MAITLAND MAIN COLLIERIES PTY LTD v HUNTER VALLEY COAL CORPORATION PTY LTD

Court of Appeal (NSW)|2006-08-29|Before: Mason P, Handley JA, Beazley JA, Young CJ

CITATION: MAITLAND MAIN COLLIERIES PTY LTD v HUNTER VALLEY COAL CORPORATION PTY LTD [2006] NSWCA 258

JUDGMENT OF: Mason P at 1; Handley JA at 65; Beazley JA at 66

DECISION: Leave to appeal granted, appeal allowed.

Coal Mines Act 1973 LEGISLATION CITED: Coal Mines Regulation Act 1982 Mining Act 1992 Mining Subsidence Compensation Act 1961

Amaca Pty Ltd (formerly known as James Hardie & Co Pty Ltd) v New South Wales [2004] NSWCA 124, 132 LGERA 309 CASES CITED: Doherty v Allman (1878) 3 App Cas 709 Murphyores Incorporated Pty Ltd v The Commonwealth (1976) 136 CLR 1

PARTIES: MAITLAND COLLIERIES PTY LTD v HUNTER VALLEY COAL CORPORATION PTY LTD

COUNSEL: Appellant: T F Robertson SC/ T G R Parker SC Respondent: B McClintock SC/ R Beasley

SOLICITORS: Appellant: Allens Arthur Robinson Respondent: Minter Ellison

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT JUDICIAL OFFICER: Young CJ in Eq

LOWER COURT DATE OF DECISION: 13 December 2005

LOWER COURT MEDIUM NEUTRAL CITATION: [2005] NSWSC 1327

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40016/2006 SC 5169/2005

MASON P HANDLEY JA BEAZLEY JA

Friday 22 September 2006 MAITLAND MAIN COLLIERIES PTY LTD v HUNTER VALLEY COAL CORPORATION PTY LTD JUDGMENT 1 MASON P: Having heard full argument as on appeal I would grant leave to appeal. 2 The appellant seeks declaratory and injunctive relief to enforce the respondent's promise by Deed not to object to proposed "second working applications" relating to a coal mine at Glennies Creek in the Hunter Valley. 3 The appellant holds a Coal Lease granted in 1991 under the Coal Mines Act 1973. From its inception, the Lease contained covenants requiring the appellant to comply with the said Act and the Coal Mines Regulation Act 1982 (CMRA). There was also a covenant concerning methods of operation that stated: 1. (b) The registered holder shall not commence or carry out any underground mining operations within the subject area:- (i) unless with the consent of the Minister first had and obtained; or (ii) except by a direction by the Minister pursuant to paragraph (c) of this Condition; and subject to such conditions, provisions and stipulations as the Minister may impose. 4 The Coal Mining Act 1973 was repealed and incorporated into the Mining Act 1992. 5 The respondent operates a coal mine at Mt Owen, in the vicinity of Glennies Creek. In 1995-96 it sought development approval to construct a spur railway line for moving its coal to the main rail network. The appellant (supported by the Department of Mineral Resources) objected to that application, contending that the spur line would be likely to restrict mining of the appellant's coal reserves or impede remedial works associated with planned subsidence from longwall extraction. The proposed spur line passed above the appellant's underground mine. 6 The appellant withdrew its objection in consideration of the arrangements embodied in a Deed of Release and Indemnity executed on 13 December 1995 that the appellant is seeking to enforce. The Deed recites that the respondent wished to construct the rail line above the Coal Lease where the appellant intended to operate multi seam longwall panels. Its operative terms stated: 1. MMC agrees to withdraw immediately its objection lodged with the Singleton Shire Council to the construction of the Rail Line by HVCC over the Land. 2. MMC will advise HVCC of its proposed second working applications and plans so as to give HVCC at least 6 months notice of extraction near the Rail Line and HVCC will not object to the proposed second working applications so disclosed to HVCC in accordance with this clause. 3. HVCC its contractors and agents shall abide by the conditions imposed by the Singleton Shire Council, the Department of Mineral Resources and the Mine Subsidence Board of New South Wales on the use of its Rail Line to allow MMC to maximise second workings. 4. HVCC hereby releases and indemnifies MMC from all claims costs demands losses or expenses in connection with damage to the Rail Line due to subsidence arising out of or in connection with MMC's underground mining activities carried out under Coal Lease No. 382 on the Land provided that the mining is carried out by MMC legally in accordance with approvals from the Department of Mineral Resources. Without limiting the generality of the above provisions of this clause, HVCC also indemnifies MMC from all costs that it may incur due to the need for extra remedial drainage work ("the incremental works") occasioned by the existence of the Rail Line beyond those works that would otherwise have been necessary. Should a dispute arise as to the necessity or extent of the incremental works it will be determined by an independent expert appointed by the President of the Australian Institute of Mining and Metallurgy whose decision shall be final and binding on the parties. 5. The parties acknowledge that HVCC intends to purchase certain land over which Coal Lease No 382 is held by MMC. In consideration for MMC entering into this Deed, HVCC shall not unreasonably withhold its consent or agreement to MMC entering upon any land owned by HVCC over which Coal Lease No. 382 exists for the purpose of exploration and development of roads or other services and infrastructure subject to the parties entering into a written agreement in relation to such entry on terms which are acceptable to both parties. Such agreement shall be binding on the successors and assigns of each party. 6. The provisions of this Deed shall bind the parties named in this Deed and their respective successors and assigns. 7 Two days later the appellant withdrew its objection to the development application which was subsequently approved by the Singleton Council. The spur line was constructed in 1996. 8 The Deed did not define "second working applications and plans" (cl 2) or "second workings" (cl 3). However, the general meaning of "second workings" was well-known to the parties at the time. The primary judge (Young CJ in Eq) observed that it was common ground that in the coal industry an underground coal mine is first worked by bord and pillar; the coal is extracted by cutting underground roadways or bords, while leaving blocks of coal or pillars to support the overlying rock strata from collapsing. This is known as "first workings". "Second workings" is a term used to refer to the total or partial extraction of the pillars. Longwall mining is one method used as a second working activity. Parallel roadways are constructed on each side of the pillar. A machine cuts into the coal face of the longwall block. 9 Longwall mining almost always causes subsidence. Accordingly, mining practice involves regulation designed to limit and ameliorate the impact of subsidence. There is also a scheme for compensation where improvements on the surface are damaged by subsidence (Mining Subsidence Compensation Act 1961). 10 I have already referred to the contractual powers reserved in favour of the Crown to control and regulate underground mining operations. These are reinforced by s138(1) of the CMRA which provides: 138 Bord and pillar system to be used in underground mines (1) No method of mining other than the bord and pillar system shall be used in an underground mine except with the approval of the Minister given on the recommendation of the Chief Inspector and subject to such conditions as the Minister may impose. (2) Where the bord and pillar system of mining is used: … (e) pillars shall not be removed except with the approval in writing of the Minister and subject to such conditions as the Minister may impose. 11 Application for approval to remove pillars under s138(2)(e) is undoubtedly a second working application within cl 2 of the Deed. The respondent accepts that cl 2 of the Deed precludes it from objecting to a duly notified s138 application. 12 Departmental practice concerning applications for approval under s138 as at the date of the Deed was set out in Guidance Notes issued in November 1992. The Introduction stated that the arrangements set out in the Notes were designed to ensure proper consideration of three significant issues associated with the extraction of coal by underground methods, namely:

(2) the responsible exploitation of the State's coal resources; and

(3) the impact of the mining operations on other land users and groups within society. 13 The Guidance Notes indicated the matters to be addressed in the letter of application and specified that the application should be accompanied by a comprehensive report dealing with all technical and societal impact matters, and the applicant's draft "Approved Plan". The report was required to cover nominated aspects of mine safety, resource recovery and mining subsidence and land use issues. As to subsidence and land use, there was to be included information identifying significant features within the surface area affected by the application so as to enable the impact of the proposed mining to be assessed by the Minister (or his delegate). 14 The Guidance Notes stated that the approach taken in assessing extraction proposals would be one of openness and consultation with all parties affected by the proposal. Departmental officers would encourage and promote dialogue between the affected parties in an attempt to find a solution which optimised benefit to society as a whole. If consensus could be achieved, the Minister (or his delegate) would make a decision on the basis of the information before him. 15 Towards the back of the Guidance Notes is a four page document called "Quality Assurance Work Instructions - Second Workings Approval". The document described the manner in which applications for second workings approvals in underground coal mines were processed by personnel within the Coal Mining Inspectorate and Engineering Branch of the Department of Mineral Resources. The document defined "second workings" as "the mining of coal by pillar extraction or longwall methods or any mining method other than bord and pillar". 16 The Department changed its practice subsequent to the Deed. The new policy is set out in a Guideline for Applications for Subsidence Management Approvals dated December 2003. 17 Since 2003, an applicant has been required first to obtain the Director-General's approval to a Subsidence Management Plan (SMP). A s138 approval will not be granted by the Minister until an SMP approval is in place. 18 According to the Guideline, the SMP application is to address the proposed mining system, community consultation, statutory requirements, "expected subsidence and its potential impacts on public safety, the environment, community, land use, surface improvements and infrastructure", and a proposed SMP for the expected subsidence impacts. 19 An SMP approval is restricted to a maximum period of seven years. 20 An SMP application is to contain a letter of application, a written report addressing various matters, the proposed SMP, the SMP Approved Plan and other related plans. These are similar to the documents required under the earlier Guidance Notes. 21 Under the earlier practice, the s138 approval was used to control all potential impacts related to subsidence, including mine safety, public safety, resource utilisation, land use impacts and environmental impacts (see p1 of the 2003 Policy document and the Guidance Notes summarised above). The new practice addresses all impacts at the SMP approval stage, except for mine safety which is deferred to the s138 approval stage. 22 Otherwise there is much similarity between the new and the old. In each instance the applicant is required to prepare a detailed report and submit various plans as well as a draft "Approved Plan". The Guideline emphasises community consultation, requiring the applicant to summarise community and stakeholder attitudes in its written report. But the differences are in matters of detail and emphasis. Interested parties could make representations to the Department under the old regime. The Guideline describes the SMP approval process as an updating from the current s138 approval process mainly in the following areas: (1) Improved environmental management consistent with community and government expectations for responsible mining, optimal resource recovery and effective land use and environmental management, and (2) Improved community consultation as a necessary and integral element of subsidence management. 23 The obligation to obtain SMP approval with regard to underground mining operations was imposed under a condition inserted into the Coal Lease in 2003 apparently pursuant to s239(2) of the Mining Act 1992. There was in any event ample power to require compliance with the new practice given the terms of s138(2)(e) of the CMRA and the original cl 1 of the Coal Lease. The validity of the obligation to comply with the 2003 practice is not in issue. 24 In July 2005 the appellant applied for SMP approval to cover the extraction of longwalls 7 to 9 at its mine. The application described the scope of the SMP as covering "proposed secondary extraction of Longwall Panels 7 to 9 and associated first workings including mains development and gateroads as illustrated on SMP Approval Plan". The application was thus not confined to the extraction of longwall panels (secondary extraction), although less than 10 per cent of the proposed resource recovery is referred to as (associated) "first workings". 25 The accompanying report addressed the Guideline requirements, providing detailed information concerning the application area, mining systems and resource recovery, site conditions, stability of underground workings, surface and sub-surface features, subsidence prediction, community consultation process, statutory requirements and subsidence impacts. The report stated (correctly) that approval of the SMP application was required as part of the s138 approval process for secondary extraction under the Guideline. 26 The respondent and its owner (Xstrata) were identified as one of the stakeholders consulted. Information about the spur line and the Deed was supplied in the application. Specific concerns raised by representatives on behalf of Xstrata owned companies were detailed in Table 13. According to the report: All of the issues are addressed within the Subsidence Management Plan and associated specific management plans, or within the GeoTerra report on Surface Water and Groundwater.

This application was notified to the respondent at least 6 months before intended extraction near the respondent's rail line. 27 The respondent wrote directly to the Department on 5 September 2005 objecting to the SMP application. The "SUMMARY OF HVCC'S OBJECTIONS" included assertions that the Deed was of no effect because the appellant was in breach of its own development consent. Several pages of additional comments were provided "in support of our objection". The Deed was said in any event to be an irrelevant consideration in the Director-General's decision to approve the SMP. The proposed SMP was alleged to have ignored critical subsidence impact issues and to have failed to comply with the Guideline. 28 Earlier, in a letter of 13 May 2005 from the respondent's solicitors to the appellant's solicitors, it was stated that the respondent reserved all rights to make submissions and if necessary object to the approval of any SMP submitted by the appellant. 29 The appellant, through its solicitors, alleged that this conduct was a breach of the Deed. Proceedings were threatened unless the respondent formally withdrew its objection and undertook in writing not to object to the appellant's foreshadowed s138 application. 30 There was no favourable response. Indeed, the respondent wrote again to the Department on 8 December 2005 urging non-approval of the SMP until various "inadequacies" were addressed. That letter made comments about the Deed, including the submission that the Deed applies to "second workings applications", not approvals for a SMP. This, in essence, is the construction argument advanced by the respondent in the current proceedings. 31 Proceedings that came before Young CJ in Eq in December 2005 were dismissed (Maitland Main Colleries Pty Ltd v Hunter Valley Coal Corporation Pty Ltd [2005] NSWSC 1327). I shall refer only to those parts of the decision relevant to the issues in this Court.

The construction issue 32 It is not seriously in dispute that the respondent's letter of 5 September 2005 was an objection to proposed second workings of which the respondent had received 6 months notice. The critical issue is whether the respondent had been notified of a proposed second working application when informed about the application for SMP approval concerning longwalls 7 to 9. 33 The primary judge held that the respondent had "objected" within cl 2 of the Deed, but that this did not matter because the appellant's SMP application was not a "second workings application" within that clause. His Honour said: 28 … I have already briefly set out the opposing contentions, that is, the plaintiff says the present procedure is really the same as the former procedure, it is just split into two. One looks to see what at 1995 the parties contemplated by a second working application and one can see that at that stage they were talking about the rolled-up application that involved the application under s 138, in which the matters of mine subsidence were a part. The commercial purpose of the deed was to ensure there would be no barrier to the plaintiff obtaining permission to conduct second working; and the only way in which this can be secured is to construe the words "second working applications" as including the current procedure for obtaining an SMP.

29 On the other hand, the defendant says that when one looks closely at the way in which applications have to be made in 2005 there are two separate and distinct applications, and that the ground rules have changed since 1995. It says that it is impossible merely to consider that the present application for an SMP is merely something that was hived off from the s 138 application. When one looks at it, it is to be decided by a completely different person, it is to only be made after there is public consultation, and it is a matter where instead of the prime focus being on mine safety, the focus is on the use of the land generally, and, indeed, there is far more focus on subsidence matters.

30 Under the 1995 guidelines, there does not appear to be any particular procedure for people to put in objections to the Department. The whole document seems to be based around proper investigation by the Department and other government authorities. The guidelines say that it is strongly recommended that there be early consultation with a district inspector, the senior inspector and the principal subsidence engineer. There are requirements that the various government departments are to look at different issues, but that seems to be as far as it goes.

31 Doubtless, someone who had an interest could make that interest known to the relevant government authorities, whether positively or negatively.

32 However, on the present system, not only must the SMP be advertised, but before that happens there is a requirement on the mining company actually to go out and consult people who might be affected.

33 There are substantial considerations in favour of both points of view. However, in my view, the proper analysis is that there is under the revised scheme what Mr McClintock properly called an application which was a condition precedent to a second working application.

34 Although it is true that the 1995 situation and the present situation have great similarities, and the same sort of subject matters are covered, in my view, the present application for an SMP is not a second working application.

34 On the construction point, the parties repeated in this Court their submissions in the Equity Division. Senior counsel for the respondent observed that the question at issue is a matter of impression. I agree, but my clear impression is contrary to that which the respondent advances and which found favour with the Chief Judge. 35 The Guideline practice makes the obtaining of a relevant SMP approval a condition precedent to the Minister's preparedness to consider an application under s138. The main criteria required to be addressed before second workings consent under s138 will be granted remain the three identified in the 1992 Guidance Notes, ie the safety of mine workers, the responsible exploitation of coal resources and the impact of mining operations upon other land users and groups within society. What has changed is that the second and third issues are addressed separately at the earlier SMP approval stage. The bifurcation of the process defers the mine safety assessment until the later stage of Ministerial consent under s138. There are also changes in the scope of matters taken into account on environmental issues and a greater emphasis in community consultation in the Guideline procedures. 36 In my opinion, the respondent's letter of 5 September 2005 breached its promise in cl 2 of the Deed. 37 The letter objected in terms to the appellant's application for SMP approval to extract longwalls 7 to 9. It proposed the refusal of the SMP. Had the objection been acceded to, the appellant would have been unable to apply for (let alone obtain) the s138 approval that is essential if it is to be able to mine the nominated longwalls. 38 The Deed had procured the withdrawal of the appellant's own objection to planning approval for the railway line on terms designed to allow the appellant to maximise its second workings (cl 3) and allocating to the respondent the financial risk of subsidence damage to the line (cl 4). Clause 2 furthered these objectives by precluding the respondent's objections to second working applications. When the Deed was executed these were perceived as applications for consent under s138. 39 The power to withhold approval under s138 and to impose conditions as the price of approval was and remains a function exercised with concern for safety, resource management and broad environmental concerns (cf Murphyores Incorporated Pty Ltd v The Commonwealth (1976) 136 CLR 1). 40 One infers that the primary focus of the parties was not the safety of mine workers, when negotiating the Deed, cl 2 in particular. Rather it would have been the possible impact of objections from the respondent designed to protect its interests as a land user. There is therefore a discordance in the respondent's contention that the Deed only engages in the final s138 stage, where the safety of mine workers is the sole focus of attention. 41 This said, the respondent is entitled to insist on the letter of its bond fairly construed. If cl 2 of the Deed has no application in the post-2003 situation then it is not the role of the Court to refashion it. 42 In my view, an objection to an application for SMP approval for longwall mining is within the scope of cl 2 of the Deed. The appellant's application for SMP approval is not an end in itself, but a step towards obtaining s138 approval. The SMP procedure addresses two of the three broad areas of concern that were and remain issues that the Minister takes into account in granting s138 approval and fashioning the conditions of such approval. 43 The appellant's application for SMP approval follows processes of consultation and procedures such as the preparation of plans, and it addresses broad environmental issues, similar to those that were part and parcel of the unbirfucated procedure under the Guidance Notes regime. The Guideline changes involved in advertising and in the particulars of the matters addressed in the report and draft approved plan are matters of detail and refinement, not differences in substance from the Guidance Notes regime. 44 The presence of "associated first workings" in the works for which SMP approval is sought does not alter the substance of application in its intent or details. Second workings extraction will involve over 90 per cent of the mining that will take place if and when s138 approval follows after SMP approval. 45 Senior counsel for the respondent submitted that there were, in effect, six features of the instant SMP approval regime that rendered it a "completely different animal" to a "second working application" within cl 2 of the Deed. These might be labelled different date, different origins, different features, different consent authority, different purposes and different process. 46 The "different date" and "different origins" arguments point to the date and mechanism whereby the obligation to obtain SMP approval came into force in 2003. These matters carry no weight, in my view. The scope of a contract is not determined by what the parties subsequently do under it. The conduct of third parties is equally irrelevant unless it operates to frustrate contractual performance. I have already indicated that, in my view, there was always ample power deriving from cl 1(b) of the Coal Lease and s138 of the CMRA for the Minister to have insisted upon SMP approval as a precondition to s138 approval. 47 The "different purposes" and "different process" arguments point to the excision of mine safety considerations from the SMP application and the more detailed addressing of stakeholder consultation found in the 2003 Guideline. These matters do not, in my view, prevent the SMP application from being a second working application within the ambit of cl 2. After all, SMP approval is a mandated precursor to s138 approval and its processes address two of the three broad areas that have always been of concern to the Minister vested with the power to grant or withhold s138 approval and to regulate the terms of approval for coal mining other than the bord and pillar system. 48 Consideration of the views of the wider public was always an aspect of the pre-2003 system. The Minister could be lobbied to withhold approval generally or unless conditions were met. The Guidance Notes expressly recognised this (above). All that has happened under the Guideline regime is that the interests of stakeholders are now more clearly spelt out and some of the departmental legwork has been outsourced to the applicant. The applicant is required to consult with stakeholders and to include its response to their summarised concerns in its detailed report in support of SMP approval. But the processes remain focussed upon the bottom line, namely the terms on which approval will eventually be granted before mining can commence. 49 The "different features" argument contrasts the scope of s138 which is effectively confined to second workings, with the SMP system which goes further. The Guideline states that underground mining operations that require SMP approval are: (1) All types of secondary extraction, such as pillar extraction or quartering, longwall or miniwall mining; (2) First workings that directly support any proposed secondary extraction by longwall or miniwall mining (eg. Gateroads, installation roadways or bleeder headings and the associated main headings, etc), and (3) Any other case where the proposed underground coal mining will potentially lead to subsidence. 50 In my opinion, this does not mean that SMP approval for the appellant is different in kind to the approval in the contemplation of the parties when they entered into cl 2. If the Guideline goes beyond second workings, this does not alter the scope of cl 2 itself. In any event, s138 has never excluded consideration of associated first workings in relation to bord and pillar second workings approval. 51 The "different people" argument points to the statutory role of the Minister under s138 and seeks to contrast the nominated role of the Director-General under the Guideline. This, in my view, is a distinction without any relevant difference. After all, SMP approval is but a step along the way to the all-essential Ministerial s138 approval for applicants such as the appellant. The argument hints at the proposition that the Director-General has some function in which he or she might have to stand against the Minister and exercise an independent judgment. Nothing in the statutory framework supports such a proposition. The principle of responsible government with its attendant notion of line management in the public sector cuts right across it (see Amaca Pty Ltd (formerly known as James Hardie & Co Pty Ltd) v New South Wales [2004] NSWCA 124, 132 LGERA 309 at [123]-[126]). 52 I therefore conclude that the respondent objected in breach of cl 2 of the Deed.

The futility and discretion issues 53 The respondent never suggested that matters such as hardship to third parties or some overarching public interest factor precluded the enforcement of the Deed. 54 But it was contended that nothing would be gained by granting declaratory or injunctive relief because the horse had bolted. At first instance, "the horse" relied upon was the letter of objection itself which had already been sent to the Department by the time proceedings had commenced. Young CJ in Eq seemed attracted to this argument although it was unnecessary for his Honour to address it squarely given his interpretation of cl 2. He said:

47 So far as the horse having bolted, I think that is right. Once a government authority has been given material then it is its duty to consider that material and give it such weight as it thinks it should give it. Even if an objection were withdrawn at this stage, I would not be satisfied, on the balance of probabilities, that it would achieve any purpose, and as the old maxim goes "Equity like nature does nothing in vain".

48 Had it been relevant to do so, I would have thought that there is a lot to be said for not making any declaration on the ground of lack of utility. A fortiori, the court would not have made a mandatory injunction bearing in mind the principles in Redland Brick Ltd v Morris [1970] AC 652 and Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499. However, the whole matter is academic because of my determination in 1(b). 55 By the time the proceedings had reached this Court, a different bolting horse was said to be in view. On 14 March 2006 the appellant obtained SMP approval for mining longwalls 7 to 9. A condition of that approval was: 11. Mt Owen Rail Line - In this clause: "Rail line" means the Mt Owen railway, and any associated structures, features and infrastructure (including but not limited to the water pipeline within the railway easement). Prior to undertaking any longwall mining that may impact on the Rail Line, the leaseholder must obtain the Director-General's approval of a management plan specifically developed for the Rail Line. The management plan must detail the measures to be implemented to manage the impacts of longwall mining on the Rail Line. The leaseholder may, at any time, submit to the Director-General an amended management plan for approval. The leaseholder must notify the Department (Principal Subsidence Engineer) immediately on becoming aware of any risk to the safety and serviceability of the Rail Line arising from subsidence caused by longwall mining.

56 The respondent contended that there was no utility in granting the relief claimed. We were invited to refuse leave to appeal on this basis alone. 57 I do not agree, for several reasons. First, the decision appealed against operates as an issue estoppel binding the parties to a particular construction of the Deed. Yet the appellant's Coal Lease runs until 2013 and it is renewable. The appellant plans in the future to do longwall mining beyond longwalls 7 and 9, some of which may cause subsidence affecting the rail line. 58 Secondly, the respondent has through its solicitors (on 15 March 2005) and through its counsel in these proceedings asserted the right to make further SMP objections. These could conceivably be raised against the appellant's application for the specific approval contemplated by condition 11 of the SMP approval touching longwalls 7 to 9. 59 Thirdly, the matters raised in par 6.4 the respondent's solicitor's letter of 15 March 2005 show the respondent asserting in effect that nothing in the Deed impedes it from urging the Department to impose conditions in an SMP approval and thereby in effect on a s138 approval that would rearrange the financial risk allocation worked out in the Deed as a whole. In these circumstances, it seems to me that a declaration as to the proper construction of cl 2 would at least provide a useful backdrop to likely further disputation as to the Deed as a whole. 60 Fourthly, there are proceedings between the parties currently before Bergin J in the Commercial List involving different disputes about the same Deed. We were informed that the respondent has invoked an issue estoppel based on the primary judge's interpretation of cl 2 in its defensive armoury in those proceedings. 61 The appellant seeks the following substantive relief:

That the orders of Young CJ in Eq on 13 December 2005 be set aside and in lieu thereof, make the following orders: (a) Declaration that the respondent breached clause 2 of the Deed of Release and Indemnity, having made an objection dated 5 September 2005 (the "Objection" ) to the appellant's application to the Department of Primary Industries for approval of a subsidence management plan for the secondary extraction of coal from Longwall panels 7 to 9 inclusive at its Glennies Creek Coal Mine. (b) An Order requiring the respondent to forthwith, and in writing, notify the Department that it withdraws the Objection. (c) An Order that the respondent is restrained from making an objection to any future second workings applications by the appellant for the extraction of coal from Longwall panels 7-9 inclusive at the Glennies Creek Coal Mine. (d) An Order that the respondent pay the appellant's costs of the appeal and in the Court below. 62 There is no utility in Order 2(b). I would, however, make the declaration sought in 2(a) and the orders sought in 2(c) and (d). This is a case involving a negative covenant within the principles of Doherty v Allman (1878) 3 App Cas 709 at 719-20 and for which no compelling discretionary reasons have been advanced for the refusal of injunctive relief. 63 There were submissions as to the right of the respondent, consistently with its obligations under cl 2 as I have construed it, to provide information and make representation stopping short of objections which the Minister and the Department would or might be obliged to take into account in the exercise of statutory functions. It is not appropriate that this Court should address such hypotheticals. 64 The following orders should be made:

Leave to appeal granted subject to the notice of appeal being filed within 14 days.

That the orders of Young CJ in Eq on 13 December 2005 be set aside and in lieu thereof, make the following orders: (a) Declaration that the respondent breached clause 2 of the Deed of Release and Indemnity, having made an objection dated 5 September 2005 (the "Objection" ) to the appellant's application to the Department of Primary Industries for approval of a subsidence management plan for the secondary extraction of coal from Longwall panels 7 to 9 inclusive at its Glennies Creek Coal Mine. (b) An Order that the respondent is restrained from making an objection to any future second workings applications by the appellant for the extraction of coal from Longwall panels 7-9 inclusive at the Glennies Creek Coal Mine. (c) An Order that the respondent pay the appellant's costs of the appeal and in the Court below. 65 HANDLEY JA: I agree with Mason P, 66 BEAZLEY JA: I agree with Mason P.

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