and Stone Boutique Australia Pty Ltd v Seppo Sakari Karvonen for the Karvonen Family Trust
[2009] SAWC 7
•31 January 2008
WARDENS COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
STEPHEN BRIAN PADDICK AND STONE BOUTIQUE AUSTRALIA PTY LTD v SEPPO SAKARI KARVONEN FOR THE KARVONEN FAMILY TRUST
[2009] SAWC 7
Judgment of Senior Warden Cannon
31 January 2008
MINING LAW - MINING LAW
EXEMPT LAND - RESIDENCE
STEPHEN BRIAN PADDICK AND STONE BOUTIQUE AUSTRALIA PTY LTD v SEPPO SAKARI KARVONEN FOR THE KARVONEN FAMILY TRUST
[2009] SAWC 7
I attended on site at Wallaroo. Mr Robert Cameron and Mr Dimitri Tahan were in attendance for Stone Boutique Australia Pty Ltd and for Mr Stephen Brian Paddick the holder of ML 6277 executed in November 2007 for the harlequin granite and EML 6155 executed in August 2004 for the limestone that overlays the granite. Mr Seppo Karvonen was in attendance for AustralAsian Granite Pty Ltd and the Karvonen Family Trust. We had a free ranging discussion and it became clear that no facts upon which I need to rely are in dispute. In preparing these reasons I have had regard to those discussions, which were recorded, a copy of the mining and rehabilitation program (MARP), a written submission by Stephen Brian Paddick and Stone Boutique Australia Pty Ltd and written submissions by the Karvonen Family Trust from Wallmans Lawyers dated 21 January 2008 and from Mr Karvonen dated 29 January 2009.
These facts are clear. AustralAsian Granite Pty Ltd purchased the freehold land with a shack on it from Mr Schmitzky in about March 2006. I had previously removed the exemption around the dwelling to permit AustralAsian Granite Pty Ltd to continue to quarry.[1] Mr Karvonen says the purchase price was $167,000 plus stamp duty and associated costs. In September 2006 it was transferred it to the Karvonen Family Trust for the same sum. Mr Schmitzky remained in the property until mid 2006. After he left the shack has been vacant. It is now derelict. Mr Karvonen has no intention of living in the shack. Mr Karvonen says it has always been his intention to build a new modern family residence on the block and initially he thought workers might reside in it but now he intends to live in it himself. Consistent with that he had plans drawn up starting in early 2006 and submitted them with the local District Council shortly after the settlement of the property in September 2006. Development approval was granted on the 22nd of February 2007. New plans for a larger two-story dwelling were submitted to the Council in August 2007 and development approval for them was granted in October 2007. No work has been undertaken on site.
[1] Hill and AustralAsian Granite v Schmitzky (2003) Wardens Court Reports 22.
Mr Cameron believes that the application for approval of a residence is a ploy to revive the exemption that surrounds a residential dwelling so as to frustrate the proposed a new quarry. Mr Karvonen says his intention to build and live in the premises is bona fides. He is however willing to abandon those plans if the new quarry operator purchases the land from him at the cost he has incurred in purchasing it from Mr Schmitzky, the plus the planning and other costs.
The first question is whether in these circumstances there is an exemption around the proposed residence. I considered the status of a workers residence in Southern Titanium NL v Heidrich and others (April 2004) Wardens Court Report 1 at pp 39-42 and noted in that case that a derelict house was not a residence and workers houses there had a different status to a principle place of residence. That precedent does not decide the threshold issue here, which is whether a piece of land purchased with a residence on it, but which then becomes vacant whilst plans to build a new residence are submitted for approval, maintains the exempt status within 400 metres of the proposed residence.
Section 9 of the Mining Act 1971 provides:
(1) (d) land that is situated—
(i)within 400 metres of a building or structure used as a place of residence …
shall be exempt from mining operations in pursuance of this Act and, unless the land ceases to be so exempt, no miner's right, claim, lease or licence shall authorise prospecting, exploring or mining upon such land (but this section does not prevent the pegging out of a claim upon such land).
(2) Where any land is subject to a claim, lease or licence under this Act and that land would, but for this subsection, be land exempt from mining operations in pursuance of this Act by reason only of a fact or circumstance occurring or arising subsequent to the pegging out, or granting, of the claim, lease or licence, that land shall not be exempt from operations in pursuance of this Act.
It makes no difference whether Mr Karvonen intends to build a residence to gain the benefit of an exemption. As long as he builds a dwelling and someone resides in it, it becomes “ … a building or structure used as a place of residence.” Accepting Mr Karvonen's bona fides, he formed the intention to build a new residence before he purchased on the existing residence. The question is then, if an existing residence is purchased with the intention of replacing it with a better one, is either the existing residence, or the proposed new residence “… a building or structure used as a place of residence.” What does “used” mean in this context? A vacancy during a major renovation may not remove the status of the building as a residence. Even the demolition and expeditious replacement of a building may in some circumstances constitute a continuous notional use of it as a place of residence. However, in this case no one has lived in the existing residence since mid 2006 and it is derelict and no longer in a state to be used as a place of residence. More than a year after its last use as a residence in November 2007 when the new mining lease 6277 came into existence it could not be called “… a building or structure used as a place of residence.” The proposed new building has not been started and cannot be notionally a building or structure. Subsection 9(2) makes it clear that where the circumstance giving a rise to a claim of exemption is subsequent to the granting of a lease the exemption does not arise against that prior lease.
That is sufficient to dispose of this application. I find that there is no building or structure that is used as a place of residence and hence no exempt land for that reason. If I am wrong and the exemption that existed for the now derelict dwelling has remained in place whilst approvals are obtained to replace it, then I would remove the exemption upon conditions designed to ameliorate the imposition of the new quarry. My basis for this would be consistent with the approach I took between Mr Schmitsky and Australasian Granite Pty Ltd.[2] The new quarry is the same sort operation as the existing quarry, and conditions that are realistic for the proposed operator can be fashioned that are sufficient to protect the resident, in the circumstances of a residence purchased by the existing owner in the knowledge that it was close to an operating quarry.
[2] Ibid.
I note that the approach taken in this judgment has the potential to cause injustice to a bona fide purchaser who pays a premium price for land reflecting an existing use of it for residential purposes. If s/he lets the residence become derelict whilst gaining approval to replace it, a mining operator may obtain a lease without the usual exemption being in place. Each case will depend on its particular facts. I note that I am not aware of this circumstance in fact arising until now.
I also note that the applicant has benefited without expense from the fact that AustralAsian Granite Pty Ltd purchased Mr Schmitzky’s property and removed the problems of having a residence in such close proximity to a quarry. I have no power to order the new operator to pay compensation for that.
I shall deliver this judgement to the parties by post. I give liberty to them to apply.
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