Kayuga Coal Pty Limited v John Earl Ducey & 4 Ors

ADMINISTRATIVE LAW-MINING LEASE-STATUTORY PROHIBITION AGAINST GRANTING OF LEASES-STATUTORY INTERPRETATION-MINING ACT 1992 (NSW)

Facts: Kayuga Coal Pty Limited ("Kayuga") applied for mining leases over two portions of land. Both applications were objected to. Kayuga disputed the rejection. They sought an inquiry and report from the Chief Mining Warden pursuant to s62(6) of the Mining Act 1992 and 23B of the Schedule The Warden found the objections were justified. Both parcels of land contained "improvements", or certain features peculiar to agricultural land, which were specified in S62(1)(c ) Mining Act. Kayuga sought judicial review of this finding. They argued the features were not "improvements" for the purposes of S62 of the act. The Master found in favour of the respondents. The appellants appealed against this decision. They submitted the Master erred in her finding that the relevant section gave the Warden a discretion to include as "improvements", items not on the list. This was in particular reference to fences, which, the appellants submitted fell outside the requirements of the section, and so could not be considered "improvements".

Held per Meagher JA, Priestley JA and Powell JA agreeing: The appellants have revealed an error in the reasoning of both the Warden and the Master. There exists no statutory warrant for the Warden to include items within the section based on a discretion. However they have not demonstrated any error in the finding that fences fall within the statutory definition of "improvement". ORDERS

1. Appeal dismissed with costs. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

19 APRIL 2000 KAYUGA COAL v DUCEY & ORS JUDGMENT

1 PRIESTLEY JA: I have had the benefit of reading in draft the reasons to be delivered by Meagher JA in this appeal. He identifies two questions of construction of s 62(1)(c) of the Mining Act 1992. One question raises the application of "substantial" in par (c); the other, the application of "other". 2 I agree with Meagher JA's conclusion concerning "other". That is sufficient to lead me to agree with the conclusion he reaches about the orders to be made in the appeal. The question concerning "substantial" seems to me a little more difficult, and, it not being necessary to reach a conclusion on it, I have not done so. 3 In my opinion the appeal should be dismissed with costs. 4 MEAGHER JA: This is an appeal by Kayuga Coal Pty Limited, a mining company, against a decision of Master Harrison, which in its turn affirmed a decision of the Chief Mining Warden (who is the third respondent). The short point is whether certain features of some agricultural land did or did not constitute "improvements" for the purpose of s.62 of the Mining Act 1992 ("the Act"). Both the Warden and the Master held they did. 5 The appellant sought a mining lease over certain land owned by Mr and Mrs Ducey and certain other land owned by Mr and Mrs Casey. These persons are respondents to this appeal. 6 The scheme of the Act is that mining leases should not (in the absence of the owners' consent) be granted over certain lands. These lands are lands containing a homestead, lands containing a garden, or lands on which are situate "any improvement". In the present case, the Duceys and the Caseys claimed that certain features of their several lands contained "improvements" and they were not minded to give the appellant any consent to mine their lands. 7 This scheme is contained principally in S.62 of the Act, which, relevantly, in the following form: "(1) A mining lease may not be granted over any land:

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

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

(c) on which is situated any improvement (being a substantial building, dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work or other valuable work or structure) other than an improvement constructed or used for mining purposes and for no other purposes,

except with the written consent of the occupier (and, in the case of private land, the owner) of the land on which the dwelling-house, garden or improvement is situated.

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

(8) In this section, valuable work or structure includes anything taken to be a valuable work or structure for the purposes of this section by clause 23A of Schedule 1, but does not include anything declared not to be a valuable work or structure by clause 23B of that Schedule." 8 Clause 23A and 23B of Schedule 1 to the Act are machinery sections, which provide, in effect, that anything which landowners claim are improvements are improvements, unless the Warden finds to the opposite effect. 9 On 7 October 1997, the appellant ("Kayuga") applied for a mining lease ("MLA 96") which extended over land owned by the first and second respondents ("the Duceys" and "the Caseys"): 10 On 11 November 1997 the Duceys and the Caseys objected to the grant of a lease, claiming that on their lands there were valuable works, structures and other improvements falling within s62(1)(c). The particular improvements claimed were, in the case of the Duceys, a dam, a contour bank and fences, and, in the case of the Caseys, fences and power lines. 11 On 15 December 1997, Kayuga disputed that there were any valuable works or structures on the Duceys' and Caseys' lands. In accordance with s62(6) of the Act and 23B of the Schedule, the dispute was referred to the Chief Mining Warden for inquiry and report. 12 The inquiry by the Chief Mining Warden took place on 21 and 22 July 1998. On 18 August 1998, the Chief Mining Warden found that: (a) the fences, dam and contour bank on the property of the Duceys, and (b) the fences on the property of the Caseys were "improvements" within the meaning of s62 of the Mining Act 1992. The warden also determined that the powerlines were not improvements within s62(1)(c), because they were not owned by the landowners, but this determination was not sought to be reviewed in the court below, and is outside the scope of the appeal. 13 Kayuga applied for judicial review of the findings that the fences, dam and contour bank were improvements within the meaning of s62(1), on the basis that those findings were tainted by errors of law on the face of the record. Kayuga's summons was referred to the Master pursuant to Schedule D, Part 3, rule 4(a), from which an appeal lies to this Court. 14 The Warden's reasons are summarised in the following passage: "In going through various decisions that I researched as to interpretation, certainly I came to a conclusion that I could not accept, particularly in relation to the phrase "or valuable work or structure", that it created a disjunctive phrase there and that it should be isolated from those other specific words which preceded it. So in relation to the question of whether it be a substantial dam or a substantial contour bank, I reached a conclusion that the word "substantial" does not apply to other words following building, so it did not apply to a dam or a contour bank. It was my opinion that if a dam or contour bank is of such standing that they fulfil the intention for which they were designed, that they are considered improvements under provision of section 62, and I did find that the dam and contour bank was of such standing that it fulfilled the intention for which it was designed.

As to fencing per se, as to whether it is a valuable work or structure really depends upon the merits of each individual case. I concluded that so far as the fencing on the Ducey and Casey properties, I accepted that presence of the fencing does increase the value of the land and the fencing does in fact perform the task for which it was constructed and that is the control of stock entering or leaving the land or paddocks which are incorporated within that fencing." 15 The Masters reasons are as follows: "It is my view that the word "substantial" was intended to apply only to the word building and not to the subsequent items such as dam, reservoir, contour bank etc. A building has different characteristics to that of a dam, reservoir etc. It is of a different genus. The latter are man made structures that assist the property owner make use of the natural resources [sic]. I agree with the chief mining warden's conclusion that the work [sic]"substantial" does not apply to the words following building. The chief mining warden did not make a finding, nor should he have that the dam, contour bank and fences were insubstantial.

It is my view that the words "or other valuable work or structure" are included to give the chief mining warden a wider discretion to include other items which are not specifically listed in s 62(1) (c). I also agree with the chief mining warden that Parliament used the word "or" to create a disjunctive phrase so that the word "valuable" does not refer to the preceding phrase." 16 Mr AJ Meagher SC, learned Senior Counsel for the appellant, levelled certain criticisms at this reasoning. In the main, they were justified. He submitted that the word "substantial" must qualify all subsequent nouns, which is normal English usage. I agree. This is all the more so when one considers the bizarre results which one would obtain if, as the Warden and the Master held, "substantial" qualified the word "building" alone: an insubstantial building would not be an "improvement", but an insubstantial levee would. Again, Mr Meagher seems to me to be justified in his submission that the Warden invented a test of his own as to the meaning of the word "improvement", viz. whether the object in question fulfilled the intention for which it was designed. There is no statutory warrant for this test. 17 However, he also submitted that the words "or other valuable work or structure" were to be construed as referring to, and only to, the words "dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work", these constituting a genus to which " or other valuable work or structure" belonged. This submission should be rejected. There is no need to mangle the words. There is no reason why "other" should not refer back to "building" as well as to the other nouns. And if it did not, one would have the odd result that objects like a bore would not constitute an improvement. As a matter of English, the wording of paragraph (c) of s.62 (i) requires such of the objects listed to be both "substantial" and "valuable", not withstanding that this involves a certain measure of tautology. 18 Mr Meagher also contended that the expression "value" implicit in the words "valuable work or structure" should be understood as referring to works of special value, considerable value; so that the words actually used should be construed as if they were "very valuable work or structure". I see no justification for this. 19 Mr Meagher further contended that the Warden and the Master were in error in holding that the Warden had a discretion to exercise: a thing either is an improvement or is not an improvement. In this, also, I think he was correct. 20 Mr Meagher's contentions were angled at excluding fences from the definition of "improvements". As I understand it, his argument was that fences could not, of their nature, be either substantial or especially valuable; and, moreover, were outside the genus he discussed in the definition of "improvements". The contentions must collapse once one rejects the notion that "valuable" means "especially valuable". 21 The result is that the appellant has demonstrated error in the reasoning of the Warden, and further error in the reasoning of the Master. However, he has not demonstrated any error in the finding that the fences on both the Ducey land and the Casey land were "other valuable works or structures" within the statutory definition of "improvements". Since the appellant seeks relief of a prerogative nature, this Court has a discretion to refuse such relief. If, as I think, there is an unchallengeably correct finding that fences are "improvements", and, if so, not withstanding the errors of the Warden and the Master, there is a statutory prohibition against granting the lease which the appellant desires, there would be no point in remitting the matter to the Warden. 22 In my view the appeal should be dismissed with costs. 23 POWELL JA I agree with Meagher JA.

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