Judgment
1These proceedings concern several decisions of the Mine Subsidence Board ("the Board"), whereby the Board refused claims made for compensation from the Mine Subsidence Compensation Fund ("the Fund"). The claims, which total approximately $15 M, were made by the plaintiffs, Jemena Ltd and Jemena Gas Networks (NSW) Ltd ("Jemena"). Jemena was previously known as the Australian Gas Light Company ("AGL"). It is agreed that nothing turns on the distinction between the two plaintiffs or AGL. Mr R J Ellicot QC appears with Mr J R Williams for Jemena and Mr S B Lloyd SC appears with Ms A M Mitchelmore for the Board.
2AGL made an application for compensation by letter of 28 September 2004. That and subsequent applications were ultimately refused on the basis that AGL had not obtained approval of the Board for the construction and installation of a pipeline, with the consequence, it was asserted by the Board, that s 15(5)(b) of the Mine Subsidence Compensation Act 1961 ("the MSC Act" - all references to sections in the balance of these reasons are to the MSC Act unless otherwise specified) prevented any such claim: see Exhibit A3 at p 1284.
3In April 2003, AGL applied for a certificate under s 15B(3A) and following a long period of correspondence AGL made formal submissions (see Exhibit A3 at pp 1253 - 1264) and the Board determined that AGL's application should be refused for the reasons communicated by letter of 29 July 2005: see Exhibit A3 at p 1274. The reasons expressed were:
"(a) AGL failed to obtain approval for the pipeline at the time of its construction, apparently without good reason. AGL's failure to obtain approval should be viewed in light of the fact that AGL is, and was at the time of construction, a large scale commercial operator involved in infrastructure projects. Other similar operators sought and obtained approval from the Board around that time;
(b) Issue of a certificate under s 15B(3A) will mean the entertainment and payment of a compensation claim from AGL under the Act is not precluded by operation of s 15(5)(b); and
(c) AGL applied for a certificate in 2003, however, s 15B(3A) and the reference to this subsection in s 15(5)(b) were inserted in the Act in 1989."
4The claims were made in connection with a portion of what is known as the Moomba to Sydney Pipeline ("the MS Pipeline"). They are said to encompass "preventative and mitigatory works": see T5.29 - T6.11 and see Exhibit A2 at p 1138 and Exhibit A3 at pp 1277, 1296 and 1581.
5An Inquiry was established in 1972 to consider the MS Pipeline proposal (see pp Exhibit A1 at 82 - 216) and a number of routes were considered. The Inquiry received a total of 207 individual submissions, as listed in Appendix 2 to the Report and Findings of the Commissioner (Exhibit A1 at pp 205 - 207). The route described as "the modified southern route" was ultimately chosen. Although the original plan had been developed by AGL, only portions of the MS Pipeline were under the control of AGL, one of them being that portion between Wilton and Horsley Park, west of Sydney (see Exhibit A1 at p 284), which I shall refer to as "the Wilton Pipeline".
6Following the Inquiry, the MS Pipeline running from Moomba (in South Australia) to Sydney was constructed, with the aim of supplying the need for natural gas in Sydney and other major population centres.
7The Wilton Pipeline passes through the Appin District. That district had been declared as a mine subsidence district in 1968. Another portion of the MS Pipeline under AGL control ran through an area near Wollongong and later the pipeline was extended from Sydney to Newcastle. A portion of that extended pipeline is known as the Barnsley Pipeline. Another portion near Campbelltown ran through an area which was only declared as a mine subsidence area after construction of that portion of the MS Pipeline.
8The Wilton Pipeline was the subject of licence granted on 27 November 1974 under the Pipelines Act 1967 (see Exhibit A1 at p 285) subject to conditions and a reference to approval was contained in the report of the Department of Mines for the year ended 30 June 1974: see pp 283 - 284.
9As part of the arrangements for the New South Wales section of the MS Pipeline (including the Wilton Pipeline), an easement 24 metres wide was created along the route of the pipeline. All easements in relation to grant of the licence were dealt with collectively by force of the Pipelines Act and notification of the vesting of land and easement in respect of the Wilton Pipeline was gazetted on 20 December 1974: see Exhibit C.
10The Wilton Pipeline was constructed in 1974 (see Exhibit A1 at p 284 and Exhibit A2 at p 961) and operated for many years and in 1996, at a time when the licence was about to expire, AGL applied for a renewal of the licence, which was granted also on conditions: see Exhibit A2 at p 673. The Minister for Mines was clearly involved in the licensing of the Wilton Pipeline and he had an ongoing role which it can be seen he fulfilled when he approved various matters on 15 December 1976: see Exhibit A1 at p 338.
11It appears to be accepted that knowledge of the risk of damage caused by subsidence to pipelines increased considerably between the mid 1970s and 2003. There is nothing in the material presented which indicates that any thought was given in the early 1970s and prior to construction of the Wilton Pipeline, by the Inquiry or the then Minister for Mines, to the question of appropriateness of laying a pipeline in a declared mine subsidence area. Even after construction, the view was taken that mining would not interfere with "the safe functioning of the pipeline": see letter and report of September 1977 in Exhibit A1 at pp 347 - 352. The unchallenged evidence of Mr Phillip John Colvin, an employee of Jemena, is that no significant problems as a result of subsidence or ground movement were experienced in the first 35 years of the MS Pipeline.
12To understand the nature of the dispute, it is necessary first to refer to various sections of the MSC Act (with emphasis added), which established both the Board and the Fund. The MSC Act has been amended several times and I shall set out the relevant provisions (emphasis added) agreed to be applicable in 1974, and then, where substantively changed, as in force now with the amendments noted by underlining.
Reprint No 1 on 16 August 1976
4 Interpretation
"Improvement" includes any building or work erected or constructed on land; any formed road, street, path, walk or drive-way; any pipeline, water, sewer, telephone, gas or other service main, whether above or below the surface of the land.
6 Body corporate
(4) The Board shall cause minutes of its decisions to be kept upon the official papers, and cause minutes to be kept of the proceedings at formal meetings.
10 Mine Subsidence Compensation Fund
(1) There shall be constituted a fund to be called the Mine Subsidence Compensation Fund.
...
(3) There shall be paid out of the Fund-
(a) all amounts payable under this Act in respect of damage caused by subsidence or payable under section 12A of this Act;
(a1) moneys expended by the Board in the exercise of its powers under section 13A or 13B of this Act;
(b) the expenses involved in the administration of this Act, including expenses incurred in connection with the investigation of notifications of damage and claims for payment of compensation;
(c) the repayment of sums loaned to the Board together with interest thereon;
(d) such other payments as are required or authorised by this Act to be paid out of the Fund.
12 Claims for damage arising out of subsidence
(1) Claims may be made under this Act for payment from the Fund of-
(a) compensation for damage to improvements, other than buildings or works used in connection with the winning of coal or shale, where such damage arises from subsidence;
(b) an amount to meet the proper and necessary expense incurred or to be incurred as a result of such damage in:-
(i) building retaining walls or bolting together or underpinning or otherwise supporting, raising or repairing buildings and walls,
(ii) altering the approaches to or the levels of lands or buildings,
(iii) raising, lowering, diverting or making good roads, tramways, railways, pipelines, bridges, fences, sewers, drains or other improvements;
...
(1A) Notwithstanding anything contained in subsection one or two of this section or section 12A of this Act, or any approval given under section fifteen of this Act, where-
(a) improvements used in connection with the carrying on of an extractive industry or operation were damaged by subsidence before, or are so damaged after, the commencement of the Mine Subsidence Compensation (Amendment) Act 1969; or
(b) expense referred to in paragraph (b) of subsection one of section 12A of this Act was incurred before that commencement, or is incurred or proposed, in relation to any such improvements,
the Board may refuse to entertain a claim, or make a payment, in respect of that damage or expense where it is satisfied that the cause of the subsidence that caused the damage or necessitated the expense was the carrying on of that industry or operation.
(2)
(a) The owner of any improvement which has been damaged by subsidence may notify the Secretary of the Board in writing in the prescribed manner and within the prescribed time of the details of such damage; the location of the improvement damaged; the amount he claims from the Fund and such other particulars as may be prescribed.
Such notification shall be treated as a claim for payment from the Fund under subsection one of this section.
(b) Any such notification received shall be recorded and investigated by the Board, an officer of the Board or some other officer in the Public Service acting for the Board and on receipt of a report of such investigation the matter shall be placed before a meeting of the Board for a decision as to the payment, if any, to be allowed in respect of the damage to which such notification relates.
...
(5) Payments may be made under and in accordance with the provisions of this Act notwithstanding any covenant, condition, stipulation or restriction affecting, limiting or restricting the recovery of damages or compensation for damage arising from subsidence to improvements in respect of which a claim for such payment has been made.
12A Claims arising out of actions to prevent or mitigate damage
(1) Subject to this section, claims may be made under this Act for payment from the Fund of-
(a) compensation for damage incurred as a result of the exercise by the Board of its powers under section 13A of this Act; and
(b) an amount to meet the proper and necessary expense incurred or proposed by or on behalf of the owner of improvements (other than buildings or works used in connection with the winning of coal or shale) in preventing or mitigating damage to those improvements that, in the opinion of the Board, the owner could reasonably have anticipated would otherwise have arisen, or could reasonably anticipate would otherwise arise, from a subsidence that has taken place.
(2) A claim under subsection one of this section-
(a) shall be made, in the case of a claim for compensation under paragraph (a) of that subsection, within three months after the day on which the extent of the damage to which the claim relates became apparent to the claimant or, where some other time within which such a claim may be made is prescribed by the regulations, within the time so prescribed;
(b) shall be made, in the case of a claim for payment of an amount under paragraph (b) of that subsection, within three months after the day on which the expense to which the claim relates became known to the claimant or, where some other time within which such a claim may be made is prescribed by the regulations, within the time so prescribed;
(c) shall specify the location of the land or improvements to which the claim relates, the amount claimed, the nature and extent of the damage or, as the case may be, the matters in respect of which the expense was, or is to be, incurred; and
(d) shall contain such other particulars as may be prescribed.
(3) The provisions of paragraph (b) of subsection two, and the provisions of subsections four and five, of section twelve, of this Act shall, mutatis mutandis, apply to and in respect of claims and payments under this section in the same manner as they apply to and in respect of notifications and payments under that section.
13A Works for prevention or mitigation of damage from subsidence
The Board may carry out, or cause to be carried out such works as, in its opinion, would reduce the total prospective liability of the Fund by preventing or mitigating damage that the Board anticipates would, but for those works, be incurred by reason of subsidence, whether or not the damage anticipated is damage to improvements on the land on which the works are to be carried out.
15 Mine subsidence districts
(2) No person shall erect or alter any improvements within a mine subsidence district or subdivide any land therein unless he has obtained the approval of the Board to such erection, alteration or subdivision.
(2A) An application for approval under this section to alter or erect improvements within a mine subsidence district or to subdivide land therein shall be made in the prescribed manner.
...
(5) Where any improvement has been erected or altered or subdivision has been made in contravention of this section or any conditions imposed by the Board pursuant to this section-
(a) such contravention shall not invalidate any instrument intended to affect or evidence the title to any land, but a purchaser may cancel any contract for sale and recover any deposit or instalment of purchase money paid together with reasonable costs and expenses where such contravention relates to the land purchased by him,
(b) no claim shall be entertained or payment made under this Act in respect of damage caused by subsidence to any such improvement or to any improvement upon land within any such subdivision.
...
(7) Any person who does or causes to be done any work in connection with the erection or alteration of an improvement within a mine subsidence district without the approval of the Board or not in conformity with such an approval, shall be guilty of an offence against this Act and shall be liable to a penalty not exceeding two hundred dollars and to a further penalty not exceeding twenty dollars for each day during which such work is done after notice to cease the work has been received by that person from the Board.
(8) Any person who subdivides any land within a mine subsidence district, or causes any such land to be subdivided, without the approval of the Board shall be guilty of an offence against this Act and shall be liable to a penalty not exceeding two hundred dollars.
Current version as at 6 January 2012
15 Mine subsidence districts
(2) (Repealed)
(2A) An application for approval under this section to alter or erect improvements within a mine subsidence district or to subdivide land therein shall be made in a form approved by the Board.
(5) Where any improvement has been erected or altered or subdivision has been made in contravention of this section:
(a) such contravention shall not invalidate any instrument intended to affect or evidence the title to any land, but a purchaser may cancel any contract for sale and recover any deposit or instalment of purchase money paid together with reasonable costs and expenses where such contravention relates to the land purchased,
(b) no claim shall be entertained or payment made under this Act in respect of damage caused by subsidence to any such improvement or to any improvement upon land within any such subdivision, unless a certificate is issued under section 15B (3A) in respect of the improvement or land.
15B Certificates of compliance
(3A) If the Board is satisfied that:
(a) an improvement or a subdivision of land referred to in an application under this section would have met the requirements of subsection (3) had the Board's approval been obtained, and
(b) it is appropriate having regard to the circumstances of the case to do so,
the Board may issue a certificate under this section in respect of the improvement or land.
13Also relevant are ss 6(1), 15, 17 and 40 of the Pipelines Act as at 1975:
6 Applications for permits
(1) Where a person desires to construct a pipeline, he may submit to the Minister a proposal for the construction of the pipeline and apply to the Minister for a permit to enter lands for the purpose of determining the route of the proposed pipeline, the situation of any proposed apparatus or works and the lands (if any) to be used for the purpose of gaining access to the proposed pipeline and any proposed apparatus or works.
15 Conditions of licence
(1) A licence may be granted subject to such conditions as the Governor thinks fit and specifies in the licence.
(2) Without limiting the generality of subsection (1), the conditions referred to in that subsection may include conditions that the licensee shall:
(a) within such time as may be specified in a notice in writing given to him by the Minister and before commencing the construction of the pipeline specified in the licence, lodge with the Minister security in such amount and in such form as may be specified in the notice;
(b) complete the construction of, and, subject to paragraph (b) of subsection (2) of section 11, commence to operate, the pipeline within the period specified in the licence;
(c) make provision for, or give security in addition to any other security required by this Act to the satisfaction of the Minister for, the payment of all charges and expenses referred to in paragraph (b) of subsection (2) of section 20,
(d) take such measures as the Minister may, by notice in writing given to the licensee, require within the time specified in the notice with respect to the conservation and protection of the flora, fauna, fish, fisheries and scenic attractions, and features of architectural, archaeological, historical or geological interest and the reinstatement, levelling, regrassing, reforesting and contouring of any lands which may be damaged or deleteriously affected by the licensee; and
(e) comply with any requirement the Registrar-General may, by notice in writing given to the licensee, make in respect of the registration of the plan, and the recording of any instrument, referred to in section 20.
17 Term and effect of licence
(1) A licence -
(a) not being a renewal of a licence, comes into force on the day specified for the purpose in the licence; and
(b) being a renewal of a licence, comes into force on the day after the day on which the last previous licence in respect of the same pipeline ceases to be in force,
and subject to this Act, remains in force for such period commencing on that day and not exceeding twenty-one years as may be specified in the licence.
(2) A licence, while it remains in force, authorises the licensee, subject to the conditions to which the licence was granted, to enter the lands specified in the licence and, in so far as his estate or interest in those lands permits him so to do -
(a) to commence or continue the construction of a pipeline thereon;
(b) to alter or reconstruct a pipeline thereon;
(c) to operate a pipeline thereon; and
(d) to inspect and maintain a pipeline thereon.
(3) Nothing in paragraph (c) of subsection (2) affects the operation of paragraph (b) of subsection (2) of section 11.
40 Section 171 and Parts XI and XIIA of Local Government Act not to apply to pipelines, etc.
The provisions of -
(a) section one hundred and seventy-one of the Local Government Act,1919, as amended by subsequent Acts, do not apply to or in respect of a pipeline; and
(b) Parts XI and XIIA of that Act, as so amended, do not apply to the construction or operation of a pipeline (not including apparatus or works),
the construction or operation of which is authorised by a licence.
The Licence
14The licence granted to AGL was subject to a considerable number of conditions, some of which required the Minister for Mines to approve or determine, for example, the maximum allowable operating pressure (see Exhibit A1 at p 287), modifications in connection with roads (see p 299) or discontinuance of process which might pollute the catchment area (see p 302; see also pp 294 and 299). The licence does not contain a condition requiring approval to be obtained for the Wilton Pipeline from the Board but it does contain the following:
"2. OTHER CONDITIONS
1) The licensee shall comply with all requirements for construction and operation of the pipeline which have been placed upon the licensee by the Minister for Mines, and after consultation by him, if necessary, with another Department or Statutory Body.
...
3) The licence shall during the construction and operation of the said pipeline and in effecting any repairs or executing any works in connection therewith comply with all applicable statutory provisions, rules and regulations and provide such guard fences, notices and warning lights and all other such things as may be necessary for the protection of persons, vehicles and stock and of owners and occupiers of adjoining property and the public." (See p 294).
15It must be possible to read condition 3 as requiring compliance with the MSC Act but I think the better view is that it is directed to provisions relating to the method of construction.
Board Composition
16The Board was as at 1975 constituted by the undersecretary of the Department of Mines, the Chief Inspector of Coal and four other persons, including a colliery nominee, a local government representative, a landholders' representative and an engineer from the Department of Public Works.
17The Board was subject to the direction of the Minister for Mines: see s 5(1) (as originally enacted and now s 5(1A)).
18The Board did not maintain a register of approvals. The MSC Act does not require it to do so although pursuant to s 6(4) it does and did require the Board to "cause minutes of its decisions to be kept upon the official papers, and cause minutes to be kept of the proceedings at formal meetings."
Issues
19The parties are agreed that the following issues arise for determination (taken from a document entitled "statement of issues" and handed up in court on 30 October 2012):
(1)Did Jemena construct the Wilton Pipeline with the approval of the Board for the purposes of s 15?
(2)If the answer to Question 1 is "No":
(a)Is the Board estopped from denying that it approved the Wilton Pipeline?
(b)Did the licence granted to Jemena under the Pipelines Act have the result that the construction of the Wilton Pipeline without approval of the Board did not contravene s 15?
(3)Can the Board entertain Jemena's claims for compensation under s 12A(1)(b) in light of s 15(5)(b), in the absence of a certificate granted under s 15B(3A)?
(4)Was the Board's decision to refuse a certificate under s 15B(3A) ultra vires or otherwise invalid on the basis that the decision was:
(a)the product of the Board taking into account irrelevant considerations;
(b)made for an improper purpose;
(c)unreasonable in the sense that it was so unreasonable that no reasonable person could have made it?
(5)If the answer to any of Questions 1 to 4 is "Yes", should relief be refused in the exercise of the Court's discretion by reason of Jemena's delay in commencing these proceedings?
(6)If the answer to Question 5 is "No", should the Board be ordered to grant Jemena a certificate pursuant to s 15B(3A) in respect of the Wilton Pipeline?
(7)If the answer to Question 6 is "No", what relief should be granted?
Issue 1: Was approval granted?
20Jemena's principal case is that the Court should infer that the Board did approve the construction of the Wilton Pipeline and it should do so for the following reasons (taken from a document entitled "matters relied upon for finding that pipeline was approved" and handed up in court on 31 October 2012):
(1)there was a public inquiry into the proposed MS Pipeline and the Board made no submission to that inquiry: Exhibit A1 at p 82;
(2)on 27 November 1974, the Minister for Mines granted a pipeline licence under the Pipelines Act to Jemena to construct and operate the MS Pipeline: Exhibit A1 at p 285. Pursuant to s 14(1)(a) of the Pipelines Act, the power to grant that licence was conditional upon the Minister for Mines having certified, inter alia, that particulars of the design and construction of the proposed pipeline had been provided;
(3)at all material times:
(a)the Board was subject to the control and direction of the Minister for Mines in the exercise of its powers and the discharge of its functions;
(b)the Minister for Mines was the Minister administering the Pipelines Act and the MSC Act: Exhibit A3 at 1253;
(c)the Chairman of the Board was the undersecretary of the Department of Mines and the Chief Inspector of Mines was a member of the Board (s 5(2) of the MSC Act); and
(d)also represented on the Board were nominees of the Minister for Public Works and the Minister for Local Government, both of whom were required to be served with a copy of AGL's application for a pipeline licence (s 13(4) of the Pipelines Act);
(4)prior to the issue of the pipeline licence, discussions took place between representatives of Jemena and the Department of Mines regarding subsidence: Exhibit A1 at p 361. In those discussions the Department had indicated that no subsidence of a nature critical to the pipeline would be encountered and that the Department would be responsible for ensuring Jemena's interests as licensee were protected with regard to mining operations: Exhibit A1 at p 361;
(5)on 15 December 1976, the Minister for Mines granted Jemena consent to operate the pipeline pursuant to s 25 of the Pipelines Act (Exhibit A1 at p 338), which consent could only be given if the Minister was of the opinion that the pipeline may be operated with safety;
(6)at all material times the Board knew of the proposed and actual construction of the pipeline and took no step to restrain construction of the pipeline in the knowledge that it was an offence under s 15 of the MSC Act to erect an improvement in a mine subsidence district without the Board's approval, such that the presumption of regularity applies from which it may be concluded that the Board in fact approved construction of the pipeline; and
(7)in July 1975, Williams Brothers - CMPS Engineers ("Williams") (on behalf of Jemena) applied to the Board for approval to construct and operate the Barnsley Pipeline, from which it may be inferred that Williams and Jemena were conscious in 1975 of the need for the Board's approval of pipelines constructed in a mine subsidence district.
21There is no direct evidence that an application was lodged by AGL for approval of the construction of the Wilton Pipeline in the period 1972 to 1974 or at any time for that matter. AGL has not produced a copy of any such application.
22The Board has not located any such application (following a thorough search) and its minutes for the period do not refer to any such application or correspondence in relation to the Wilton Pipeline (see affidavit of Mr Peter Evans, subsidence risk engineer at the Board, dated 1 May 2012 and his evidence at T82, T85 and T88 - T89). A search undertaken by Mr Evans did locate correspondence having as its subject matter the Barnsley Pipeline, which passes through another mine subsidence area (known as the Killingsworth District). It is a section of pipeline which was added after the Wilton Pipeline and for which approval was sought from the Board by or on behalf of AGL and was granted.
23Recognising that there was no direct evidence of any application for approval having been made, Jemena asserted that it ought be inferred that Williams, retained by AGL for the Wilton and Barnsley Pipelines (and retained by the Commonwealth for other sections of pipeline), made an application for approval. This contention was based on the following:
(1)the Wilton Pipeline was a very significant project;
(2)it should be inferred that Williams knew they had to obtain approval for the Wilton Pipeline because to not obtain approval would have put themselves and AGL in breach of s 15(5);
(3)there is evidence that they knew that approval was needed - the Barnsley Pipeline application and a document prepared by Williams shows that they did appreciate the need for an application;
(4)there is no evidence that the Board did not regard an application for approval of the MS Pipeline passing through mine subsidence areas as necessary; and
(5)there applies a "presumption of regularity". Mr Ellicot relied on Brickworks Ltd v The Council of the Shire of Warringah (1963) 108 CLR 568 ("Brickworks") and Darley Australia Pty Ltd v Walfertan Processors Pty Ltd [2012] NSWCA 48 ("Darley").
24I do not regard 20 as having any relevance to the question of approval by the Board. Items 20 and 20, whilst potentially relevant to other arguments, do not establish approval unless it is said that the Minister must have approved of the pipeline construction and that his approval is equivalent to Board approval. The Minister is not a member of the Board and his approval, although clearly established in the issue of the pipeline licence, cannot be equivalent to Board approval for the purpose of the MSC Act. Furthermore, whilst it is certain that the undersecretary of the Department of Mines knew of the plan to construct the pipeline, I doubt that it can be said that the Board knew of the proposal. There is no evidence to suggest the assertion that the person nominated by the Minister for Local Government or the person nominated by the Minister for Public Works were informed of AGL's application for the pipeline licence. Even assuming knowledge by all members of the Board and leaving aside the question of estoppel, I do not accept that inaction, of itself, can establish approval.
25In relation to 20, the document at p 361 referred to is part of a document entitled "Study of Coal Mining Leases affecting the Pipeline Authority - Moomba to Sydney Natural Gas Pipeline" and is dated 8 December 1978 (Exhibit A1 at pp 355 - 372). Objection was taken to its admission into evidence by the defendant. The page in question refers to the licence and raises assertions about assurances given by the Department of Mines. It does not establish, and does not support Jemena's contention, that approval was given by the Board in 1974 to the construction of the Wilton Pipeline. I should note that originally reliance was placed on documents at Exhibit A1 at pp 330 - 335 and 337 but it appears to have been accepted, correctly in my view, that these documents relate to the Barnsley and Campbelltown sections of the pipeline and do not support Jemena's case in respect of the Wilton Pipeline.
26In relation to 20, I agree with the proposition that the Minister for Mines' consent could only have been issued if the Minister was of the opinion that the pipeline could be operated with safety but that fact does not establish that this was the view of the Board or that the Board had approved an application from AGL. It does not establish that the Minister did pay any regard to the fact that the pipeline passed through a declared subsidence area.
27I turn now to the "presumption of regularity" referred to in 20 and 23. The presumption, expressed in latin as "omnia praesumuntur rite esse acta" and translated as "all acts are presumed to have been done rightly and regularly", is described thus by J Stone and W A N Wells, Evidence: Its History and Policies (1991), Butterworths at p 186:
"if someone acts as a public officer or in a public capacity, it is virtually certain that he was duly appointed. It is also likely that any given act he has performed was in pursuance of lawful authority to perform it."
and they expanded the description in relation to public and official acts at p 205:
"the presumption of regularity covers all acts done by officers in the course of their public duty, so that it is for a party alleging some irregularity to prove it."
28In Darley, McColl JA (with whom Macfarlan and Whealy JJA concurred) held that it could be inferred that there had been development consent for the operation of the tannery, given that four development consents had been issued by the then issuing authority, Scone Shire Council, which consents could not have been issued had there not been development consent for the tannery in the first place. Her Honour said at [115]:
"The presumption of regularity has also been described as one which "arises from the ordinary course of business", being "a rule of very general application, that where an act is done which can be done legally only after the performance of some prior act, proof of the later carries with it a presumption of the due performance of the prior act": McLean Bros & Rigg Ltd v Grice [1906] HCA 1; (1906) 4 CLR 835 (at 850) per Griffith CJ (Barton and O'Connor JJ agreeing), citing Knox County v Ninth National Bank 147 US 91 (1893). In Minister for Natural Resources v NSW Aboriginal Land Council (at 164) McHugh JA explained its operation in the public law context as follows:
"Where a public official or authority purports to exercise a power or to do an act in the course of his duties, a presumption arises that all conditions necessary to the exercise of that power or the doing of that act have been fulfilled.""
and having earlier noted that the presumption was rebuttable, said at [116] - [118]:
"[116] In deciding whether the presumption of regularity is rebutted, the inference from the ordinary course of human affairs carries some weight which may vary according to the proved circumstances: Hill v Woollahra Municipal Council (at [52]). In this respect, in my view, Windeyer J's remarks in Brickworks Ltd v Warringah Corporation remain cogent:
"The giving or refusing of a consent, as required by the Ordinance, was an important discretion entrusted to the Council as the 'responsible authority'. It is not to be assumed that the Council and its officers neglected their duties or discharged them in a perfunctory manner."
[117] There is authority to the effect that the presumption of regularity applies "only to matters of form, rather than of substance", a proposition which may not be consistent with earlier decisions of this Court: see the discussion in GPT RE Limited v Belmorgan Property Development Pty Limited [2008] NSWCA 256; (2007) 72 NSWLR 647 (at [82]) per Basten JA (Bell JA and Young CJ in Eq agreeing). Such authority would also be inconsistent with Brickworks Ltd v Warringah Corporation in which the presumption of regularity was applied to conclude that a council had given consent for land to be used to extract minerals.
[118] The presumption of regularity was considered capable of applying to the issue [of] whether development consent had been given, or its validity, in Baiada and Ashfield Municipal Council v Armstrong [2002] NSWCA 269; (2002) 122 LGERA 105. Indeed, Powell JA, who dissented in Baida, held (at [97] - [117]) that the presumption could be invoked to demonstrate development consent had been given. I proceed accordingly on the basis that Walfertan was entitled to call the presumption of regularity in aid."
29In Brickworks, the owner of land had applied for approval to mine coal and shale. A letter signed by the council engineer and the president of the council advised that approval had been granted on conditions. Subsequently the council determined erroneously that the conditions imposed had not been complied with, and commenced proceedings against the owner. In the course of those proceedings, the council contended that in fact no approval had been given, which assertion was accepted by counsel for the owner, there being no minute recording approval of the application.
30The High Court, by a majority, was of the view that the council had approved the application - Windeyer J on the basis that, if it had not, the council was, by issuing the letter and by its subsequent conduct, estopped from denying that it had given approval. Owen J held at 588 that, but for one matter, the proper conclusion was that:
"consent had been given by the council before the document of 22 April was sent to the appellant and that, for some reason or another, that fact had not been recorded in the minutes. The issue of the document of 22 April over the signature of the President gave rise to a presumption that the Council's consent had been given and that presumption was greatly strengthened by the Council's subsequent actions. The only material in rebuttal consisted of the meagre and unsatisfactory oral evidence and the fact that no record of a minute granting consent appeared in the Council's minute book. I would certainly not be prepared to hold that the Council had discharged the onus of showing that it had not, prior to 22 April, consented to the appellant's application to extract clay and shale from Portion 4 and that the document of that date was not one which the President had authority to issue."
The one matter was that concessions to the contrary had been made by counsel for the owner at the hearing, so his Honour proceeded on the basis that there was no prior consideration of the approval. His Honour held at 589 that, after the letter was sent:
"the council approved or adopted the President's action in issuing the document of that date and that approval or adoption itself amounted to a consent."
31In both cases, the council had taken positive steps which it could not lawfully had undertaken if the contested fact had not occurred. The circumstances here are quite different. This is not a case in which a document was issued by the Board or some act done by the Board inconsistent with approval not having been given by the Board. Rather, it is a case in which the plaintiff contends that it should be inferred that approval was sought and granted because it ought not be assumed that the Board members were acting negligently or in breach of duty and because the Board refrained from bringing proceedings or seeking to injunct the construction of the Wilton Pipeline.
32There are several problems with the presumption of regularity argument here:
(1)Unlike the situation in Brickworks, the presumption needs to also found the assumption that an application was made and one made in accordance with the requirements of the MSC Act. Leaving aside the question of estoppel, to which I shall return, if there was no application, it is extremely unlikely that there was any approval.
(2)There is evidence to rebut the presumption:
(a)The minutes of the Board do not record any such application having been made, considered or approved. I infer that the size of the pipeline is such as to have required any application to come before the Board itself for determination and not under any delegated authority. In this connection, I note approval for the other much smaller pipelines have been minuted: see for example Exhibit 4 at pp 8, 18, 34, 121, 142 and Exhibit 2 at p 170.
(b)There is no evidence from AGL of an application having been made.
(c)AGL's own letter of 28 September 2005 (see Exhibit A3 at pp 1276 - 1282) does not assert that any application was made or approval sought or given.
(3)It requires the inference to be drawn that not only the undersecretary for the Department of Mines knew that the pipeline was being laid but that all members of the Board were aware of that fact.
33In my view, the presumption of regularity does not assist Jemena and even if it is available it has been rebutted by evidence from the defendant as to its record-keeping in the form of minutes and other documents by transfer to microfiche (see T88 - T89, Mr Evans' evidence) and the absence of any evidence of an application having been made.
34I should also note that to the extent that the plaintiff contends that the Board must have lost or destroyed the application and approval, that submission is not supported by any evidence. It seems really to rest on the premise contended for at 20 and 23 and (3) that, since no application or approval can be found and since to construct the Wilton Pipeline without approval was a breach of the MSC Act, there must have been an application and there must have been an approval. The reasoning is not sound as it stands. I do not think that the inference that Williams knew that the Appin area had been declared as a mine subsidence area, and that if it was, that approval was required, can be drawn. Even if both inferences could be drawn, it does not follow that it can be inferred that they must have applied for an approval. Further, it is an alternative argument of Jemena that no approval was in fact required. In relation to the latter point, as Mr Lloyd pointed out, the fact that Williams, on behalf of AGL, did subsequently seek approval for the Barnsley Pipeline does suggest that it did not, by that stage, understand that the licence under the Pipelines Act obviated the need for approval of the Board and the Board in granting approval for that pipeline did not regard the application as otiose.
35AGL, in its letter in reply to the Board's observation that no approval had ever been sought by AGL, did not in reply assert that it had sought approval - rather it asserted that it had been granted a licence. The existence of the Barnsley file contents on microfiche (and, as it happens, also in hard copy), if anything, reinforces the Board's contention that it did not receive any application for approval rather than supporting the inference that the Board must have destroyed or lost the files for the Wilton Pipeline. It is a contention of Jemena in this case that its construction of the pipeline was lawful by virtue of the provisions of the Pipelines Act and the grant of a licence. In relation to the first point, as Mr Lloyd pointed out, when Williams first wrote in connection with the Barnsley Pipeline, they seemed unaware that formal approval was required, but a week later they did make a formal application, rather suggesting that they were advised around that time that approval was required: see T64 - T65 in submissions.
36Mr Lloyd submitted that the documents relied on, written after construction of the Wilton Pipeline, establish that at the time they were written Williams appreciated that approval was required but the documents cannot be taken as evidence of what Williams knew in 1973 or 1974 before construction on the Wilton Pipeline commenced. I accept Mr Lloyd's submission.
37So far as 23 is concerned, to the extent it has any relevance, it is to make clear that had the Board received such an application it would very likely have been treated as significant by the Board.
38I do not accept that any conduct of the Board has been established to evidence approval or permit the drawing of an inference that approval was either sought or given.
Issue 2(a): Estoppel
39The estoppel asserted is founded on the following (taken from a document entitled "matters relied upon for estoppel claim" and handed up in court on 30 October 2012)":
(1)The matters relied upon by Jemena to support the inference that the pipeline was approved by the Board.
(2)The correspondence between Jemena and the Board in the period 12 August 1976 to 9 September 1976 (Exhibit A1 at pp 330 - 335).
(3)The Board by its conduct and by its correspondence in 1976, in particular:
(a)its letter of 20 August 1976 in Exhibit A1 at p 332, in which it said that Jemena's natural gas main trunk line to Sydney is automatically covered by the compensatory provisions of the MSC Act so that in the event of it being damaged by mine subsidence Jemena would be entitled to claim appropriate compensation from the Board;
(b)its failure to advise Jemena that the pipeline was not covered by the compensatory provisions of the MSC Act to the extent it traversed the Appin Mine Subsidence District when Jemena's correspondence sought details of subsidence in already proclaimed mine subsidence districts - see Jemena's letter of 9 September 1976 in Exhibit A1 at p 334; and
(c)that to its knowledge it had not approved the Pipeline;
represented to Jemena, and created an assumption on Jemena's part, that the Board had approved the erection of the Wilton Pipeline and that the Wilton Pipeline was automatically covered by the compensatory provisions of the MSC Act (for example, by obtaining the passage of a statute to clarify the position).
(4)The plaintiffs relied on this assumption in expending significant funds in constructing the pipeline and operating the pipeline and in refraining from taking steps to resolve any doubt about the Board's approval of the pipeline.
40The elements of estoppel are set out in Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428 - 9 and discussed in N C Seddon and M P Ellinghaus, Cheshire and Fifoot's Law of Contract (2008), 9th ed, LexisNexis Butterworths at pp 62 - 63 and are relevantly as follows:
(1)the plaintiff assumed or expected a particular legal relationship would exist between it and the defendant - in this case, the relevant assumption was that the Board had granted its approval for the pipeline;
(2)the defendant, by promise, representation or conduct, induced the plaintiff to adopt that assumption;
(3)the plaintiff acted or abstained from acting in reliance on the assumption;
(4)the defendant knew or intended the plaintiff to do so;
(5)the plaintiff's action or inaction occasions detriment if the assumption is not fulfilled; and
(6)the defendant has failed to act to avoid that detriment by fulfilling the assumption or otherwise.
Where a plaintiff establishes those elements, the defendant is estopped from going back on the assumption which it induced in the plaintiff by the Court ordering a remedy which removes the detriment suffered by the plaintiff.
41There is no evidence that AGL or its agents assumed that approval had been granted or that it did not need to be sought and no evidence that either assumption or expectation was induced by conduct of the Board.
42In my view, the correspondence at Exhibit A1, pp 330 - 335 is clearly referable to the context of the Barnsley Pipeline and the Campbelltown Pipeline and it is not capable of creating an estoppel. Further, it was written after the Wilton Pipeline had been constructed. The letter on which Jemena appears to place the most reliance for its estoppel argument (Exhibit A1 at p 332) is headed "Re South Campbelltown Mine Subsidence District" and from p 333 it seems that AGL's concern was with potential damage to that pipeline. It was accepted that until the introduction of s 15B(3A) in 1989 it was too late to seek approval after construction, but if it is asserted that it was not, then by 10 July 1975 Williams was aware of the need for approval from the Board by reason of its application in respect of the Barnsley Pipeline: see Exhibit 1.
43A further issue which arises is whether or not an estoppel can operate in the face of a statute. Mr Ellicott relied on what had been said by Windeyer J in Brickworks but Mr Lloyd referred to St Alder v Waverley Local Council (2010) [2010] NSWCA 22; 172 LGERA 147 per Handley AJA, with whom Allsop P and Beazley JA concurred and Minister for Immigration, Local Government & Ethnic Affairs v Kurtovic (1990) 21 FCR 193 per Gummow J. The circumstances of Brickworks are very different to those here but given my views on the other aspects of the estoppel argument, I do not think it is necessary to endeavour to resolve this question.
Issue 2(b): Did the licence produce the result that construction without Board approval did not contravene s 15 of the MSC Act?
44The Pipelines Act provides that a licence, whilst in force and subject to the conditions, authorises the licensee to (inter alia) commence or continue the construction of a pipeline on lands so far as his or her interest in those lands permits.
45Section 15(7) of the MSC Act provides that a person contravenes s 15 of the MSC Act if he or she does, or causes to be done, any work in connection with an improvement within a mine subsidence district without approval of the Board.
46The general principles in relation to inconsistencies in legislative provisions of the same legislature have been stated by the High Court in Goodwin v Phillips (1908) 7 CLR 1, Mitchell v Scales (1907) 5 CLR 405 at 416 - 417 per Isaacs J and the New South Wales Court of Appeal in Sarris v Penfolds Wines Pty Ltd [1962] NSWR 801 and R v Chalak [1983] 1 NSWLR 282; (1983) 47 ALR 600 (and see also D C Pearce and R S Geddes, Statutory interpretation in Australia, 7th ed (2011) LexisNexis Butterworths), which I summarise as:
(1)The first question is: is the later Act clearly and indisputably contradictory to the former Act in the very matter and the repugnancy is such that the two Acts cannot be reconciled?
(2)If the two Acts are inconsistent or repugnant, the later will be read as having impliedly repealed the earlier.
(3)An exception to (2) is the situation where the earlier Act is directed to an individual or special case and has made provision for it unambiguously, in which case there arises a presumption that the earlier and special legislation is not to be taken as repealed, altered or derogated from merely by force of general words without any indication of a particular intention to do so.
(4)In cases where the provisions are not wholly inconsistent but may become inconsistent in their application to particular cases, "to that extent the provisions of the former Act are excepted or their operation is excluded with respect to cases falling within the provisions of the later Act" (see Goodwin v Phillips per Griffiths CJ at 7).
47Section 11(1) of the Pipelines Act makes construction of a pipeline "except under and in pursuance of a licence" an offence. Section 17(2) says that a licence authorises the licensee "subject to the conditions to which the licence was granted" to, inter alia, "commence or continue the construction of a pipeline thereon". The MSC Act makes construction of an improvement without Board approval an offence.
48On the face of it, the Pipelines Act permits (in the absence of conditions imposed by the licence) the construction of a pipeline regardless of whether the pipeline passes through a declared mine subsidence district and the MSC Act prohibits construction of the pipeline in a declared mine subsidence district without Board approval, and hence the two appear to be inconsistent.
49The Board submits that the Pipelines Act cannot be taken to have precluded the need for approval of the Board because:
(1)it does not say so expressly;
(2)it does expressly state that s 171 of the Local Government Act 1919 and Pt XI and XXIIA do not apply to the construction of a pipeline (see s 40), with the inference that it was not intending to include the operation of s 15 of the earlier MSC Act; and
(3)there is nothing in the Pipelines Act requiring the Minister to have regard to mining subsidence potential in deciding whether or not to grant a licence.
50The Court's attention was drawn to Associated Minerals Consolidated Ltd v Wyong Shire Council [1974] 2 NSWLR 681 at 687F - G. In that case the appellant held mining leases over Crown land pursuant to s 107A of the Mining Act 1906 and sought to argue that a planning scheme made by the defendant council could not operate to prevent it mining on the land. It argued first that the Local Government Act, Pt XIIA did not apply to mining land at all, which was governed exclusively and comprehensively by its own code and, second, that the planning scheme ordinance should not be construed as taking away rights validly conferred on holders of mining leases to exploit their holdings in accordance with the terms of the leases. The Privy Council rejected both provisions, holding that both Acts could apply, having different purposes - see Associated Minerals Consolidated Ltd v Wyong Shire Council at 686F - 687E:
"Both Acts apply, or are capable of being applied, with complete generality to land in the State of New South Wales. Can they, in relation to a given piece of land, coexist? In their Lordships' opinion they clearly can, and do. The Acts have different purposes, each of which is capable of being fulfilled. The purpose of the mining legislation is to enable persons to acquire a legal right or title to enter upon, to prospect, and ultimately to mine, land in the State. It also-and this is important-regulates the conditions under which, as between private citizens, rights may be acquired and used. In relation to the subject lands, it provides the title of mining enterprises to enter upon and to work land of the Crown. The planning legislation, i.e. Pt. XIIA of the Local Government Act, is, in its turn, capable of being applied to all land in the State, including Crown land, without exception.
...
There is no indication anywhere in this part of an intention to exclude land used, or usable, for mining, or to reserve the application of mining legislation. Section 10 of the Act sets out a list of enactments which are stated not to be affected by the Act: the Mining Act is not mentioned, and, while it is true that this section does not form part of Pt. XIIA, its application is general and it has several times been amended since Pt. XIIA was introduced in 1945, without adding the Mining Act to the list of preserved statutes. It mentions some statutes, e.g. the Liquor Act, 1912, which, in spite of preservation, must clearly operate subject to planning restrictions.
...The planning scheme does nothing to invalidate, or nullify, the leases: what it does is to require the lessees to operate in conformity with planning restrictions: these, except as regards the land zoned Residential "A", permit mining subject to consent of the responsible authority. If the land were private land, there could be no doubt, in their Lordships' opinion, that, whatever the terms of the lease, mining operations would have to take place subject to planning regulation, and the position of land held on lease from the Crown must be the same."
51I have come to the view that the Pipelines Act should not be seen as excusing non-compliance with the MSC Act and for the following reasons:
(1)I think it is significant that the Pipelines Act specifically detailed legislative provisions which were not to have effect - that is, the Local Government Act, and did not mention the MSC Act. The Pipelines Act can be seen as making it clear that local council approval was not required. Generally speaking, a licence permits the licensee to do what of itself might otherwise not be permitted but it does not exhaustively deal with the activity to which it relates. Where a statutory licence expressly by the terms of the statute exempts the licensee from being required to comply with legislation, as here in respect of the Local Government Act, it would be incongruous if other Acts not mentioned did not need to be complied with.
(2)The potentially explosive force of gas or petroleum products carried in a pipeline and the environmental risks of rupture due to subsidence is of such an order as to make it highly unlikely that Parliament intended the Pipelines Act to exempt pipelines from supervision by a specialised Board set up to deal with improvements in a declared subsidence area.
(3)The MSC Act deals with a very specific subject matter - construction of improvements in specifically declared mine subsidence areas - and introduces a comprehensive scheme for management of construction and compensation in such areas. Whilst in one sense the Pipelines Act also deals with a specific subject matter - pipelines - it deals with pipelines spanning all areas. It is entirely possible that the pipeline to be constructed will not pass through any declared mine subsidence area. It might be possible to view the two Acts as coexisting in a manner analogous to that described in Associated Minerals Consolidated Ltd v Wyong Shire Council because the MSC Act does not prohibit the construction of a pipeline through a declared subsidence area rather it requires approval to be sought and the Board may impose conditions on the grant of approval, but if there is an inconsistency then in my view the exception referred to in 46 above applies.
Issue 3: Construction of s 15(5)(b)
52Jemena submits that a claim for preventative works is not a claim in respect of damage caused by subsidence, with the consequence that s 15(5)(b) does not preclude Jemena's claims even if, contrary to its position, it did not have approval and needed approval.
53Section 12 of the MSC Act deals essentially with claims for compensation for damage to improvements and s 12A deals with two other species of claims:
(1)claims for compensation for damage incurred as a result of the exercise by the Board of its powers under s 13A (that is, damage as a result of work carried out to reduce the total prospective liability of the Fund by preventing or mitigating damage that would be incurred by reason of subsidence if the works were not carried out): see s 12A(1)(a); and
(2)claims for expenses for works "in preventing or mitigating damage" to improvements that "in the opinion of the Board, the owner could reasonably have anticipated would otherwise have arisen, or could reasonably anticipate would otherwise arise, from a subsidence that has taken place taken place": see s 12A(1)(b).
54It will be noted that both types of claims with which s 12A deals relate to preventative and mitigatory works. No claims in relation to s 12A(1)(a) are involved here but Jemena's claims are described as being for both mitigatory works and also preventative works (see Exhibit A3 at p 1282 for example) falling within s 12A(1)(b).
55The critical question is whether the words "in respect of damage caused by subsidence to any such improvement" in s 15(5)(b) is limited to a claim for damage under s 12 or can include a claim under s 12A. Section 15(5)(b) in its current form includes reference to the need for a certificate under s 15B(3A) if there has been an improvement erected in contravention of the section. When originally enacted there was no provision for retrospective approval; that change was introduced in 1989 and s 12A was introduced in 1969.
56The approach which Jemena urges is that a claim for the expense of preventative and mitigatory works is not a claim in respect of damage caused by subsidence. It is, it says, a claim to avoid damage which is anticipated would be caused by subsidence. In support of the contention, the following arguments have been deployed:
(1)section 15(5)(b)'s express words are limited to claims in respect of damage caused by subsidence;
(2)the legislature introduced s 12A and did not alter the terms of s 15(5)(b);
(3)the legislature introduced a change to s 15(5)(b) to permit retrospective approval but did not extend the prohibition to s 12A claims;
(4)Jemena draws attention to the wording of s 10(3)(a), which draws a distinction between amounts payable "in respect of damage caused by subsidence" and amounts "payable under s 12A". This is consistent with the construction urged by Jemena, namely that amounts payable in respect of damage are quite different from amounts payable under s 12A.
(5)the High Court in Jemena Gas Networks (NSW) Ltd v Mine Subsidence Board [2011] HCA 19 ("Jemena Gas"), in construing the legislation, described as significant the relationship between ss 14 and 12A of the MSC Act, noting that:
"[35] The legislature struck a compromise in s 14. On the one hand, s 14(2) left the proprietors of colliery holdings liable for damage caused by subsidence where the subsidence resulted from their negligence or that of their employees. On the other hand, s 14(1) gave the proprietors an immunity from action where there was no negligence. In return for that immunity, the proprietors were obliged to contribute to the Fund under s 11, and those who otherwise could have sued for damages or injunctive relief were given a right to claim against the Fund. It was for reasons of this kind that in Alinta LGA Ltd v Mine Subsidence Board (43) this Court described s 14 as the "statutory quid pro quo for the contributions of colliery proprietors to the Fund". There is a close relationship between what the colliery proprietors gained under s 14 and what they lost under s 11. It is for that reason that the Alinta case referred to the Act as disclosing "an accommodation, on particular terms, between the interests of colliery proprietors and the owners of damaged improvements" (44).
[36] Section 14 thus takes away the legal rights of those who could otherwise prevent damage to themselves by obtaining negative or mandatory injunctions, or who could get compensation for any damage caused. Those were rights which were of considerable utility to those who had them, but which posed considerable risks for those who owed the corresponding duties.
[37] Legislation is commonly construed not to expropriate or extinguish rights unless just terms are provided in their place. That is because there is a common law rule of statutory interpretation requiring that "clear and unambiguous words be used before there will be imputed to the legislature an intent to expropriate or extinguish valuable rights relating to property without fair compensation" (45). The Act does provide substitutes for the rights taken away. Before 1969, the substitutes were found in ss 12 and 13 (46). In 1969, further substitutes were added - ss 12A, 13A and 13B. Section 51(xxxi) of the Constitution, providing for just terms when property is acquired pursuant to Commonwealth legislation, is to be construed with liberality (47). Similarly, non-constitutional legislation which, in accommodating conflicting public and private interests, provides substitutes for what private interests must lose, is to be construed amply. The need for it to be construed amply is reinforced by reflection on the damage to the coal industry which would be caused if s 14 did not exist and colliery proprietors had to fight continual outbreaks of litigation in conducting their businesses. That amplitude of approach applies as much to provisions enacted in 1969, eight years after s 14 was originally enacted, like s 12A, as it does to those enacted contemporaneously with s 14. A purposive construction of ss 10, 12 and 12A is that they give to the owners of improvements advantages broadly commensurate with what they lost by reason of s 14. Broadly speaking, it may be said that the scheme of the Act is to convert all relevant rights to sue for damages or seek injunctions into money claims against the Fund. For colliery proprietors, s 14 is a very beneficial provision. For owners of improvements, s 12A is thus properly to be seen as a beneficial provision, not to be restricted by a close and technical reading. To do so would arbitrarily restrict rights of compensation offered in substitution for the rights destroyed by s 14. And it is questionable whether a construction of s 12A which gives compensation to owners of improvements for some of their losses but not all is sound. On the Board's preferred construction of the Act, the owners of improvements would have had all their common law and equitable rights in relation to non-negligent nuisance removed, but with no corresponding right against the Fund in relation to some of those rights." (footnotes omitted)
Jemena contends that this important purposive approach identified by the High Court ought be applied here to preclude any wider reading of s 15(5)(b) than its literal terms would indicate. Jemena also asserts that the words in question should be read as they were originally enacted and not expanded to include provisions that had not yet been acted. Jemena also refers to the High Court's endorsement of preventative measures: see Jemena Gas at [40] - [43] and [49].
57The Board's submissions are:
(1)It could not have been the purpose of the legislature to permit claims for preventative or mitigatory works where claims for actual damage are not permitted and such a reading, being illogical, requires the legislation to be interpreted in a different way. Mr Lloyd submitted that the words "in respect of damage" should be read as meaning "in respect of damage caused by or anticipated to be caused by subsidence".
(2)In Jemena Gas at [23] the High Court said that it was not possible to find consistency in the numerous references to "subsidence" in the MSC Act. The Court, I would add, also noted at [30] that there were linguistic difficulties in all possible constructions of s 12A.
(3)The words "in respect of" used in s 15(5)(b) are wide and should not be read down and a claim in respect of damage that is reasonably anticipated to arise from a subsidence that has taken place is a claim in respect of damage caused by subsidence.
(4)The MSC Act contains a number of sanctions and enforcement measures in pursuit of encouraging persons to obtain Board approval (see ss 15(7), 15(5)(a) and s 15D in addition to s 15(5)(b)) and it would be surprising if, without approval, a landowner (or improvement-owner) could obtain a benefit.
(5)An Act is to be construed as a whole, including amendments.
(6)There was no need to amend s 15(5)(b) when s 12A was introduced because it is sufficiently wide to exclude claims of the kind advanced by Jemena.
58In Jemena Gas, the High Court held that the words "that the owner could reasonably have anticipated would otherwise have arisen or could reasonably anticipate would otherwise arise from a subsidence that has taken place" did not require that subsidence or damage had to have occurred before a claim could be made under s 12A of the Act. The Court also made reference to the desirability of preventative action being taken and expressed preference for a construction that encouraged prevention rather than one which discouraged preventative action: see Jemena Gas at [40] and [42].
59As a matter of first impression, "a claim in respect of damage caused by subsidence" would require subsidence to have occurred and damage to have occurred. Work carried out to avoid damage does not have that character.
60There are considerable restraints on the extent to which a court can overcome perceived failure of the legislature to deal with a particular situation when the words of the statute do not allow it: see R v Young [1999] NSWCCA 166; (1999) 46 NSWLR 681 per Spigelman CJ at [5] - [6], [12] and [15]:
"[5] The task of the courts is to determine what parliament meant by the words it used, not to determine what Parliament intended to say: see Stock v Frank Jones (Tipton) Ltd [1978] 1 WLR 231 at 236G; [1978] 1 All ER 948 at 952; Black-Clawson International Ltd v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591 at 613G and 645C-D; Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 459.
[6] In order to construe the words actually used by parliament, it is sometimes necessary to give them an effect as if they contained additional words...
[12] ...the words which actually appear in the statute must be reasonably open to such a construction...
[15] ...If a court can construe the words actually used by the parliament to carry into effect the parliamentary intention, it will do so notwithstanding that the specific construction is not the literal construction and even if it is a strained construction."
and see Griffiths v The Trustees of the Parliamentary Contributory Superannuation Fund [2011] NSWSC 983; Taylor v Centennial Newstan Pty Ltd (2009) 76 NSWLR 379; [2009] NSWCA 276 per Beazley, Giles and Basten JJA and see Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 and Whiting v JDS Engineering and Labour Services Pty Ltd [2010] NSWCA 28. The approach outlined in R v Young does not permit a construction that the words cannot bear, even when the three conditions identified by Lord Diplock in Jones v Wrotham Park Settled Estates [1980] AC 74 at 105 - 107 (and see R v Young at [9] - [12]) are fulfilled (that is, that one can determine what mischief it was the purpose of the Act to rectify, that it is apparent that the draftsman and Parliament have inadvertently overlooked an eventuality with which it was required to deal if the mischief was to be overcome and that the Court is convinced that the additional words would have been added had attention been drawn to the omission).
61The additional words which, in effect, the Board seek to have read into s 15(5)(b) are the words "or anticipated to be caused" between "caused" and "by" in the phrase "damage caused by subsidence".
62The High Court in Jemena Gas has held that s 12A was designed to compensate landowners whose improvements were imperilled by subsidence and whose rights were curtailed by s 14, but this does not lead to the conclusion that landowners (or improvement-owners) who have not complied with the legislative requirements are to be compensated. Jemena Gas was not concerned with works carried out in respect of a pipeline constructed without approval because the pipeline in question there had been constructed before Campbelltown was declared a mine subsidence area. I do not read the Court's concern to avoid a narrow construction of a remedy given to landowners whose rights have been curtailed as extending to landowners who have not complied with the legislative provisions. The "quid pro quo" which the High Court in Jemena Gas referred to must, in my view, include compliance with the legislative requirements and the requirements of the Board for construction in a mine subsidence area.
63The fact that s 12A does not contain the words "subject to s 15(5)(b)" does not assist Jemena because s 12 does not contain those words either.
64In response to Jemena's argument that s 15(5)(b)'s reference to "in respect of damage" could only be referring to s 12 damage because as originally enacted there was no s 12A, the Board contended that when any Act is amended by a later Act, the two are to be regarded as one connected and combined statement of the will of Parliament (see Statutory interpretation in Australia), so that "the effect of the amending Act may be to alter the meaning which remaining provisions of the amended Act bore before the amendment": see Commissioner of Stamps v Telegraph Investment Co Pty Ltd [1995] HCA 44; (1995) 184 CLR 453; (1995) 133 ALR 130 per Brennan CJ and Dawson and Toohey JJ at 135.30. I accept the Board's contention that the meaning of the words in s 15(5)(b) are not frozen in time.
65I think that there is considerable force in the Board's submission that it is unlikely that the legislature intended that a landowner who did not obtain approval before construction and did not seek retrospective approval after construction and who therefore could not make a claim for actual damage, could nevertheless make a claim for preventative damage. On Jemena's proposed construction, that would apply even if the need for that work arose because of the failure to build the structure without due regard for known risks or even in breach of conditions imposed by the Board. The change that s 12A made was to ensure that steps which were taken in advance to minimise damage were also entitled to compensation. As Mr Lloyd pointed out, it would be most surprising if the legislature by that amendment intended to grant to those who had not complied with the legislative requirements for approval in respect of actual damage, the right to claim for preventative works.
66I accept too that the words "in respect of" are words having "the widest possible meaning of any expression intended to convey some connexion or relation between the two subject-matters to which the words refer": Trustees Executors and Agency Co Ltd v Reilly [1941] VLR 110 at 111, cited with approval in State Government Insurance Office (Qld) v Crittenden (1966) 117 CLR 412 and McDowell v Baker (1979) 144 CLR 413 at 419 per Gibbs J and see Nordland Papier AG v Anti-Dumping Authority [1999] FCA 10; (1999) 161 ALR 120 at 126.
67Having regard to the width of the words "in respect of", I do not think that reading a claim for payment of an amount to meet the expense of mitigating damage as "a claim in respect of damage caused by subsidence" involves any forced construction. I am not, however, satisfied that a claim for payment of an amount to prevent damage can be treated as a claim in respect of damage caused by subsidence even on a wide and generous view of the words "in respect of". Whilst it is theoretically possible that an interpretation is adopted which excludes claims for mitigatory expenditure but not preventative expenditure, neither party promoted such a construction as an alternative construction for which it contended. I think it is unlikely that the legislature intended to distinguish between two species of claims, which are dealt with in the same subsection, that is, s 12A(1)(b).
68I regard s 10(3) as of significance. It makes a very clear distinction between claims for amounts payable in respect of damage caused by subsidence and claims for amounts payable under s 12A. It is true that s 12A(1)(a) is dealing with claims for damage incurred as a result of damage to improvements arising by reason of preventative or mitigatory works by the Board and not by reason of subsidence, which is different to expense incurred by reason of preventative or mitigatory works by the claimant. On the construction advanced by the Board, however, all claims under s 12A must be claims in respect of damage caused by subsidence so there would be no necessity to divide the claims in this manner. The distinction drawn between damage which has arisen from subsidence and the expense of preventative or mitigatory damage that the owner could reasonably have anticipated would arise was discussed in Alinta LGA Ltd (formerly The Australian Gas Light Co) v Mine Subsidence Board [2008] HCA 17; (2008) 244 ALR 276 at [60]. The legislature has used a phrase "in respect of damage caused by subsidence" in s 10(3) that cannot there have the meaning ascribed to it by the Board and the same phrase is used in s 15(5)(b).
69Accordingly, I conclude that claims for preventative and mitigatory work are not excluded by virtue of s 15(5)(b) if no approval was originally given and no certificate has been obtained under s 15B(3A). If the conclusion to which I have come is correct, then there is a need for a consideration of statutory amendment given that claims are allowed on the Fund for preventative and mitigatory works by landowners and improvement-owners whose works have not been approved where none are allowed for direct damage caused by subsidence.
Issue 4: Was the refusal of certificate ultra vires or otherwise invalid?
70Section 15B(3A)(b) does not specify what particular circumstances are to be taken into account and it does not specify matters that cannot be taken into account. Before dealing with the matters which the Board relied on, I should indicate that I agree with Mr Lloyd's submission that there is no warrant for excluding circumstances that were not in existence at the time of the original construction. As Mr Lloyd pointed out, the subsequent circumstances might be very helpful to the applicant - for example, where a subsequent purchaser has been informed by the Board, erroneously, that approval had been granted. The only temporal restriction is that imposed by s 15B(3A)(a), namely that the improvement would have met the requirements of the Board (which the parties agree means at the time the improvement was constructed).
71I turn now to consider the matters relied on by the Board which I think can be characterised as follows:
(1)AGL did not have a good reason for not applying for approval in 1974;
(2)AGL is a large commercial organisation;
(3)other large organisations did apply for approval;
(4)the Board will have to pay the claim if a certificate is granted; and
(5)Jemena delayed in bringing an application for retrospective approval - the legislative change permitting retrospective approval was made in 1989 and no application was made until 2003.
72AGL did not assert in the submissions to the Board that it did seek approval. Nor did it assert that it did not seek approval because of anything said or done by the Board. Whilst the submissions refer to the Pipelines Act and the licence granted, AGL does not in terms assert that it did not apply for approval because it thought it did not need approval.
73The only paragraphs in the AGL submissions which might be said to offer an explanation are pars 3.10 and 4.11 and I set these out (see Exhibit A3 at pp 1257 and 1263):
"3.10 AGL further submits that the Minister for Mines' involvement in the public inquiry into the proposed routes for the Moomba to Sydney pipeline evidences that the Board (who was administered by the Minister for Mines) would have also approved of the erection of the Pipeline under the Act. The route was known including its passage through the Appin Subsidence District which had been declared at that stage.
...
4.11 In addition to the matters set out in section 3 above, AGL submits that it is appropriate having regard to the circumstances for the Board to issue a 15B(3A) Certificate for the matters set out in the following paragraphs. There is no reason why the discretion should not be exercised in favour of the grant of the 15B(3A) Certificate. The discretion is not arbitrary. Its exercise is inferred by the objects and purpose of the Act. Those objects are served by the grant of the 15B(3A) Certificate to AGL. There is an absence of evidence about original approval, but an abundance of evidence that the Pipeline was subjected to strict and extensive regulatory scrutiny and approved by the Minister who administered the Board. There is no evidence of any attempt by AGL to ignore or circumvent the Act. All that was done by AGL in respect of the Pipeline was public and transparent." (emphasis added)
74I think it is true that AGL does not actually proffer expressly a reason for its failure to obtain approval. Jemena claims in par 49 of the plaintiffs' outline of submissions in this court that the Board was relying on the fact that approval for the Wilton Pipeline was not obtained at the time of its construction. I do not read the Board, by 71 above, as relying on the failure of AGL to seek approval at the time of construction but rather as considering whether AGL had proffered good explanation for that failure.
75In relation to 71, I think this is a relevant matter in the sense that as a highly resourced corporation its failure to seek approval is less excusable. In relation to 71, the fact that other large organisations applied for approval can only be relevant to demonstrate that in the industry others were aware of the need to apply. A general lack of knowledge in the industry might be relevant to excusing a failure to apply. In relation to 71 above, the MSC Act does not impose any restriction on when an application made and the fact that approval might lead to a claim does not seem to be a reason for denying approval. The amendment in s 15B introduced in 1989 was described in the explanatory note as being "to extend the compensation provisions to improvements or subdivisions that have met all requirements except prior approval" and this reinforces the view that it could not have been the intention of the legislature to add as a filter to approvals the fact that approval might lead (or would inevitably lead) to claims on the Fund. I do not think that this ground was open to be relied on. The Board maintained that it is in a situation comparable to an insurer who must ensure that it has sufficient monies in its fund and that the fact that approval will lead to claims and large claims ought be a matter that can be taken into account but the legislature has provided no differentiation between claims and sets no limits and the MSC Act provides a mechanism for levies to be raised to meet the Fund's requirements. In Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106 at 136, Windeyer J noted that the Commissioner of Taxation could not, in the exercise of his discretion, refuse the taxpayer a refund "merely because allowing it would diminish the revenue" and I think the same approach applies here.
76So far as 71 is concerned, I should set out the background to the issue of delay in making the claim. Jemena was from 1989 entitled, by virtue of legislation passed that year, to seek retrospective approval by the Board for the Wilton Pipeline. No application was made until 2003. The proceedings were not brought until 2009. Jemena's explanation in this court for its failure to apply at any time before 2003 is that it had no need to do so. The pipeline had been constructed in 1974, the time for any prosecution for failing to obtain approval had long passed by 1989 (it was agreed) and it did not have to expend any money on preventative work. Even when it was clear that money had to be expended, the work was carried out in connection with not only the Wilton Pipeline but other sections of the MS Pipeline as well, and pursuant to a "Pipeline Undermining Mitigation Project" agreement Jemena had to be informed of its share of cost. There is no temporal restriction introduced in the MSC Act as to when retrospective applications should be made. If one accepts that the fact that approval might lead to a claim on the Fund is irrelevant, then I think it follows that it cannot be a "circumstance" adverse to the applicant that it did not apply before it knew that preventative work was required and how much that work would cost.
77I raised with counsel the question of whether the Board should have taken the approach of not determining whether the improvement would have met the requirements had approval been sought in 1973/1974, as a precursor to considering whether circumstances existed to make it appropriate to issue a certificate.
78The Board cannot grant approval if it is not satisfied of the matter specified in s 15B(3A)(a). The approach taken seems to have been: "we do not think we need to consider s 15B(3A)(a) because we are not satisfied for the reasons in s 15B(3A)(b)". If the Board was satisfied of (a), the "circumstances" in (b) must be satisfied so there has been no hardship to Jemena by (a) not being determined. Jemena maintained that if it established that the circumstances for approval were made out, it was too late for the Board to raise the question of whether the construction met the requirements of (a) but it did not argue that the failure to consider (a) vitiated the decision. In correspondence the Board asserted that approval was dependent on compliance with requirements as at the time of the application but before me it was accepted that the improvement had to comply with the requirement as at the time of construction. I deal further with this issue in [83] - [84] below.
Issue 5: The Court's discretion to refuse relief by reason of delay
79The delay asserted in this context relates to the failure of Jemena to bring proceedings until December 2009 in the Supreme Court. The Board accepts that Jemena (then known as Alinta LGA Ltd) did commence proceedings in 2006 in respect of the Board's refusal to pay claims under s 12B. Those proceedings were brought in the Land and Environment Court, which determined that it had jurisdiction, a decision which was challenged successfully by the Board in the Court of Appeal. The High Court dismissed the appeal on 24 April 2008: see Alinta LGA Ltd (formerly The Australian Gas Light Co) v Mine Subsidence Board.
80The Board submits that there has been no adequate explanation for the failure to bring proceedings prior to December 2009, that is, between April 2008 when the High Court handed down its decision and when it commenced these proceedings.
81There arose in this context a claim by the Board that Jemena had obtained an increase in gas price based upon its having expended money on the work which is the subject of the claims on the Fund. Jemena responded with evidence (Exhibit B) that indicates that the Australian Energy Regulator has determined how mine subsidence costs are to be determined but that any compensation from the Fund will be dealt with at the next review. I do not think this question has any relevance to the issue of delay.
82When it is recognised that Jemena commenced proceedings in 2006, which proceedings were held to have been commenced in the wrong jurisdiction by which time the Board had taken the point that claims in respect of preventative or mitigatory work under s 12A could not be brought unless actual damage had been incurred, a view accepted both at first instance and in the Court of Appeal (by a majority) in a very long and complex history of claims and litigation, I do not think it is appropriate to treat Jemena as having inordinately delayed in pressing its claims. The Board accepted that the progress of these proceedings (once commenced) should await the outcome in the High Court and I think there is in Mr Colvin's affidavit sufficient explanation to justify the delay in commencing these proceedings. I would not refuse relief to Jemena on discretionary grounds.
Issue 6: Should the Board be ordered to grant Jemena a certificate?
83The Board resisted Jemena's amendment by which Jemena sought to amend its statement of claim again to seek an order that the Board issue a certificate pursuant to s 15B(3A). I indicated that I would rule on the amendment in the course of this judgment. I do not think that this is a case in which the defendant should be ordered to grant a certificate under s 15B(3A), for reasons which I will explain below and quite apart from my conclusion on the effect of s 15(5)(b), but I do not think it is appropriate to shut Jemena out from so contending by not allowing the amendment (no prejudice having been asserted). I accordingly have allowed the amendment.
84I accept that there are cases in which the determination of the Court is such as to lead to only one outcome, so that the discretion of the administrative decision-maker is said to have "run out", making it appropriate to order that a certificate (or refund) be granted (see Chen Shi Hai v Minister for Immigration and Multicultural Affairs [2000] HCA 19; (2000) 201 CLR 293 and R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177; see also Finance Facilities Pty Ltd v Federal Commissioner of Taxation and Commissioner of State Revenue (Vic) v Royal Insurance Aust Ltd [1994] HCA 61; (1994) 182 CLR 51; and see M I Aronson, B D Dyer and M Groves, Judicial review of administrative action, 4th ed (2009), Thomson Reuters Australia at 13.40 - 13.45), but I do not think this is such a case. The Board would, in any fresh consideration of the application for a certificate, need to consider the question of whether the requirements of s 15B(3A)(a) have been met, the outcome of which cannot be determined by this court as one capable only of a conclusion favourable to Jemena.
Conclusion
85It follows, in my view, that the answers to the questions posed are:
(1)approval was not granted for the purposes of s 15;
(2)
(a)the Board is not estopped from denying that it approved the Wilton Pipeline;
(b)the fact that a licence was granted under the Pipelines Act did not have the result that the construction of the Wilton Pipeline did not contravene the MSC Act;
(3)the Board can entertain claims for compensation in respect of claims for expenses incurred in mitigating damages caused by subsidence under s 12A(1)(b) in the light of s 15(5)(b), in the absence of a certificate granted under s 15B(3A). Section 15(5)(b) does not preclude claims for preventative or mitigatory expenses even if no certificate of approval was obtained;
(4)the Board's decision to refuse a certificate under s 15B(3A) was invalid because the Board took into account irrelevant considerations, namely:
(a)the fact that approval would lead to a claim; and
(b)that there had been a delay between 1989 and 2003 in the making of the application for a certificate;
(5)Jemena should not be denied relief by reason of the delay in commencing proceedings between April 2008 and December 2009; and
(6)the Board should not be ordered to grant a certificate pursuant to s 15B(3A) in respect of the Wilton Pipeline.
86I will hear counsel on the precise form of relief which should be granted in the light of my conclusions.