Citigold Corporation Limited v Chief Executive, Department of Environment... [2016] QLC 62 | Case summary

Citigold Corporation Limited v Chief Executive, Department of Environment... [2016] QLC 62 | Case summary | Zoe

[42]

"11. For the reasons outlined in these submissions, Citigold submits that:

(a) in making a decision about financial assurance, the Court can be satisfied that the:

(i) PoO complies with the requirements of section 288 of the EP Act;

(ii) rehabilitation program contained in the PoO complies with the conditions of the EA;

(iii) Citigold can, and has, entered into agreements with the underlying landowners regarding the retention of infrastructure on the tenements subject of the EA;

(iv) the rehabilitation program contained in the PoO is appropriate given the:

(A) nature

(B) staging and areas of proposed rehabilitation works;

(C) the proposed rehabilitation techniques; and

(D) the rehabilitation land form criteria in the EA.

(v) the FA is appropriate in light of the proposed rehabilitation program contained in the PoO;

(vi) alternatively, the rehabilitation program proposed by the expert for Citigold and outlined below is appropriate given the:

(A) nature

(B) staging and areas of proposed rehabilitation works;

(C) the proposed rehabilitation techniques; and

(D) the rehabilitation land form criteria in the EA.

and, the FA should be assessed in accordance this.

(vii) in the alternative to the FA stated in the PoO, the amount of financial assurance proposed by Mr Thompson in the joint report and identified as WPT1 is appropriate to satisfy the legislative purpose of providing for financial assurance; and

(viii) Alternatively, in the event that the Court does not accept the landowner agreement and infrastructure statement, that certain infrastructure has a residual beneficial use which does not interfere with the conditions of the EA and accordingly should remain in situ, with financial assurance reduced proportionately.

(b) in making a decision about financial assurance, the Court can not:

(i) impose its own rehabilitation program;

(ii) have regard to the principles regarding an environmental management decision; and

(iii) have regard to the precautionary principle.

MATTERS FOR THE COURT TO DECIDE

[49]

"(1) The appeal is by way of rehearing, in the nature of a hearing de novo.

(2) The statutory intention is that the Appellant bears the legal or practical onus of persuading the Court that its financial assurance calculations should be imposed, in circumstances where:

(a) The EP Act places responsibility upon the applicant to provide a rehabilitation program and costings for that program, in the form of financial assurance calculations.

(b) It is the decision of the Respondent and not the Appellant which determines the amount and form of the financial assurance required for a plan of operations.

(c) Once made, the Respondent's decision is operative and binds the Appellant unless and until it is substituted or set aside following an internal review or appeal. The orthodox legal convention that a party seeking to set aside a decision must prove its case applies.

(3) Alternatively, neither party bears the legal or practical onus.

(4) The legislative regime is as follows:

(a) Section 295 provides that the Court "must have regard to" the prescribed guideline and any regulatory requirements.

(b) The statutory intention is not that the guideline is strictly binding upon the Court. It is a matter which must be taken into consideration. However, in all the circumstances, it should be given significant weight.

(c) In circumstances where the hearing is a hearing de novo, version 3 of the guideline is the version to which the Court must have regard.

(d) Alternatively and in any event, section 295 does not prevent the Court from having regard to all relevant matters in making its decision, including version 2 and version 3 of the guideline.

(e) Other matters which the Court may have regard to as being relevant to the calculation of financial assurances include the regulatory requirements concerning environmental management decisions contained in the Environmental Protection Regulation 2008 ("the EP Regulation"), and the "precautionary principle". However, the Court's decision need not turn on consideration of either of those matters.

(5) In determining whether costs and expenses are "likely" to occur, the word "likely" should be interpreted as meaning a "real chance or possibility", rather than "more probable or not".

(6) The key issues in the appeal are:

(a) First, what infrastructure should be included or excluded from the calculations?

(b) Second, what rehabilitation requirements or assumptions should be relied upon to calculate the costs?

(7) In terms of the first issue:

(a) The waste rock dumps and tailing storage facility ("TSF") are not infrastructure. They are not properly the subject of landowner agreements or statements. They should be included in the financial assurance calculations.

(b) The infrastructure on unallocated State land is not properly the subject of landowner agreements or statements. The infrastructure should be included in the financial assurance calculations.

(c) Neither the Respondent nor the Court are precluded from scrutinizing the landowner statements and agreements, and determining whether it is appropriate to give effect to them.

(d) In all of the circumstances, it is not appropriate that the infrastructure which is the subject of the landowner agreements and statements be excluded from the financial assurance calculations.

(e) Further, and alternatively, the landowner agreements and statements are inconsistent with the conditions of the Appellant's environmental authority, including and in particular condition F1-1.

(8) In terms of the second issue:

(a) In light of Mr Towsey's qualifications and expertise, his interests in Citigold and his duties to the company, and the opinions of Mr Thompson and Mr Anderson, the Court should give Mr Towsey's evidence about his own rehabilitation designs and assumptions, and the resulting financial calculations, no or alternatively very little weight.

(b) The Appellant has not established that Mr Thompson has sufficient qualifications and expertise to give expert evidence concerning mining or metalliferous mining rehabilitation generally, or alternatively that he is qualified to give expert evidence about the risks and rehabilitation requirements concerning the waste rock dumps and TSF.

(c) If the Court determines that Mr Thompson is capable of giving expert evidence, it should be given little or no weight, and the evidence of Mr Anderson should be preferred.

(d) The Court should rely upon the rehabilitation requirements and assumptions adopted by Mr Anderson, and the financial assurance calculations he has prepared.

(e) The financial assurance should be calculated on the basis that rehabilitation of the TSF involves high risk material. Alternatively, the calculation should be made on the basis that the rehabilitation involves low risk material.

(f) The financial assurance should be calculated on the basis that rehabilitation of the waste rock dumps involves high risk material.

Alternatively, the calculation should be made on the basis that the rehabilitation involves low risk material.

(g) A contingency amount should be included in the financial assurance calculation."

[106]

[19] The hearing began in Brisbane on 7 December 2015 and was scheduled for a week, including two days of inspection on site in Charters Towers on 8 and 9 December 2015. The inspections were held as planned, but unfortunately the parties' estimates of time required for the hearing were well under what was actually needed. The hearing continued in Brisbane from 10-16 December 2015, and again resumed in Brisbane on 3 February 2016 and continued on 4, 5, 6, 18 and 19 February.

[20] It appeared that evidence in the matter had concluded on 19 February and a timetable was set for written and oral submissions. However, on 4 March 2016 Financial Assurance Guideline 3[15] was gazetted. This resulted in an application by Citigold to reopen the hearing. The application was granted. The facts and circumstances surrounding the reopening, and the reason for granting the reopening, are fully set out in my decision of 10 March 2016.[16]

[21] Due to very heavy court commitments that I had already set down, it was not possible to resume the hearing until 12 September 2016.[17] On 16 September the parties again closed their cases and a timetable was set for the provision of written submissions, with oral submissions subsequently heard on 24 and 27 October. Unfortunately, both parties were considerably late with their written submissions, which has severely impacted on the Court's ability to deliver a decision urgently by 31 October 2016, as stressed as being necessary by both parties (see heading Urgency below).

[22] Citigold was represented throughout the hearing by Ms KJ McIntyre of Counsel, instructed by Holding Redlich Lawyers. The respondent was represented throughout by Mr J.T. Dillon of Counsel, instructed by the Litigation Unit of the respondent.

[23] Citigold relied on affidavit and oral lay evidence of Mr M Lynch and Mr Towsey. Citigold also relied on the expert evidence of Mr Thompson.

[24] The respondent relied on the lay evidence of Ms Reupena (affidavit and evidence in chief only) and Ms Minnesma, who provided affidavit and oral evidence, and also relied on the expert evidence of Mr Anderson.

[25] To the extent that it is necessary, given the available time in light of the stated urgency, I will assess the evidence of each witness later in these reasons.

[26] In reaching my decision in this matter, I have considered and taken into account all of the evidence and submissions of the parties. Particularly in light of the stated urgency, this decision sets out the salient points, but not all the evidence and submissions that I have taken into account. Further, as advised to the parties, I have relied extensively on the written submissions of the parties in the preparation of this decision.

[107]

[27] As the chronology shows, this is the second Plan of Operations by Citigold which has resulted in an appeal to this Court regarding the question of Financial Assurance payable. Primarily, as I understand it, because of the lodgement of the current Plan of Operations, the first Land Court appeal was discontinued on 1 December 2014.

[28] Citigold lodged its current Plan of Operations[18] on 31 October 2014. It expires on 31 October 2016. In short, Citigold is required to lodge a new Plan of Operations to take effect once the existing Plan of Operation expires. A new Plan of Operations will require Citigold to submit what it says should be the amount of Financial Assurance for the new Plan, which will then be considered by the respondent.

[29] Potentially, in a relatively short period of time, there may be yet another decision, then another review decision, by the respondent, and appeal by Citigold. If the current matter is not resolved urgently, it would appear a virtual certainty that such potentiality will occur, given the great distance between the parties on their respective views as to the proper determination of Financial Assurance, and the evidence that the project is currently in a care and maintenance phase, leading to the likelihood that a Plan of Operations at least similar to Ex 6 will soon be lodged.

[30] The concern has been expressed that the lodgement of a new Plan of Operations and any subsequent appeal may render the lengthy hearing already conducted in effect nugatory. Although I have some doubt that such circumstances would result in a decision in the current matter being of no value; worthless; inoperative; useless; or futile,[19] I agree with the parties that the interests of not only justice generally, but the parties in particular, warrant this Court going to rather extraordinary lengths to deliver this decision by 31 October 2016 to overcome any possibility of all the work and costs which have been expended in this matter ultimately proving in vain.

[31] Further, I note in particular the provision of s 289(6) of the Environmental Protection Act 1994 (the EP Act) which states as follows:

[157]

[57] There are relevant differences between Guideline 2 and Guideline 3 as I set out in my decision in Citigold (No. 3).

[58] There is little or no remaining dispute between the parties as to the applicability of Guideline 3 and, for that matter, Guideline 2 to the Court's determination of this matter.

[59] The respondent submits that s 295 of the EP Act permits the Court to also have regard to the respondent's Guideline Resource Activities Rehabilitation Requirements for Mining Resource Activities[40] (Rehabilitation Guideline), the EP Regulation, and the Precautionary Principle.

[60] Citigold does not agree that the Rehabilitation Guideline, EP Regulation and Precautionary Principle require further consideration. The respondent conceded that this Court's decision does not turn on further consideration of the EP Regulation or the Precautionary Principle.[41]

[61] As regards the Rehabilitation Guideline the respondent maintains that it should be taken into account given the facts of this case.[42] Citigold strongly submits that the Rehabilitation Guideline is not relevant to this appeal.

[62] Citigold submits that the Rehabilitation Guideline:

(a) does not constitute a 'relevant regulatory requirement' for the purposes of s 295(3)(a) of the EP Act;

(b) is not a Prescribed Guideline in accordance with s 295(3)(b) of the EP Act;

(c) is only relevant to the calculation of financial assurance where the environmental authority holder is seeking a 'discount' under the Prescribed Guideline [Exhibit 26 or 69]; and

(d) otherwise is not a guideline to which the Court ought have regard.

[63] Citigold accepts that the respondent may make guidelines for the administering authority inter alia about:

(a) how it complies with regulatory requirements (Compliance Guideline);[43] and

(b) to inform persons about matters it considers appropriate for the administration of the EP Act (Information Guideline).[44]

[64] Any such guideline must be notified in the gazette [45] and the Department must follow the relevant guideline.[46] Not all such guidelines are prescribed under regulation and apply to the assessment of financial assurance. The Rehabilitation Guideline is not prescribed under the EP Regulation in respect of s 295 of the EP Act and decisions on the amount and form of financial assurance.

[65] The Rehabilitation Guideline is described as a guideline:[47]

[165]

[70] Of relevance to the application of the Rehabilitation Guideline is a discount for progressive rehabilitation and certification (table 3) which is divided into four subcategories:

(a) a 10% discount for avoiding any impacts to remnant vegetation (Avoidance);

(b) a 10% discount for undertaking proactive rehabilitation work to reduce the total area of disturbance (irrespective of the final land use) (Stabilisation);

(c) a 10% discount for undertaking proactive revegetation of a wood regional ecosystem (Restoration); and

(d) a 10% discount for progressive certification (Certification).

[71] The information and criteria contained in table 3 makes it clear that the Rehabilitation Guideline would be relevant in deciding whether or not a discount for progressive rehabilitation and certification can be granted and applied to the decision on the amount of FA.

[72] Citigold has not sought a discount in accordance with Appendix B of the Prescribed Guideline. Accordingly, it would seem that the Rehabilitation Guideline is irrelevant to deciding the amount of Financial Assurance in the present proceedings.

[73] Citigold submits that the Court cannot be satisfied that the Rehabilitation Guideline is a guide to which it must have regard because:

(a) Citigold is the holder of the EA;

(b) the EA contains rehabilitation objectives and outcomes;

(c) the Rehabilitation Guideline does not apply to the preparation of the Plan of Operations;

(d) the Rehabilitation Program contained in the Plan of Operations is not a 'progressive'[53] or 'final'[54] rehabilitation report;

(e) the Rehabilitation Program contained in the Plan of Operations complies with the EA conditions;

(f) the Rehabilitation Guideline is not a guideline prescribed under regulation pursuant to s 295(3)(b) of the EP Act;

(g) Citigold has not sought a discount of its financial assurance in accordance with Appendix B of Guideline 2; and

(h) Citigold has not sought certification of progressive rehabilitation under s 318Z of the EP Act.

[74] Citigold submits in the alternative, that if it is the case that the Rehabilitation Guideline is applicable, then it would only be relevant in circumstances where the administering authority (or, on appeal, the Court) was also required to decide whether or not the rehabilitation program proposed in the Plan of Operations by Citigold was appropriate and, if not, impose its own rehabilitation program on the holder.

[75] Citigold submits,[55] and as confirmed by Ms Minnesma for the respondent,[56] that it is not for the Respondent (or, on appeal, the Court) to impose its own rehabilitation program on an EA holder when making a decision under s 295 of the EP Act.

[76] Citigold argues that it follows that where an EA holder has sought to reduce the amount of financial assurance required as a condition of its environmental authority, as in the present case, the Rehabilitation Guideline is irrelevant to deciding the amount of financial assurance payable, and that any other interpretation would give the Respondent carte blanche in respect of the matters it can have regard to in making its decision, a result that was clearly not the intention of the legislature.

[77] Further in the alternative, Citigold submits that the Rehabilitation Guideline clearly distinguishes between policy objectives for rehabilitation, called rehabilitation goals, and rehabilitation objectives selected by mining companies in their rehabilitation strategies linked to the application stage for an environmental authority and the environmental impact statement (EIS) process.[57]

[78] Table 1 of the Rehabilitation Guideline outlines possible strategies to achieve rehabilitation goals for various domains.[58]

[79] Section 8 of the Rehabilitation Guideline identifies how existing mines ought be dealt with. Namely, it refers to rehabilitation having already been completed and being evaluated against the rehabilitation requirements that were in place for the mining project at the time the rehabilitation was completed. This section also refers to mining projects having prepared an EMOS which will have identified at least one rehabilitation objective (typically low intensity grazing).[59]

[80] Section 2.2 identifies the rehabilitation hierarchy in the following terms:

[188]

[99] The Cuthbert case concerned an appeal to the Planning and Environment Court by Ms Cuthbert pursuant to s 531 EP Act against the imposition of an environmental protection order (EPO). In an interim hearing Searles DCJ determined that the respondent council bore the onus of proof to establish the issue of the EPO was a legitimate exercise of its discretion, effectively following the decision in Oakley.[80]

[100] At the final hearing Morzone DCJ confirmed that the onus of proof rested with the respondent.[81]

[101] Citigold further submits that in circumstances where no clear reasons were given by the respondent as to how it came to its conclusion, it would be unfair to require Citigold to bear the onus of proving why the amount determined by the respondent is incorrect.[82]

[102] Alternatively Citigold submits that neither party in this matter should bear an onus of proof due to the principles that apply to the determination of an administrative appeal.

[103] Citigold notes that the Land Court is a specialist judicial tribunal and is not bound by the rules of evidence and may inform itself in any way it considers appropriate.

[104] Citigold submits that although this matter is referred to as an appeal, it is closer to a review of an administrative decision, where the Court stands in the shoes of the administrative authority in deciding the matter and has all the powers of the authority and its decision is taken to be the authority's decision.

[105] Citigold submits that the Court's role in this matter is more akin to that of an administrative decision maker than a judicial entity to which a decision is appealed. In this regard Citigold cited two commonwealth authorities in support of its submission that administrative tribunals are not required to act in accordance with onus of proof principles.[83]

[106] Finally Citigold submits that to the extent any onus is placed on it, it should only be to provide sufficient documentation to support the financial assurance calculation it has proposed as part of its rehabilitation plan (as contained in its Plan of Operations).[84]

[190]

[112] A starting point for any onus of proof consideration is the standard axiom that the party who brings the action must bear the onus of proof. The initiator of the action must prove its case to the Court's satisfaction.[87]

[113] However this rule does not always apply, for example it can be altered expressly or impliedly by statute.[88]

[114] Also the facts of the case could be such that the standard onus of proof is reversed. For example Sanpine v Koompahtoo Local Aboriginal Land Council[89] was an action for wrongful termination of a joint venture. The defendant claimed that the joint venture was lawfully ended because of breaches by the plaintiff. The plaintiff denied that allegation. It was held that the defendant must prove the plaintiff's default. It was not the plaintiff's task to prove that he was not in breach.[90]

[115] In this case the relevant legislation is silent as to which party should bear the onus of proof. The Court must then look to the facts of the case.

[116] This is a matter where Citigold has been granted an EA so it can legally undertake its mining activities in Charters Towers. As part of the process Citigold submitted a Plan of Operations. The Plan of Operations contained a rehabilitation plan and an estimate of what Citigold believed were the necessary costs of putting its rehabilitation plan into effect.

[117] The respondent then assessed the rehabilitation plan and calculated the financial assurance amount it believed should be paid by Citigold.

[118] The Court in determining the appropriate amount of financial assurance, must have regard to the rehabilitation plan proposed by Citigold and its accompanying financial assurance estimation,[91] as well as the respondent's assessment of that rehabilitation plan and its calculation of financial assurance.

[119] In effect the onus is on Citigold to prove its rehabilitation plan and resulting financial assurance calculations are sufficient; and for the respondent to prove its concerns with respect to Citigold's rehabilitation plan and resulting financial assurance estimation and also prove its own financial assurance calculation is correct. In my view both parties bear the onus of proving what they assert with respect to the rehabilitation plan and resulting financial assurance calculations.

[120] The decision in Gladstone Ports Corporation can be distinguished as it dealt with a very different fact situation and different enabling legislation. In this matter, unlike the Gladstone Ports Corporation case, each party should bear the onus of proving the financial assurance figure they have contended for.

[121] The decisions of Oakley and Cuthbert can be distinguished as in both cases it was the respondent who was taking action against the appellant disturbing the status quo, while in this case the decision appealed against is just part of the process of Citigold submitting a Plan of Operations.

[122] Citigold has submitted it would be unfair for it to bear the onus of proof where there are no clear reasons how the respondent came to its financial assurance decision. By splitting the onus of proof I have resolved this issue as Citigold only has the onus of proving its own financial assurance calculations, and in any event there has well and truly been sufficient evidence provided at the hearing of this matter, for Citigold to know how the respondent calculated its financial assurance figure.

[123] Citigold has also submitted that this Court in conducting a hearing de novo with respect to the respondent's financial assurance decision, is engaging in an administrative rather than a judicial process and hence no onus of proof is applicable. With respect to Citigold, I do not agree with this submission.

[124] The Land Court is a judicial tribunal.[92] The Land Court is a court of record.[93] The Land Court is also afforded all of the powers of the Supreme Court.[94] The Land Court may subpoena witnesses[95] and punish for contempt.[96] A member of the Land Court has the same privileges, protection and immunity as a Supreme Court judge,[97] and those same privileges, protection and immunity also apply when the Land Court is performing an administrative function.[98]

[125] The Land Court conducts its hearings in open court and must take evidence on oath, affirmation, affidavit or declaration.[99] Parties have a right to be represented[100] and reasoned decisions are given.

[126] The Land Court may exercise administrative functions from time to time[101] but in terms of hearing this appeal pursuant to s 524 EPA, the Land Court is exercising its judicial functions albeit to review an administrative decision - in a similar vein to the Planning and Environment Court in the matters of Oakley and Cuthbert.

[127] Observations concerning the inapplicability of adversarial proceeding concepts such as onus of proof in administrative proceedings,[102] do not apply to this judicial determination of an administrative matter in the Land Court.

[220]

[149] Mr Dillon for the respondent contends that the evidence Mr Lynch gave was at times evasive or contradictory and he was prone to exaggeration. Mr Dillon's included such topics as:[129]

Mr Anderson's expertise and approach to the financial calculations.[130]

The estate, the activities of the estate and the supposed "gravel business" run by the estate, which on his own evidence simply consisted of allowing other parties to process gravel.

The "symbiotic" relationship with the Council and the community, and the supposed support given by Council with respect to the proposed tourism and gravel businesses.

The involvement of Mr Lynch in the estate and gravel business.

The involvement of Mr Francis Rigby, Citi gold's company secretary, in the preparation of the business plans for either Citigold or other parties.

[150] Mr Dillon submits that the Court should treat Mr Lynch's evidence with care and give it very little weight, particularly when it comes to scrutinizing the landowner agreements and statements; the genuineness of those agreements and statements; and the likelihood of either the gravel or tourism businesses ever proceeding.

[151] I cannot agree with all the submissions of Mr Dillon and in particular his conclusion that Mr Lynch's evidence should be given very little weight. I will deal with the five key areas of complaint by Mr Dillon separately.

[152] Firstly, I agree that Mr Lynch was rather dismissive of the evidence of Mr Anderson, the expert witness for the respondent. I do not take any of Mr Lynch's evidence contra to Mr Anderson into account. Primarily, the expert evidence of Mr Anderson will be tested alongside the expert evidence of Mr Thompson for Citigold.

[153] As regards the activities of the estate and the gravel business, Mr Lynch's evidence was that the estate was clearly involved in part of the gravel business, in that it received some income by selling product to intermediaries who process the crushed rock.[131]

[154] The manner in which the estate chooses to generate income out of the crushed rock is a matter for it, but it is clearly part of the gravel producing process by being the supplier for profit of the crushed rock and allowing use of its facilities by intermediaries for the processing of that crushed rock into gravel.

[155] I now turn Mr Dillon's attack on Mr Lynch's relationship with the local council. The evidence makes it clear that the council has given its agreement in principle to the proposed tourism and gravel businesses.[132]

[156] It must be remembered that the evidence shows that Citigold has plans which may include a further 30 years of active mining activity. Although there would of course be some progressive rehabilitation during this time, it would appear that much of the rehabilitation would not occur until after the cessation of mining activities. Given therefore the uncertain timeframe for when Mr Lynch's planned tourism and gravel businesses would actually start operating, it is only logical that an approval in principle would be obtained from the local council rather than a full, formal approval. No doubt, had Mr Lynch not obtained the approval in principle of the local council, the respondent's attempts to make the proposed tourism and gravel businesses little more than 'pie in the sky' concepts would have been emboldened by an argument that Mr Lynch had not even bothered to obtain local authority approval in principle for his proposed businesses.

[157] It is clear that Mr Lynch does not have a detailed knowledge of the operation of the estate, that responsibility primarily falling to his brother Peter Lynch who lives in Sydney. However, Mr Lynch has provided sufficient documentary evidence as to landholder agreements with Citigold relating to the estate, as well as documents and evidence regarding the gravel business.

[158] Turning next to the involvement of Citigold's Company Secretary, Mr Rigby, there certainly are question marks over Mr Rigby's preparation of business plans for either Citigold or other parties.

[159] Mr Rigby was appointed company secretary on 1 September 2015.[133]

[160] Mr Lynch gave evidence regarding the plans for the gravel business going back to 1993. Mr Lynch gave evidence that he as a personal representative of his brother, Peter Lynch, asked Mr Rigby in a personal capacity to prepare a business plan for Queensland Gravel,[134] a trading name of JJ Lynch Estate, a business which was subsequently transferred to his brother.[135]

[161] Mr Lynch also gave evidence that Mr Rigby was asked by him as a director of Citigold to prepare a business plan for a Tourism Business.[136] While unorthodox, Citigold has evidence an ongoing intention to realise a plan for a tourism business culminating in the business plan.[137]

[162] Mr Lynch was clear and open that neither he nor Mr Towsey had the necessary skill set to prepare a business plan and that prior to his appointment Mr Rigby had 14 years' experience as a financial planner.[138]

[163] It is logical that when you have an idea for a business but do not possess the relevant skill set to realise that idea you hire someone to do this job for you. Ideally this could have occurred prior to appealing the amount of financial assurance and provided to the department at the time of the internal review, as it happened this did not occur but the business plans are well made and support the plans/intentions that were rejected by the original decision maker as stated in Exhibit 2, the Amended Notice of Appeal:

[231]

Initiated and drove a successful consulting business for 17 years. Clients included BHP, MIM, Cyprus, Aust Ores and Minerals, Bruce Resources, Battle Mountain, Delta Gold, Charters Towers Gold Mines and the Anglican Church.
Increased Chatters Towers Gold Mines gold resources by 50% in nine months and presented technical data to stockbrokers resulting in $3M private share placement in unfavourable market (March 2000). Contributed to innovative capital raising scheme to raise $25M. Took resources from 200,000 ounces to one million ounces in 18 months at [173] This level of detail is important as, on 18 May 2012, Mr Towsey prepared a technical report titled "Mineral Resources and Reserves 2012 Charters Towers Gold Project Citigold Corporation Ltd (Gold and Silver)". At the head of the front page of the document appears logos of Citigold Corporation and Pathfinder Exploration, this document is Exhibit 54 in these proceedings and is very extensive, containing 173 pages of technical detail regarding Citigold's operations.

[174] Without doubt, in my view, Mr Towsey was not an employee of Citigold at the time of preparing exhibit 54. Any doubt in this regard is removed by Mr Towsey's JORC statement[142] as follows:

"JORC STATEMENT - The following statements apply in respect of the information in this report that relates to Exploration Results, Mineral Resources and Ore Reserves: The information is based on, and accurately reflects, information compiled by Mr Christopher Alan John Towsey, who is a Corporate Member and Fellow of the Australasian Institute of Mining and Metallurgy and a member of the Australian Institute of Geoscientists. Mr Towsey is a consultant geologist. He has the relevant experience in relation to the mineralisation being reported on to qualify as a Competent Person as defined in the Joint Ore Reserves Committee GORC) Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves, having worked on the Project as a consultant and former full-time employee since 1999. Mr Towsey has consented in writing to the inclusion in this report of the matters based on the information in the form and context in which it appears."

[175] There are some noteworthy points highly relevant to the current proceedings that are made by Mr Towsey in Exhibit 54.

[176] Under Part 18.0 Project Infrastructure, Mr Towsey has this to say about dumps and stockpiles:[143]

"Dumps and stockpiles - Run-of-Mine (ROM) stockpiles are established at the Imperial Mine and at the gold processing plant to ensure surge capacity from variable underground production is stored awaiting haulage to the processing plant or crushing at the plant. Waste material from the Imperial Mine is dumped on an above-ground stockpile at the mine. The material is non-acid-forming granite and granodiorite, which is crushed as required for gravel for mine roads and backfill."

[177] In that same part, Mr Towsey has this to say as regards tailings disposal:[144]

"Tailings disposal - tailings comprise mostly 80% minus 106 micron fine quartz sand, crushed granite, minor clay and some metal sulphides (pyrite, galena and sphalerite) averaging around 9000 ppm lead and zinc and 0.05 to 0.2 ppm gold at a slightly alkaline pH of 8.5 to 10. There is no acidic run-off as process water has lime added to it to maintain an alkaline pH, and the weathered granite generates calcium carbonate as the feldspars decompose, neutralising any acid that may form from the decomposition of the sulphides. Tailings are stored in a registered tailings storage facility ('TSF') at the processing plant, with process water being recycled. The very high evaporation rate in the semi-arid Charters Towers area ensures tailings are solidified. The TSF measures about 600 metres by 300 metres with a design storage capacity of some two million tonnes and area for expansion."

[178] Under heading 20.6 Mine Rehabilitation and Shutdown in exhibit 54, Mr Towsey makes the following observation:[145]

"An allowance of $2 per tonne of ore mined has been budgeted to cover progressive rehabilitation and final mine shutdown. With the current planned production schedule, this amounts to some A$18 million over 15 years."

[179] I should make some immediate comment regarding Mr Towsey's estimate of $18,000,000 being spent on progressive rehabilitation and final mine shutdown by Citigold. A cursory glance at such sum shows of course that it is above the amount of financial assurance sought by the respondent from Citigold. Given that Citigold's then consultant and now Executive Director and Chief Scientist has arrived as recently as 2012 at such a figure, one may rhetorically ask the question; What is this case all about given that statement?

[180] Mr Towsey explained[146] that the sum of $18,000,000 referred to was budgeted for progressive rehabilitation and final shutdown over a period of 15 years. This is a normal part of mining operations. Put simply, the more that a miner mines, the more impact the miner will have on the environment, and the greater the rehabilitation that will have to occur. Financial assurance is however, in my view, having taken particular note of the evidence surrounding the reason for the current financial assurance scheme operating, is completely different. The financial assurance will be called upon when a miner stops mining and goes into liquidation/abandons the mine site/or the like. The financial assurance is to be a sum to rehabilitate the land back to an acceptable standard should those circumstances arise. It is a full rehabilitation at a particular point in time, not a progressive rehabilitation over an extended life of an operating mining program.

[181] The respondent can gain no comfort for its case by relying upon Mr Towsey's sum of $18,000,000 derived for a different purpose under completely different conditions circumstances.

[182] It is noteworthy at this point that both experts Mr Anderson and Mr Thompson confirmed that they had regard to exhibit 54, Ms McIntyre submits that Mr Towsey's evidence of the Metallurgy and Geochemistry of the awe body and open burden was unchallenged.[147] I tend to agree. Noteworthy evidence that Mr Towsey gave in this regard is as follows:

"PAF doesn't go into the waste rock. Potentially acid forming material is the ore that we put through the processing plant."[148]

...

"You have to understand how the mining procedure goes. We drive tunnels through the background material. That is looked at as material goes through. We then drive along the ore bodies, and that material is actively sampled every face. We advance about 3m every time we blast. Each face is sampled with a number of samples taken across that area. So there's a chemical analysis taken in potentially acid forming material every three metres...where we encounter it."[149]

"Well, you could not say that without knowing what the alkaline load, so to speak, and the acid load in the TSF is?---

We do know. We know there's two per cent sulphide in there. Alright? There's two per cent sulphide. We've established that from all the chemical analysis we've done. Part of that is galena, lead sulphide, which is acid consuming, not acid producing. Part of it is sphalerite, zinc sulphide, which is also acid consuming. And there is a small amount of pyrite which is acid producing, but it is so outweighed in its own sulphide by the acid consuming sulphides - not all acid - not all sulphides produce acids. Some sulphides, galena and sphalerite, are acid consuming. And we have more acid consuming material, by a long way, than we have acid producing. So there's no way that anything in that tailings dam can produce acid, even if it is subjected to 100 years of adding acidic rain to it or adding acidic humic acid of the soils."[150]

[183] Mr Towsey's evidence is that there were three types of waste, they are overburden, waste rock, and tailing,[151] and that Citigold does not have waste rock. As he put it:

[233]

[184] His evidence was also that the financial assurance calculator, under domain 4, lists overburden and waste rock, clearly defining them as two separate terms, with overburden the background material.[153] He went on to explain that Citigold did not undertake rock modelling of the overburden and that it is standard mining practices to develop a block model of the ore body that you intend to mine, not the waste rock that is characterized, chemically identified and stored.[154]

[185] Mr Towsey gave further evidence that visual control of an ore body is sufficient in this area because of the mineralogy of Charters Towers, and that in this respect selective handling is not necessary.[155]

[186] Mr Towsey stated that the analysis of the tailings was not just for gold recovery rates but also to determine lead and zinc levels,[156] and that the periodic sampling undertaken on the TSF along with the tailings themselves were available to the experts and that Mr Thompson asked for chemical analysis data which was supplied to him.[157]

[187] It is Mr Towsey's view that Citigold in undertaking its testing of both the overburden and tailings contained in the TSF along with the various water testing and other testing activities undertaken by the company, is sufficient to meet its obligations under the EA. To the extent that it is required to do anything further, Citigold has not been informed of this.[158] Further, as a result of the proceedings, Citigold has taken the view that it will undertake a block model of the TSF and in fact has already drilled eight holes and sampled 1m of material.[159]

[188] As regards rehabilitation, Mr Towsey's evidence is that the rehabilitation plan is reviewed and assessed every two years as is required under the Mining and Quarrying Safety and Health Act 1999 requirement to update the standard operating procedures (SOPs). His evidence is that if upon reviewing the SOPs nothing material has changed, then there's no need to update or amend anything.[160]

[189] Mr Towsey says that it is not possible to conduct a rehabilitation trial on the TSF until such time as the TSF is not actively in use.[161] Mr Towsey's evidence in this regard in on the basis of the size of the TSF and the way the TSF is set up. He stated:

[255]

[203] Mr Towsey accepted that it was standard practice to carry out rehabilitation trials to test proposed rehabilitation methods.[182] In the context of questions about the TSF, Mr Towsey accepted that capping trials or trials about covers were very important,[183] and that if a capping trial of the TSF was conducted you could get a response that would be representative of how the tailings dam would perform over time.[184]

[204] He accepted that it is similarly important to undertake trials with respect to things like waste rock dumps, although he maintained his denial that Citigold had no waste rock dumps.[185]

[205] There is a stark difference between the parties as to the way in which I should deal with the evidence of Mr Towsey. Ms McIntyre submits that Mr Towsey's evidence with respect to the specific matters regarding background geology in Charters Towers; the geology of the project site; the specifics of gold extraction and processing; and the processing plant should be preferred over that of Mr Anderson and that such evidence also compliments the evidence of Mr Thompson.[186]

[206] Mr Dillon has a completely different approach to the evidence of Mr Towsey. He submits that Mr Towsey's interests are closely aligned with those of Citigold, and as an executive director he has a duty to act in the best interests of the company, and that accordingly his evidence should be considered in that context.[187]

[207] Mr Dillon specifically submits that Mr Towsey was not nominated as an independent expert or relied upon in that capacity.[188]

[208] Whilst it is certainly true that Mr Towsey was not classified as an expert witness, it is clear from Citigold's overall case that Citigold does rely upon Mr Towsey's expertise. That distinction is particularly important for the period of time when Mr Towsey's only involvement with Citigold was as an independent consultant.

[209] Mr Dillon rightfully points out that Mr Towsey is a geologist and not a mining rehabilitation expert although he claims to have sufficient experience to manage that part of the operation.[189]

[210] Mr Dillon noted that at its highest Mr Towsey only claimed some experience in mining rehabilitation.[190]

[211] Overall, I agree with Mr Dillon that great care must be taken with Mr Towsey's evidence. However, I do not go so far as to say that his evidence is of little or weight and should be disregarded. In many respects, his evidence is unchallenged and relates to a time when he was an independent consultant of high expertise. He also clearly has a thorough knowledge of the mining industry in general and the Citigold operation in particular.

[212] Overall, where Mr Towsey's evidence is in conflict with the expert evidence of Mr Anderson and Mr Thompson, the expert evidence of Mr Anderson and Mr Thompson must prevail. However, where there are areas of disagreement as between the experts in an area where Mr Towsey has given evidence, then in my view Mr Towsey's evidence may be of some assistance to the Court in determining any such matter, although great care must be taken by the Court before any reliance is made on Mr Towsey's evidence in this regard. In short, apart from those areas in this decision where I have specifically relied upon the evidence of Mr Towsey, I prefer the evidence of Mr Anderson and Mr Thompson.

[281]

Ms Minnesma confirmed that the guideline does not prescribe a contingency fee and indeed stated that she included it simply because she thought it was a good idea.
Ms Minnesma in her Affidavit and in evidence, concerns herself with the question of whether it is appropriate for infrastructure which is the subject of the agreement and statement to be excluded from the financial assurance calculations. Whilst it may be of interest to Ms Minnesma to consider whether it is appropriate for infrastructure to be returned, it is not what the EA nor what the guideline requires. Indeed at paragraph 44 and in evidence Ms Minnesa agrees that it is her view and not the view contained in the guideline.
Her observations are of value to the Court insofar as it provides the Court with guidance as to the use of the guideline. However, Ms Minnesma appears to be misguided in her understanding, despite her many years of experience, about the way in which financial assurance is to be assessed.
She accepts that the standard criteria is not referred to in either section 295 of the EP Act nor the guideline in respect to calculating financial assurance and as such it is submitted that Ms Minnesma's evidence with respect specifically to the financial standing of Citigold, the content of the landholder agreement and the criteria against which financial assurance ought be assessed must be disregarded.
To the extent that the rehabilitation program is not consistent with the conditions of the EA, then it is submitted the Court ought defer to the position of Mr Thompson in those discrete areas.
That being the case, the Respondent failed to lead any evidence to suggest that the rehabilitation program contained in Exhibit 6 did not comply with the conditions of the EA. In any event if it were the case that the state felt that the rehabilitation program failed to comply with the conditions of the EA or otherwise the PoO was inconsistent with the conditions of the EA, then it should have notified Citigold of such a discrepancy and pursuant to section 291 of the EP Act Citigold would have been required to rectify that inconsistency. No such notification has been made to Citigold." (footnotes omitted)

[282]

[222] For his part, Mr Dillon submitted as follows:

"130. In circumstances where neither the EP Act (in particular s 295(3)), nor the guideline require the automatic exclusion of infrastructure subject to landowner agreements or statements, the Court should take the approach of Ms Minnesma and Mr Anderson and include all of the infrastructure in the financial assurance calculations."

[223] Mr Dillon also made rather courageous submissions regarding the applicability of Ms Minnesma's evidence to Guideline 3:

"123. Although Ms Minnesma gave evidence at a time when version 2 of the guideline was in force, her evidence remains generally relevant to both version 2 and version 3 of the guideline."

[224] I use the word courageous deliberately, because Mr Dillon makes no attempt to justify his submission above by reference to any of the evidence nor to any legal authority as to why such comprehensive evidence as given by Ms Minnesma, particularly in her affidavit evidence, as to the calculation of the financial assurance payable by Citigold in accordance with calculations done under the calculator but pursuant to the guidelines as set out in Guideline 2 should apply to Guideline 3.

[225] This is particularly troubling in circumstances where it was the State of Queensland which introduced the new Guideline during the course of these proceedings and, as strongly submitted by Mr Dillon, Guideline 3 is the appropriate guideline to use in calculating the financial assurance, yet no action was taken by the respondent in the six month period that it had available to it to bring together its evidence for the re-opened hearing to even obtain the most cursory affidavit from Ms Minnesma which could have indicated, for instance, her view that her assessment as to the financial assurance payable by Citigold had changed or not as a result of Guideline 3 now applying. The absence of any further evidence from Ms Minnesma is unexplained.

[226] Ms McIntyre for Citigold makes the following strong submission in this regard:

"[395] The Respondent has not led any evidence from Ms Minnesma in respect of the way in which the calculation of financial assurance should be undertaken pursuant to the new guideline Exhibit 69 and indeed Ms Minnesma has not filed a further Affidavit to state whether or not her opinion would change and if so to what extent in respect of the new guideline gazetted 4 March 2016.

[396] Accordingly Ms Minnesma's evidence in respect of the calculation of financial assurance must be confined to her views in respect of EM1010 [Exhibit 26]. At no point in her evidence nor in her Affidavit does Ms Minnesma state that her evidence is anything other than that confined in EM1010."

[227] I agree with Ms McIntyre's submissions. In short. I do not know what Ms Minnesma's evidence would be as to the appropriate amount of financial assurance payable by Citigold when Guideline 3 is applied.

[284]

[229] Mr Thompson prepared two reports,[197] a further statement of evidence,[198] and co-authored with Mr Anderson two Joint Expert Reports, known as JER1[199] and JER2.[200]

[230] Since 1993, Mr Thompson has held the position of Director, Land Resource Assessment and Management, Brisbane.[201]

[231] Mr Thompson has a Bachelor in Agricultural Science[202] with a major in soil science[203] and some 42 years of experience in the industry. He has extensive experience with acid sulphate soils,[204] rehabilitation of land,[205] land classification[206] and beneficial use.[207] In my view, his specific experience in metalliferous mining is limited, but for the purpose of this proceeding his experience with rehabilitation of contaminate land, vegetation impact resulting from chemical impairment, chemical mobility in soils and the impact that it may have on re-vegetation, receiving environment for soil and water, likely behaviours of cap and seal covers, behaviour of capillary breaks in rehabilitation covers, percolation rates and soil reaction in climatic conditions specific to the area of Charters Towers is of considerable assistance to the Court.

[232] Ms McIntyre submits[208] that Mr Thompson's knowledge of soil mechanics, soil chemical composition and soil behaviour is of particular relevance to the proposed rehabilitation of the TSF and WRD's and that specifically, his expertise with the prospective chemical impact on re-vegetation of those structures, capillary breaks and behaviours of cover designs is of relevance to the Court. She submits that the persuasive, authoritative field based evidence of Mr Thompson should be preferred over what she calls the academic desk-top analysis undertaken by Mr Anderson.

[233] Mr Thompson has quite an extensive project and work history set out in his CV to Exhibit 7. I note in particular Mr Thompson's oral evidence during his concurrent evidence with Mr Anderson that, at the time he completed his degree in 1974, his studies encompassed many fields within the one degree which, in more recent tertiary education times, have tended to become multiple, more specialised degrees.

[234] Mr Dillon is critical of the fact that Mr Thompson only holds a bachelor of Agricultural Science with a major in Soil Science and has no other specific academic qualifications relating to post mining land rehabilitation,[209] and further that he has no engineering qualifications and he is not a geologist.[210]

[235] Mr Thompson accepted that prior to 1992 the primary types of areas he worked in were soil and land classification and use,[211] and that after 1992 soil and land classification and rural land use remained a major area of work and the main area of practice, although he was involved in land rehabilitation areas as well.[212]

[236] Mr Thompson said that his CV reflected the major project work that he carries out,[213] and accepted that it was a fair reflection of his experience and the sort of work he did.[214]

[237] Mr Thompson accepted that it was fair to say that there was fairly limited reference to mine rehabilitation land work in his CV.[215]

[238] In respect of the particular resource projects listed in his CV, Mr Thompson accepted:

That it was not until 2008 that a resource project was listed in his CV. That primarily involved land use categorization and assessment and subsequent management of disturbed areas in respect of a pipeline.[216]

That his experience in beneficial use applications in 2011 didn't primarily relate to land rehabilitation.[217]

The primary focus of the Alpha Coal project was on land resource assessment as part of an EIS, and although land rehabilitation requirements were part of it, the project didn't have any rehabilitation components in it, because it hadn't been constructed at that stage.[218]

The three beneficial use applications in 2013 related to irrigation projects involving an assessment of the use of CSG (coal seam gas) irrigation water, and not land rehabilitation in any general sense.[219]

[239] Following cross examination by Mr Dillon about projects specifically listed in Mr Thompson's CV, the following exchange occurred:[220]

[375]

[270] The following are matters upon which the experts agree during the concurrent evidence heard between Tuesday 13 September and Friday 16 September:

(a) some of the infrastructure is non-compliant (i.e. not safe, polluting, unstable);[271]

(b) retaining infrastructure in some instances will be consistent with rehabilitation goals in Queensland;[272]

(c) the EA nominates the waste rock dumps having a final land use of low intensity grazing;[273]

(d) the waste rock dumps and TSF pose potential risk;[274]

(e) the presence of waste rock dumps or tailings storage facilities creates a potential risk;[275]

(f) the tailings storage facility contains problematic material;[276]

(g) the TSF needs some form of cover;[277]

(h) the cover design proposed by Citigold is not something that either expert would have suggested;[278]

(i) the information presented indicates that acid mine drainage is not evidenced on site;[279]

(j) Citigold has not carried out any progressive rehabilitation;[280]

(k) there is a paucity of data demonstrating rehabilitation - in particular vegetation growth on the waste rock dumps - is actually working;[281]

(l) the assessment of pasture land condition/status involves a series of traverses with quadrant type tests along it;[282]

(m) traverses with quadrant type tests is one of the tools in the grass model which is used in the mining industry;[283]

(n) the samples taken from the waste rock dumps do not show a plethora of metals in the results;[284]

(o) the propositions on page 1 of the MEND - Cover design and construction manual;[285]

(p) the proposition on the bottom paragraph of page 2 of the MEND - Cover design and construction manual;[286]

(q) the MEND - Cover design and construction manual is a recognised publication in the mining rehabilitation sector;[287]

(r) some of the pits require fencing;[288]

(s) there is not a plethora of metals turning up in the water test results;[289]

(t) the source of the fluoride in the groundwater is not clear;[290]

(u) the cost of reshaping the cut face at the waste rock dumps would form part of a contingency sum;[291]

(v) one needs sufficient experience to design studies, assess what is required, take measurements and characterise the problem;[292]

(w) the leach pad does not need to form part of the contamination assessment;[293]

(x) there only needs to be a contaminated land assessment associated with the heap leach pad and pregnant pond;[294]

(y) predictive studies for aquatic ecosystems have not been carried out;[295]

(z) fresh water ecosystems require a higher standard of water quality;[296]

(aa) the 2003 Washington rehabilitation report has limited use.[297]

[271] There was agreement regarding the propositions contained in Mr Anderson's further statement of evidence in paragraphs 27,[298] 28,[299] 29,[300] 32,[301] 36,[302] 37,[303] 38,[304] 39,[305] 40,[306] 41,[307] 42, and 43,[308] 45 and 46,[309] 47 and 48,[310] 59,[311] 69,[312] 72(a)(i),[313] 93,[314] 95,[315] and 98.[316]

[461]

[294] I find some strength in Ms McIntyre's submissions that all that it is necessary for the Court to do, pursuant to the conditions of the EA, is to satisfy itself that there are in fact valid infrastructure agreements in place between Citigold and the respective landholders.

[295] Even if I am wrong in accepting Ms McIntyre's submissions as set out in the paragraph above, I am satisfied on the evidence presented to the Court that there is a real intention on the part of both Citigold and the landholders for the landholder agreements to take effect regarding infrastructure.

[296] As regards the infrastructure agreement contained in the Charters Towers Gold Deed, I am impressed by the evidence of Mr Lynch in particular and all of the evidence in general regarding the plan post mining to use the infrastructure as a community mining tourism attraction.

[297] In this regard, it is of importance that the tourism project has received in principle support from the local council. Given the location of Central Mine as shown on the map set out early in these reasons, it is hardly surprising that the local authority would support a tourism attraction relating to mining in a town such as Charter Towers. It is not as if Charters Towers Gold Pty Ltd is proposing a tourist attraction far distant from Charters Towers. Central Mine has its name for a reason; it is located centrally in Charters Towers. As is evident from the evidence and was confirmed on the inspection, Charters Towers is an historic mining town and it is no surprise that the local council would wish to further tourism potential of Charters Towers by having a tourist proposal such as that for Central Mine proceed.

[298] I should add that I understand why the respondent thought it necessary to in effect look behind the landholder agreement relating to Central to see if the tourism proposal was indeed real or a fiction. The reason for this is clearly because the wording of Guideline 3 relating to the application of infrastructure agreements to financial assurance calculations is written in discretionary terms.

[299] To remove any doubt, if, contrary to my view regarding to the proper construction of the EA, it is necessary for the Court to exercise discretion as to whether or not to take an infrastructure agreement into account as envisaged by guideline 3, then in my view the circumstances of the Charters Towers Gold Deed, supported by the evidence in this case, warrant such a discretion being made in favour of Citigold for financial assurance purposes.

[300] I now turn to consider the Estate Deed. Just as I was satisfied with the Charters Towers Gold Deed, my views regarding this deed are identical to the conclusions I have reached above as regards compliance with the EA conditions by the Charters Towers Gold Deed, save for the issue of infrastructure on unallocated state land (USL) on Blackjack. I will deal with my views as to USL on Blackjack separately.

[301] I have expressed my view with respect to the Estate's gravel business earlier in these reasons. I am fully satisfied on the evidence before me that the gravel business of the Estate is already in operation and providing financial reward to the Estate. The evidence also indicates, and I accept, that there is potential for the Estate, be it through a related company or entity or otherwise, to ramp up its involvement in the gravel business by actively processing and sorting the gravel itself instead of having that part undertaken by others as at current.

[302] To the extent that it is considered necessary for me to exercise a discretion in taking into account Guideline 3 relating to the infrastructure of the Estate relating to the primary purpose of the gravel business and the secondary purpose of low intensity grazing, taking all of the evidence of this matter into account I am satisfied that this is an appropriate case where the Estate Deed should be taken into account as an infrastructure agreement for the purposes of determining the financial assurance payable by Citigold.

[462]

[303] I now turn to the question of the infrastructure on USL at Blackjack. I certainly acknowledge that the Estate Deed does seek to make binding terms to apply between Citigold and the Estate with respect to the Blackjack infrastructure on USL. There is however an obvious difficulty.

[304] As the evidence presented by the respondent makes clear, the purpose of financial assurance is to enable the State to hold sufficient funds to rehabilitate the land in circumstances where, to put it bluntly, Citigold goes out of business or otherwise abandons its mining operations. In those circumstances, the stark reality is that the respondent would be faced with a situation of dealing with an area of USL, should the worst happen to Citigold at the time of making this decision as the policy intent applies, and the respondent would be responsible for the rehabilitation of that USL.

[305] Like it or not, and despite the evidence of the advanced stages that have occurred for the purchase of the Blackjack USL, there is nothing in the evidence to show that that purchase has proceeded, due no doubt to the complexity of Native Title ILUA negotiations, and this Court has no idea as to the timeframe in which ILUA negotiations will come to fruition, if ever.

[306] Further, in circumstances where the Blackjack USL remains USL and Citigold has abandoned its mining leases, I have severe doubt as to the enforceability of the Estate Deed to allow the Estate to enter into the Blackjack USL and remove the infrastructure. Specifically, it is not this Court's function to consider the hypotheticals of what or may not be legally enforceable with respect to infrastructure on the Blackjack USL. There are, quite simply, far too many variables. For instance, any mining lease/s on the USL may no longer be in existence, or such mining leases might be in the hands of administrators or liquidators, who could have their own views as to the appropriateness of what was to occur under the Estate Deed and/ or legal enforceability of what was supposed to occur under the Estate Deed.

[307] I am not satisfied that the infrastructure on the Blackjack USL should be removed from the financial assurance calculations. However, as I raised with the parties on 27 October, there is a lack of direct evidence as to the dollar amount that applies to the Financial Assurance to for the Blackjack USL.

[308] The final positions of the experts as to their opinions of the appropriate amount of Financial Assurance are detailed in exhibit 68. In the main, the experts prepared exhibit 68, and indeed all of their evidence, on the basis of the Infrastructure Agreements applying or not applying.

[309] It is possible to discern, via a rather tangled route through the evidence, the identification of some of the Blackjack USL in exhibit 68. Firstly, exhibit 6 page 106 is a map of Blackjack in the Plan of Operations which identifies the boundaries of various Mining Leases (ML), including ML 1407, ML 1408 and ML 1409.

[310] Exhibit 19[328] on page 3 reveals that the underlying tenure of ML 1407, ML 1408 and ML 1409 is USL. Turning back to exhibit 68, items identified by numbers in Mr Dillon's submissions[329] as B4, B5 and B8 make specific reference to ML 1407. Prima facie, therefore it could be expected that those items at least represent Blackjack USL. Exhibit 19 however shows that that is not the case at least as regards B5. B5 in Mr Anderson's description in exhibit 68 refers to "complete removal of processing plant from ML 1407". However, exhibit 19, page 2 clearly shows that infrastructure described as "screening plant with feed and return conveyors" and "conveyor to crushed rock storage bin" are both located on ML 1431, which is owned by the Estate. The evidence in this matter leaves me in no doubt that the "processing plant" referred to by Mr Anderson includes the screening plant and conveyors on ML 1431 which is not Blackjack USL. Therefore, B5 in exhibit 68 includes items which are subject to the Estate Deed and therefore should be excluded from the Financial Assurance calculations.

[311] As was submitted by Mr Dillon on this issue on 27 October 2016:[330]

[504]

[317] In my view, the financial position of Citigold is irrelevant. That is because the whole point of financial assurance is to ensure there are sufficient funds available to the respondent to rehabilitate the land should circumstances arise where the respondent is required to call upon the financial assurance. In other words, in situations where the position of Citigold would be dire to put it mildly.

[318] It is my view that s 295 of the EP Act clearly sets out circumstances as to the calculation of an amount of financial assurance to be applied in circumstances where the respondent is required to call upon that financial assurance. It does not set out any form of additional penalty that is to apply for companies or miners that may be "more riskier" than other more "financially stable" companies. The function of the Court is simply to determine the amount of financial assurance required, and no more.

[319] A mining company in a seemingly strong financial position may have its fortunes reverse literally overnight for any number of financial or market reasons. Alternatively, a company like Citigold which for all intent and purposes appears to be in a weak financial position may receive the financial backing that Mr Lynch has given evidence about, thus causing its fortunes to quickly turn around. Again, factors such as the unpredictability of the market, and indeed the price of gold, could have a significant impact in that regard.

[320] Finally, on this topic, I note Mr Dillon's submissions regarding an allegation that Citigold is behind on payment of fees to the respondent. The last evidence that the Court received in this regard was that Citigold had been given time by the respondent to make payment of those fees. That extension of time was due to expire many many months ago, yet there was no evidence led by the respondent to indicate that Citigold had not paid its fees as it committed to do. It is trite for Mr Dillon to ask this Court to assume a non-payment of fees when the factual circumstances regarding that matter were known to the respondent at the time of putting together its evidence for the further hearing of this matter in September 2016 and, if the respondent in fact had evidence that fees remained outstanding and considered that fact relevant, the respondent should have put on at least affidavit evidence to that effect before the Court in September.

[516]

[332] In determining the appropriate amount of financial assurance, s 295 EP Act provides that I must have regard to any relevant regulatory requirements and any criteria in a Prescribed Guideline. As discussed in this judgment, my fundamental consideration must be directed towards those matters specifically described in s 295. However that does not mean I am bound to only consider those matters in s 295 to the exclusion of other relevant factors.

[333] Having said that, Citigold's submissions are compelling in the sense that the precautionary principle is not mentioned as a factor to consider in s 295. I note that there are many sections within the EP Act that provide for the precautionary principle to be considered.[338] I can only take from that, that the legislature did not require a consideration of the precautionary principle in financial assurance calculations.

[334] The respondent's submission that the precautionary principle can be considered because it is consistent with the objects of the EP Act as embodied in ss 3 and 4 is not compelling. Just because a principle is consistent with the objects of an Act does not mean that it should be considered in circumstances where the specific section lists other considerations, while the principle has been otherwise enshrined as a consideration in other sections of the Act. I also note the decision in Hinchinbrook where Jones J determined it was not appropriate to consider the precautionary principle in circumstances where there had not been an express statutory obligation to apply it.

[335] The precautionary principle applies where there is a serious or irreversible risk of environmental damage and there is a degree of scientific uncertainty about whether the threat exists. It requires a cautious approach to decision making to prevent potential environmental damage, rather than remediate it. It does not on the face of it apply to financial assurance calculations and would appear to be contrary to s 295(4) which limits the amount of financial assurance to no more than is likely to cover the cost of rehabilitation.

[336] With respect to Mr Anderson's evidence, I do not believe it should be disregarded in its entirety simply because he believed he should be following the precautionary principle, though the force of his evidence is weakened somewhat. Certainly his evidence needs to be carefully considered and evaluated (as does all the evidence) before it can be relied upon. In this regard I note the following evidence provided by Citigold's own witness Mr Towsey in cross-examination;[339]

Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection

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