Hume Coal Pty Ltd (Hume) holds an exploration licence authorisation number A349 (the licence) for the exploration of coal in the Southern Highlands of New South Wales.
The licence - granted in 1986 and last renewed on 12 March 2013 - permits Hume to conduct prospecting and prospecting operations on land within the exploration area subject to an access agreement.
Hume's exploration programme is targeted to obtain as much geological information as possible about the coal resource within the area to which A349 relates. This is achieved through drilling, which extracts a solid core of strata or coal that can be examined at the surface. The core is subject to laboratory testing for:
1. Geological structures including: faulting, joints, unit thicknesses, depth of weathering, dykes, sills, or other igneous impacts.
2. Rock types and geotechnical testing.
3. Seam thickness and depth measurements.
4. Coal quality, likely yields and other specific quality parameters.
In addition to the taking of down-hole geophysical logs, physical measurements of geological formations are also made by other instruments lowered into the hole to assist with determining geological structures.
As explained by Mr Doyle, Hume's Coal Exploration Manager, the exploration licence authorises the drilling of 20 exploration holes on land that is located in or around the Golden Vale Road, Sutton Forest. The location of the proposed drill hole coincides with a significant scarcity of information within the currently defined areas of lower confidence in the resource. Targeting those areas will allow data on geological structures and coal quality to be gathered. This information will, in turn, allow a conclusion to be made about the likely safety of the working environment and product quality.
Each of the plaintiffs' properties lie within the exploration licence area.
The plaintiffs and their rural properties are identified for the purposes of this judgment as follows:
Peter Martin - Lot 6 DP 829835 (Martin Property)
Phillip Pollicina - Lot 9 DP 104027 (Pollicina Property)
Ross Alexander - Lot 10 DP 1040207 (Alexander Property )
Vincent Roche - Lot 1 DP 249175 and Lot 17 DP 705 590 (Roche Property)
(The Court notes that Mr Pollicina is the sole director of Feson Pty Ltd).
Hume has served on each of the plaintiffs a notice under s142 of the Mining Act 1992 (NSW) (the Mining Act) seeking access to their land pursuant to an access arrangement.
The particular routes and drilling sites are identified in the Amended Defence dated 5 August 2015 and marked on the plan in Exhibit 3.
Each of the plaintiffs has refused Hume consent to access their land for prospecting operations.
The text of section 142 of the Mining Act is set out below:
MINING ACT 1992 - SECT 142
Holder of prospecting title to seek access arrangement
142 Holder of prospecting title to seek access arrangement
(1) The holder of a prospecting title may, by written notice served on each landholder of the land concerned, give notice of the holder's intention to obtain an access arrangement in respect of the land.
(2) The notice of the holder's intention to obtain an access arrangement must, in addition to stating the holder's intention, contain:
(a) a plan and description of the area of land over which the access is sought sufficient to enable the ready identification of that area, and
(b) a description of the prospecting methods intended to be used in that area.
(3) The holder of a prospecting title and a landholder of the land concerned may agree in writing (either before or after the prospecting title is granted) on an access arrangement.
(4) If some but not all of the landholders of any particular land have agreed to an access arrangement, a reference in ss 143-156 to each landholder of the land or to a party to the hearing before an arbitrator does not include a reference to any of those landholders who has agreed to an access arrangement. However, the arbitrator may allow a landholder who has agreed to an access arrangement to become a party to the hearing of the matter in order to ensure consistency in the access arrangements over the same land, and may, for that purpose, replace the agreed access arrangement with the access arrangement determined by the arbitrator.
(5) In this section, a reference to the holder of a prospecting title includes a reference to the proposed holder of a prospecting title.
[2]
Orders sought by the plaintiffs
Relevantly, these proceeding have nothing to do with the determination of an access arrangement in respect of the plaintiffs' land consequent of a notice served under s142 of the Mining Act.
These proceedings are discrete. They concern the resolution of disputes between the parties said to arise under s 31 (1) of the Act.
By a summons filed on 12 May 2015 the plaintiffs seek orders and declarations that particular improvements on their land are either "dwelling houses, gardens or significant improvements" within the meaning of the Mining Act, and as such operate so as to prevent Hume from exercising any rights conferred by the licence over the surface of the land including accessing any of the proposed drilling sites by vehicle.
The text of section 31 of the Mining Act provides as follows:
MINING ACT 1992 - SECT 31
Dwelling-houses, gardens and significant improvements
31 Dwelling-houses, gardens and significant improvements
(1) The holder of an exploration licence may not exercise any of the rights conferred by the licence over the surface of 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 person occupying it, or
(b) on which, or within the prescribed distance of which, is situated any garden, or
(c) on which is situated any significant improvement other than an improvement constructed or used for mining purposes only,
except with the written consent of the owner of the dwelling-house, garden or improvement (and, in the case of the dwelling-house, the written consent of its occupant).
(2) The prescribed distance is:
(a) 200 metres (or, if a greater distance is prescribed by the regulations, the greater distance) for the purposes of subsection (1) (a), and
(b) 50 metres (or, if a greater distance is prescribed by the regulations, the greater distance) for the purposes of subsection (1) (b).
(3) A written consent given under this section is irrevocable.
(4) This section does not apply with respect to a dwelling-house, garden or significant improvement owned by the holder of the exploration licence or, if the holder is a corporation, by a related corporation.
(5) If a dispute arises as to whether or not subsection (1) applies in a particular case, any party to the dispute may apply to the Land and Environment Court for a determination of the matter
[3]
Jurisdiction
As is clear from subs (5) the Act gives this Court jurisdiction to determine a dispute that arises as to whether or not subs (1) applies in any particular case. It is also clear from the text of the section that I have no jurisdiction to determine whether a particular improvement on the plaintiffs' land is within s 31(1), in the event of a dispute, unless it arises because Hume is exercising the rights conferred by the licence over the surface of the land where the improvement is situated or within the prescribed distance of a claimed dwelling houses or garden.
[4]
Summary contentions
The construction of s31 (1) is the central issue between the parties in these proceedings.
Hume's primary submission is the rights conferred by its exploration licence are, as provided in s 29 of the Act, to prospect on the land specified in that licence, and that any right it has to access and drive across that land is not a right conferred by the licence within the meaning of s 31(1).
In the event that I accept that proposition Hume submits that the only remaining issues for determination are whether an improved pasture (in the case of the land owned by the plaintiffs other than the Vincent and Kathleen Roche), a cross-country course and a paddock used for car-parking is a significant improvement within the meaning of the Act. All other claimed improvements, Hume argues, fall away because Hume does not intend to exercise any rights conferred by the licence over the land on which those claimed improvements are situated, or within the prescribed distance of a claimed dwelling houses or garden.
The plaintiffs' primary position is that the rights conferred by the licence include the express right to access areas within the plaintiffs' land by vehicle. The identified primary access routes cross each of the properties, and Hume intends to access the boreholes using existing tracks and driveways (which the plaintiffs claim are significant improvements) or new access ways on the land surface of which is a significant improvement. They contend that s 31 operates to prevent Hume from doing so. The plaintiffs suggest that the first task for the Court is to determine the plaintiffs' claims that significant improvements are situated on the surface of the land and then consider the application of the provisions of s31(1) of the Mining Act to the facts in light of those determinations.
As noted I have no jurisdiction under s31 (5) to determine a dispute as to whether subs (1) applies to a particular improvement on the plaintiffs' land unless the dispute arises because Hume is exercising "a right conferred by the licence" over the surface of the plaintiffs' land. It seems to me that it is necessary to understand the "rights conferred by the licence" and where Hume proposes to access those rights before anything else.
To adopt the approach suggested by the plaintiffs, namely first ask whether something is a "significant improvement" and then consider whether s 31(1) applies is unsatisfactory in circumstances where I have no jurisdiction to determine such a matter under s31 (5) unless 31(1) applies.
[5]
Statutory Construction
In order to construe the meaning of s 31(1) it is appropriate to apply orthodox principles of statutory construction as set out in Project Blue Sky Ltd v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at 381[69] per McHugh, Gummow, Kirby and Hayne JJ:
The primary object of statutory construction is to construe the relevant provision so that is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined by reference to the language of the instrument viewed as a whole. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that:
The context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed.
Thus, the process of construction must always begin by examining the context of the provision that is being construed.
In considering the text of s31(1), which must be the starting point, I appreciate that the Mining Act is divided into distinct parts of the exploration and mining process, and that the rules of statutory interpretation applying to an Act divided into self-contained parts may not be necessarily helped by having regard to provisions outside the relevant part. That said, the parties agree that there are some provisions in the Act which are relevant to all parts of the Act. Clearly, the objects clause in the Act, in s 3A, applies to all parts of the Act. While the plaintiffs contend that the language in s 31 is clear and it is not necessary to have regard to the objects clause: Minister for Urban Affairs v Rosemount Estate Pty Ltd (1996) 91 LGERA 31 at 78, Cole J: they accept that it is appropriate to do so, and to that end they have addressed the issue both orally and in their written submissions. As has Hume.
The use to which objects can be put is provided for by s 33 of the Interpretation Act 1989 (NSW):
In the interpretation of a provision of an Act … a construction that would promote the purpose or object underlying the act … shall be preferred to a construction that would not promote that purpose or object.
The Mining Act follows a logical structure reflecting these objects. It prohibits prospecting or mining without an authorisation, provides mechanisms for obtaining such authorisation and conditions that may be imposed, addresses the various exigencies that arise once authorities are in place, and requires the payment of royalties to the Crown on any minerals ultimately extracted.
The objects of the Mining Act are set out in s 3A as follows:
The objects of this Act are to encourage and facilitate the discovery and development of mineral resources in New South Wales, having regard to the need to encourage ecologically sustainable development, and in particular:
(a) to recognise and foster the significant social and economic benefits to New South Wales that result from the efficient development of mineral resources, and
(b) to provide an integrated framework for the effective regulation of authorisations for prospecting and mining operations, and
(c) to provide a framework for compensation to landholders for loss or damage resulting from such operations, and
(d) to ensure an appropriate return to the state from mineral resources, and
(e) to require the payment of security to provide for the rehabilitation of mine sites, and
(f) to ensure effective rehabilitation of disturbed land and water, and
(g) to ensure mineral resources are identified and developed in ways that minimise impacts on the environment.
The section states that the objects of the Act are to encourage and facilitate the discovery and development of mineral resources in New South Wales, having regard to the need to encourage ecologically, sustainable development. And, the Court of Appeal has endorsed the interpretation that:
The objects of the Mining Act support the statutory structure of the operative parts of the Act, that is, as legislation directed to the means by which mining may be facilitated and undertaken. (Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc [2014] NSWCA 105; 86 NSWLR 527 at 592[323])
Each party to the proceedings contends that its construction of s 31 is consistent with s 3A.
Yet, the plaintiffs' construction emphasises the words "…having regard to the need to encourage ecologically sustainable development" which qualify the overarching objective in s3A. Read with objective (g) "to ensure mineral resources are identified and developed in ways that minimise impacts on the environment", the plaintiffs contend, based on their evidence, that the Court would not be satisfied that an application of s 31 which permits prospecting operations, including access, on valuable works, including driveways, paddocks containing improved pastures or lucerne crops, and an international standard eventing course, without the consent of the owner is one which is consistent with the objects of the Act.
Having regard to the Act as a whole, the plaintiffs contend that the objects seek to encourage ecologically sustainable prospecting and mining and that it gives a number of protections to individual landowners under whose land the mineral resources lie. In its written submissions the plaintiffs articulate that the scheme of the Act, identified by s 31, is that prospecting operations, and any rights conferred by the exploration licence, cannot take place (in the absence of the landowner's consent) on the surface of certain land: Kayuga Coal Pty Ltd v John Ducey [2000] NSWCA 54 at [6] per Meagher JA. (Even though that case was dealing with s 62, the plaintiffs submit the principle remains apposite.)
The plaintiffs contend that the subject lands contain dwelling houses, lands containing a garden, or lands on which are situated significant improvements. Consistent with the objects of the Act, and the need to ensure that mineral resources are identified (through prospecting) in ways that minimise impacts on the environment, the plaintiffs' submit Parliament, through s 31, has sought to give the landholder the choice as to whether he/she wishes to protect the most environmentally sensitive and valuable parts of the property from the effects of the prospecting operation.
While I accept the plaintiffs' submissions that the objects in s 3A encourage ecologically sustainable development, and seek to ensure that mineral resources are identified and developed in ways that minimise impacts on the environment and, further, that s 31 provides a landowner with the opportunity to preclude access over the surface of land in certain circumstances, it does not follow that the defendant's interpretation of s 31 is at odds with the objects in s 3A.
On the contrary, it seems to me that the plaintiffs' interpretation of s 31 which would identify all driveways and improved pastures as "significant improvements" is in effect inconsistent with the objects of the Act. Such an interpretation has the potential to inhibit or sterilise the development of mineral resources over vast areas of rural land which are paddocks and if made roads and tracks cannot be used and new tracks and roads need to be made for the purposes of access for prospecting do anything other than minimise impacts on the environment.
Accordingly, I believe it is relevant, in construing s 31, to take into account the overarching purpose of the Mining Act as stated in s 3A and adopt orthodox principles of statutory interpretation as discussed in Blue Sky and use the objects in accord with s 33 of the Interpretation Act to derive an interpretation which has the effect of encouraging and facilitating the ecological, sustainable development of New South Wales mineral resources rather than an interpretation which inhibits or precludes development of those resources.
[6]
Order of consideration of the issues
In order to tackle the issues in this case I propose to deal, first, with what is comprehended by the reference in s 31 of the Act to "the rights conferred by the licence".
Next, I will determine which of the plaintiffs' claimed dwellings, gardens, significant improvements are (or in the case of dwellings and gardens, within the prescribed distance) on the surface of the land over which Hume proposes to exercise those rights. Thirdly, I will identify the content of the statutory-defined term "significant improvement" and, in particular, discuss the concept of "substantial … or other valuable work or structure". Lastly, I will determine which, if any, of the claimed dwellings, gardens and significant improvements fall within the statutory concepts of "dwelling house that is a principal place of residence of the occupant, garden and significant improvement" under s 31(1).
[7]
What is comprehended by the reference in s 31(1) of the Mining Act to "the rights conferred by the licence"?
[8]
A. The plaintiffs' interpretation
As stated, the plaintiffs' position is that the right to access their land and drive across it are rights conferred by the licence itself. In support of that proposition they submit (plaintiffs' written submissions at [40]-[84]) that:
The way to identify the "rights conferred by the licence" is to look at the text of the licence itself.
In this case, the licence permits prospecting operations to be carried out on the exploration area subject to the conditions of the licence. Condition 1 states:
The licence holder may conduct Category 1 Prospecting Operations on the exploration licence area subject to the conditions of the licence.
Category 1 Prospecting Operations are defined in the licence as "development to which cl 10(2) of the Mining SEPP applies": SEPP cl 10(2)(b)(iv) includes:
Accessing of areas by vehicles that does not involve the construction of an access way such as a track or road.
Hume also has approval from the Minister to carry out Category 2 Prospecting Operations. This approval, granted on 3 September 2014, includes development of the kind described in cl 10(2) of the Mining SEPP but it is exempt development because it will not take place on land that is described in cl 10(1); construction of access ways such as a track or road; excavations (including bulk sampling) totalling less than 100m³; and non-intensive drilling of boreholes.
Having regard to the above the plaintiffs submit that Hume has "rights conferred by the licence" which include rights to carry out Category 1 and 2 prospecting operations. Those rights include accessing of areas by vehicle, and the construction of an access route. But the rights, they say, are expressly subject to s 31.
Further, the plaintiffs submit "the access of areas by vehicle" within the definitions of "prospecting operations" in the licence is consistent with the provision of Div 4 of the Act. Section 29(1) identifies that the holder of an EL may, in accordance with the conditions of the licence "prospect" on the land. The grant of a right to prospect, pursuant to ss 22 and 21, carries with it a right to conduct prospecting operations: s 138(1) of the Act. The term "prospecting operations" has a wide definition in the dictionary to the Act and means "operations carried out in the course of prospecting". The prospecting operations proposed to be carried out on each of the plaintiffs' land include drilling boreholes, excavation (bulk sampling) totalling 100m3, accessing of areas by vehicle, which may involve the construction of new access ways. Vehicle access is necessary and is proposed partly on existing tracks and partly across the surface of the land on which are improved pastures, lucerne crops, a country eventing course, fences and drainage channel. Vehicle access is necessary for the initial environment assessment of the drilling sites, for example, drilling rig brought on by low-loader, compressor on a truck (plaintiffs' written submissions at [90]-[94]).
In summary, they submit that the natural meaning of "prospect" and "prospecting operation" in the Act contemplates both the drilling of a borehole and the means of access to it by vehicle, whether it is by way of existing roadway or access way or by the creation of a new track or road.
The use of an existing access, or creation of a new access for the purpose of accessing the boreholes, is an activity which is integral to, or subsumed in, the use of the land for the purposes of carrying out prospecting operations.
Therefore, the "rights conferred by the licence" is the right to conduct prospecting operations on the land within the EL area, including the plaintiffs' land; the prospecting operations necessarily include access to the drilling site by vehicle - whether by existing road or creation of a new road.
However, the prospecting operations must be in accord with an access arrangement. The right to conduct prospecting operations, including access on the plaintiffs' land, is expressly qualified by s 31(1) of the Act. The effect of s 31 is that Hume cannot use an existing road - drive on the plaintiffs' land - where that existing road is held to be a significant improvement and Hume is prevented from creating an access on or over a significant improvement.
[9]
B. Hume's interpretation
As stated, Hume's primary position is that the rights conferred by the exploration licence are, as provided in s 29, to prospect on the land specified in the licence, and that any right to obtain access and drive across that land is not a right conferred by the licence within the meaning of s 31.
Access rights are provided by the Mining Act.
Section 31 appears in Pt 3 of the Mining Act - which deals with exploration licences (one type of "authorisation") that can be obtained to overcome the prohibition on prospecting in Pt 2. Divisions 1 and 3 are directed to applications and grants of exploration licences. Any person may apply for an exploration licence: s 13, and the Minister is empowered to either grant an exploration licence or refuse the application: s 22.
Division 4 of Pt 3 - which contains s 31 - sets out the rights and duties under the exploration licence once granted by the Minister. The prohibition on exercising "any of the rights conferred by the licence" in s 31 should be construed as referring to the rights conferred by an exploration licence as set out in the same division, in s 29(1).
Reading ss 29 and 31 together, the prohibition in the latter provision relates to the rights referred to in the former.
Therefore, the right given by the grant of an exploration licence is the right to "prospect" as defined in the Dictionary to the Act:
To carry out works on, or remove samples from, land for the purpose of testing the mineral-bearing qualities of the land, but does not include any activity declared not to be prospecting by a regulation under s 11A or by a declaration made under such a regulation.
(The Court notes that Regulation 13 of the Mining Regulations 2010 (NSW) and any declarations made under it to date are not relevant to the case at hand.)
In the ultimate, Hume submits that neither gaining access to the land, nor driving people or equipment on it, is carrying out works on or removing samples from land within the meaning of the defined term "prospect". Gaining access and driving, therefore, is not prospecting within s 29 and is not the exercise of a right conferred by the licence as that expression is used in s 31.
Similarly, while the grant of a right to "prospect" pursuant to ss 22 and 29, carries with it a right to conduct "prospecting operations" being "operations carried out in the course of prospecting" (Dictionary to the Act), it follows that to be a prospecting operation an activity must be carried out during the "carrying out of works on, or removing of samples from, land for the purposes of testing the mineral-bearing qualities of the land". In short, "prospecting operations" is part of "prospecting" as defined under the Act.
Gaining access to and driving on land, therefore, is not prospecting or the conducting of prospecting operations and thus is not the exercise of a right conferred by the licence.
Accordingly, there can be no dispute within s 31(5) in respect of the roads and access ways in this case.
[10]
Finding - What is comprehended by the reference in s 31 of the Act to rights conferred by the licence
I agree with Hume's construction of the meaning of the words "rights conferred by the licence" in s 31(1).
A right to access is not conferred by an exploration licence.
Rather, a right to access is dealt with in Div 2 of Pt 8 of the Mining Act (ss 138-158). This part of the Act deals with access arrangements for prospecting titles - an exploration licence is a type of "prospecting title": s 138(1). Accordingly, it is an access arrangement entered into consensually (s 142(3)) by the parties or imposed by an arbitrator or the Court that takes effect as a deed (s 156(b), s 155(7)). It is that agreement that gives the licenceholder the right to access properties and to gain access to the particular parts of the property where prospecting is proposed to be carried out, not the exploration licence.
If I were to accept the plaintiffs' approach to the construction of the licence as conferring a right of access to the plaintiffs' land it would, as Hume submits "set at nought the detailed provisions of the formation of binding access arrangements pursuant to Div 2 of Pt 8 of the Act".
The right of access to the exploration licence area is separate from the right to prospect and this is made plain by the fact that an arbitrator exercising his or her function under ss 149(1) and 151 must make a "determination as to whether or not the holder of the prospecting title should have a right to access the land concerned".
I do not accept that legislation is construed by reference to executive instruments made under it: CCM Holdings Trust Pty Ltd v Chief Commissioner of State Revenue [2013] NSW SC 1072 at [118]-[120] per Bergin CJ in Equity.
The plaintiffs' reliance on the conditions 1, 2, 3 and 12 of the licence to support their position is misconceived. The conditions do not confer rights to access land or bore sites within particular parcels of land. Conditions 1 to 3 qualify, by condition, the exercise of rights (whether the right to prospect conferred by the licence itself, or access rights obtained pursuant to an access agreement).
In other words, the conditions function to impose qualifications on the exercise of rights under the licence. This is clear from the terms of the conditions on the EL - they permit less intensive action and mandate the obtaining of and compliance with further approval of certain categories of activities.
The power in s 22 allows the Minister to "grant to the applicant an exploration licence over all or part of the land over which a licence is sought". Section 29 then sets out the "rights under the exploration licence": the holder "may prospect on the land specified in the licence". There are no provisions empowering the Minister to confer, through the grant of an exploration licence, other rights upon application for such a licence. In contrast, there are as Hume submits numerous provisions which empower the Minister to subject the licence to conditions (example ss 26, 168A, 238-239, 246P, 261B).
The subject matter of the terms of the exploration licence held by Hume are the conditions upon the exercise of the rights to prospect; - they do not expand or add to that right. Nor can the language of the Mining SEPP broaden the powers of the Minister pursuant to s 22. Having regard to Hume's written submissions, in particular [41], and the submissions in respect of Condition 12 at Hume's supplementary written submissions at [6]-[8], I do not accept that an exploration licence condition can confer a right of access.
The conditions of the exploration licence referred to by the plaintiffs cannot expand the meaning of "prospect" and "prospecting operations" to include access. The plaintiffs' construction would in my assessment have the Minister, in exercising his power under s 22 of the Act, conferring rights on licence holders beyond those for which the Act provides.
Hume's interpretation of s 31 in my assessment better achieves the objects of the Act and more accurately reflects the text and context of s 31: it operates more harmoniously with the balance of the Act.
[11]
Which of the plaintiffs' claimed dwellings/gardens/ significant improvements are on (or, in the case of dwellings and gardens, within the prescribed distance of) the surface of the land over which Hume proposes to exercise those rights?
Having accepted Hume's primary submission, the remaining disputes for determination have been reduced. In summary they are: whether an improved pasture (in the case of the land owned by the plaintiffs other than Vincent Roach), a cross-country event course and a paddock used for car-parking is a "significant improvement" within the meaning of the Act.
(I note that the dispute about the contour bank on the Roche property has been resolved because the bore hole is to be moved. This was discussed at the site visit and as I understand it confirmed by Mr Doyle's evidence in Court. I make some comment in due course about the dam on the Roche property and the second dwelling on the Pollicina Property).
It must be the case that all other identified disputes are outside my jurisdiction under s 31(5) because Hume does not intend to exercise any rights conferred by its licence over the land on which the plaintiffs' other claimed improvements are situated (or within prescribed distance of claimed dwelling houses or gardens).
The plaintiffs list the remaining s 31(5) disputes in [10]-[17] of their closing submissions. (As I understand it this list replaces [5] of their opening submissions at (CB 241-242) and, should be read together with the list of gardens in disputes at [100] of the plaintiffs' closing submissions, the reference to the Pollicina dwelling house at [56], and the reference to the right-of-way attaching to the title to the Pollicina land at [59] to [66]).
In identifying the remaining disputes for the purposes of s 31(1), Hume submits that the plaintiffs misunderstood what it is proposing in respect of each property. It submits that the plaintiffs believe that Hume proposes to "create or construct new access tracks or routes on all of the properties" and that is incorrect. Rather, Hume intends, in areas where no existing formed road or existing track is available to access the exploration licence area by driving across the plaintiffs' paddocks from the nearest such road or track to the borehole site. This was explained by Mr Doyle in his evidence and is envisaged in the review of environmental factors (REF) at (CB 1284). And, in relation to other "access upgrades" referred to in the REF (CB 1284-1285) the works involved, where necessary, include:
1. slashing of grass (though this is rarely necessary according to Mr Doyle);
2. moving loose rocks, logs or branches to facilitate access and ensure safety as necessary;
3. placement of gravel - only with the landholder's permission, and
4. despite a reference to new tracks requiring the installation of drainage, Mr Doyle told the Court that in his time with the company he has never needed to do this (CB 1285)
With that in mind, Hume contends that the disputes under s 31(5) which the Court has jurisdiction to determine are as follows:
1. Martin property
Lucerne paddocks 1 and 2.
1. Alexander property
Drainage channels (with respect to dams, the Court appreciates the uncontradicted evidence of Mr Doyle that Hume does not intend to drill or drive over the Alexander dams) (CB 1050).
16 working paddocks - only paddocks 1, 2, 4, 6, 8, 9 and 15 - were identified by Mrs Alexander on Exhibit 3 during cross-examination as in dispute.
Automated irrigation system (again, according to Mr Doyle, Hume does not propose to drill or drive over any part of this system which is "on the surface of the land" - therefore there is no dispute within s 31).
Landscaping on Carter's Lane and along the Alexander driveway is not an issue because driving on the driveway in Carter's Lane is not prospecting within s 31 of the Act.
1. Fesen property
Fences - according to the evidence no prospecting is proposed near the fences on this property. And, the cutting of the fences in three places to facilitate access to the bore location is a matter to be dealt with under the access arrangement and is not a dispute within the terms of s 31.
15 paddocks - only paddocks 1, 2, 7, 11 and 16 and one of either 13 and 12 are in dispute.
Automated irrigation system - not within s 31 as Mr Doyle's unchallenged evidence (CB 1048) is that Hume does not propose to drill or drive over any part of this system which is "on the surface of the land".
Cattle ways - Hume contends that the claim in respect of the cattle ways is in fact a different formation of the claim in respect of the irrigation system. Hume does not propose to prospect in this cleared area of paddock but, rather, cross it to access the borehole and on that basis no dispute is enlivened by s 31.
1. Pollicina
Formed gravel driveway extending around machinery shed - there is no evidence before me that Hume intends to prospect in this area therefore there is no dispute.
Nine paddocks with improved pastures - paddocks 3, 7 and 8 are in dispute.
Automated irrigation system (again, no issue under s 31(5) for the same reason as noted earlier based on the evidence of Mr Doyle (CB 1046) - not on the surface of the land.
The right-of-way over Carter's Lane attaching to the title of the Pollicina property. Mr Pollicina does not own the land and accordingly this does not give rise to any dispute under s 31(5), even if it were the case (which it is not) that Hume were intending to prospect on this area.
Landscaping along the Pollicina driveway - again, this landscaping area if it is a garden or significant improvement is not proximate to any prospecting activity Hume intends to carry out under its licence. Driving along this driveway is not, as I said, prospecting. Or a right under the licence.
The dwelling house on the Pollicina property is not a principle place of residence based on the evidence before me (I note that only the first line of [9] of Mr Pollicina's affidavit at CB 445 was read). In the absence of evidence, no s 31(5) dispute arises.
1. Roche (plaintiffs' closing submissions at [16]-[17]).
Having identified as best I can, from the evidence, the issues in dispute it is necessary to now deal with the third issue.
[12]
What is the content of the statutory-identified term "significant improvement" and in particular the concept "substantial … other valuable work or structure".
The Act defines "significant improvement" as meaning "any substantial building, dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work or other valuable work or structure" (Dictionary definition).
This definition applies to the words used in s 31(1).
According to the evidence the defined term was introduced into the Act by the Mining Act (Improvement of Lands) Act 2008 (NSW). Before that, the key terms of the current definition for "significant improvements" were found in the substantive provisions of the Act: ss 31(1)(c) which deals with exploration licences, 49(1)(c) which deals with assessment leases and 62(1)(c) which deals with mining leases. Those sections which now use the phrase "significant improvement" formerly referred to an improvement (being a substantial building, dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work or other valuable work or structure").
Given the words are the same; I accept that decisions on those sections (with the former words) are relevant to the interpretation of the defined term in the Act as it currently stands (Hume's closing submissions at [46]).
Hume submits: based on those earlier decisions that the words "substantial" and "valuable" apply to all matters covered in the definition so that the objects listed must be both "substantial" and "valuable" to fall within the terms of the definition. Kayuga Coal Pty Ltd v Ducey [2000] NSWCA 54 at [17] per Meagher JA at [17], Priestley and Powell JJA agree.
Furthermore, "valuable" does not mean very valuable or special value: Kayuga Coal at [18]. And, because the concept of an improvement captures any item that enhances the value of the land, the word "valuable" must mean more than merely enhancing the value of the land; therefore "valuable" adds emphasis and a qualitative element. To be valuable an improvement must be of more than minimal or little value: Ulan Coal Mines Pty Ltd v Minister for Mineral Resources [2007] NSWSC 1299 at [31] per Smart AJ.
The plaintiffs also cite the Newland decision to explain the meaning of the words "significant improvement" but place a different emphasis on the Court's reasoning at [31] wherein the Court states "it is hard to imagine an insubstantial improvement being valuable".
They also refer the Court to the decision in Lightning Ridge Miners Association Ltd v Slack-Smith and Anor [2013] NSWLEC 1063, Moore SC, who held that fences and the clearing of land to create firebreaks constituted, on the facts of that case, "other valuable works" and therefore were "significant improvements" at [62]. Similarly, the plaintiffs' submit "improved pastures" and "crops" are improvements to land and fall within the definition of valuable works at [11].
The plaintiffs' also submit that I should have regard to the authorities in the areas of compensation law, valuation and taxation law in order to determine the meaning of the term "improvements" in s 31(1). These authorities, it is contended, support the proposition that improved pastures and crops are improvements to land and fall within the definition of valuable work. In Trust Co of Australia Ltd v The Valuer General [2007] NSWCA 181, Campbell JA held that an improvement in relation to land is defined as something that "has the effect of enhancing the land's value or profitability compared with its natural state" at [24]. In Goode v Valuer General [1979] 22 SASR 247, Wells J held "pastures with perennials and annual species of improved pastures where the soil has been prepared and treated with minerals and then maintained were an improvement as they increased the carrying capacity of the land".
Based on these authorities, the plaintiffs contend that the following requirements need to be satisfied in order to enliven the provisions of s 31(1)(c):
1. there needs to have been something done to or upon the land;
2. what has been done either adds something beneficial to the land which was not present, or remove or reduces something detrimental to land which was;
3. the effect of the matters referred to in (i) and (ii) is to enhance the value of the land;
4. the enhanced value may be of a capital nature, or by increasing the profitability of the land;
5. increasing the productivity of the land constitutes value;
6. the landholder need not demonstrate particular or special value, or quantify the value resulting from the things done to or upon the land.
Hume rejects the plaintiffs' reasoning as outlined and submits to the extent that the plaintiffs rely on authorities in relation to the meaning of the word or the concept "improvement" in other contexts (plaintiffs' written submissions [11]-[13], such reliance fails to appreciate the significance of the qualifying words "valuable" and "substantial" as explained by Smart AJ. Moreover, those decisions are of extremely limited assistance in interpreting the meaning of the defined phrase "significant improvements" in the particular statutory context of the Mining Act.
[13]
Finding - the meaning of "significant improvement"
The Courts have not previously determined whether improved pastures, paddocks containing crops and a cross-country eventing course are "significant improvements" for the purposes of s 31(1) of the Mining Act. The plaintiffs contend that they are "other valuable work" and thus "significant improvements". Mrs Alexander, Mr Pollicina and Mr Martin have all provided detailed affidavits relating to the amount of work done to their land, by whom and when and what soil testing, eradication of noxious weeds, ground preparation, sowing, fertilising, weed spraying, harrowing, aerating and careful grazing, not overstocking or understocking and other activities that have been undertaken to establish the introduced perennial pasture species and the lucerne crops on the property.
The Court observed these relevant areas of the plaintiffs' land at the site view and at that time heard evidence directly from these witnesses and their expert agronomist, Mr Lucas. He opined that the effect of the works in creating the pastures and the crops has been to increase the profitability of the land by increasing its productivity and Dr Roche, in his affidavit evidence, has told the Court of the substantial work that has gone into creating and maintaining and preparing the equestrian event courses for events on the property at Araluen, including the cross-country course and the parking area. The plaintiffs contend that the evidence supports a finding that the improved pastures, lucerne crops and the cross-country course and the parking areas all constitute "other valuable works". They should be declared to be "significant improvements". The plaintiffs' also contend that "other valuable works" include fences, roadworks, driveways and access tracks. They are all "significant improvements".
I accept on the evidence before me that the fences on the plaintiffs' properties are stock-proof and appropriately maintained. That was apparent at the view. I also appreciate from the evidence and my observations at the view that the building and engineering operations in creating Carter's Lane and the driveway and roadways on the respective properties has provided functional access which is well maintained.
However, given the Court's jurisdiction under s 31(5), the only disputes I am able to determine at this time relate to whether the improved pastures, the lucerne paddocks, the cross-country eventing course, the Araluen car park (where prospecting is proposed -as outlined in the evidence) should be declared to be "other valuable works" and thereby "significant improvements".
Having regard to the general principles of statutory construction discussed earlier derived from the Interpretation Act and Project Blue Sky, it is important to read the defined term "significant improvement" in its context. Or as Hume submits, "inserted into the fabric of the substantive enactment": Kelly v The Queen [2004] HCA 12; 218 CLR 216 at [103] per McHugh J. For that reason an interpretation of "rights conferred by the licence", "significant improvements" and "gardens" and any decision on the meaning of one term necessarily affects and informs the interpretation of each other term. Moreover, any such determination of the meaning of the words in the section needs to take account of the overarching purpose of the Act stated in s 3A which supports the statutory structure of the operative parts of the Act, Warkworth at [27], "being legislation directed to the means by which mining may be facilitated and undertaken in New South Wales". It is true that the scheme in s31, as identified in the Kayuga case, is intended to protect the most sensitive parts of a landholders' property from the effects of exploration. However, to extend those protections in s31 - by interpreting the conditions of the licence as rights which permit vehicle access (absent an access arrangement or a consideration of the provisions in s138) - or having regard to improved pastures and crops or a cross country event course as "valuable works" where the emphasis in the text of the definition is on substantial and valuable structures, built items simply ignores orthodox principles of statutory construction.
I accept Hume's submission that the authorities relied upon by the plaintiffs in respect to the meaning of the word "improvement" in other contexts (plaintiffs' written submissions [11]-[13]) do not adequately appreciate the significance of the qualifying words "valuable" and substantial" in the defined term. For that reason they are, in my assessment, of limited assistance in interpreting the meaning of the defined phrase "significant improvement" in the context of the Act. I prefer Hume's interpretation of the relevant law.
As the plaintiffs concede at [20] of their opening written submissions, if the Court were to declare the improved pastures, lucerne paddocks, cross-country course, Araluen parking areas to be significant improvements, the consequence would be that Hume cannot conduct any prospecting operations over the surface of the land on which it is situated those significant improvements: s 31(1).
Such a declaration has alarming consequences for mineral exploration on vast areas of rural land in New South Wales, and in my assessment the potential to frustrate the object of the Act "to encourage and facilitate the discovery and development of mineral resources in New South Wales in having regard to the need to encourage ecologically sustainable development": s 3A of the Act. In my opinion an orthodox construction of the section in the context of the Act as a whole which promotes the purpose or object underlying the Act should be preferred to a construction that would not promote that purpose or object: s 33 Interpretation Act; Warkworth at [323].
[14]
Finding - improved pastures/lucerne crops
Relevantly, the defined term "significant improvement" does not include "improved pastures". And, I accept as Hume submits the exclusion of the term from that definition appears to have been intentional on behalf of the drafters.
I have reached this conclusion for two reasons. Firstly, it seems inconceivable to me that if an "improved pasture" was meant to be a "significant improvement" that those words or some similar wording were not also included. It could have been so easy for the drafters of this legislation, after the words "soil conservation work", to have inserted the words "improved pastures" or "lands upon which crops are grown" but the words are not there. Instead, the plaintiffs must massage the words "improved pastures" into the defined term "other valuable work". But an "improved pasture" simply is not a work in the ordinary sense of the word.
The other reason why I believe that an "improved pasture" is not a "significant improvement" is because there are other statutory provisions in the Act which do include the term "improved pastures".
I am referring to the term "Agricultural land" as defined in Schedule 2(f) of the Act includes improved pastures being "land that has a preponderance of improved species of pasture grasses". The evidence from the plaintiffs' expert agronomist is that the paddocks in which Hume proposes to drill its boreholes on the Alexander, Fesen and Pollicina properties have a preponderance of improved species of pasture grasses, and the Martin paddocks on which Hume intends to drill its boreholes are used for production of lucerne for hay and silage (Mark Lucas transcript 15 September 2015).
The expert evidence suggests that the relevant paddocks may well be "agricultural land" as defined in Schedule 2 to the Act. There is simply no textual support at all in the Act for something like an improved pasture to be a significant improvement. It is more likely that improved pastures and lucerne crops are agricultural land as defined.
As such, cl 22 of Pt 2 of Schedule 1 of the Act enables such a landholder to make objection to the grant of a mining lease if it is to cover agricultural land. While I am not seized with the task of determining that issue in these proceedings if I were to determine that such improved pastures were also "a significant improvement' under s 31(1) then the provisions of cl 22 and the assessment process pursuant to subcl 23 to determine whether land was agricultural land could be circumvented. As Hume submits, this is a strong indication that things capable of meeting the definition of agricultural land; such as improved pastures are not significant improvements under s 31(1).
I do not accept the plaintiffs' attempts to isolate the Court's interpretation of "significant improvements" in cl 31 from the provisions of Schedule 1 dealing with agricultural land (plaintiffs' closing submissions at [1]-[3]. The term is, as Hume submits, used in Pts 3, 4, 5, 9 and 12 of the Mining Act, in addition to its use in Schedule 1 (cl 23A). As the term "significant improvement" has one definition in the Act, its meaning must be consistently applied throughout the Act - which is to be construed as a whole.
[15]
Finding - cross-country horse event course
I accept Hume's submission that a cross-country course is not "a structure" or "work" within the meaning of the definition of "significant improvement". The business of a farm as an entire operation is not considered in order to determine whether it, in totality, is substantial and valuable work. Similarly, the eventing business operated by the Roche family should not be considered, in its totality, for the purposes of determining whether the surface of the land - which is intermittently used as a cross-country event course - is a "significant improvement" under s31 (1). The Act is directed toward identifying improvements or things on the surface of the land or items which are substantial and valuable - not uses to which land is put from time to time.
You need to look exactly what is on the surface of the land, and the fact that land is used for a horse event or a sport does not of itself constitute in this case something which is a substantial or valuable and thereby a significant improvement within the meaning of s 31(1). A cross country horse event course is not a significant improvement and therefore no dispute arises under s 31(5).
[16]
Finding - the Roche's car park
Again, the use of the paddock, to park cars and horse floats from time to time is neither "a work" nor "structure" or significant improvement as defined by the Act within the meaning of the term in s 31(1). To the extent that it is claimed that the car park/paddock is an improved pasture, again that does not constitute a significant improvement as defined for the reasons earlier stated that it might also be argued that it is agricultural land.
[17]
Finding - the cattle ways
The cattle ways are cleared spaces within paddocks. Having regard to the evidence and my observations of this area at the Court view I accept Hume's submission that they are a category of existing path or access way, which is the function they serve on these properties. Given that Hume only intends to use the cattle ways for the purpose of access/driving there is no s 31(5) dispute arising on the facts.
[18]
Finding - irrigation piping under the cattle ways
To the extent that the plaintiffs' claim that the irrigation piping system running underneath the cattle laneways- is a valuable work and thereby a significant improvement - such an argument cannot be sustained having regard to the fact that s 31 only relates to the exercise of rights over the surface of land on which is situated a significant improvement. Again, no dispute arises under s 31(5) in respect of the irrigation piping under the cattle laneway.
[19]
Finding - underground irrigation pipes over the plaintiffs' land
By definition, underground irrigation pipes are not situated over the surface of the land and thereby are outside s 31(1) and s 31(5) of the Act. Obviously, this is the case in respect of all irrigation piping underground referred to in the plaintiffs' case.
[20]
Finding - fences
Before I deal with fences I would like to discuss the date for the assessment of a "significant improvement" for the purposes of s31.
[21]
Date for determination of "significant improvement" under s 31
This issue, if it arises at all in this case, relates to the fences on the Roche and Pollicina properties because they are the only structures on the surface of the land which the evidence records have changed since the date of service of the s142 notice. Although, nothing ultimately turns on this matter in this case because I have determined that access is not a right conferred under the licence, the parties have addressed this issue in their submissions in some detail and it is appropriate that I set out my view.
In my assessment the date for determination of the existence of a "significant improvement" for the purposes of s 31 must be the date of the service of the written notice pursuant to s 142(1) of the Act by the holder of the exploration licence on the landowner.
The date of the Court's decision, as contended by the plaintiffs, cannot be the correct date on which to assess whether there is a significant improvement on the surface of the land for the purposes of s31 because the Court must decide the case based on historical facts, not present facts. The logic of this is apparent if one assumes that a hearing concludes and there is a period of some months before the decision is handed down. The plaintiffs' interpretation would allow a dissatisfied landholder to create a dam or other significant improvement on her land before final orders and frustrate the Court's determination.
It is clear, from s 31(5) - provision for determination of disputes, that the Mining Act contemplates that s 31(1) in respect of any particular exercise of rights is capable of fixing upon claimed significant improvements at a particular point of time. Otherwise, it would be impossible for the scope of disputes to be crystallised and determined for the purposes of s 31(5).
In my assessment of the parties' submissions on this point, s 31(1), insofar as it relates to exercise of rights conferred by the licence in accordance with a particular access arrangement, it must be limited to a prohibition upon the exercise of rights conferred by the licence over a significant improvement situated on the surfaces of the land at the time a s 142 notice is served. This meets the concerns of practicality, finality and the administration of justice already referred to and reflects the structure and content of s 31 and the Mining Act as a whole. More often than not, the owner of the s 31(1) thing is also the landholder (as defined in the dictionary to the Act). Consent under s 31(1) will most conveniently be sought, to the extent it is necessary, as part of seeking an access arrangement pursuant to Div 2 of Pt 8 of the Mining Act. Notice, therefore, will occur pursuant to the provisions of that division, in accordance with s 142. The notice fixes the time at which any s 31(5) dispute crystallises, in my opinion.
The fences I was shown on the plaintiffs' properties during the Court view and subsequently discussed in the evidence are stockproof fences which are well maintained.
With respect to the Fesen property and the Roche property, the evidence is that three gates in existence in February 2015 have been removed and replaced with fencing. Mr Pollicina told me that the gates were removed on his land for security reasons after the service of the s 142 notice by Hume.
The evidence is that Hume intends to cut particular fences on the Fesen property in three places in order to obtain access to the boreholes (plaintiffs' written submissions at [57]. Relevantly, Hume does not intend to carry out prospecting proximate to the fences. The facts at hand are different those considered by the Court in Lightning Ridge Miners Association v Slack-Smith and Anor [2013] NSWLEC 1063 where it found fences to be valuable works and, thereby, significant improvements.
As there is no prospecting proposed on or within close proximity to any fences on the plaintiffs' land in this case no dispute arises under s31 (5). I do not have jurisdiction to determine whether the fences at issue are valuable works and thereby "significant improvements".
[22]
Finding - contour banks on Roche property
Section 31(1) specifically defines a contour bank as a "significant improvement". The contour bank at issue on the Roech property has also been referred to in the evidence as a swale. It is located in the car-park paddock (Roech affidavit CB 380). It is of imprecise size, shape and location. At the view, the parties took some time to understand the features of the contour bank. In light of the scant detail before the Court, I am unable to determine whether it is a substantial and valuable feature within the meaning of significant improvement. Therefore, without sufficient detail I am not inclined to exercise my discretion to make any declaration about the matter at this time
That said it was my understanding that Hume proposes to avoid any prospecting on or within the requisite distance of the swale/contour bank or to access the borehole over it.
[23]
Conclusion
For the reasons stated, it is plain from the text and context of s 31 that reference to "rights conferred by the licence" does not include rights to access or drive across private land. That interpretation of s 31 promotes the purposes of the Mining Act. Furthermore, to extend the meaning of "rights conferred by the licence" to access and driving would be to extend the prohibition in s 31 to such a wide range of activities that, rather than the discovery and development of New South Wales mineral resources being encouraged and facilitated, such discovery would be frustrated and their development potential, as Hume submits, sterilised. After careful consideration of the evidence and the parties' comprehensive written and oral submissions for the reasons stated I am of the opinion that s 31 is not engaged as claimed by the plaintiffs.
Therefore, Hume may access the plaintiffs' properties as proposed and prospect at the identified locations in accordance with terms of the licence under any binding access arrangements made pursuant to Div 2 of Pt 8 of the Mining Act. The rights conferred by the exploration licence A349 do not include a right of access or transit. In my opinion the plaintiffs' interpretation of s 31 (1) of the Mining Act is too broad.
[24]
Costs
These proceedings are in Class 8 of the Court's jurisdiction and the provisions of s98 of the Civil Procedure Act 2005 and the Rule 42.1 Uniform Civil Procedure Rules 2005 apply.
As a result, costs follow the event which means in the present case that the plaintiffs' should be ordered to pay Hume's costs. However, as the question of costs has not been argued I propose, if the plaintiffs seek a different order for that which I propose, they should request the registrar to relist the matter before me for the hearing of submissions.
[25]
Orders
The Court orders:
1. The summons dated 12 May 2015 is dismissed.
2. Order that the plaintiffs pay the defendant's costs of the proceedings unless within 14 days from the date of these orders the plaintiffs apply to the Registrar to relist the matter for hearing argument as to costs.
3. The exhibits are returned.
Susan Dixon
Commissioner of the Court
[26]
Amendments
13 November 2015 - 2 typographical errors
17 November 2015 - typographical errors
26 November 2015 - Typographical corrections made in paragraphs [9], [21], [24], [31], [41], [44], [62], [63], [73(2)], [73(4)], [73(5)], [75], [77], [85], [98], [105], [114] and [121].
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 26 November 2015
Contour bank - as noted earlier I do not understand this to be still at issue because Hume intends to move the drilling hole away from the contour bank.
Automated irrigation system (again, no issue under s 31 based on Mr Doyle's evidence at CB 1053). Hume does not propose to drive or drill over any part of this system which is on the surface of the land.
Two bridges over Wells Creek - no issue, given my interpretation of access. In any event, I only recall seeing one bridge at the view and this is consistent with the defendant's submission that there will be two access crossings of 1 bridge as marked on Exhibit 3. Again, no dispute arises in respect of the bridges given my interpretation of s 31.
Dam - no issue based on Mr Doyle's evidence - which is unchallenged - because Hume does not propose to drive over land on which any of the dams on the Roche's property are situated (CB 1054(xi)).
With respect to the dam near borehole HP365, there is no satisfactory evidence that the dam goes to the boundary of the Roche property and is intersected by the proposed access route. To the extent that the plaintiffs now seek to include the catchment of a dam within the scope of the claimed improvement,- which I accept should be considered in determining the improvement: Ulan Coal Mines Ltd v Minister For Mineral Resources [2007]NSWCA 1299 at [223] there is simply not sufficient evidence before me to determine the extent of the catchment area of the dam in this case. In fact, the evidence of Mr Roche given on site was, to say the least, vague as to the extent of the dam and its catchment. Without further evidence I am unable to determine whether the prospecting (as opposed to access) at borehole HP365 is inside the requisite distance from the dam.
Spine track - from house to the clubhouse - Hume's access along this track does not enliven a dispute under s 31 of the Act for the reasons earlier stated.
Underground water reticulation system - again, a s 31 dispute does not arise as Hume does not propose to drill or drive over any part of the system which is on the surface of the land (CB 1053).