Ulan Coal Mines Limited v Minister for Mineral Resources - [2007] NSWSC 1299

No judgment structure available for this case.

CITATION: Ulan Coal Mines Limited v Minister for Mineral Resources & Anor [2007] NSWSC 1299
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 18; 20-21; 24-28 September; 3 & 11 October 2007

JUDGMENT DATE :
16 November 2007

JUDGMENT OF: Smart AJ at 1

DECISION: See paras 420 and 421

CATCHWORDS: Mining Lease Applications (MLAs) - land surfaces - Correct construction of s 62 of Mining Act 1992 - whether improvements substantial and valuable - whether procedure in s 62 and Schedule 1 has to be followed for prohibitions in s 62(1)(c) to apply - effect of not following such procedures and adhering to time limits - Whether cleared pasture land a substantial and valuable improvement within s 62(1)(c) - Methods of service of notices of MLAs - correct construction of s 383 of Mining Act - Whether notices may be served at place of business and do not have to be served at corporation's registered office - History of Mining Legislation - Meaning of "land" in s 62(1) of Mining Act - Map required to accompany application and notice - technical defects did not invalidate application - Compensation provisions - Effect in declaring Moolarben Coal Project one to which Pt 3A of Environmental Planning & Assessment Act (EP&A Act) applied - Effect of approval of Minister for Infrastructure & Planning - Operation of s 75V of EP&A Act - single assessment and approval process - relationship between Pt 3A of EP&A Act and Mining Act - once approval of Minister of Infrastructure & Planning given, mining lease cannot be refused. - Relief would not be refused on discretionary grounds but refused on substantive grounds

LEGISLATION CITED: Coal Mining Act 1973
Coal Mining (Amendment) Act 1976
Coastal Protection Act 1979
Environment Planning and Assessment Act (EP&A Act).
Environmental Planning and Assessment Amendment (Infrastructure and Other Planning Reform) Act 2005
EP&A Act Regulation Part 1A
Fisheries Management Act 1994.
Heritage Act 1977
Mining Act 1906
Mining Act 1992
Mining Regulation
Mine Subsidence Compensation Act 1961.
National Parks and Wildlife Act 1974
Petroleum (Onshore) Act 1991
Protection of the Environment Operations Act 1997
Rivers and Foreshores Improvement Act 1948
Roads Act 1993

CASES CITED: Goodwin v Phillips (1908) 7 CLR 1
Kayuga Coal v Ducey & Ors [2000] NSWCA 54
Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355
Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 230 ALR 370
Sandvik Australia v Commonwealth (1989) 89 ALR
Trust Company of Australia v The Valuer General [2007] NSWCA 181
Tugun Cobaki Alliance Inc v Minister for Planning and RTA [2006] NSWLEC 396

PARTIES: Ulan Coal Mines Limited v Minister for Mineral Resources & Moolarben Coal Mines Limited

FILE NUMBER(S): SC 030025/07

COUNSEL: (P) B McClintock SC & R Beasley (Ulan)
(D2) M J Leeming SC & C Withers (Moolarben)

SOLICITORS: (Ulan) Minter Ellison
(Moolarben) Sparke Helmore
(Minister for Primary Industries (Mineral Resources)) (submitting) I V Knight State Crown Solicitor

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
ADMINISTRATIVE LAW LIST

SMART AJ

Friday, 16 November 2007

030025/07:
ULAN COAL MINES LIMITED (Ulan)

v

MINISTER FOR MINERAL RESOURCES & MOOLARBEN COAL MINES LIMITED (Moolarben)

JUDGMENT
Introduction

1 Ulan claims relief which would have the effect of preventing coal mining operations by Moolarben on the surface of lands Ulan owns in the Ulan-Moolarben district for the time being. Those lands are about 40 kms from Mudgee travelling towards Cassilis. Of course, the relief sought is not couched in such blunt terms. Declarations and injunctions are sought which are said to give effect to the legal rights of the parties under the Mining Act 1992 and at law. In the report of the Department of Planning of September 2007 it is written that the Moolarben Coal Project:

“involves the construction and operation of three open cut mining pits, an underground mine and a range of associated infrastructure including a coal handling and preparation plant, and new rail loop and coal loader off the Sandy Hollow-Gulgong railway line. Over 21 years, Moolarben would extract a coal resource of 127 million tonnes of coal at a rate of up to 12 million tonnes of run of mine (ROM) coal, process this coal on site, and then rail it to domestic and export markets.”

“The project has a capital investment value of $405 million, could contribute up to $350 million a year to the NSW economy and employ around 320 people during operations. It would also provide royalties and tax income to Government.”

2 Ulan Coal Mine and Wilpinjong Coal Project are within relatively close proximity to the Moolarben Coal Project.

3 The contest was between Ulan and Moolarben. The Minister for Mineral Resources (now the Minister for Primary Industries) took no active part in the proceedings, submitting to such order as the Court thinks fit except as to costs. Ulan is owned principally by the mining giant Xstrata with Mitsubishi having a 10 per cent shareholding. Moolarben is a subsidiary of Felix Resources. This was a battle of the Titans.

4 The contest turned mainly on questions of construction of some of the provisions of the Mining Act and s. 75V of the Environmental Planning and Assessment Act. However, there were some factual issues which were litigated. The parties indicated that I should make factual findings to obviate the case having to be referred back for hearing if an appellate court took a different view on the construction questions.

5 The Court is not concerned with the wide ranging environmental issues which arose nor whether the development should have been approved. Its task is to deal with the issues of statutory construction and whether the procedures specified in the Statute and Regulations have been followed and the consequences if these have not been followed in whole or in part.

6 Consequent upon being granted exploration licences and carrying out exploration work Moolarben lodged Mining Lease Application (MLA) 264 in July 2005 with the Department and Mining Lease Application 290 in about October 2006. Much of the land the subject of MLAs 264 and 290 was owned by Ulan. It was not enamoured of the surface of its land being disturbed by coal mining operations on the part of Moolarben. Ulan had acquired its land over many years.

7 MLA 264 sought a lease to permit the conduct of coal mining by underground methods approximately 3 kilometres east of the village of Ulan between the Goulburn River National Park and the existing Ulan Mine. The MLA 264 resource is estimated to contain 74 million tonnes of thermal quality coal. MLA 290 sought a lease to permit the conduct of 3 open cut mines in the lease area south of the MLA 264 project and the Gulgong-Sandy Hollow railway and west of the Munghorn Gap Nature Reserve. The MLA 290 resource is estimated to contain 130 million tonnes of thermal quality coal.

8 Section 63(1) of the Mining Act 1992 provides that after considering an application for a mining lease the Minister may grant a mining lease to the applicant or refuse the application. By virtue of s. 68(3) of the Act a mining lease may be granted over the surface of the land and also below the surface.

9 These proceedings involve the surface of the areas the subject of MLAs 264 and 290.

10 Section 62(1)(c) of the Act broadly provides that a mining lease may not be granted over the surface of any land on which is situated any substantial and valuable improvement other than an improvement constructed or used for mining purposes and no other purposes. (See Kayuga Coal v Ducey & Ors [2000] NSWCA 54 esp at [17].)

11 It was common ground that the relevant date for the existence of such an improvement was in July 2004, Exploration Licence Application Number 2395 being lodged by White Mining Limited, a predecessor of Moolarben, on 9 July 2004 and Exploration Licence Application Number 2398 being lodged by White Mining Limited on 20 July 2004. At the hearing the relevant date was taken by Ulan and Moolarben to be 20 July 2004.

12 Ulan sought a declaration that by reason of s. 62 of the Mining Act and the existence of nominated improvements (not being improvements constructed or used for any mining purpose) situated on the surface of specified land (being the subject of MLAs 264 and 290) the Minister for Primary Industries, Mineral Resources, was not entitled to grant or approve MLA 264 and MLA 290.

13 Ulan challenged:

Mining Act

(b) the notice caused to be published by the Minister in the Mudgee Guardian on 5 August 2005 as to MLA 264 on the ground that it contained errors and was misleading and deceptive in stating that Moolarben had obtained development consent and that no person was entitled to object to the Minister in relation to the grant of a mining lease and on the ground that the published notice did not comply with cl. 24(4) of Schedule 1 of the Act. Moolarben complained that the notice did not state that objections to the granting of the lease may be made in writing to the minister and did not explain (having regard to the provisions of cl. 28) what persons were entitled to object. Nor did it state that such objections should be made on or before the date specified in the notice, being a date not less than 28 days after the date of publication of the notice. There was an unresolved debate about the validity of a 1985 development consent and whether it could still be used. Without in any way conceding the point Moolarben subsequently sought a further and wider development consent from the Minister for Infrastructure and Planning.

Mining Act

Mining Regulation

14 Moolarben did not accept Ulan’s complains and contended that in any event the breaches alleged, even if established, did not prevent the Minister granting Moolarben the mining leases which it sought. Moolarben also pointed to s 135 of the Mining Act empowering the Minister to grant an authority, which the Dictionary states means, inter alia, a mining lease, even though it has failed to comply with a requirement of the Act or the regulations as to the details to be contained in any notice or as to the particulars to accompany any application.

15 Moolarben relied on and sought to invoke the discretionary power of the Court to refuse relief on a number of grounds.

16 Moolarben relied heavily on the approval given on 6 September 2007 by the Minister of Infrastructure and Planning to the Moolarben Project. This had previously been declared as a major project by the Minister under s. 75B of the Environment Planning and Assessment Act (EP&A Act). Thus it became a project to which Pt 3A of that Act applied. Having regard to the terms of Pt 3A and especially ss. 75U and 75V, Moolarben contended that the approval of the Minister of Infrastructure and Planning under Pt 3A of the EP&A Act superseded the provisions of the Mining Act. Section 75(V)(1)(c) of the EP&A Act provides that a mining lease cannot be refused if it is necessary for carrying out an approved project and is to be substantially consistent with approval under Pt 3A of the EP&A Act. The approach under the Mining Act and the EP&A Act where a major project was approved by the Minister of Infrastructure and Planning was a matter of substantial debate. Ulan contended that the prohibition contained in s 62 of the Mining Act still applied and sought to read the provisions of the two Acts together. It did not accept that Pt 3A of the EP&A Act and the approval of the Minister of Infrastructure and Planning under that Act over-rode the prohibitions contained in s. 62 of the Mining Act. Ulan accepted that Pt 3A and the approval of the Minister of Infrastructure and Planning did mean that the Minister for Primary Industry no longer had a general discretion under s 63(1) to refuse to grant the mining lease which was sought but that was a different issue from the prohibitions in s 62.

17 If Moolarben’s submissions as to the effect of Pt 3A of the EP&A Act and the approval of the Minister of Planning are correct then the points raised by Ulan as to the construction and operation of the Mining Act have no or little utility.

Mining Act

18 Section 62 provides:

“62 Dwelling-houses, gardens and improvements

(1) A mining lease may not be granted over the surface of any land:

(a) on which, or within the prescribed distance of which, is situated a dwelling-house that is the principal place of residence of the person occupying it, or

(b) on which, or within the prescribed distance of which, is situated any garden, or

(2) The prescribed distance is:

(a) 200 metres (or, if a greater distance is prescribed by the regulations, the greater distance) for the purposes of subsection (1) (a), and

(4) Subsection (1) does not apply in respect of a dwelling-house, garden or improvement that was not in existence at the relevant date.

(5) The relevant date is:

(c) in the case of a mining lease for coal the subject of an application made by the holder of an exploration licence for coal in respect of the same land, or of an assessment lease for coal granted over the same land to the holder of such an exploration licence, the date on which the application for the exploration licence was lodged.

(6) Any dispute as to whether or not subsection (1) applies in any particular case is to be referred to a warden for inquiry and report and is to be decided by the Minister on the basis of the warden’s report.

(8) In this section, valuable work or structure includes anything taken to be a valuable work or structure for the purposes of this section by clause 23A of Schedule 1, but does not include anything declared not to be a valuable work or structure by clause 23B of that Schedule.”

19 On this section questions arise as to the meaning of the word “land” in the first line of subs. (1), the word “improvements” in subs. (1)(c) and what constitutes a substantial and valuable improvement. The question also arises whether this Court should determine whether certain nominated structures or works are substantial and valuable or whether that is the sole province of the Warden under subs. (6).

20 In the Schedule to the Further Amended Summons (FAS) Ulan has listed some 49 instances of claimed substantial and valuable improvements on the land the subject of MLAs 264 and 290 or close by. Ulan did not press as such improvements the claims listed under stations 14, 15, 16, 23, 29, 34, 44 (as to the fence), 45, 46 and 49 (part) in the Schedule to the FAS. (In item 44 it still pressed that the pasture was an improvement.) On the view it was apparent that the claimed improvements had been in existence for many years and that the issue was whether they were substantial and valuable as at 20 July 2004. Attention concentrated on the extent, nature and quality of the improvements.

21 Before Ulan can obtain the primary declaration which it seeks that on the true construction of the Mining Act including the Schedules it should appear

(a) the prohibitions contained in s 62(1) were absolute; and

(b) were not subject to the time limits imposed by cl 21 of Schedule 1, those time limits being that the landholder had to lodge objections to the granting of the lease on the grounds that the land is agricultural land and claims with respect to valuable works and structures on the land to the Minister within 28 days after service by the applicant for the lease of the notice stipulated in the Schedule; and

22 For the purposes of Points (b) and (c) it is assumed that the Notices served complied with the requirements of the Act or that any non-compliances do not prevent the leases being granted. I will deal later with Ulan’s point that the Notices did not comply with the requirements of the Act.

23 If there are no improvements that could reasonably be classed as substantial and valuable, Ulan’s case under s 62(1)(c) evaporates. If there are some improvements that could be reasonably so classed these will be identified. There are at least these possibilities:

(a) the improvements (or some of them) are substantial and valuable;

(b) the improvements (or some of them) are capable of being held to be substantial and valuable with the ultimate decision being left to the warden.
(c) the improvements could not reasonably be regarded as substantial and valuable.

24 To obviate a multiplicity of hearings in this Court I will express my views on the improvements.

25 Ulan sought to have its claims of substantial and valuable improvements considered against the background of its long history of land acquisitions and the leases it has granted of parts of its land, some of these leases extending back to 1985. This history is set out in the affidavit of Mr V Istomin. He has explained that strategic grazing of livestock for the maintenance and rehabilitation of land and agricultural use of land are particularly reflected in the history of lands owned by Ulan. As the drought has continued that use has not been able to be as extensive as previously.

26 Moolarben did not accept that any of the improvements were substantial and valuable although it was conceded that some of the dams were well constructed and that stock would use them. As to many of the fences Moolarben asserted that they were not stock proof and in poor condition. Some were acceptable. It was Moolarben’s alternative case that if the Court held that some of the improvements were substantial and valuable (and there were few of them, it contended, which were capable of being so categorised) the Court should identify such improvements as s. 69 of the Mining Act enabled the Minister to grant a mining lease which differed in size or shape from, but may not include land other than, the land over which the lease was sought.

27 Ulan sought to include the clearing of large areas of land as substantial and valuable improvements. In the Schedule to the Summons the description given was “Former Cultivation Now Pasture Lands”. Moolarben disputed that such clearing could constitute a substantial and valuable improvement within s. 62(1)(c) of the Act. Moolarben contended that even if land clearing could be classed as a substantial and valuable improvement the current condition of some of the cleared land with its re-growth including weeds and other adverse growths did not constitute a substantial and valuable improvement. Having regard to the quality of the land it would be uneconomic to remove such re-growth, weeds and other adverse growths. Ulan directed attention to the words in s. 62(1)(c):

“Any improvement (being a substantial building, dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work or other valuable work or structure).”

28 Ulan submitted that:

(i) “an improvement” in relation to land is defined as something that has the effect of “enhancing the land’s value compared with its natural state”: Trust Company of Australia v The Valuer General [2007] NSWCA 181 at [10] and [68] and the cases on “improvement” referred to at [25], [26] and [30];

(ii) In Kayuga Coal v Ducey & Ors [2000] NSWCA 54 Meagher JA, with whom Powell JA agreed, made it clear that the word “valuable” should not be construed with any gloss. It does not mean “of special value, considerable value or very valuable”;

(iii) if “valuable” is not to be construed as something requiring an item to be of considerable worth or very valuable this word in the context of s. 62(1)(c) of the Act can only refer to a thing that has “some value” or adds “some value” to the land. All of the remaining items referred to in the Schedule to the Summons add some value to the land – some more so than others – and are all capable of being “improvements” within s. 62(1)(c);

(iv) Meagher JA erred in holding in Kayuga at [16] that the word “substantial” qualified all subsequent nouns. (This was a formal submission to enable the point to be raised on appeal. It was recognised that I was bound by the view expressed by Meagher JA and concurred in by Powell JA, although Priestley JA did not express a view on this point, regarding it as unnecessary to do so);

Tillmans

,

29 Moolarben submitted that:

(i) an “improvement” for the purposes of s. 62(1)(c) is a work or structure created by a landholder to assist in the conduct of non-mining activities on the land and which has a continuing presence on the land. The catchment areas seen on the view were not “improvements” but features of the landscape;

(ii) a work or structure is “valuable” for the purposes of s. 62(1)(c) only if there can be attributed to that particular improvement a value which would be reflected in the price paid by a prudent purchaser. (I think that is putting the position too high. It may, on occasions be difficult to separate the value of the land and the value of the improvement). An improvement which is not functional would (at least ordinarily) not be valuable for that reason. Nor would an improvement be valuable merely because it is functional and adds marginal value to the land as a whole;

(iii) an improvement is “substantial” if it is material, functional and has a significant presence on the land having regard to the scale of the land, the improvements and its intended use. It calls for a qualitative judgment;

30 In Kayuga at [17] Meagher JA remarked, “as a matter of English, the wording of paragraph (c) of s. 62(1) requires such of the objects listed to be both ‘substantial’ and ‘valuable’, notwithstanding that this involves a certain measure of tautology."

31 In construing s. 62(1)(c) account has to be taken of three concepts, namely an improvement which had the effect of enhancing the land's value compared with its natural state and one which was substantial and valuable. There is some overlapping. An improvement enhances the value of the land. In that sense it is valuable, it adds some value to the land. But enhancing or adding value to the land does not necessarily mean that the improvement is valuable. The word “valuable” adds emphasis and a qualitative element. It is hard to imagine an insubstantial improvement being valuable. To be valuable an improvement must be of more than minimal or little value.

32 Making all due allowance for the sustained drought and the recent extensive rainfall, the Ulan land the subject of MLA 264 and MLA 290 appeared to be of poor quality and quite “stoney”. There was relatively little feed evident on the land including the cleared sections and the feed seemed to be widely spread. While there were extensive cleared areas there were also extensive uncleared or timbered areas. There was a large mostly timbered area in the southern section of MLA 290 which consisted of rocky ridges or hills which were difficult of access. Heavy duty vehicles were needed. Experience and skill were required to drive them successfully. The conditions in July 2004 were probably substantially similar.

33 An expert from each side accompanied counsel, solicitors and assistants and me on the view. Mr Baguley had been retained by Ulan and Mr McMichael by Moolarben. Both were knowledgeable and helpful.

Station 1 – Stock Water Dam

34 Mr Baguley estimated the approximate dimensions of this dam to be 20 metres by 20 metres and the approximate volume to be 533.3 (m3) as at 26 April 2007.

35 As at 30 April 2007 Mr McMichael estimated that the dam had a capacity of approximately 900 (m3). He was of the opinion that the north south fence on the northern side of this dam was not stock proof and performed no function and that the area serviced by this dam was approximately 66 ha. Mr McMichael thought that, assuming normal water consumption, the paddock could carry 41 cattle on an annual basis. He regarded the dam as badly silted and thought that it would quickly turn into a bog which could cause livestock to flounder and become stranded with the water becoming fouled and therefore unusable. Mr McMichael thought that the dam would not adequately support livestock in its current state due to its limited capacity, extensive silting and unreliability caused by the potential failure of the badly eroded spillway.

36 On about 23 August 2007 Mr McMichael again inspected the lands the subject of MLAs 264 and 290. He was informed that there had been 7 inches of rain in early August 2007. In his evidence in Court Mr McMichael was questioned as to his general approach and conclusions as to some specific claimed improvements but not as to Station 1.

37 On the view on 3 October 2007 Mr McMichael adhered to what he had written in his report and his evidence in Court. Mr McMichael commented that this dam had more water in it than it did have as depicted in the photographs on p. 12 of his report. In a tight drought situation, he thought that this would be a dangerous water point for bogging and pollution of the water.

38 Mr Baguley accepted that there were “obviously some pollutants there now from cattle accessing it and so forth”. He added that in the drought situation it was also providing a water resource for the cattle that were in that area. He was “not exactly sure” as to the long term. While the region was drought declared, Mr McMichael did not think it was a drought situation on the day of the view at this station.

39 On the view there was vegetation evident in the dam and there was evidence of the potential for cattle to become bogged, particularly as the water level dropped. My assessment was that this dam did provide a water resource for cattle within the general area of this dam in drought conditions but that in times of extreme drought, when the going was particularly tough it would be dangerous because of the potential for bogging and pollution of water. There was no direct evidence as to the condition of this dam in July 2004. The dam could be improved by the removal of the vegetation and improvements to the walls of the dam so as to render them less likely to become “boggy”. I thought that this dam in July 2004 was probably substantial and valuable, but it was not of high value or especially valuable. Nor was this dam of minimal value. While I appreciate the desirability of a dam being able to function adequately in times of extreme drought and that such a dam would have greater value, that does not mean that a dam which can function adequately in times of drought but not in times of extreme drought is not valuable. More stock management is required when a dam does not function adequately in times of extreme drought.

Station 2 – Fencing within Lot 24, DP 755439 – Northern fence for MLA 264

40 In his report, Mr McMichael wrote that the fence was old and constructed with wooden posts and hinge joints/barbed wire, that the wires were badly rusted, that there was no bottom wire to hold the base of the fence down, that the fence had no signs of maintenance being carried out over recent years and that the fence was not stock proof and would not adequately control livestock.

41 Between late April 2007 and the view the fence had been the subject of some repair. Mr McMichael said that when he inspected the fence some of the strands of barbed wire were not there and some of the bottom wire was not there; the stock could go straight underneath the fence. He pointed to a hole where he said the kangaroos were still coming through.

42 It was not in dispute that parts of the fence were not in the MLA area. The line of MLA 264 was pointed out to me.

43 Having seen the fence, I would conclude that as at July 2004 this fence was neither substantial nor valuable. It would have required extensive repairs. Its value was minimal.

Station 3 – Fence – Eastern Section of Lot 24, DP 755439

44 On the view it was agreed that the fence was adequate and stock proof as at July 2004. This was a substantial and valuable improvement.

Station 4 – Stockyards within Lot 24 and Dam

45 Ulan withdrew its claim that the old stockyards constituted a substantial or valuable improvement.

46 There was some question as to whether the dam was on MLA 264 or right beside it. Mr Baguley doubted whether this dam was on MLA 264 and thought that it was probably only in times of rain that water would extend into MLA 264, that is, past the boundary fence. Mr McMichael thought that the dam was an unreliable structure. In a drought situation it would not sustain livestock. I would exclude this dam from consideration as the dam as distinct from the overflow does not appear to be on MLA 264.

47 The fence north of the marker was not within MLA 264 and may be excluded from consideration. The fence south of the marker was conceded to be stock proof. It was adequate and constituted a substantial and valuable improvement.

Station 6 – Fencing Lot 24, DP 755439/ Lot 2, DP 722822 and Former Public Road (Lot 2)

48 The fencing did not appear to me to constitute a substantial and valuable improvement, either as of July 2004 or presently. Attention was focussed on the dirt road. There was marked erosion. The viewing party was able to travel along it in substantial 4 wheel drive vehicles. I agree with the comment of Mr McMichael that this road was severely eroded at Station 6 and has not been maintained for a long period. Mr McMichael was correct that the road was currently usable by suitable heavy duty vehicles. Ordinary cars could not use it safely. Mr McMichael wrote that without remedial action on the erosion of Station 6 the road will become impassable. This is probably correct. Blue metal had been placed on the road when the viewing party travelled along it and this helped to make it passable.

49 My view was that in July 2004 and presently the road was passable but with some difficulty. With some work it could be made readily passable. Debris had to be removed from it periodically and the road required maintenance and supplementary works to be kept passable. In my opinion the road was a substantial and valuable improvement as at July 2004.

Station 7

50 This is dealt with under Station 8.

Stations 8 & 36 – Stock Water Dam, Drainage Channel and Former Cultivation Now Pasture Lands

51 Mr McMichael wrote that this was a large dam with an estimated capacity of 1,700 cubic metres, with a sound catchment suitable for stock watering in the paddock in which it is located. He estimated the paddock to be approximately 100 hectares and that it would carry approximately 62 cattle.

52 On the day of the view there were a lot of cattle, including young calves, around the dam. It was agreed that this was a well constructed dam. There did not appear to be a lot of feed in the vicinity of the dam and the cattle and calves appeared to be in but moderate condition.

53 As the viewing party approached the dam we drove past a lengthy drain with signs of erosion along most of its distance.

54 Mr McMichael wrote that the drainage channel showed considerable deep “moving” erosion and that it was in urgent need of repair. He expressed the opinion that the channel did not perform any function related to livestock grazing.

55 Mr Baguley thought that the reason the drain was put in was to direct water away from the railway line. Mr Baguley commented that the drain would still move water when it rained but there was noticeable erosion. Ulan submitted that as the drain near Station 36 directed water away from the railway line it was still a valuable and substantial improvement.

56 Mr Baguley also made the point that the overflow water in times of heavy rain in the vicinity of the dam at Station 9 could travel down to the dam at Station 8 but for this to happen there would need to be a lot of water.

57 The dam at Station 8 is a substantial and valuable improvement. Despite the extensive erosion I would regard the drainage channel as a substantial and valuable improvement as at July 2004 because of its capacity to divert water from the railway line. With the prolonged drought it may not have seemed necessary to remove the silting and vegetation from the drainage channel until substantial rains fell with some consistency.

Station 9 – Stock Yards, Fencing, Dam and Former Cultivation Now Pasture Lands

58 The stockyards were small in size. Recent work involved replacing material (the race) that had been taken off and removed by the previous lessee/licensee in February 2007.

59 There were extensive pasture lands in the vicinity of this dam but they were dry and there did not appear to be much feed on those lands. The drought had left is mark. I will deal later with the issue whether such cleared pasture lands constitute an improvement within s. 62(1)(c) of the Mining Act.

60 I was shown the old loading ramp and the race which is now in existence. Mr McMichael thought that the previous race was not as long as the present race. Counsel for Ulan and Mr Baguley pointed out that the present race was a replacement and disagreed with Mr McMichael’s opinion. The latter pointed out that there was no crush and expressed the opinion that trying to treat animals in the existing race would be unsafe and difficult. Mr McMichael indicated that some of the metal planks (“w” strap panels) had pretty sharp edges. Mr McMichael pointed to other non-compliant features with occupational health and safety requirements.

61 Mr Baguley commented that by installing the race as was done there was no facility to handle cattle in them but that there was the facility to unload cattle and reload cattle onto a truck. That was so. He assumed that any animal husbandry work was done elsewhere. b He agreed that there were some occupational health and safety issues.

62 By modern standards, and I include those that applied in July 2004, the stockyards did not comply with occupational health and safety requirements because of the sharp edges on many of the panels, the lack of a reasonable drafting yard or man gate and the lack of safe latching devices. If any animals are to be treated there a crush would be needed either permanently or temporarily. The point was made that very few stockyards in the Mudgee District complied with occupational, health and safety requirements but they were still used.

63 The stockyards needed some alteration and improvement. Mr Baguley thought that with such improvements and alterations they could be used for the purpose of loading and unloading stock. That is probably so. There were a lot of metal panels or W-straps with sharp edges. I cannot disregard the non-compliance with occupational, health and safety requirements. As at July 2004 these stockyards were probably not a substantial or valuable improvement.

64 Mr McMichael estimated the dam near Station 9 was approximately 700 cubic metres and that it should serve the paddock estimated to be approximately 17 hecatres with an annual carrying capacity of 11 cattle. Mr Baguley estimated the approximate dam dimensions as 30m x 30m and the approximate volume as 1,800 (m3). I prefer the estimate of Mr Baguley based on the photographs and my view.

65 Mr McMichael wrote that this dam was open to all areas south of the railway line and north of Wollar Road and that there was poor “open gate” management of cattle, that the two dams at Station 10 were sufficient to water the whole areas given the open gate management and that while the Station 9 dam would adequately support livestock grazing, it was surplus to requirements as livestock had access to nearby water supplies. The photograph at p. 25 of his report shows a large dam with a large amount of water in it. This is the dam at Station 9. See T 384, l. 18 – 29. The photograph shows a lot of cattle on the nearby pasture lands. The dam appears to have sound walls. As at July 2004 the dam was a substantial and valuable improvement.

66 Mr McMichael wrote that fencing in the area of Station 9 was sound but lacked maintenance. He said that he was referring to the fencing adjacent to Station 9. The fencing generally appeared to be sound. If the fencing was generally sound and the gate was closed the cattle could feed on the pasture and use the dam.

67 There were extensive pasture lands in the paddocks around the dam shown in the photograph on p. 25 of Mr McMichael’s report. I noted these on the view. The lands had been cleared of timber and other items and stock were grazing. I will deal subsequently with the question whether the cleared pasture lands can be deemed as a substantial and valuable improvement under s. 62(1)(c) of the Mining Act.

68 As to the fencing, I regarded Mr McMichael’s description as sound but lacking maintenance as reasonable. While I had some doubts as to this fencing it probably falls within the description of a substantial and valuable improvement.

Station 10 – 3 Dams, Fencing and Former Cultivation, now Pasture Lands

69 Mr Baguley estimated the three dams to have approximate dimension of 20m x 20m, 20m x 20m and 6m x 6m, and approximate volumes of 533.3 (m3), 533.3 (m3) and 14.3 (m3) respectively. Mr McMichael described the eastern dam as small, unnecessary and surplus to requirements as the two dams just to the west of the small dam have a significant catchment area and have a combined capacity in excess of 2,800 cubic metres. Mr McMichael wrote that the two larger dams were badly silted. He estimated that the area serviced by these two dams was 70 hectares and would carry approximately 44 cattle. He thought that there was sufficient volume in these dams to safely water this number of cattle. The photograph of the twin dams at p. 27 of Mr McMichael’s report does show one dam which is badly silted up and a relatively small volume of water. The second dam area or “twin dam” is marginally visible. Mr McMichael, on the view, pointed out that the catchment area for the dam was relatively small and that the dam was very small in its entirety.

70 The photographs attached to Mr Irwin’s report taken at Station 10 indicate somewhat better dams and one, which while it has some vegetation in it, has more water. On the evidence and what was seen at the view it is hard to draw any conclusion as to the position at July 2004.

71 The size and capacity of the dams do not take them out of the category of being a substantial and valuable improvement. They are capable of safely watering an appreciable number of cattle as stated by Mr McMichael.

72 As at July 2004, the dams were capable of being regarded as and were probably a substantial and valuable improvement. A contrary view could also be reasonably held.

73 The fence in the vicinity of Station 10 separates a public road and the lands the subject of MLA 290 and is about 1 km in length. Some parts of the fence require repair and some of the posts are loose or suspended and no longer serve any useful purpose. They need to be replaced. The fence appeared to be in better condition as it went up the hill and along the road from the dam. Mr McMichael pointed out that in relation to the area of the fence near the dam that the stock had been pushing underneath the fence, this being evidenced by the area being grazed out. Mr Baguley thought that livestock had probably not gone through the fence but that the gaps or depressions had been created by kangaroos and native wombats. I thought that both points were soundly made. Generally the land around the dam at Station 10 was pretty dry and there did not appear to be much pasture.

74 The fence needed repair and strengthening but what was needed did not strike me as too costly or time consuming or difficult a task. In my opinion as at July 2004 this lengthy fence, even allowing for the repairs and strengthening needed probably constituted a substantial and valuable improvement. I accept the statement in the report (p. 12) of July 2007 of Mr J Lane, a well qualified and very experienced agricultural consultant:

“Use of electric wires with the power supplied by solar energisers can be used simply, effectively and cheaply to shore up an old fence or to create temporary subdivisions. At the subject land, they would have the benefit of avoiding expensive repairs made necessary by kangaroos.”

75 The pasture lands in the general vicinity of Station 10 were extensive. The lands had been cleared but were dry. Despite the heavy rain in early August 2007 the lands had not recovered from the prolonged drought. As at July 2004 the lands were probably dry and much affected by the drought. The question whether cleared drought affected land as at July 2004 constitutes a substantial and valuable improvement is dealt with later.

Station 11 – Airstrip

76 While this was seen from a distance on the view it was agreed that this was outside MLA 290 and does not require consideration.

77 This was an internal subdivision fence. It was agreed that it was in need of some repair. Mr Baguley remarked “there is lots of different styles of fencing on this fence.” He was not sure if the most recent looking repairs had been effected since his first inspection. Mr McMichael thought that they had been effected since his April inspection and he is probably correct.

78 In his report Mr McMichael wrote that the fence was old and constructed with wooden posts, wooden battens, netting and barbed wires, that all wires were badly rusted, that there was no bottom wire to hold the base of the fence down and that the fence had no signs of maintenance being carried out over recent years. On the view I thought that many of the old wooden posts were not robust.

79 As at July 2004 this fencing was not a substantial and valuable improvement, even allowing for the use of inexpensive electrical wiring.

Station 13 – Stock Water Dam with Lot 253 DP 755442

80 Mr Baguley estimated the approximate dimensions of the dam as 20m x 20m and a volume of 533.3 (m3). It was a rather small dam. Mr Baguley said that this dam adequately held water but it would be difficult in the terrain to service livestock. Mr McMichael thought that it served no purpose because livestock could not access it. The dam was surrounded by scrub and there was a fence nearby.

81 Ulan contended that this dam was a water resource for the land but it appeared to be a small resource.

82 In my opinion as at July 2004 this was neither a substantial nor valuable improvement.

Stations 14, 15 & 16 – Old Ruins, Old Stockyards, Old Fencing

83 Claims in respect of these items were withdrawn.

Station 17 – Stock Water Dam

84 Mr Baguley estimated the approximate dimensions of the dam as 30m x 30m and a volume of 1,800 (m3). Mr McMichael estimated its capacity as 1,300 cubic metres and wrote that it had a significant catchment area. He estimated that it serviced an area of 18 hectares with a capacity to carry approximately 11 cattle. He wrote that this dam would adequately support livestock grazing. This dam had firm sides and cattle using it would not get bogged. It was not a large dam. Moolarben submitted that this was perhaps the most debatable of all the dams. It accepted that it had a good catchment and would support livestock grazing but in an area able to carry only 11 cattle. To that limited extent it performs its function. Moolarben submitted that when considered against the scale of the land the dams which were substantial (the quarry dam and the dam at Station 8) this dam was neither a valuable nor a substantial work.

85 Ulan submitted that this dam was well constructed and a good water resource and a valuable and substantial improvement. I agree that this was and is a well constructed dam and a good water resource. Mr McMichael was correct when he said that it had a good catchment area.

86 There is force in the contention that it services a relatively small area which was able to carry only 11 head of cattle. Other cattle could be brought to this dam to drink from it or water could be taken from it to cattle in other areas in drought conditions.

87 In my opinion, notwithstanding the limitations to which Moolarben has pointed, this well constructed dam and good water resource constituted a substantial and valuable improvement as at July 2004. It impressed me as a dam that any competent farmer grazing cattle would wish to have.

Station 18 – Stock Water Dam

88 Mr Baguley estimated the approximate area of the dam as 20m x 20m and its volume as 533.3 (m3). Mr McMichael estimated its capacity as approximately 860 cubic metres. Mr McMichael wrote that this dam was in an un-maintained poor state as it was heavily infested with Cumbungi, that it was in urgent need of de-silting/Cumbungi removal and that without this work the dam was in jeopardy of bogging which could cause livestock to flounder and become stranded leading to the water becoming fouled and therefore unusable. Mr McMichael wrote that this dam would not adequately support livestock grazing. Mr Baguley agreed.

89 On the view this appeared to be fairly shallow. Mr McMichael added that effectively this was a silt trap not a dam. The construction was for the purpose of collecting silt coming down preventing it from silting the dam below. Mr Baguley agreed. The dam below is the one at Station 19.

90 The contour bank was associated with the overall dam construction and was there to divert water into the silt trap and from the silt trap into the dam.

Station 19 – Contour bank/swale

91 This needs to be considered in conjunction with Station 18 which is close by. Because they are so close together it may well be that the dam dimensions and capacity referred to by Mr Baguley and summarised under Station 18 apply to this dam.

92 Mr McMichael wrote that the bank assists in the collection of water for Station 18 dam and that the bank is small and would only provide a limited supply of water to the dam.

93 On the view it was noted that this dam was very heavily silted. Roughly 75 – 80% appeared to be occupied by vegetation (Cumbungi). There was some water in it. Removing the cumbunji was not a difficult or expensive task.

94 On the view it is probable that the numbering of Stations 18 and 19 was reversed when compared with the numbering in the Schedule to the Summons. The whole area appeared to be neglected. The Cumbungi was quite tall and appeared to have been there for some years.

95 I did not regard the works at Stations 18 and 19, namely, the contour bank, the silt trap and the heavily silted dam as substantial and valuable improvements as at July 2004.

Station 20 – Former cultivation now pasture lands

96 The general position of these lands is shown on the map on p. 5 of Mr Irwin’s report of 19 April 2007. There are two useful photographs of the lands at p. 38 of that report. The lands have been cleared. Mr McMichael is correct that the pasture lands identified do not include any physical structures or works. Mr McMichael wrote that the pastures were native only and there were no legumes evident as at late April 2007. I will deal later with the issue whether cleared lands constitute a substantial and valuable improvement under s. 62(1)(c) of the Mining Act.

Station 21 – Subdivisional Fencing and Track on Boundary of Lots 179 & 227, DP 755442

97 From one of the aerial photos part of MLA 290 attached to Mr Baguley’s report on 4 May 2007 the track and cleared area along the fence line can be seen. They can also be seen in PB Ag Photos 42 & 46.

98 Mr McMichael wrote that this fence was constructed with wooden and steel posts, hinge joint and barbed wire and that vermin are commuting under this fence. I would not put the matter so broadly. There were a couple of places where there appeared to be kangaroo holes or a depressed area where the earth had been scratched away which would let kangaroos and vermin through.

99 Mr McMichael wrote that the fence was old and at least 75% through its life and that there were no signs of maintenance over recent years. He also wrote that the fence would control livestock but was in need of repair to maintain this status. The fence abutted a timbered area and I did not think that it was in as poor a condition as Mr McMichael. I agree that it would control livestock. Limited repairs would be advantageous. Good fences, unless supported with electric wires would not normally be proof against determined kangaroos and native wombats scratching the earth away under parts of them.

100 Mr McMichael wrote that the track claimed as an improvement was merely a track caused by vehicular access with no formation or maintenance work being carried out. On the day of the view the track was clear of obstacles and easy to drive along and it was reasonably level. I was unable to tell whether a grader had been used on the track or other work done on it.

101 As at July 2004 the fence was probably a substantial and valuable improvement but I am not satisfied that the track was.

Station 22 – Subdivisional Fencing & Track in S/W corner Lot 179 DP 755442

102 On the view attention was focussed on the fence between Stations 22 and 23.

103 In the previous six months there had been some maintenance work to the fence. Mr McMichael said that the fence had had “two high tensile barbs put along it and the old number 10 wire had been strained. He said that on 30 April 2007 the fence was in a dreadful state.

104 In his report (pp. 44 & 45) Mr McMichael described the fence as very old, obsolete and beyond repair. The fence was not stock proof and would not adequately control livestock. The photographs taken by Mr McMichael illustrate his view. Mr Baguley estimated that it would take two men about half a day to repair the fence. Mr Baguley said that the fence was in a lot better condition than previously and that it would now hold stock in place. Mr McMichael thought that the fence would not be stock proof. I thought that the fence was now in a reasonable condition. It would benefit from further maintenance.

105 As at July 2004 this fence was neither a substantial nor valuable improvement.

106 The track was in much the same condition as that near Station 21, possibly a little worse. I was not satisfied that the track was either a substantial or valuable improvement.

Station 24 – Stock Water Dam on Northern Boundary of Lot 178, DP 75542

107 Mr Baguley estimated the approximate dimensions of this dam as 5m x 5m and its volume at 8.3(m3). It was described by Mr Baguley as a small water dam for the purposes of some holding yards (now seemingly defunct) and in its current state as having very little value.

108 As at July 2004 this dam was neither a substantial nor a valuable improvement.

Station 25 – Subdivisional Fencing N/W corner Lot 178 & within Lot 14, DP 755442

109 Mr McMichael wrote that this fence was old and constructed with wooden posts and hinge joint/ barbed wire, that the fence had no signs of maintenance over recent years, and that it was not stock proof. The photographs at pp. 49 – 50 of his report illustrate the poor condition of the fencing.

110 At T556, ll. 34 – 36 I recorded on the view that part of the fence south of Station 25 was lying on the ground.

111 As at July 2004 this fencing was neither substantial nor valuable.

Station 26 – Graded Bank to Direct Water from Airstrip & Subdivisional Fencing Within Lot 14 DP 755442

112 It was common ground that the airstrip was outside the MLA area. The area is shown in photograph 51 annexed to Mr Baguley’s report.

113 Mr McMichael wrote that the graded bank drains a very small area, that the structure is very small and that a grader could construct a similar structure in about two hours. Mr McMichael thought that the structure benefited the adjacent airstrip but not livestock grazing.

114 The airstrip fence was stock proof but it seemed to be outside the MLA area. The fence appeared to be designed to keep stock off the airstrip.

115 Neither the graded bank nor the fencing constituted a valuable or substantial improvement within s. 62(1)(c) of the Mining Act. No time was spent on these items at the view save that they were pointed out from a distance.

Station 27 – Subdivisional Fencing, Track & Former Cultivation Now Pasture Lands within Lot 92, DP 755442

116 There was a disagreement as to the fencing. Mr McMichael wrote that the fence was old and constructed with wooden posts, rabbit netting and barbed wire, that the fence had no signs of maintenance over recent years and that it was not stock proof and would not adequately control livestock. On the view Mr McMichael adhered to what he had written. He pointed to some kangaroo holes and areas of vermin access. Mr Baguley said that these were vermin access holes. He thought that the majority of the fencing from where we were standing could contain livestock. The fencing was old and there were areas where vermin including kangaroos had created access ways under the fence.

117 On the whole, but not without some doubt, I thought that this fence probably did not constitute a substantial and valuable improvement within s. 62(1)(c) of the Mining Act.

118 Mr McMichael thought that the track was one caused by vehicular access with no formation work being carried out. I could not tell whether a grader had been used or other construction work had been carried out.

119 I was not satisfied that as at July 2004 the track was a substantial and valuable work.

120 Large areas of land had been cleared. There was no evidence of introduced species. The pastures were native, predominantly red grass with either no legumes or minimal areas of legumes. Mr Baguley added that native grasses tended to come away reasonably quickly and, when young, can be quite palatable. Stock will survive on these pastures. The land clearing had been done to allow grazing to occur.

121 Whether as at July 2004 these pastures constitute a substantial and valuable improvement within s. 62(1)(c) of the Mining Act will be dealt with later.

Station 28 – Subdivisional Fencing between Lots 14 and 92 DP 775442

122 This fencing is shown in photos 54 and 57 of Mr Baguley’s report and at pp. 56 and 57 of Mr McMichael’s report.

123 Mr McMichael wrote that these fences were old and constructed with wooden posts and various types of wire including netting / barbed wire, plain wire and hinge joint, that there were some signs of maintenance but with little effect and that the fences were not stock proof and would not adequately control livestock. Parts of the fence were leaning over and did not appear to be stable.

124 This fencing did not constitute a substantial and valuable improvement within s. 62(1)(c) of the Mining Act.

Station 29 – Old Boundary Fence between Lot 92 DP 755442 and Lot 7010 DP 1025345 (Crown Lands)

125 Ulan withdrew this claim.

Station 30 – Subdivisional fencing within Lot 92, DP 755442

126 This is captured in photograph 59 of Mr Baguley’s report and on pp. 60 – 62 of Mr McMichael’s report.

127 Mr McMichael wrote that this subdivision fence is of sound quality being constructed with steel posts, hinge joint and barbed wire. However, he also wrote that there was no evidence of ongoing maintenance as it has fallen timber over it in places and has lifted in several points through which vermin or sheep could commute. The fence was stock proof and would adequately control livestock. There is a picture on p. 62 of his report where Mr McMichael points out that the bottom wire is not low enough to retain sheep or vermin.

128 On the view (T 558, ll. 41 – 45 and 55) Mr Mc Michael said that this fence was a relatively new fence and that in a section about 20 metres in length it was significantly above ground. This could readily be repaired with little expense and effort.

129 I thought that this fencing should probably be regarded as a substantial and valuable improvement as at July 2004.

Station 31 – Contour Bank within Lot 92 DP 755442

130 Both Messrs McMichael and Baguley thought that the purpose of this contour bank was to enlarge the catchment of the very large Moolarben Dam. Moolarben Dam has a very large catchment. It was common ground that Moorlarben Dam was not on the land the subject of the MLAs – T 75, ll. 8 – 15. On the view, Mr McMichael expressed the opinion that when compared to the catchment area in the valley above the Moolarben Dam, the contour bank would be insignificant. Mr Balguley thought that the contour bank added to the catchment area by increasing its size and that any increase in the catchment area had to be beneficial (T 559, ll. 9 – 11). I would not go so far as to say that the contribution made by the contour bank to the Moolarben Dam would be insignificant but it would probably be small. About 14-15 per cent of the catchment area of Moolarben Dam is located within MLA290. The contour bank assists in adding water to the dam by increasing the catchment area.

131 As at July 2004 this contour bank on the balance of probabilities was a substantial and a valuable improvement but one directed to increasing the catchment area of a dam not on the land the subject of the MLAs. It was not suggested that for this latter reason the improvement was not caught by s. 62(1)(c) of the Mining Act, but I am prepared to hear further argument on this point.

Station 32 – Boundary Fencing and Cleared Pasture – Lot 242 DP 755442

132 This marks the boundary between Ulan’s land and that of the Swords family. The fencing is shown in photographs 68 and 69 attached to Mr Balguley’s report and at pp. 65 – 67 of Mr McMichael’s report.

133 Mr McMichael wrote that this boundary fence was of fair quality and parts would be considered stock proof but there were areas where the fence was not stock proof as fallen timber had demolished parts of it. Mr McMichael thought that because of what he regarded as a seriously damaged section the fence as a whole was not stock proof and would not adequately control livestock. Mr Swords was a very experienced and capable grazier and it was obvious on the view as we looked across the Swords family lands that he and his family were major landholders who ran an extensive and quality grazing operation. He has run both sheep and cattle. He was familiar with the boundary fence between the “Swords” property and Ulan. Mr Swords accepted that by the look of the photo taken in April 2007 the fence was not stock proof but added that nothing went through it. Mr Swords said that he had fixed the fence quite a while ago. It took but a short time to fix it – “five minutes”.

134 Mr Swords insisted that he first obtained access to Ulan’s land in about April 2004 following an invasion by grasshoppers. He asked Mr Gibb of Ulan if he could agist stock on Ulan’s land. He said that at various times he had placed up to 300 sheep and 30 head of cattle on the Ulan lands and that the infrastructure on the Ulan lands which he used included boundary fencing, gates and stock dams. Such infrastructure on the Ulan lands was in a condition which allowed him to carry out grazing and agistment tasks as part of his farming operations and it was adequate for these purposes. I accept Mr Sword’s evidence.

135 As at July 2004 the boundary fencing was a substantial and valuable improvement. In this instance I thought that Mr McMichael was being overly critical and did not allow sufficiently for Mr Swords’ supervision of his operations, and his capacity and willingness to carry out repairs and maintain the boundary fence.

136 There was a large area of cleared pasture land in the vicinity of this Station. It was not suggested that it consisted of other than native grasses. I deal later with whether this constitutes a substantial and valuable improvement within s. 62(1)(c) of the Mining Act.

Station 33 – Small Stock Water Dam (Spring Fed) – Lot 242

137 This spring fed stock water dam was dry at 30 April 2007. Mr McMichael did not regard it as a safe and reliable livestock watering point. Mr Swords remarked that as at April 2007 not too many dams had water in them. Mr Swords said that the dam now had water in it. He described this dam as "very small". Mr Swords said that in April 2007 the condition of the lands around Ulan in relation to drought was "devastated". There had been good rains since and the dams in the area have filled.

138 This very small dam is neither a substantial nor a valuable improvement.

Station 34 - Old Subdivision Fence - Lot 24, DP 755439

139 This is shown on photograph 7 attached to Mr Balguley's report and pp. 69 - 70 of Mr McMichael's report. Mr McMichael wrote that this fence consists of a line of old posts with minimum wires in place, that it was beyond repair and that it was not stock proof. Mr Swords agreed that the fence was in very poor condition and not stock proof. Ulan withdrew this claim.

Station 35 - Dam - Lot 24 DP 755439

140 Mr Baguley estimated its approximate dimension as 20m x 20m and its approximate volume as 533.3 (m3). Mr McMichael wrote that this dam was very small and was dry as at 30 April 2007, that it was not a safe and reliable livestock watering point, that it was showing a bad "moving" erosion area adjacent to the wall and spillway and that it would not adequately support livestock grazing. The erosion is highlighted in the photograph at p. 72 of his report. While this dam was virtually empty as at April 2007 it was full when seen on the view and contained vegetation.

141 Mr Baguley said that in its present state (October 2007) the dam adequately serves the purpose of watering cattle. That was correct.

142 The dam appeared to be relatively shallow. While it would continue to serve the purpose of watering cattle in the early years of a drought, I doubt if it would continue to do so in a prolonged and severe drought.

143 On the balance of probabilities I am not satisfied that as at July 2004 this dam was a substantial and valuable improvement. It falls marginally short.

Station 36 - Drainage Channel

144 See earlier under Stations 8 & 36. The drainage channel was probably a substantial and valuable improvement.

Station 37 - Dam - Lot 53, DP 736630

145 Mr Baguley estimated the approximate dimensions of this dam as 10m x 10m and its approximate volume as 66.7 (m3). On the view it was accepted that this small dam was just within the boundary of MLA 264. There was a large amount of vegetation in it.

146 Mr Baguley stated that this dam had a very small catchment area and that it would have a very shallow short-term water supply. Mr McMichael said that as at 30 April 2007 there was a small amount of water in the dam.

147 Mr McMichael pointed out that the Station 8 dam, which was substantial and in close proximity, serviced the area.

148 This dam was neither a substantial nor a valuable improvement as at July 2004.

Station 38

- Airstrip Fence - Lot 14 DP 755442

149 Mr McMichael wrote (p. 76 of his report) that the southern airstrip fence to the eastern end of the airstrip appeared to be within the MLA area, that it was stock proof and would adequately control livestock. It was probably constructed and maintained to keep livestock off the airstrip. We observed this fence from a distance on the view.

150 The question whether this is a substantial and valuable improvement is not directly touched upon in the extensive submissions of the parties. The evidence does not seem to disclose the length of this section of the fence. Moolarben's submissions seem to proceed on the basis that there is no dispute about this section of the fence not being a substantial and valuable improvement, whereas Ulan's submissions also seem to proceed on the basis that there is no dispute but for the opposite reason. Perhaps I have overlooked some relevant factor. This may need to be further argued. A complicating factor was that part of the airstrip fence - see earlier under Station 26 - was outside the lands the subject of the MLAs. That part of the airstrip fence was also stock proof.

Station 39 - Dam Adjacent to Airstrip within Lot 14

151 Mr Baguley estimated the approximate dimensions of this dam as 10m x 10m and its approximate volume as 66.7(m3). At p 77 of Mr McMichael's report there is a photograph of this structure which Mr McMichael describes as having no bank and therefore not holding water.

152 On the view it was noted that this structure did not appear to have any water in it. Mr Baguley commented that it was a small dam with not a lot of ability to hold water, that the water tended to flow through and that there was not a lot of formation around the dam.

153 This was neither a substantial nor valuable improvement.

Station 40 - Drainage Channel Adjacent to Airstrip - Lot 14

154 This is shown in photograph 52 attached to Mr Baguley's report, more clearly on p. 78 of Mr McMichael's report and also clearly on p. 47 of Mr Irwin's report.

155 Mr McMichael wrote that this drainage channel directs water from land to the south of it, to a culvert going under the airstrip, that vegetation had grown over the structure and reduced its effectiveness, that because of the lack of maintenance the channel would have limited effect in directing water in the event of a lot of rain and that the drainage channel provided no benefit to livestock grazing on the property.

156 On the view it was noted that parts of the channel appeared to be silted and parts eroded. The channel ran roughly parallel to the fence that separates MLA 290 from the airstrip.

157 Messrs McMichael and Baguley thought that the purpose of the drain was to stop the airstrip from flooding. With the lack of sustained rain over an extended period the risk of flooding has not been a major consideration over recent years. It would take a lot of rain to remedy the drought conditions and the drain could be maintained and cleared as necessary if rains in sufficient quantity returned. The main potential beneficiary of this drain is Ulan in its continued use of the airstrip in very wet conditions. The drain does not appear to be of benefit to the grazing operations on the lands the subject of MLAs 264 and 290. I am prepared to hear further argument on the question of whether s. 62(1 )(c) of the Mining Act applies to improvements which are of direct benefit to operations conducted off the land of the subject MLAs but close to it. The issue may be able to be better framed. My provisional view is that the channel despite its shortcomings and its need of maintenance was a substantial and valuable improvement as at July 2004.

Station 41 - Subdivision Fence Within Lot 14

158 This is shown in photo 51 attached to Mr Baguley's report, on p. 48 of Mr Irwin's report and on pp. 79 - 80 of Mr McMichael's report.

159 Mr McMichael wrote that this fence is of very light construction consisting of wooden strainer posts and widely spaced steel posts together with hinge joint and barbed wire, that the fence was of fair quality and parts would be considered stock proof. Parts of the fence have been demolished by fallen timber. As a whole the fence was not stock proof.

160 This fence is neither a substantial nor a valuable improvement.

Station 42 – Dam Adjacent to Airstrip within Lot 14

161 Mr Baguley estimated the approximate dam dimensions as 20m x 20m with an approximate volume of 533.3 (m3). This is shown on p. 42 of Mr Irwin’s report and on p. 81 of Mr McMichael’s report.

162 Mr McMichael wrote that the dam is small but does have a reasonable catchment area, that it is in a state of disrepair, and that it would adequately support livestock grazing. On the view Mr McMichael observed that in its present state the dam would only support a small number of cattle. The dam needed extensive vegetation clearing or de-silting. That should not prove to be too difficult or expensive.

163 As at July 2004 this dam was probably a substantial and valuable improvement. It has a reasonable catchment area and if cleaned it would support livestock grazing. It is probable that the vegetation has increased over the years.

Station 43 – Fence and Track – S/E Corner Lot 179

164 This is shown on p. 49 of Mr Irwin’s report, in photo 42 attached to Mr Baguley’s report and on pp. 82 and 83 of Mr McMichael’s report.

165 Mr McMichael wrote that the fence was old and constructed of wooden posts, steel posts, hinge joint and barbed wire, that there were no signs of maintenance over recent years, that the fence was stock proof and that in its current state it could adequately contain stock.

166 On the view Mr McMichael thought, in hindsight, that he had been very generous in his assessment in his report. He stated that there were a significant number of “roo” holes. Mr Baguley stated that even with “roo” holes the fence was still stock proof for retaining cattle. Mr McMichael disagreed. He thought that cattle and small calves could go through and get trapped on the wrong side of the fence.

167 I agreed with Mr Baguley that the holes were not big enough for cattle, but they were big enough for small calves to get through. Mr Baguley thought that any calves that passed through the holes would return to their mothers. There was a good chance of that happening.

168 Mr McMichael thought that, in a location like this where there was a significant vermin problem, a prudent operator would do more than patch the fence with some wire and put a stick across it; he would install a trap door – otherwise “roos” would break the fence again and again. That struck me as sensible and taking such a step would not be expensive. Of course, the operator would have to determine how many trap doors were desirable.

169 On the whole, whilst appreciating the points made by Mr McMichael, I thought that as at July 2004 this fence was probably a substantial and valuable improvement.

170 I thought that Mr McMichael was probably correct when he assessed the track as one caused by vehicular access with no formation work or maintenance being carried out. The track, while useful in facilitating access, was not a substantial or valuable improvement as at July 2004.

Station 44 – Old Subdivision Fence, Former Cultivation Now Pasture Lands

171 The claim as to the old subdivision fence was withdrawn.

172 As the viewing party approached Station 44 it came through an area which was particularly hilly, rocky, heavily timbered and very steep. The skill and experience of the drivers was notable in negotiating the difficult terrain. After passing through this terrain there was a large and extensive area of cleared land which the party drove across for some distance. This cleared land joined up with cleared land claimed under Station 48. The biddy bush which was prominent there was not the subject of comment in relation to Station 44.

173 The question whether cleared lands can constitute a valuable and substantial improvement is dealt with later.

Station 45 – Boundary Fence
Station 46 – Electricity Line

174 Ulan withdrew these claims.

Station 47 –Fence (north-south)
Station 48 – Fence and Cleared Land

175 Part of the fence at Station 47 is shown in picture 67 attached to Mr Baguley’s report, on p. 50 of Mr Irwin’s report and on pp. 88 and 89 of Mr McMichael's report.

176 Mr McMichael wrote that the fence at Station 47 was very old and obsolete and beyond repair. It was not stock proof. On the view Mr McMichael stated that some repairs had been carried out on this north-south fence but he was not sure how recently. There were some new steel posts propping up the fence where posts had rotted. Mr Baguley stated that this fence had been repaired by the use of some iron posts.

177 Part of the fence at Station 48 is shown in photograph 69 attached to Mr Baguley’s report, on p. 50 of Mr Irwin’s report and on pp. 88 and 89 of Mr McMichael's report.

178 Mr McMichael wrote that the fence at Station 48 was very old, obsolete and beyond repair. It was not stock proof. On the view Mr McMichael adhered to these views. Mr Baguley stated that this fence had “a lot of holes which would allow livestock to go through with the probably limiting factor” that the fence had been put in this position to restrict livestock from moving up to the top of the hill (or rocky outcrop) where the actual boundary was. He stated that the cattle would be unlikely to go up there because of the steepness of the hill (or cliffs), the makeup of the terrain (rocky and difficult) and the availability of pastures in the area that stretches away from the fence. That was some of the land over which Mr Swords had a licence to agist.

179 As to the large area of cleared land Mr McMichael stated that there was a significant problem with the regrowth of biddy bush which livestock will not eat. It had been let go and become a significant problem.

180 Mr Baguley stated that it would be a big job to remove some of the regrowth. Mr McMichael commented that given the carrying capacity of the country it would not pay you to do it agriculturally.

181 Mr McMichael placed emphasis on there being no gate – see the photograph at p 89 of his report.

182 Parts of the fences at Stations 47 and 48 were in reasonable condition but other parts were in poor condition. I thought that Mr Baguley was probably correct when he said that stock were unlikely to go through the fence at Station 48 because of the nature of the terrain and would be likely to remain on the pasture lands. This applies, but to a much lesser extent, at Station 47.

183 On the whole I do not regard the fences at Stations 47 and 48 as substantial and valuable improvements. They needed a lot of repair.

184 There was a substantial amount of biddy bush and this was a major problem. This regrowth had re-claimed portions of the cleared land and it had thereby lost some of its value as cleared land. The stock would have to graze on the areas on which biddy bush was not growing

185 The value of this pastureland as at July 2004 was reduced. Whether cleared pastured lands constitute a substantial and valuable improvement is dealt with later.

Station 49 – Electricity Line

186 Ulan withdrew this claim.

Quarry Dam

187 This was a very large dam with a lot of water in it. The dam had been formed out of excavations due to a large quarry. About half the dam was located on the land the subject of MLA 290.

188 This was a dam of substance. Access to it was difficult. For safe access a path to it would have to be cleared. With the present access difficulties which would have existed in July 2004 stock would not access this water. There is no evidence as to what it would cost to create safe access but, having seen it, it would probably not be inexpensive to do so.

189 Ulan submitted, correctly, that there was a very large amount of water in this dam. Ulan further submitted that at times of drought or at any time the landholder saw fit it would be a relatively simple task to pump water from this dam into a water tanker and distribute that water to any dams or other areas on the land that needed it. Because of the access difficulties I would not assume that it would be a simple task to pump water from this dam into a water tanker. Either an access way would have to be created or there would need to be long lines of canvas piping (or piping of other suitable material) and adequate power for extended pumping. Perhaps there are other and better courses. There is no expert evidence on these matters and I would be wary of making any estimates as to what could and should be done and its cost effectiveness. Other than that, this appears to be a valuable and substantial resource that could be utilized but probably at considerable expense.

190 Moolarben accepted that this dam was substantial. However, it submitted that it was not valuable because livestock would not access it. This submission is based on the presently existing conditions and presumably those existing in 2004. This does not allow sufficiently for the potential of this large and valuable water resource. Moolarben further submitted that fairly obviously this dam was created because of the void left after quarrying activities and that it was excluded from consideration under s 62(1)(c) since it was an improvement constructed for mining purposes and for no other purposes.

191 Under the dictionary to the Mining Act “mining purpose means any purpose prescribed by the regulations as a mining purpose for the purposes of this definition.” Under cl. 3(7) of the Mining Regulation the following purposes were prescribed for the purpose of the definition of mining purpose in the Dictionary :

(iii) any reservoir, dam, drain or water race …

…

192 Under the Dictionary “mining operations means operations carried out in the course of mining”. Mining is not defined, but “mine" means:

(a) when used as a noun – any place, pit, shaft, drive, level or other excavation … in on or by means of which any mining operation is carried on, and

193 The evidence does not disclose what was quarried or how the excavation was created or its purpose. Nor is it clear that any mineral was extracted. The view did not enable me to determine any of these matters. What was clear was that the quarry dam contained a very large amount of water and was a valuable water resource and the largest water resource on the land the subject of MLA 290. On the evidence as it stands I am unable to say whether as at July 2004 the Quarry dam was constructed or used for mining purposes and no other purposes. I add that provisionally I do not regard what was seen as the construction, maintenance and use (in or in connection with mining operations) of any drill hole or shaft for conveyance or drainage of water. I am also doubtful as to the applicability of cl. 3(7)(a)(iii).

194 In both instances further evidence may lead to a variation of my provisional views. The quarrying may have occurred many years ago and evidence may be difficult to obtain.

195 The Quarry dam and its importance did not really emerge as a significant issue until the view.

196 On the present state of evidence the Quarry Dam was both a substantial and valuable improvement as at July 2004.

Additions to Station 49 – Dam located about 100 metres north of Station 15

197 This small dam is shown on p. 94 of Mr McMichael’s report. Mr McMichael wrote that it was in a scrub (ungrazed) area and of no use in livestock grazing. It was neither a substantial nor a valuable improvement as at July 2004. It appears to be shallow and to contain a considerable amount of vegetation.

355 On 9 November 2006 Moolarben wrote to the Department of Planning responding to Ulan's letter of 23 October 2006. Amongst other things Moolarben pointed out that Ulan had made no objection to either of the MLAs lodged in 2005 and that the time for the making of objections in respect of them had expired allowing the Minister to grant each application without restriction. Moolarben complained that Ulan had declined to supply requisite information. The letter deals with various matters raised by Ulan.

356 On 29 January 2007 Ulan wrote to the Department objecting to the grant of MLA 290 for these reasons:

1. a large amount of the land was agricultural land

2. Ulan had a commitment with the Department of Environment and Conservation as a condition of its Environment Protection Licence requiring Ulan to set aside about 5000 hectares of its landholdings as Salinity Offset areas. Ulan objected to the grant of the MLA as this could cause Ulan to breach its existing statutory obligations.

3. the presence of valuable works and structures – namely Moolarben Dam and its associated pipeworks and Ulan's airstrip including the proposed lengthening for which it held a development consent..

357 Each of these was close to the land the subject of MLAs 264 and 290 but not on such land.

358 The letter contains no reference to what are now claimed to be valuable works and improvements. By letter dated 9 February 2007 to Ulan the Department stated that objections 1 and 3 were not valid as they were received outside the time frame specified.

359 The Department advised that objection 2 should be addressed by the Part 3A process under the EP&A Act or between the involved parties as there was no provision under the Mining Act 1992 to prohibit the grant of a mining lease for this reason.

360 The Department also advised that Moolarben would be required to address the issue of valuable works and structures under s 62 as part of the processing of its application.

361 Ulan drew attention to Moolarben's MLA 264 and in particular to Question and Answer 11. The application reads:

11. Is the area sought within a distance of 200 metres of any dwelling house that is a principal residence or within 50 metres of a garden? Is there any other improvement, as described in section 62(1) of the Mining Act 1992, on the land applied for.

Yes No Information Not Yet Available (Please circle)

[Mr Callow circled Information Not Yet Available]

Details to be provided in a Statutory Declaration. If details are not available at the time of application a statutory declaration will be required before a lease is granted.

362 Moolarben's MLA 290, Question and Answer 11 asks the same question and concludes with the same statement. Mr Callow, the person preparing the application has in the blank space provided, inserted the words:

"Information Not Yet Available"

363 Ulan challenged the correctness of the answers given. Mr Callow agreed that he was aware that there were improvements on the surface of MLA 264 from an agricultural perspective. Those he had seen included the dam near Station 8 and the fence along the Mudgee/Cassilis Road. Mr Callow had seen cattle grazing and drinking on MLA 264 He had not seen cattle wandering on the railway line or on the Mudgee/Cassilis Road. Mr Callow thought that he had been to the site at least 10 to 12 times prior to MLA 264 being prepared.

364 Mr Callow said that the reason he circled that the information was not yet available in MLA 264 was that he was not aware whether Ulan had determined that the improvements were valuable improvements. He was aware of the improvements and that they were used by the lessee in his agistment on those paddocks. Mr Callow said that he had not discussed these improvements with Ulan and he did not know if Ulan were going to respond to his notification letter and claim that they were valuable works and structures. Mr Callow continued, "Its up to them to make that call, not me."

365 When pressed about the Statutory Declaration referred to in paragraph 11 of the Application Form Mr Callow said that he would not disclose that there were improvements on the land. Mr Callow took the view that Ulan had had its opportunity to make a claim as to improvements and had not done so either at all or within the time specified. Ulan, by contrast, adopted the position that Mr Callow (and Moolarben) knew that there were improvements on the land the subject of the MLAs and had not supplied the correct information to the Department and so had misled it.

366 I did not regard the position taken by Moolarben as unreasonable in view of its overall approach that taken together the improvements were neither substantial nor valuable. While I thought that the dam near Station 8 and the quarry dam were substantial, stock would not access that latter dam without considerable access work being carried out and many of the claimed substantial and valuable improvements could not be so classed. As previously indicated it was arguable whether some of the claimed improvements which I classed as substantial and valuable should be so classed. In the circumstances which prevailed it was permissible for Mr Callow to take the approach which he did.

367 Assuming, contrary to my view, that Ulan's submission that the notices of 3 and 5 August 2005 had to be sent to its registered office is correct, Moolarben rejected the suggestion that Ulan was not given adequate notice of MLA 264 when the letters of 3 and 5 August 2005 were sent to Mr Orr at Ulan's Private Mail Bag at Mudgee. On 5 August 2005 on receipt of the Mudgee Guardian Mr Orr discussed the application with other officers of Ulan at Mudgee and also mentioned it to Ms Lucy Roberts. This is quite different from immediately sending the notices to Mr Robinson as he did with MLA 290. Mr Callow stated that he felt Mr Orr was the most competent person to handle the statutory notifications as Mr Orr had impressed him (Callow) with his knowledge of the Mining Act, the Surveyors Act and the Planning Act.

368 Mr Orr was conscious that his role had been restricted by Mr Robinson and that Mr Callow was aware of this. Mr Robinson had taken charge of all major matters and, in conjunction with Mr Buffier, had dealt extensively with Messrs Callow and Flannery. It is surprising that Mr Orr did not transmit copies of the notices of Moolarben of 3 and 5 August 2005 promptly to Mr Robinson as he did with the notices of 1 November 2006 received on 7 November 2006. While I accept that Mr Orr made the assumption which he claims there was nothing in the notice of 3 August 2005 to indicate that it was a courtesy copy or that the original notice had been sent to the registered office of Ulan or to either Messrs Robinson or Buffier.

369 It appears from his email of 18 August 2005 that Mr Orr had previously spoken to Ms Roberts about the receipt of MLA 264 and what should be done. Mr Orr wanted Ulan to make a formal submission with respect to Moolarben's MLA (MLA 264). She replied in her email of 18 August 2005 that she had spoken to Mr Robinson who had asked Mr Whitehouse, a solicitor with experience in planning matters and development consents, to prepare a draft response.

370 Neither Mr Robinson nor Ms Roberts appear to have fully appreciated what was required once an MLA has been received. Perhaps they were not sufficiently seized of the amendments made in 1996 and subsequently to the Mining Act.

371 What is also surprising is that even after Ulan's senior executives were furnished with a copy of Moolarben's notice as to MLA 290 on 7 November 2006 no objections or claims were lodged until 29 January 2007.

372 The correct conclusion is that by not later than 5 August 2005 Mr Orr had received Moolarben's notice of 3 August 2005, that on 5 August he and other officers at Ulan became aware of the notice in the Mudgee Guardian as to MLA 264, that the senior executives of Ulan were told of MLA 264 and that submissions in opposition should be lodged with the Department but concentrated on the issue whether there was a valid relevant development consent in existence and did not take any of the steps required under the Mining Act.

373 The receipt by Mr Orr of Moolarben notices of 3 and 5 August 2005 and the steps taken by him preclude Ulan from contending that it was not aware of those notices and the requirement to lodge objections and claims within 28 days.

374 Moolarben relied on the negotiations which took place between Xstrata and Felix Resources. About 13 June 2006 Mr P R Coates, Chief Executive Officer of Xstrata in Australia told Mr Flannery of Felix Resources that Xstrata may be interested in acquiring Felix. Mr Coates stated that Xstrata wanted to look at the operations of Felix and to conduct some due diligence. There were further high level discussions. On 9 November 2006 Xstrata and Felix Resources entered into a confidential agreement. There were further high level discussions. By early March 2007 the negotiations and discussions had come to nought. About 8am on Wednesday 21 March the Chairman of Felix Resources signed an agreement to sell his 19.2 per cent shareholding in Felix to another company. This disappointed Mr Coates. A little later on 21 March 2007 Mr Coates asked Mr Flannery if Felix was interested in a joint venture for the Moolarben project. Mr Flannery invited Mr Coates to put a reasonable offer. In the course of the ensuing discussions Mr Coates stated that Ulan had rights over the land. Mr Flannery replied that Ulan missed the deadline for filing objections. Mr Coates stated that he was aware of that but Ulan had common law rights. There were further discussions on 22 March 2007 between Messrs Flannery and Coates. They could not agree on a "decent offer". These proceedings were commenced on 27 March 2007.

375 It was Moolarben's case that Ulan did not wish to prejudice the discussions nor to undermine the value of the assets it sought to acquire and that this explained its failure to lodge its objections and claims within the specified time. While a possible explanation I did not regard it as the correct one. Xstrata was primarily interested in obtaining Felix or its Moolarben assets for a price which it did not regard as too high. Xstrata would not have been concerned about taking action which would have had the effect of deflating the value of Felix or those assets and consequently the price it had to pay, especially as it could probably take steps at a later stage to reinstate the value. Commercial negotiations tend to be somewhat robust and I doubt if the prospect of loss of goodwill, hurt feelings and the like would have been important considerations.

376 No satisfactory explanation has been advanced on behalf of Ulan for the failure to lodge timely objections and claims. I do not accept that the failure was due to any defects in the service of the notices of 3 and 5 August 2005 and 1 November 2006.

Compensation

377 The Mining Act, 1992 distinguishes between those cases where a mining lease may not be granted over the surface of any land where there are substantial and valuable improvements (s 62(1)(c) (or a valuable work or structure) and those cases where compensation is payable. Section 265(1) provides that on the granting of a mining lease a landholder of any land (whether or not subject to the lease) becomes entitled to compensation for any compensable loss suffered or likely to be suffered by the landholder as a result of the exercise of the rights conferred by the lease.

378 By s 262 "compensable loss" means loss caused or likely to be caused by:

"(a) damage to the surface of land, to crops, trees, grasses or other vegetation (including fruit and vegetables) or to buildings, structures or works, being damage which has been caused by or which may arise from prospecting or mining operations, or

(b) deprivation of the possession or of the use of the surface of land or any part of the surface, or

(c) severance of land away from other land of the landholder, or

(d) surface rights of way and easements, or

(e) destruction or loss of, or injury to, disturbance of or interference with, stock, or

(f) damage consequential on any matter referred to in paragraph (a)(-(e),

but does not include loss that is compensable under the Mine Subsidence Compensation Act 1961."

379 Compensation is payable for damage to grasses or other vegetation or to buildings, structures or works. The building does not have to be substantial and the works or structures do not have to be valuable. However, if the buildings were substantial or the structures were valuable this does not mean that compensation is not payable. A landholder may prefer to make no claim under s 62 and Schedule 1 of the Act in an endeavour to invoke the prohibitions in s 62(1), but claim compensation. As severance loss and consequential loss are part of compensable loss this reinforces the view expressed earlier that a valuable or substantial improvement under s 62(1)(c) does not include large areas of land around it.

380 If a landholder wants to invoke the prohibitions contained in s 62(1) he or she must follow the procedure in s 62 and Schedule 1. That enables it to be determined whether any of the provisions of s 62(1) apply. If the Minister acting on the report of the Warden determines that the ones claimed do not apply the landholder still has his claim for compensation. Not every improvement is sufficient to invoke the statutory prohibitions in s 62(1).

Part 3A of the EP&A Act

381 Section 75B(1) provides that Part 3A applies to the carrying out of development that is declared under s 75B to be a Project to which Part 3A applies. It was not in issue that the relevant declaration had been made and that Part 3A applied to the Moolarben Coal Project.

382 Under s 75F(2) and (3) the Director-General of the Department of Infrastructure, Planning and Natural Resources is required to prepare environmental assessment requirements and to notify the proponent of these. Under s 75G(1) the Minister may, as he did in the present case, constitute a panel of independent experts to assess any aspect of a project. He may also constitute a panel of officers representing the Department and other relevant public authorities.

383 There is provision in s 75H for the proponent to submit to the Director-General the environmental assessment required and for the Director-General to require a revised environmental assessment to address the matters notified to the proponent. After the environmental assessment has been accepted by the Director-General, that officer makes it publicly available for 30 days. During that period any person may make a written submission to the Director-General. Section 75H stipulated how these are to be dealt with.

384 Under s 751 the Director-General is to give a report to the Minister and that report must include specified matters.

385 Section 75J provides that if the proponent has duly applied to the Minister for approval under Part 3A and the environmental assessment requirements under Part 3A, Division 1 have been met the Minister may approve or disapprove of the carrying out of the project with such modifications or on such conditions as he may determine.

386 Section 75U provides that specified authorisations in certain other State Acts are not required for an approved project and that the provisions of any such Act that prohibit an activity without such an authority do not apply. The provisions affected include Ministerial concurrence under Part 3 of the Coastal Protection Act 1979, an approval under Pt 4 or an excavation permit under s 139 of the Heritage Act 1977, a permit under s 87 or a consent under s 90 of the National Parks and Wildlife Act 1974 and a permit under Pt 3A of the Rivers and Foreshores Improvement Act 1948. Further provisions have been enacted to the effect that certain statutory powers may not be exercised in certain circumstances.

387 Moolarben pointed to s 75U as an illustration of the wide ranging reach and effect of the Minister's approval. Moolarben submitted, correctly, that s 75U replaced the need for authorisations under a variety of important Acts whose purpose was directed to ends not associated with the approved project. (such as protection of the environment). Moolarben submitted that s 75V dealt with authorisations facilitative of an approved project and that such authorisations cannot be refused.

388 Sections 75V(1), (4) and (5) provide:

"75V Approvals etc legislation that must be applied consistently

(1) An authorisation of the following kind cannot be refused if it is necessary for carrying out an approved project and is to be substantially consistent with the approval under this Part:

Fisheries Management Act 1994

Mine Subsidence Compensation Act 1961,

Mining Act 1992,

Petroleum (Onshore) Act 1991,

Protection of the Environment Operations Act 1997

Roads Act 1993.

(4) A reference in this section to an authorisation or approval includes a reference to any conditions of the authorisation or approval.

(5) This section applies to a person, court or tribunal that deals with an objection, appeal or review conferred on a person in relation to an authorisation in the same way as it applies to the person giving the authorisation."

389 The directly relevant provision is s 75V(1)(c). There is no difficulty in applying this to the various subsections of s 63 of the Mining Act with the possible exception of s 63(3A). Section 62(1) is in a different position as it provides that a mining lease may not be granted over the surface of any land which falls within para (a) or (b) or (c) except with the written consent of the owner. The Minister administering the Mining Act is powerless to grant a mining lease in respect of the surface of the land to which any of the paragraphs mentioned refers, subject to the EP&A Act and the Regulations.

390 One contention is that where s 75V(1) provides that an authorisation of a mining lease cannot be refused this overrides any provision in s 62(1) which would prevent the granting of a mining lease.

391 Moolarben submitted that s 75V of the EP&A Act had impliedly repealed s 62(1) of the Mining Act and relied on this statement of principle in Goodwin v Phillips (1908) 7 CLR 1 at 7 by Griffith CJ:

"Where the provisions of a particular Act of Parliament dealing with a particular subject matter are wholly inconsistent with the provisions of an earlier Act dealing with the same subject matter, then the earlier Act is repealed by implication. It is immaterial whether both Acts are penal or both refer to civil rights."

392 Moolarben also relied on the judgment of Gummow and Hayne JJ, with whom Gleeson CJ agreed, in Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 230 ALR 370 at [48] where it was said that the doctrine of implied repeal

"requires that actual contrariety be clearly apparent and that the later of the two provisions be not capable of sensible operation if the earlier provision still stands"

393 Moolarben submitted that s 75V(1)(c) and s 62(1)(c) addressed the same point – the Minister's power pursuant to s 63(1)(b) to refuse to grant a mining lease. If the Minister for Planning grants a Part 3A approval, the Minister for Primary Industries, Mineral Resources cannot invoke s 63(1)(b) to refuse to grant a Mining Lease. Moolarben further submitted that there was actual contrariety. Section 62 of the Mining Act formerly obliged the Minister to refuse certain mining lease applications whereas s 75V(1) provides that the Minister administering the Mining Act cannot refuse a mining lease where there is an approved project.

394 The submission concentrates primarily upon the power in s 63(1)(b) of the Mining Act of the Minister to refuse the application for a mining lease. It does not pay sufficient heed to the fact that where s 62(1) applies the Minister has no power to grant a mining lease over the surface of the land. That subsection does not impact upon the Minister's power to grant a mining lease below the surface of the land. Again, where s 62(1) applies any refusal to grant a mining lease operates not by virtue of an exercise of Ministerial discretion but by virtue of the prohibition in that subsection of the Mining Act.

395 Moolarben submitted that its approach to the construction of s 75V of the EP&A Act and s 62 of the Mining Act was consistent with s 75V(1)(c) and the new legislative policy introduced in the EP&A Act. Reliance was placed on the Second Reading Speech of the Minister for Infrastructure and Planning, as to inserting Part 3A into the EP&A Act in 2005 (Act No 43 of 2005, Sch 1 – Environmental Planning and Assessment Amendment (Infrastructure and Other Planning Reform) Act 2005. That speech read in part:

"A single assessment and approval system for major development and infrastructure projects will replace approval processes currently scattered through several pieces of legislation …

…

The bill provides up-front certainty for major projects through the introduction of new concept approvals, removes the need for up to 15 different approvals and licences from nine separate pieces of legislation replacing them with one assessment and approval process … " (Hansard 27 May 2005)

396 Moolarben also relied on the Explanatory Memorandum. It adopted this description of the new legislative policy "to provide a separate streamlined and integrated development assessment and approval system for major infrastructure and other projects of significance to the State (and to facilitate the delivery of critical infrastructure projects)" and a "single assessment" process for major project approval.

397 Moolarben submitted that these remarks of Jagot J in Tugun Cobaki Alliance Inc v Minister for Planning and RTA [2006] NSWLEC 396 at [42] correctly summarised the position:

"Section 75V provides that any authorisation required under other nominated Acts cannot be refused if necessary for carrying out an approved project and is to be substantially consistent with the approval under Pt 3A. This reflects part of the second reading speech in which the Minister said that '(n)ew Pt 3A provides for integrated approvals that will consolidate 15 approvals given under nine Acts into a single assessment process and approval given under the Environmental Planning and Assessment Act'." (Hansard, 27 May 2005, p 16322).

398 I do not disagree but these remarks do not address the situation under s 62(1) of the Mining Act.

399 Moolarben submitted that because the Minister for Primary Industries, Mineral Resources does not have the power to decline to grant a lease to Moolarben this Court does not have the power which that Minister does not have and cannot enjoin the grant of a mining lease over the whole of the subject lands (cf s 75V(5)).

400 Moolarben relied upon Pt 1A of the Environmental Planning and Assessment Regulation which came into operation on 1 August 2005 – see 75Z of the EP&A Act (the Regulation making power under Pt 3A) and the general Regulation making power under s 157.

401 Section 75Z(b) provides that the regulations may make provisions for or with respect to the approval of projects under Pt 3A and to approved projects including:

"(b) requiring owners of land on which projects are proposed to be carried out to consent to applications for approvals under this Part.

402 Under s 8B(c) of the Regulation the Director-General's Report under s 75I of the EP&A Act is to include the suitability of the site for the project

403 Under s 8F(1)(c) of the Regulation the consent of the owner of land on which a project is to be carried out is required for a project application unless "the application relates to a mining or petroleum production project." Under s 8F(4) "mining or petroleum production" includes any activity that is related to mining or petroleum production, but does not include a project on land that is a state conservation area reserved under the National Parks and Wildlife Act 1974.

404 Moolarben contended that this had the effect of negativing the consent requirements of s 62(1) of the Mining Act. Section 8F(3) specifies the steps to be taken by way of notification where the consent of the owner of the land is not required.

405 Moolarben pointed out that sections 8K and 8L also refer to mining leases and make detailed provisions.

406 Moolarben submitted that once the Minister granted approval under Pt 3A of the EP&A Act that triggered s 75V. That removed the restriction under s 63 which would otherwise apply as a result of s 62(1). The mining lease would be granted and that would bring s 265 of the Mining Act into operation and the assessment of compensable loss.

407 Moolarben submitted that the Minister could impose a condition that it had to acquire, if Ulan so desired, any land the subject of an approval on which there was a dwelling house, being a principal place of residence, a garden or a substantial and/or valuable improvement.

408 Reference was made to cl 3 on p 7 (excessive noise) and cl 22 on p 11 (excessive dust emissions) of the Minister's Conditions of Approval and the land acquisition procedures in Schedule 4 pp 21-22 of the Conditions. Much would depend on the terms of the conditions as to any acquisition rights. It was not suggested that the conditions in the present case required Moolarben to acquire any of Ulan's land.

409 Two examples were taken. One assumed that there was a very valuable principal residence on the site of the proposed mine project. Would s 62 apply in such a case or could it be overridden under Pt 3A and the Regulation. The other assumed that a valuable principal residence stood in the way of the construction of a major freeway. Part 3A applies to a wide range of infrastructure. These two examples illustrated the difficulties which could arise. The powers of statutory compulsory acquisition should not be overlooked in the latter instance.

410 Ulan submitted that while the effect of s 75V of the EP&A Act was to remove from the Minister for Mineral Resources the discretion which he has under s 63(1) of the Mining Act it did not in any way affect the prohibition or restrictions on the Minister for Mineral Resources under s 62 of the Mining Act. Section 75V cannot overcome a statutory prohibition of the type that appears in s 62(1).

411 Ulan further submitted:

(a) There was no express reference in s 75V of the EP&A Act depriving (or relieving) the Minister of Mineral Resources of his obligations under the Mining Act nor to depriving landholders of their private property rights to the extent that they are protected under s 62 of the Mining Act.

(b) A specific Act should prevail over a later general Act or provision; a fortiori where, as here, the specific Act and provisions contain important protections of private property rights (not to mention mine safety – s 61 of the Mining Act ) .

(c) It could not have been the intention of the legislature to deprive landholders of the protections of s 62 of the Mining Act without an express reference to this in s 75V of the EP&A Act.

412 Counsel for Ulan submitted that the provisions of s 75V of the EP&A Act and s 62 of the Mining Act could be readily read together as an harmonious whole and that they were not in conflict and to the contrary of each other.

413 While Ulan has important rights as the owner of the land and I would not ignore the common law position, the coal is owned by the Crown and the Mining Act provides extensive provisions as to the mining of the coal and the grant of coal mining leases. Two sets of rights have to be considered and reconciled. Part 3A of the EP&A Act was designed to provide a streamlined and single assessment approval.

414 I was initially attracted to Ulan's submission as to the manner in which s 75V and s 62(1) could be read together, particularly because of the statutory and not discretionary prohibitions or restrictions in s 62(1) and the discretionary power in s 63(1). However, three points should be made:

(i) Part 3A deals with mining leases specifically and envisages a single assessment and approval process with the Director-General of Planning providing a report encompassing all considerations. (ii) Section 75Z enables regulations to be made requiring owners of land on which projects are proposed to be carried out to consent to applications for approvals under Pt 3A

(iii) Section 8F(1)(c) of the Regulation provides that the consent of the owner of land on which a project is to be carried out is required unless the application relates to a mining project

415 Section 8F(1)(c) does not specifically state that the owner's consent under s 62(1) is not required. The subject is approached by stating that consent is required unless the application relates to a mining project. In my opinion that indirect provision has the same effect.

416 Accordingly, because of the provisions of Pt 3A of the EP&A Act and the Regulation I have reached the conclusion that, as the Minister for Infrastructure and Planning has approved a project under Pt 3A of the EP&A Act, the prohibitions and restrictions in s 62(1) no longer apply and the Minister for Primary Industries, Natural Resources cannot refuse to grant Moolarben's application. Once the mining lease is granted the provisions in ss 265 and 262 as to compensation operate.

Discretion

417 Moolarben submitted that even if I were against it on all the various issues Ulan should be refused any relief on discretionary grounds for the following reasons:

(a) Ulan delayed commencement of these proceedings for 19 months after the deadline for its objections and claims as to MLA 264 and 4 months after the deadline for its objections and claims as to MLA 290.

(b) Moolarben has been substantially prejudiced in that it has spent about $19 million in developing the Moolarben Coal Project and the Project will produce significant benefits to the State and its people.

(c) The real reason for Ulan's delay was its attempts to acquire Felix and Moolarben .

(e) The evidence of Mr Nasser and Mr Holland was unsatisfactory.

(g) there had been inconsistent conduct on Ulan's part.

418 The question of delay loses much of its impact if service of the notices was not valid and effective. The substantial complaint of Ulan was that the MLA 264 notice did not come to the attention of the senior executives of Ulan and Xstrata. That notice was not sent to the registered office nor to them. That was the notice that advised of the 28 day time limit. Mr Nasser, Ulan's general counsel said that he first received copies of MLA 264 on 28 March 2007. I do not accept that "the real reason for Ulan's delay" was its attempt to acquire Felix and Moolarben's and access to "in confidence commercial material" so it could carry out due diligence prior to making an offer. I did not think that the failure to call any of the senior executives of Ulan nor the conduct of the trial was sufficient reason to exercise the Court's discretion to refuse relief. While some mistakes were made and there were memory defects the conduct of Ulan, its advisers and the litigation did not warrant the refusal of relief on discretionary grounds if Ulan had otherwise been entitled to relief. This was difficult and complex litigation.

419 I record my appreciation of the industry and skill of all counsel and the solicitors for Ulan and Moolarben. Although hard fought, the case was conducted with good humour and the co-operation and efficiency of the solicitors and the parties in arranging the view and on the view was notable.

420 Having regard to the views I have formed on the construction and operation of the whole of s 62 and Schedule 1 of the Mining Act and the construction and operation of Pt 3A of the EP&A Act and the Regulation, Ulan's summons should be dismissed.

421 Unless Ulan submits to the contrary within 7 days it should pay Moolarben's costs. I am prepared to hear argument on costs and will list the matter for argument if requested by either Ulan or Moolarben.

**********

06/07/2012 - added - Paragraph(s) 137-160

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Citations

Ulan Coal Mines Limited v Minister for Mineral Resources [2007] NSWSC 1299

Most Recent Citation

Martin v Hume Coal Pty Ltd [2016] NSWLEC 51

Cases Citing This Decision

4

Ulan Coal Mines v Minister for Mineral Resources [2008] NSWCA 174

B.F.B. Pty. Limited v Sandfire Resources NL [2019] NSWLEC 1235

Martin v Hume Coal Pty Ltd [2016] NSWLEC 51

Cases Cited

8

Statutory Material Cited

17

Kayuga Coal Pty Ltd v Ducey [2000] NSWCA 54

Trust Company of Australia Ltd v Valuer-General [2007] NSWCA 181

Goodwin v Phillips [1908] HCA 55

CITATION:	Ulan Coal Mines Limited v Minister for Mineral Resources & Anor [2007] NSWSC 1299 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	18; 20-21; 24-28 September; 3 & 11 October 2007
JUDGMENT DATE :	16 November 2007
JUDGMENT OF:	Smart AJ at 1
DECISION:	See paras 420 and 421
CATCHWORDS:	Mining Lease Applications (MLAs) - land surfaces - Correct construction of s 62 of Mining Act 1992 - whether improvements substantial and valuable - whether procedure in s 62 and Schedule 1 has to be followed for prohibitions in s 62(1)(c) to apply - effect of not following such procedures and adhering to time limits - Whether cleared pasture land a substantial and valuable improvement within s 62(1)(c) - Methods of service of notices of MLAs - correct construction of s 383 of Mining Act - Whether notices may be served at place of business and do not have to be served at corporation's registered office - History of Mining Legislation - Meaning of "land" in s 62(1) of Mining Act - Map required to accompany application and notice - technical defects did not invalidate application - Compensation provisions - Effect in declaring Moolarben Coal Project one to which Pt 3A of Environmental Planning & Assessment Act (EP&A Act) applied - Effect of approval of Minister for Infrastructure & Planning - Operation of s 75V of EP&A Act - single assessment and approval process - relationship between Pt 3A of EP&A Act and Mining Act - once approval of Minister of Infrastructure & Planning given, mining lease cannot be refused. - Relief would not be refused on discretionary grounds but refused on substantive grounds
LEGISLATION CITED:	Coal Mining Act 1973 Coal Mining (Amendment) Act 1976 Coastal Protection Act 1979 Environment Planning and Assessment Act (EP&A Act). Environmental Planning and Assessment Amendment (Infrastructure and Other Planning Reform) Act 2005 EP&A Act Regulation Part 1A Fisheries Management Act 1994. Heritage Act 1977 Mining Act 1906 Mining Act 1992 Mining Regulation Mine Subsidence Compensation Act 1961. National Parks and Wildlife Act 1974 Petroleum (Onshore) Act 1991 Protection of the Environment Operations Act 1997 Rivers and Foreshores Improvement Act 1948 Roads Act 1993
CASES CITED:	Goodwin v Phillips (1908) 7 CLR 1 Kayuga Coal v Ducey & Ors [2000] NSWCA 54 Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 230 ALR 370 Sandvik Australia v Commonwealth (1989) 89 ALR Trust Company of Australia v The Valuer General [2007] NSWCA 181 Tugun Cobaki Alliance Inc v Minister for Planning and RTA [2006] NSWLEC 396
PARTIES:	Ulan Coal Mines Limited v Minister for Mineral Resources & Moolarben Coal Mines Limited
FILE NUMBER(S):	SC 030025/07
COUNSEL:	(P) B McClintock SC & R Beasley (Ulan) (D2) M J Leeming SC & C Withers (Moolarben)
SOLICITORS:	(Ulan) Minter Ellison (Moolarben) Sparke Helmore (Minister for Primary Industries (Mineral Resources)) (submitting) I V Knight State Crown Solicitor