B.F.B. Pty. Limited v Sandfire Resources NL

The Issues

1. The parties agree that the primary issue which I must determine is whether the particular Access Lands comprise "significant improvements" in accordance with the Mining Act, and are thereby exempt from mining and prospecting activities.
2. And, if the Access Lands are not "significant improvements", then the parties ask me to determine the terms of access.

Statutory framework

1. Although Division 2 of Part 8 of the Mining Act - which provides for access arrangements for prospecting titles, in cases in which there is a dispute between the owner of the land and the holder of (relevantly) an exploration licence in respect of that land, was amended in a material way by the Mining and Petroleum Legislation Amendment (Land Access Arbitration) Act 2015 (NSW) (2015 Amending Act) and commenced operation on 1 December 2016, it is common ground that, for present purposes, the old provisions apply.
2. Accordingly, the text of s 155(1) is that which was in force immediately before its amendment by the 2015 Amending Act. It provides: 155 Review of determination (1) A party to a hearing who is aggrieved by an arbitrator's final determination (other than a determination referred to in section 147 (2)) may apply to the Land and Environment Court for a review of the determination. ... (5) Subject to any order of the Land and Environment Court to the contrary, an application for review of a determination operates to stay the effect of any related access arrangement in relation to a party to the arrangement from the time when a copy of the arrangement has been served on the party until the decision of the Land and Environment Court on the review. (6) In reviewing a determination under this section, the Land and Environment Court has the functions of an arbitrator under this Division in addition to its other functions. (6A) A review of a determination is to be by way of rehearing, and fresh material or material in addition to, or in substitution for, the material considered on the making of the determination by the arbitrator may be given on the review and taken into consideration by the Land and Environment Court. (7) The decision of the Land and Environment Court on a review of a determination is final and is to be given effect to as if it were the determination of an arbitrator. (8) The holder of the prospecting title must pay the reasonable costs of the landholder of the land concerned in a review of a determination under this section. (9) The Land and Environment Court, in determining those reasonable costs, must consider whether or not the landholder has acted unreasonably in the negotiation, mediation, arbitration or review proceedings.
3. The relevant definition of "significant improvement" remains by operation of cl 170(b)(1) of Part 24 of Schedule 6, the unamended definition namely: Significant improvement means any substantial building, dam, reservoir, contour bank, graded bank, Levy, water disposal area, soil conservation work or other valuable work or structure.
4. It is also common ground that the answer to the primary question with respect to the meaning of "significant improvements" and s 31 of the Mining Act as at the date of the service of the notice is to be determined by reference to the law as decided by Preston CJ in Martin v Hume Coal Pty Ltd (2016) 215 LGERA 289; [2016] NSWLEC 51 (Martin).
5. Relevantly, in Martin at [63], the Court decided that the inquiry under s 31 of the Mining Act is to consider the position by reference to the particular paddocks at issue, and this requires an examination of and making of factual findings about whether each particular paddock falls within the concept of "work" or "structure" or both and, if so, whether it was "substantial" and "valuable". It is all a question of fact and degree: Martin at [62].
6. The following passages of the judgment are also relevant: "[63] The concept of a work refers not to a process but rather to the physical result of labour done on land: Parramatta City Council v Brickworks Ltd (1972) 128 CLR 1 at 24-25. Whether what has been done to the land is sufficient to be described as a work will depend on the nature and extent of what has been done and its significance in relation to the site on which it is situated. The depositing of fill on land, for example, may or may not be of such significance as to be regarded as a work. It will depend on the quantity of the filling and its significance in relation to the site: Parramatta City Council v Shell Company of Australia Ltd [1972] 1 NSWLR 483 at 489-490; (1972) 26 LGRA 25 at 31-32. [64] Labour could be done to land that might or might not make the land capable of being regarded as a work. For example, significant earthworks could be undertaken to level land and install drainage and irrigation pipes and channels on the land to make it suitable for some agricultural purpose, such as irrigated crops. The paddocks may be sown with crops, such as rice or cotton. The crops may be irrigated through an irrigation system installed in the paddocks. The paddocks that are the product of these labours might be able to be regarded as works. On the other hand, the broadcast application of fertiliser to paddocks, although leading to improvement in pasture productivity, might not cause the paddocks to become works." (emphasis added)
7. Also relevant are the following propositions referred to when summarising Hume Coal's submissions in that case (at [56]): "[56] ... The adjective 'substantial' qualifies all subsequent nouns in the list, including 'other work or structure': Kayuga Coal Pty Ltd v Ducey [2000] NSWCA 54 at [16]. So too does the adjective 'valuable' qualify the list of nouns, including 'other work or structure': Ulan Coal Mines Ltd v Minister for Mineral Resources [2007] NSWSC 1299 at [31]: 'The word 'valuable' adds emphasis and a qualitative element … To be valuable an improvement must be more than minimal or little value'."
8. Accepting that the Court in Martin did not expressly adopt the appellant's submissions as outlined at [9] - consistent with the decision of the Court of Appeal when considering an analogous provision in Kayuga Coal Pty Ltd v Ducey [2000] NSWCA 54 (Kayuga Coal) at [17], I accept that: "As a matter of English, the wording of [the section] requires such of the objects listed to be both 'substantial' and 'valuable', notwithstanding that this involves a certain measure of tautology".

The Evidence

1. A review of the determination under s 155 of the Mining Act is by way of rehearing and fresh material or material in addition to, or in substitution for, the material considered on the making of the determination by the arbitrator may be given on the review and taken into consideration by the Court. Noting that in undertaking the review, the Court has the functions of the arbitrator in addition to its other functions.
2. In addition to providing me with the documentation in respect of the relevant determinations, the parties have taken up the opportunity to rely on fresh evidence including a view of the site, the Moore Park piggery (owned by the applicant), and the various plant and equipment used by BFB on the site (Exhibit A).
3. BFB relies on the following evidence: 1. Applicant's Statement of Facts and Contentions; 2. Affidavit of Terry James Brabin (3 October 2018); 3. Agronomy expert report by Peter McInerney (31 July 2018) and his evidence in the joint report prepared with Sandfire's Agronomist John Francis dated 18 September 2018; 4. Affidavit of Melinda Jane Gallagher (31 July 2018); 5. Affidavit of Melinda Jane Gallagher (9 August 2018); and 6. Valuer's expert report submitted by Dominic Thomas (9 August 2018) and joint report prepared with Sandfires' real estate valuer Chris Egan filed on 19 September 2018.
4. Sandfire relies on the following evidence in addition to the joint reports identified at [23]: 1. Affidavit of Adam Groeneveld sworn 31 August 2018; 2. Affidavit of Jeneta Ann Owens sworn 31 August 2018: 3. Expert Agronomy report of John Francis dated 24 August 2018; and supplementary report 4. Expert Valuation report of Christopher Egan dated 30 August 2018 and letter dated 30 August 2018.
5. Some of the evidence was the subject of objection and where relevant I have addressed this in my judgment.
6. I have been provided with written and oral submissions in relation to the law and the evidence relevant to the issues and the competing terms of the final access arrangement. I have also read the transcript of the Court proceedings held in Temora and later in Sydney on 7 December 2018.

BFB's position

1. When opening its case BFB said it relies on s 31(1)(c) of the Mining Act and the Dictionary definition of "significant improvement" and on the words "other valuable work", to assert that the Access Lands being cropped paddocks are "substantial" and "valuable work" and therefore comprise "significant improvements" within s 31(1)(c).
2. Accepting that the Access Lands do not contain any building or structure, and are not within the prescribed distance from any dwelling house or garden, BFB initially contended on the expert opinion of its agronomist, Mr Peter McInerney, that the cropped paddocks or fields have been worked through the application of pig manure and the process of "deep soil ripping" to produce measurably, or substantially superior "healthier soils" to those found on comparable lands. This outcome, it submits, constitutes a "significant improvement" as that expression has been judicially defined with respect to the Mining Act.
3. BFB also indicated at that time that it relies on the business records of the company attached to Mr Brabin's affidavit of 3 October 2018 (as supplemented by his oral evidence), to demonstrate that the extent of the work done by or on the company's behalf to improve its land over many years was at a substantial cost. Work which BFB submits has involved substantial, enduring and measurable improvement of the land itself - not merely increased productivity, although productivity has been substantially increased. The two outcomes, being not mutually exclusive (Applicant's Written Submissions (AWS) at p5, paras [1]-[3]). The work is therefore valuable.
4. The reason why pig manure is applied to the cropped paddocks is because part of BFB's aggregation comprises a commercial piggery. This piggery business enterprise is proximate to the area sought to be explored by Sandfire and is called the Moore Park Piggery. Noting that Sandfire has agreed not to explore within 350m of the piggery enterprise. According to Mr Brabin, the Chief Executive Officer and Managing Director of BFB, the piggery produces about 2000 pigs a week. The pigs (who are raised in eco shelters or igloos) require bedding. The bedding is straw which is the residue from the wheat and barley straw from the crops. As I understand his evidence this bedding material is placed in large square bales. The bales are then placed in the igloos. Over a period of 18 weeks, the pigs are removed and the spent bedding is also removed and stockpiled, composted and then trucked and loaded into a piece of equipment which applies the material on the cropped paddocks.
5. The particular piece of machinery used to apply the pig manure on the cropped paddocks was shown to me at the site view. It is called a "spreader", and according to the agronomists, the machine can apply 20 tonnes of pig manure at a time and 20 tonnes is sufficient to cover 1 hectare. Mr Brabin's evidence is that the machinery used by BFB is either leased or owned by BFB (Tcpt, 16 October 2018, p 34(25)).
6. In addition to the spreader, at the site view I was also shown the "Agroplow" which is used in the process of "deep soil ripping" and is owned by BFB. Mr Brabin's affidavit and oral evidence is that this machine is used on the paddocks at issue to break up the soil after harvest. I am told it is used in conjunction with the "Pariot" - a 120 foot wide self propelled weed sprayer that runs across the BFB paddocks spraying chemicals and water. Mr Brabin explained in his oral testimony that this machinery is used over the summer months where there is no crop for the control of weeds and to retain moisture in the ground (Tcpt, 16 October 2018, pp 37(30-38), 38(5-50)). He also explained that before sowing a kelly chain is run behind a tractor across the paddocks to break up the wheat and canola stubble or in his words to "…blow it out of the ground".
7. At sowing time, Mr Brabin said, BFB then uses a tractor to drag an air seeder (weighing about 20 tonnes) to sow the crop.
8. In addition to the application of pig manure, Mr Brabin told the Court that "at sowing the company applies MAP at a slip rate of 70 to 80 kilos depending upon the property, the rainfall and the yield potential. And, then we use artificial nitrogen called Urea - depending on the weather". In relation to the amount and frequency of the application of fertilizer and other nutrients to the paddocks Mr Brabin said that he relies on "…the advice of BFB's agronomists as to what nutrients are required and how much to apply depending on the yield of the previous year and the weather". Fertiliser, he said "…is applied on a "blanket paddock" basis as there are no fences" (Tcpt, 16 October 2018, p 35(10-50)). When applying pig manure Mr Brabin explained that trucks are used to ferry the pig manure to the mother bin for application by the spreader. The mother bin is an 18 wheeler and ranges between 75 to 150 tonne. The trucks pull up to the mother bin and then the chaser bins take it from the header back to the mother bin. Mr Brabin was careful to say that the Company is concerned about compaction of the soil and the machinery and vehicles used on the propery have wide wheels to limit the impact. Furthermore, as was apparent at the site view, BFB has a network of permanent access roads within its farmlands that it regularly grades and maintains for use by the farm machinery and vehicles. Although, when prompted with some photographs of bins in the BFB paddocks by Sandfire's Senior Counsel Mr Lancaster during cross examination, Mr Brabin accepted that on occasions laden trucks do cross the paddocks and the mother bins can be positioned in paddocks also (Tcpt, 16 October 2018, p 37(12-20), (25-35)).
9. The farm machinery was collected off site in one place for the Court's inspection at the hearing in Temora. Ordinarily, Mr Brabin said this machinery is kept off site and is available for use on other lands owned by BFB - it comes and goes. Photographs of the relevant plant and equipment observed at the view were tendered and are marked Exhibit A.
10. Despite hearing a great deal about the application of pig manure - the amount and the frequency of application on particular paddocks, by the conclusion of the evidence the applicant submitted that this is not a case of assessing how much work is done in relation to a particular paddock. Mr Coleman's final submissions warrant reproduction because they sought to emphasise a slightly different focus. He said: "…it's not a cascading argument where it's submitted that it's all of it, but if it's not all of it, then it's these paddocks or those paddocks. You'll recall in light of the deficiencies in the records with respect to precisely where pig manure has been applied is referrable to the scale of the operation and the fact that whereas, well realistically, the smallest paddock on this aggregation is probably bigger than a lot of whole farms, there's not that - so its across the board, all in or all out, put bluntly. …. There was work done and work is ongoing but to the extent that it might be asserted against us that the case for the applicant stands or falls on the asserted significance of pig manure, we would respectfully submit that that is not the case, and that even if, contrary to Mr McInerney's evidence you accepted that, for example there was no material distinction between the inputs on the comparable block leading to its state of productivity or the BHB blocks that does not preclude a finding that it is nevertheless a significant improvement. The work, that in our submission, although not surprisingly, given the significance which the pig manure process has assumed one might be tempted to imagine that the case is ultimately all about the impact of pig manure, in our submission, that's not so because it is clear beyond doubt that the pig manure, at the very least, has had an impact. It is clear beyond doubt that there have been other significant inputs over time and an ongoing basis, most notably lime, gypsum and synthetic fertilisers, generally referred to as MAP or DAP which are nitrogen and phosphorus soil enrichments sown through the air seeder when crops are sown. Our broad contention is firstly, it is clear beyond doubt that significant work has been done and is being done utilising the arry of plant and equipment, most of which the Court saw yesterday. The other integral piece of equipment, the Agroplow being something that the Court has a photograph of. In terms of work, which is, in our submission, in effect, a threshold question, has work been done and it is substantial, in our submission the evidence is clear beyond doubt that very substantial work has been done. That of course of itself doesn't get us there but it does remove the first hurdle to success. The question then becomes though, the significance of the work in relation to the site, as the Chief Judge recognised in para 63 (Hume) and its clear, as a matter of law and indeed commonsense, that these case are very sensitive. What in one circumstances may be significant improvement might not be in another and in our submission, what isn't or can't be as opposed to what can't be is instructive for present purposes. Paragraph 64 some indication is given. The example of significant earthworks, drainage pipes channels irrigated crops, and that not relevant for present purpose. The end of para 64 "the broadcast application … to become works. Well, in this case, its nothing remotely resembling the broadcast application of fertiliser. There's the deep ripping and the evidence is clear that is not part of the cropping phrase as such. It does it to improve the soil by essentially opening the soil up and making it more readily accessible for nutrients, whether the nutrient be pig manure, lime, gypsum or fertiliser and water and the evidence is clear." (Tcpt, 17 October 2018, p 47(6-50)).
11. In short, Mr Coleman submitted that management processes of the farm are capable of being a work. And, asked me to accept the "abundance of figures that are not disputed that this is a costly process, even in circumstances where the pig manure itself has no actual costs to BFB" (Tcpt, 17 October 2018, p 48(5-10)). Moreover, Mr Coleman submitted that the evidence supports a finding that on every relevant paddock at some point there has been deep ripping. He submits that Mr Francis picks this up from the unread affidavit of Mr McLaren to overcome waterlogging. He submits that the science is not in doubt both Mr Francis and Mr McInerney identify why deep ripping is done. Its then followed by the application of pig manure which Mr Coleman submits is a "discrete process", unlike the introduction of fertiliser through the air seeders, that is not done as part of the cropping phrase. It's a discrete operation. Its purpose is to carry further the soil enhancement commenced by the process of deep ripping.
12. Accepting that work has been done then BFB submits that the focus is on the physical result of that work or labour which has been done. The cost of it, on any view of the expert agronomical evidence, BFB submits is substantial without descending into semantics, and of course, noting that the legislation simply refers to "valuable". It is not quantified, and therefore he submits that it is not limited to something that has an identifiable dollar value or consequence.
13. BFB submits that the physical result of labour done on the land identified at [63] of Martin even implies that it doesn't have to have some value added component. It can, of itself be sufficient if there is a physical result. In short, the submission is that there is no question in this case that the work done by BFB over a long period of time has produced a physical result and the physical result is that the land has been enhanced.
14. In the ultimate, BFB submits that I do not need to make a finding that the enhancement is referrable to pig manure. It is open to me to conclude that the evidence about that is controversial and I am unable to make a finding on the balance of probabilities that the physical result of the labour done on the land is referrable to the introduction of pig manure, as Mr McInerney contends, or has less influence as Mr Francis concludes.
15. Having regard to the expression "other valuable work … substantial and valuable" at the end of [65] of Martin, BFB submits that there is absolutely no question in this case that whether you have regard to the Humes purchases and the value per hectare attributed to the arable portions of that land or simply to the BFB land alone that these lands as a result of, putting it in its broadest terms, the work that has been done on them, the work and labour and inputs done on them are substantial and valuable. In this case "… to the tune of $31 million or as Mr Egan acknowledged if one applies the $4,800 hectare deduced arable land component of the Humes purchase of the larger of the two properties $36.5 million". And, the value of the work is confirmed when cross referenced with the 2017 sale of the large acreage of Rosewood - for a much lower figure per hectare - which the experts agreed was inferior to the BFB lands as it had not been the subject of work done and labour as on the BFB lands, the Bushel land and the Hume land.
16. Accepting that improved pastures such as plants - clovers and phalaris, cocksfoot and rye type grasses, traditional temperate climate improved pastures could be "significant improvements", as was discussed by the Court at [67] of the Martin judgment BFB submits "it would be logically incorrect to suggest that what is required for a significant improvement when one is dealing with broadacre land is what grows on the surface of it and nothing else. Ultimately, in our submission, if improved pastures, which are plants growing on land are capable of being a significant improvement, then it is a very short and very easy step to take to find that the land in or on which those pastures are growing is itself capable of being a significant improvement".
17. Relying on the agreed evidence of the agronomists in their joint memorandum (p1 Exhibit 7) that the soil has been improved and that the application of pig manure has contributed to that improvement - Mr Coleman submits that the effect of what has been done on the BFB lands is to enhance a variety of aspects of the land. The pig manure supports better soil resource and this results in enhanced productivity - which he suggests ought constitute significant improvement.
18. Accepting that the control was a potentially invalid comparison, as Mr Francis suggested in his evidence and that the analysis carried out by Mr McInerney was thereby limited, the methodology adopted was not called into question. Faced with two highly intelligent, qualified and measured expert witnesses, with Mr Francis conceding that he was not familiar with the adopted methodology, and accepting that the result may have been referrable to the different management strategies employed on the different farms, this is suffice to establish from an agro-economical perspective that the evidence established on the balance of probabilities is that these works are substantial and are valuable on any view.
19. And, as far as the real estate evidence could quantify the difference between property treated with pig manure (BFB) and the other nominated properties the real estate valuers using conventional methodologies used in valuation simply disagreed in relation to two issues. Mr Egan insists that soil type is everything and soil fertility does not matter for valuation purposes but Mr Thomas disagrees with this proposition. Of the 8 soil classes tested relevant to broadacre cropping, the evidence is that they vary enormously in terms of productive capacity depending of fertility. That is agreed. Ultimately, Mr Egan accepted that there is cost associated with restoring soil fertility in a degraded paddock irrespective of soil type.
20. Based on the valuers' written and oral evidence, BFB submits that I would find that Mr Egan's disregard for soil fertility in the valuation exercise for institutional buyers is simply not correct where listed entites need to produce annual reports - it is not all about soil type and not all about soil fertility. Whereas, Mr Thomas's expert view stands up to scrutiny - someone spending tens of millions of dollars wants to generate income from the moment they purchase rather than wait 12 months as Mr Egan suggests is sufficient time to restore fertility (albeit absent evidence to support this timeframe).
21. BFB also rejects Mr Egan's two distinct markets approach - what the corporates pay is no different to what the Humes pay for a fraction of the acreage. BFB criticises Mr Egan for discrediting the comparables used and despite opportunity not endeavouring to find his own before the hearing. Whereas to the extent that there is any Mr Thomas relies to some extent on the Glencore acquisition and the Rosewood acquisition by BFB. Mr Egan did not engage those sales in his report or in the joint report and therefore his assertion between smaller and larger holdings is unsupported by reference to market evidence. In the circumstances, BFB submits that Mr Thomas's evidence while not overwhelming is sufficient to assume importance on balance.
22. Finally, BFB submits: "that to the extent that the quantification of the value added by specific management practices - that is pig manure is required - its submission is that it ultimately instructive rather than determinative of the issue. Even if one says "Well, that's not the finding the Court makes, that the pig manure is the decisive factor" our position remains as outlined at the commencement of my submissions, in broad terms that it doesn't mean that the applicant failed. It simply means that the reliance on pig manure as elevating the improvements to the extent that Mr McInerney asserts may not be accepted but the fact remains that the combination, which is not in contest, of the initiative taken, does produce that result and if one compares the rate per hectare to the Glencore and the Rosewood acquisition, there is support for that."

BFB's lands are not substantial or valuable works or structures

1. Sandfire wants access to the leased areas post-harvest and pre-sowing and it submits that the central question is to assess the paddocks in the relevant part of the year being December to March and to ask "is there a work on the surface of the land at that point of time?" (Tcpt 16 October 2018, p 22(10)).
2. Relying on the principles stated in Kayuga Coal and Martin to the facts of this case, Sandfire contends that the steps taken by BFB to till and fertilise its lands from time to time do not constitute a "substantial" or "valuable work" or "structure" situated on the surface of the land.

The land is not a work or structure

1. In fact, Sandfire contends that the relevant land does not have, situated on its surface, a "work" or "structure" at all. In that regard, it rejects the proposition submitted by BFB that the "work" is the labour that has been undertaken over years of owning and operating the properties and submits that the concept of a "work" refers not to a process but rather to the physical result of labour done on land: see Parramatta City Council v Brickworks Ltd (1972) 128 CLR 1 at 24-25, cited in Martin at [63].
2. The nature of the processes undertaken by BFB on its lands as addressed in its evidence even at its highest, are on the evidence only: (i) the occasional application of pig manure to the paddocks; and (ii) the very occasional use of the technique of "deep ripping" of the paddocks, which is a physical process of ploughing the land, breaking up the surface of the land so that moisture is retained more easily and absorbed into the soil.
3. Accepting that those activities have not created any "structure", Sandfire argues on the evidence that those activities have not created any "work" within the meaning of the definition. It submits: "some interpretative flavour to the meaning of 'work' is provided by its context in the definition, which otherwise refers to lands with a substantial and observable added physical characteristic on the land and a clear degree of permanence: 'dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work'. There is no such element in this case."
4. In this case, the evidence supports a finding that the relevant lands are conventional rural paddocks or fields, and the fact that the surface might have been broken up from time to time, and that fertiliser has been added from time to time, has not created a "work" on the land.
5. The 'physical result' of the activities of BFB is not any new or different or added work or structure. It remains general rural land, with the same contours and configuration throughout the years. Accepting that the productivity of its soils have varied across the years, this is not different to all general farming land, which sees productivity respond to the amount of rain, the extent of tilling of the soil, and the application of different kinds of fertiliser. Breaking up the top soil and adding pig manure does not create any physical thing on the land that has any real degree of permanence. A fertile field will sustain the next crops upon it, but will then be depleted. Such activities that provide merely a temporary uplift in fertility or productivity could not be considered to constitute a "work".
6. At best, BFB's lands are like those described in the example given by Preston CJ in the last sentence of the decision in Martin at [64] - "…paddocks to which the owner has added the broadcast application of fertiliser - and has not thereby created a 'work' upon the land. The land is not a substantial and valuable work."
7. Alternatively, even if the activities of BFB had created a work upon the land, Sandfire contends that the work is neither "substantial" nor "valuable" within the meaning of the definition.
8. After focussing on what has actually occurred on BFB's lands (based on the oral and written evidence of Mr Brabin) and what, if any, ongoing effect those activities have had on the condition and quality of the relevant lands, the respondent submits that there is no evidence to find that there is either a "substantial" or "valuable" work within the definition. Breaking up the top soil and adding pig manure does not create any "substantial" or "valuable" physical thing on the land that has any real degree of permanence. A fertile field will sustain the next crops upon it, but will then be depleted. There is no "substantial" and "valuable" work left on the land from the occasional (or even annual) spread of fertiliser. Moreover, Sandfire submits that the volume of pig manure asserted to be applied is not such as to amount to any "substantial" work on the land. As its agronomist, Mr John Francis, explains in his evidence: "... the application of pig manure appears significant in agronomic terms due to the magnitude of the material being applied relative to rates of inorganic fertilisers applied (20,000 versus approximately 100 kilograms per hectare). Assuming a bulk density of 0.26 tonnes per cubic metre, the volume of pig manure applied by BFB at a rate of 20 tonnes per hectare equates to 76 cubic metres per hectare, 7.7 litres per metre squared or 2 kilograms per metre squared which is a small amount in comparison with industrial soil movement; the application of 20 tonnes per hectare of pig manure equates to 48 kilograms of phosphorus and 144 kilograms of nitrogen per hectare. When annualised over the ten-year period between applications this rate equates to 4.8 kilograms per hectare of phosphorus and 14.5 kilograms per hectare of nitrogen. This is equivalent to 40 percent and 16 percent respectively of the annual requirements to meet the 4 tonne per hectare wheat yield target. In my opinion, this fails to qualify as significant in relation to the site."
9. Additionally, it is argued that the infrequent "deep ripping" in the past has not created a "substantial" and "valuable" work. Breaking up the top layer of soil to assist rainwater to permeate the soil is not the creation of any work situated on the surface of the land. In any event, even if BFB's lands were held to constitute a "substantial" work, that work is not a "significant improvement" because it is not "valuable" within the meaning of the definition. The relevant activities undertaken by BFB have not been shown to have generated any added value to the land. The expenditure of money on fertiliser from time to time - even if it is substantial amounts of money - is presumably reflected in the crop yield from that land in the following year. It is an annual equation, which is inherently impermanent. Addition of fertiliser does not create a "valuable" work and BFB is unable to demonstrate that the application of pig manure, or of infrequent deep ripping, or even of improved soil fertility, positively affects the market value of the relevant property.
10. Sandfire has submitted that its valuer, Mr Christopher Egan, is clear in his evidence that the farming practices adopted by BFB do not affect the value of the subject property and are generally considered standard management practices and are therefore not considered "significant improvement". Furthermore, he takes issue with the inclusion of an agronomy report at Appendix C in the CBRE valuation report prepared by Peter McInerney and states: "In the past 20 years of valuing rural properties I cannot ever recall being provided an agronomy report of this nature to conduct a valuation. In my experience soil fertility is not a consideration in a purchaser's mind however soil type is."
11. In the joint report of the valuation experts, this area of disagreement is highlighted. Mr Egan's view, which Sandfire contends should be accepted, is: "Mr Egan believes there is extremely strong demand currently for arable cropping country, and with such limited supply, there is not a differentiation in sale price for standard institutional sized cropping properties compared to similar assets with an alternate source of organic fertilizer. Fertilizer is not considered a 'significant improvement' as it is an annual input that is depleted by crops, or applied as required. The main determinants of the value for rural properties are soil types and rainfall levels, not by the annual fertilizer inputs. There is no differentiation between the valuation amount CBRE Valuation Report) of subject property's arable country and the analysis of arable country within the comparable sales evidence, to account for fertilizer history."
12. Sandfire submits when one looks at the valuation joint opinion and based on Mr Egan's evidence, there is simply no market evidence that demonstrates that soil that has a recent good fertilisation history in arable land transacts for a higher price than other land. Rather, the evidence is that the incoming land owner will pay a price for arable land in this district at a certain level fully understanding and aware of the fact that it is the farm management practices applied by the purchaser in the future from season to season that will determine fertility and determine productivity and determine yield per hectare that is achieved from the property. On that basis, the application of the pig fertiliser and deep soil ripping is not a "significant improvement" but a farming practice which is not "substantial" work or "valuable" work such as to satisfy the Act. One measure of value is looking to the extent to which that work being in place on the land, if it is a "work", has a transactional value. And, in this case, there is no evidence of that.
13. Rather, the evidence is that very substantial pieces of machinery every year rollover to and fro across the paddocks and to no ill effects. The yield is not affected or the productivity of the land. It is land which can cope with that sort of equipment and even a Kelly Chain to break up the stubble from the last crop and there was also evidence of road graders being used on the network of permanent internal access roads. The fact that mining equipment, 30 tonnes or thereabouts might cross an uncropped paddock by the best use from an existing, by the best route is not qualitatively different from what already happens for the purposes of the farming enterprise. For example, it might be different if it were a cotton field to use Preston CJ's example in Martin and you drove a mining vehicle over a shallow buried line for watering. There is just no problem of that sort in this case.
14. To move from the character of the land to what has actually been done to the land by the landowner to support the submission that is made that a work has been the result of physical activity applied to the land - you need to carefully consider what the evidence actually shows about what has been done on the lots to which access is sought. At its highest, Mr Brabin's affidavit shows that application of piggery waste started in 2004 and if you look at the spreadsheet not all areas had pig manure applied in the eight years from 2004 to 2012 so on the page Annexure 1 that refers to pig manure before 2012 it shows that some of the areas had one or two applications of pig manure in eight years from 2004 to 2012 but on our count ten of the units didn't have any application of pig manure before 2012 and working through each year after that in 2012 none of the relevant land had any pig manure applied. In 2016, none of the land had pig manure. Furthermore, based on the table in Annexure 1, in 2015, 2017 and 2018 almost none of the land had any pig manure applied. There was just one unit of property in each of those years that had pig manure applied according to the specific evidence of Mr Brabin. On the basis of Annexure 1, only Heinrichs has had more than one application of pig manure in 14 years.
15. Moreover, the agronomist did not rely on this evidence for their reporting but rather worked on the common assumption that the relevant areas of land in this case had each had at least one application of pig manure in the 14 year period from 2004 to 2017 and this assumption is incorrect. Mr McInerney's final evidence to the Court is that his analysis is based on advice from BFB employees that a single application of 15 tonnes or in some cases 2 applications of 20 Tonnes over the timeframe of the almost 14 years (Tcpt, 17 October 2018, p 30(40-50)). With Mr Francis confirming that this equates to 1.2 a 15 litre bucket over a metre squared (Tcpt, 17 October 2018, p 29(35-50)) and Mr McInerney suggesting it is akin to what you might do in your backyard vegetable patch.
16. In relation to the access arrangement Sandfire submitted that the usual protection and concern that the law has for rights in real property have been severely altered by the statute for very many years in NSW by the Mining Act and the terms of the Mining Act access regime have struck the appropriate balance that the legislature considers appropriate. The Court would apply the statutory test as to the access that the statue says an exploration licence holder is entitled to, except in the limited circumstances associated with the existence of a "significant improvement". The access arrangement put forward already has a very large number of serious limitations as to the type of access, the area of access and the time of year of access that will be applied.
17. For example, there is a 350m buffer zone around the piggery, exploration in daylight hours apart from the diamond drill and a series of compensation provisions. The proposition is that whatever sort of drilling is undertaken Sandfire will be in and out in a three or four month period and rehabilitate (Tcpt, 16 October 2018, p 24(10)). They will not take any of the paddocks out of commission for their planting year and will go in and out in the off seasons as it were. Mr Groenveld who is responsible for the care and conduct of the statutory mining title compliance and land access arrangement in his affidavit, which was read without objection has identified in general terms the type of access that is proposed. Moreover, he has confirmed that Sandfire is committed to mitigating the impact of the exploration activities and there are a number of particular aspects of the arbitrated access arrangement that he accepts. His affidavit (Exhibit 2) was read without objection and he was not required for cross-examination.
18. Ms Jeneta Owens, the senior geologist, also prepared an affidavit for the proceedings and gave oral evidence in Court at Temora explained in some detail the likely number of exploration holes and the size of the exploration area and the vehicles involved in the exploration in each session. Noting that the particular method to be used was yet to be determined because of lack of access to the site to date.

Considerations/Findings

1. The applicant's case has evolved with little consistency as it sought to react to the oral evidence. Nonetheless, I have summarised my understanding of each parties' position in respect of the relevant evidence.
2. As Mr Coleman identified, this is a case where the experts had very different opinions with respect to agronomical issues and real estate valuation issues. For example, as detailed in their joint report and confirmed by his oral evidence, Mr Francis, the agronomist engaged by Sandfire does not accept Mr McInerney's asserted comparison block and the relevance of the catchment as a whole system approach to support a position that the Access Lands are superior to other farm lands. Similarly, the real estate valuers do not agree as to whether the land is more valuable because of the farming methods adopted by BFB. Mr Egan saying that they are not more valuable and that soil fertility adds no particular value, and Mr Thomas submitting that they are more valuable than other comparable lands which do not have the superior soils said to be found on BFB lands.
3. As stated at the outset of my judgment the issue between Sandfire and BFB is whether the particular cropped paddocks, the subject of the exploration leases, comprise a significant improvement.
4. BFB relying on s 31(1)(c) and the Dictionary definition of "significant improvement" and on the words "other valuable work" asserts that the cropped paddocks are substantial and valuable works and therefore significant improvements within s 31(1)(c).
5. Accepting that the concept of a "work" refers not to a process but rather to the physical result of labour done on land: see Parramatta City Council v Brickworks Ltd (1972) 128 CLR 1 at 24-25, cited in Martin at [63] I do not accept on the evidence before me that the farming processes outlined by Mr Brabin in respect of the activities carried out to prepare the land for sowing through the application of organic or chemical fertiliser and /or deep soil ripping is a work for the purposes of s 31 of the Mining Act.
6. As Sandfire submits, on the evidence of Mr Francis the process of fertilisation (whether organic or chemical) and the weed control practices as explained by Mr Brabin over the entire BFB lands are part and parcel of normal farming practice. It is merely a transit process of fertilisation, and as the respondent submits, this is an important distinction between doing work on the land on the one hand and a work defined as being the physical result of labour. I accept the submission that the deep tilling or ripping and fertilising do not get BFB past the statutory threshold in this case. Furthermore, in light of how the evidence played out I have little confidence in the company records produced through Mr Brabin about the process of fertilisation applied to the Access Lands. I accept that so far as pig manure is concerned that the evidence may support a finding that it has occurred once on each of the relevant paddocks in 14 years maybe twice and the process of deep soil ripping is much less certain if ever. However, the management processes to achieve healthy fertilised soil as outlined in the evidence in this case are not capable of being a work as determined by: Martin.
7. In fact I have not been provided with any case law to support a finding that healthy fertilised soil maintained over time is a substantial and valuable work for the purpose of s 31 of the Mining Act.
8. Properly understood the comments by his Honour in Martin at [65] that "…the end phrase "other valuable work" is sufficient to catch paddocks which are the product of sufficient labour done to or on the land so as to cause the paddocks to be a work or structure that is substantial and valuable" necessarily raises matters of fact and degree. In my opinion "other valuable work" is only sufficient to catch paddocks that are the "product of sufficient labour done to or on the land so as to cause the paddocks to be a work or structure that is "substantial and valuable".
9. The evidence is that the relevant land does not have, situated on its surface, a "work" or "structure" at all nor do I have evidence to support a finding that sufficient labour has been done to or on the subject land so as to cause the paddocks to be a work or structure that is substantial and valuable. As I said at best I have evidence from Mr Brabin of 1 or maybe 2 applications of pig manure over 14 years and no satisfactory evidence of deep ripping of the particular paddocks at issue together with general statements explaining the usual farming maintenance activities carried out in preparation for sowing after harvest in respect of the whole of the BFB land. My focus is on the Access Lands only.
10. I reject the proposition submitted by BFB that the "work" is the labour that has been undertaken over years of owning and operating the properties because I accept for the reason articulated by Sandfire that the concept of a "work" refers not to a process but rather to the physical result of labour done on land: see Parramatta City Council v Brickworks Ltd (1972) 128 CLR 1 at 24-25, cited in Martin at [63].
11. There is no satisfactory evidence of the extent or nature of the labour undertaken on the Access Lands in this case to support a finding that the physical result of the activities of BFB has added a work it remains general rural land with the same contours and configuration through the years based on the evidence before me. While I accept that productivity of the soils may vary across the years in response to variations in climate and the like I accept as Mr Egan states in his evidence that soil fertility can be restored in 12 months. BFB's physical labour in maintaining healthy soils on the Access Lands are not a work on the evidence before me.
12. The prospecting is to be undertaken after harvest. At that point of time based on the evidence before me, there will be no significant or valuable work or structure on the relevant Access Land. Instead, Mr Brabin is likely to be waiting for advice from the company agronomist to be told what nutrients to apply to prepare the BFB lands for sowing subject to weather. I have no reliable records which demonstrates the activity on each of the Access Lands over time to satisfy me that sufficient physical labour had been done to or on the lands at issue such as to cause them to be a work or structure let alone substantial or valuable.
13. I do not find that "healthy soil" on these paddocks which on the evidence of Mr Francis is transient and seasonal is sufficient to bring each of the cropped paddocks at issue in this case within the meaning of a "work" within the meaning of that term in the definition in the Act as referred to by His Honour in Martin. There is nothing on the evidence before me in terms of the nature and extent of the labour and acts done to or on the lands comprising the cropped paddocks and the significance thereof in relation to make each of them a work and then whether that work is "substantial" and whether is it "valuable". I have no reliable evidence in the records tendered through Mr Brabin or otherwise in the evidence as to how often these particular paddocks are sprayed, and /or deep ripped (if at all) or the amounts of lime, gypsum or organic (pig manure) or other chemicals or nutrients. At best, the evidence shows that the BFB lands are prepared for sowing by relatively conventional means rather than constituting an improvement of the paddock being a "work" as understood in Martin at [63].
14. In short, I am unable to find on the evidence before me that the paddock preparations explained in the evidence make each of the cropped paddocks at issue a "work". There is simply no evidence from anybody in this case that what has been done is sufficient or is of such significance that it makes each of the cropped paddocks at issue a work let alone substantial or valuable work. It may be improved soil according to the agronomists but that of itself does not make it a "significant improvement" for the purposes of the Mining Act. The nature of the processes undertaken by BFB on its lands as Sandfire submits at its highest, on the available evidence are (i) occasional application of pig manure to the paddocks; and (ii) the very occasional use of the technique of "deep ripping" of paddocks, which is a physical process of ploughing the land to break the surface so moisture can be absorbed more readily. This evidence supports a finding that the Access lands are conventional rural paddocks and the breaking up of the surface occasionally and the addition of fertilizer organic or chemical from time to time has not created a work on the land.
15. I accept the respondent's submissions that merely fertilised soil that sits there between cropping seasons, healthy or improved soil is itself not a "significant improvement" - it is a condition which is transient, not observable on the land. Furthermore, I find on the evidence that the fact that work has been done over many years and continues to be done is not what is relevant. The farm management processes explained in the evidence before me applied to the Access Lands is not a "work" at all situated on the surface of the land as referred to in s 31 of the Mining Act for the reasons submitted by Sandfire as summarised.
16. As Sandfire submitted the broadcast application of fertilizer does not in this case cause paddocks to become works. In Martin the Court spoke about "significant earthworks …" there is nothing that will be damaged destroyed even affected from year to year that exists on the land that could be impacted by mining equipment rolling over it. And, having regard to the term "work " as used in the definition and understood in Martin the Access Land paddocks at issue in this case do not qualify as a "work".
17. I accept Mr Francis' evidence that there are different methodologies, different means that can be applied by a farmer to get to the same result of having a fertilised field. Mr Coleman submitted that healthy or improved soil is itself a significant improvement but I do not accept that to be the case in this instance. The improved soils in this case are not a substantial work or structure and there is no authority that has held that healthy or improved soil is a significant improvement under the Mining Act. As Sandfire submits where is the boundary drawn - at what point is healthy soil sufficiently healthy to constitute a work?
18. I accept Mr Francis' expert evidence that the application of pig manure or any other fertiliser is transient. Mr Brabin acknowledged as much when he told the Court that he relies on the advice of the agronomist each year to tell him what the soil needs in terms of nutrients as it changes over the seasons. While I accept that labour could be done to land that might or might not make the land capable of being regarded as work, and that paddocks that are the product of these labours might be able to be regarded as works however, in this instance the evidence does not support such a finding of fact.

Conclusion

1. For the reasons stated I am not persuaded that the management processes employed by BFB on the Access Lands constitute a "work" such as to preclude Sandfire access under s 31(1)(c) of the Mining Act.

Final Access Arrangement

1. I have determined the terms of the final access arrangement which in my assessment affords appropriate protection to the interests of BFB whilst allowing Sandfire reasonable access to the Access Lands.
2. The final access arrangement is based on the applicant's Exhibit L. It was shared with BFB on a "without prejudice basis" on 23 October 2016. The parties have made submissions in relation to the final term orally and in writing. Apart from Special Condition 2 of Annexure D and the Rehabilitation and repair provisions in clause 12 the final terms are generally agreed. This was confirmed at the mention on 7 December 2018 when Sandfire's submissions of 26 October 2018 were discussed and at that time, the matters in the dispute were crystallized further.
3. With respect to the following changes, I have sought to explain why I think they are appropriate and despite opportunity BFB did not agitate any particular issue with Sandfire's proposed amendments apart from Special Condition 2 of Annexure D.
4. For the reasons that follow I have decided to accept the following amendments:

Clause 2.1

1. Clause 2.1 the words "and confirmed in writing" have been included in clause 2.1 to ensure that there is no misunderstanding between the parties, which can potentially happen where information is conveyed in a verbal format only. This amendment accords with BFB's expressed desire to have as little contact as possible with the Sandfire during it activates on the site.

Clause 9.6

1. Clause 9.6 has been amended so that the drafting better aligns with Annexure C. In addition, the landholder must act "reasonably". The inclusion of a requirement that the landowner act reasonably is appropriate.

Clause 12

1. Clause 12 has been amended to accommodate the following principles:

• Scope of Works: The Respondent must provide the Applicant with a scope of works for rehabilitation of the surface disturbance. This is to ensure that any rehabilitation works undertaken by the Applicant meet the conditions of the exploration licenses, the Mining Act 1992 (NSW) and any other approvals that apply to the prospecting. In addition, having a scope of works in place will ensure that there is a framework for determining the cost to the Respondent of the Applicant performing the rehabilitation works.
• Budget: Clause 12 has also been amended to require the Applicant and Respondent to first agree a budget for the rehabilitation works. The Applicant is entitled to recover the reasonable costs of the rehabilitation works. The clause has also been amended to enable the rehabilitation works to occur notwithstanding a dispute in relation to the agreement of the budget itself. This will ensure that any impact on the land is minimized for the next cropping season.

1. The Respondent submits that this is a more balanced approach as it will limit the potential for, and the scope of, disputes in relation to the cost of the rehabilitations works undertaken by the Applicant. I accept this submission.
2. BFB submits that the right to direct rehabilitation and recovery of cost in that regard is consistent with its submissions in relation to a landholder's "rights of property". Further, that the landholder's enjoyment of its property should be curtailed to the least extent necessary to facilitate, in this case, the legal rights of an entity which would otherwise be a trespasser. While this submission ignores to a certain extent the rights and obligations on Sandfire under the Mining Act I am satisfied that the terms of the proposed direct access for rehabilitation and repair suggested by Sandfire are appropriate as they satisfactorily address BFB's concern that rehabilitation may be deferred by Sandfire. I accept the amendment.

Dispute resolution

1. The dispute resolution clause has been amended to include an "independent expert" determination clause.
2. The Respondent submits that such a clause is necessary to ensure that there is a cost effective means by which small disputes may be resolved between the parties without recourse to the New South Wales Land and Environment Court. For example, were a dispute to arise in relation to a failure to agree a budget for rehabilitation works, it could be determined by an appropriate independent expert. I accept that submission. The amendment protects both parties' interests and seeks to minimise costs.

Clause 16.1(b)

1. The deletion of the words "subject to clause 1" have been made consequential upon the Respondent accepting the deletion of the assignment clause from the access arrangement. I accept this amendment.

Special Condition 2 of Annexure D

1. The amendments to Special Condition 2 of Annexure D, proposed by Sandfire were initially controversial but refined at the mention on 7 December 2018 to focus on the wording in subclause (b).
2. I have carefully considered the parties' submissions in respect to the final terms of provision and find them acceptable for the following reasons.
3. The amendment of the special condition seeks to create a framework around how the window of access as between post-harvest and pre-sowing might occur which in my assessment is necessary given the evidence at the hearing that certain paddocks may not be cropped in any season and the timing of any cropping is not set.
4. I accept that the frame work proposed will minimise disputes by providing a process for the exchange of information and will give clarity around the window in which Sandfire can access the prospecting areas. Importantly, the final version includes the flexibility required by BFB to accommodate contingencies such as the weather by the inclusion of the words "… as soon as reasonably practicable" in subclause (b) and on that basis I am satisfied that the condition now reflects the reasonable needs of the parties.

Costs

1. BFB seeks an order that Sandfire pay BFB's reasonable costs of the review of the final determination pursuant to s 155 the Mining Act. Relevantly, s 155 of the Mining Act facilitates such an application under subcll (8) and (9) they provide as follows: (8) The holder of the prospecting title must pay the reasonable costs of the landholder of the land concerned in a review of a determination under this section. (9) The Land and Environment Court, in determining those reasonable costs, must consider whether or not the landholder has acted unreasonably in the negotiation, mediation, arbitration or review proceedings.
2. As the parties have not addressed me in respect of the landowner's costs I will reserve consideration of them and provide an opportunity for the matter to be addressed at a later time, if required unless otherwise agreed.

Orders

1. Accordingly, the Court orders: 1. The application for a review of the final determination of the Arbitrator Michael Heaton QC under s 151(2)(a) of the Mining Act 1992 and final access arrangement under s 151 of the Mining Act 1992 dated 8 March 2018 is upheld. 2. The Final Access Arrangement under s 151(2)(b) of the Mining Act 1992 determined by the Arbitrator Michael Heaton QC is modified under s 155(7) to the form in Annexure A to this judgment. 3. Costs reserved. 4. Should the landowner wish to agitate for costs then it may file the necessary Notice of Motion within 14 days from the date of these orders and request that the Motion be returnable before me. 5. The exhibits are returned.

Addendum made on 26 November 2019

1. Following my judgment on 30 May 2019, the only outstanding matter remaining to be finalised was the matter of costs (see [104]-[105] above). On 19 November 2019, the parties came to a mutual agreement as to costs and a Consent Order reflecting such agreement was filed with the Court. As such, the Court orders that: 1. The Respondent must pay the Applicant's costs of the proceedings as agreed or assessed.

Senior Commissioner of the Court Annexure A (1.49 MB, pdf)

Amendments 26 November 2019 - See Addendum made on 26 November 2019 at [107]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 November 2019