Discussion
20The primary judge did not hold, and neither party contends, that there is any middle ground in relation to the construction of s 15(5)(b). Either it includes claims and payments made under s 12A(1)(b) or it does not: [67], [69]. A claim for compensation for damage falls under s 12(1) and a claim for expense incurred in preventing or mitigating damage is made under s 12A(1)(b). That will be so even if the anticipated damage may be the outcome of subsidence which has already occurred and caused some damage.
21Section 15(5)(b) prevents claims being "entertained" and payments "made". The language of "entertain" and "payment" is also used in the penultimate paragraph of s 12(1) and in s 12(1A). As s 12(1A) expressly acknowledges, and as the High Court held in Alinta LGA v Mine Subsidence Board, that language is capable of applying to a claim for payment of compensation for damage under s 12(1)(a) and a claim for payment of an amount to meet expense incurred or proposed under s 12A(1)(b).
22The prohibition is directed to claims and payments characterised as being "in respect of damage caused by subsidence to [an] improvement". As French CJ observes in The Queen v Khazaal [2012] HCA 26; 86 ALJR 884 at [31] the words "in respect of" are ambulatory words which, in their general use, cover a variety of subjects and a variety of relationships between those subjects. They take their meaning from the context in which they appear and the nature and breadth of the relationship in any particular case depends upon that context: Workers' Compensation Board (Qld) v Technical Products Pty Ltd [1988] HCA 49; 165 CLR 642 at 653-654; Commissioner of Taxation of the Commonwealth v Scully [2000] HCA 6; 201 CLR 148 at [39].
23The "claim" is a claim under the Act made by or on behalf of the owner of an improvement or household or other effect. The "damage" is damage of a particular kind, namely that caused by subsidence due to extraction of coal or shale. In ordinary language, a claim or payment "in respect of damage caused by subsidence" is one for the loss or detriment incurred as a result of such damage and its consequences.
24When s 15(5)(b) was first enacted (Act No 22 of 1961) the only claims to which it could apply were those made under s 12(1)(a) to (c). Those were claims for payment of compensation for damage to improvements, claims for payment of expenses incurred or to be incurred in undertaking works as a result of such damage and claims to recover an amount equivalent to rent or the value of use of premises which was lost by reason of such damage. Later, claims for payment of compensation for damage to household or other effects were added by s 12(1)(d).
25With the enactment of s 12A in 1969, two further claims could be made. One was introduced with the grant of power to the Board to carry out preventative works. The other, as explained by the Minister for Mines, Mr Fife, in the Second Reading Speech, was to encourage the undertaking by landowners of works designed to prevent or mitigate damage arising from subsidence "as the costs of prevention are often cheaper than of cure": New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 2 October 1969 at 1551.
26A claim under s 12A(1)(a) could be brought for compensation for damage incurred "as a result of" the exercise by the Board of its powers under s 13A. Those powers permitted the carrying out of works which, in the Board's opinion, would reduce the total prospective liability of the Fund by preventing or mitigating subsidence damage anticipated to otherwise occur. Such a claim would not be for payment of compensation for subsidence damage, and accordingly would not be precluded by s 15(5)(b). It is unlikely, however, that such works would be carried out by the Board to prevent or mitigate damage to an improvement which had not been approved because the carrying out of such work would not reduce the prospective liability of the Fund (because of the application of s 15(5)(b)) so as to permit the Board to form the opinion required by s 13A. There would remain the possibility of such claims by the owner of that improvement in relation to damage caused to it by works carried out to prevent damage to other improvements.
27A claim under s 12A(1)(b) is for payment of an amount to meet proper and necessary expense incurred or proposed. The requirement that it be incurred or proposed "in preventing or mitigating damage" means that the object or purpose of the expense must be that of preventing or mitigating subsidence damage. No such payment can be made unless, in the opinion of the Board, the owner could reasonably have anticipated that the damage sought to be prevented or mitigated would otherwise have arisen or would otherwise arise: Jemena Gas Networks v Mine Subsidence Board at [48].
28The occurrence of damage and its detrimental consequences to the claimant are not the subject of or justification for claims brought and payments made under s 12A(1)(b). The subject of and justification for those claims and payments is the expense incurred or proposed for preventative or mitigatory work in circumstances where it could reasonably be anticipated that subsidence damage would otherwise occur. The claim is brought for recompense in respect of that preventative or mitigatory work.
29Looking at the matter broadly, claims under s 12(1) and under s 12A(1)(b) both bear a relation to damage caused by subsidence. For claims under s 12(1) that relation is to damage which has occurred. In the case of claims under s 12A(1)(b) it is to damage which was or is anticipated as likely to have arisen or to arise in the absence of preventative or mitigatory work. There are, however, important differences of substance between the two types of claim and payment. The subject matter of and justification for the former (s 12(1)) is the occurrence of subsidence damage and its detrimental consequences to the claimant. For claims under 12A(1)(b) it is the incurring or proposed incurring of expenditure in the face of anticipated subsidence damage and its detrimental consequences. A payment made in satisfaction of a claim under s 12(1) is directed to compensating for damage and its detrimental consequences and will be assessed on that basis. In contrast, the assessment of the payment to be made under s 12A(1)(b) is by reference to the expense incurred or proposed; which is the cost of prevention and may bear no relationship to the cost of compensating for the avoided damage, had it occurred.
30The notification provisions which apply to the claims take account of their different subject matter. Claims under s 12(1) must be notified "within the prescribed time", which is a period commencing on the day on which the owner knew, or the Board determines the owner should have known, that the damage was caused by subsidence: s 12(2) and Regulation 6 of the Mine Subsidence Compensation Regulation 2007. Similarly, claims under s 12A(1)(a) must be notified within three months after the day on which the extent of "damage to which the claim relates" becomes apparent. On the other hand, in relation to claims under s 12A(1)(b), that notification period is within three months after the day on which the "expense to which the claim relates" becomes known to the applicant: s 12A(2).
31The owner of an improvement or household or other effect which has been damaged must provide "details of such damage; the location of the improvement damaged; the description of the household or other effects damaged; and the amount claimed from the Fund": s 12(2)(a). In s 12A, a distinction is drawn between claims under s 12A(1)(a) and claims under s 12A(1)(b). In relation to the former, which are for compensation for damage occurring as a result of an exercise by the Board of its power under s 13A, the claim must specify "the location of the land or improvements, or the description of the household or other effects, to which the claim relates, the amount claimed, [and] the nature and extent of the damage". For the latter what must be specified is "the matters in respect of which the expense was, or is to be, incurred": s 12A(2)(c). Those matters are the completed or proposed preventative or mitigatory works.
32In support of their argument that claims for the expense of such works are not "in respect of" subsidence damage, the respondents draw attention to other provisions of the Act in which that or similar expressions are used. They emphasise that, where used, the references are to damage which has already occurred as distinct from damage which is anticipated. In particular, they rely upon the amendment to the language of s 10(3)(a) made by the Mine Subsidence Compensation (Amendment) Act 1969 which inserted ss 12(1A), 12A, 13A and 13B.
33Before that amendment, s 10(3) provided that there "shall be paid out of the Fund: (a) all amounts payable under this Act in respect of damage caused by subsidence". Section 2(a)(i) of the amending Act inserted after those words the words "or payable under section 12A of this Act" to accommodate the addition of claims under that section. The respondents submit that the addition of these words is consistent only with claims and payments under s 12A not being "in respect of damage caused by subsidence". In response, the Board points out that some additional authorisation was required to make payments from the Fund because claims under s 12A(1)(a) would not be claims "in respect of damage caused by subsidence". In my view that is correct. Notwithstanding the respondents' submission to the contrary, a claim and payment made under s 12A(1)(a) is for compensation for damage caused by works undertaken by the Board. That being the position, it was necessary to amend s 10(3) to authorise the payment of such claims from the Fund. Nevertheless it remains of some significance, as the respondents point out, that when doing so the draftsman did not use an expression such as "or otherwise payable under s 12A", which would have given an indication that payments under 12A(1)(b) were already authorised as payments "in respect of damage caused by subsidence".
34The respondents also point to the distinction made in the provisions of s 12(1A) between claims under s 12(1) and those under s 12A(1)(b). As originally enacted, the Act excluded from the improvements in relation to which payments might be made, buildings and works used in connection with the mining of coal. The 1969 amendments extended the application of that exclusion to claims under s 12A(1)(b). They also, by s 12(1A), introduced a new exclusion (to be applied at the discretion of the Board) with respect to improvements used in connection with the carrying on of any extractive industry or operation. Section 12(1A) deals separately with claims under ss 12(1) and 12A(1)(b) and does so by reference to their being "in respect of" "damage" (s 12) and "expense" (s 12A); in the same way as do the provisions, referred to earlier, which specify the information which must be provided in support of those claims. That it deals separately with those claims is partly explained by the need to make clear that the exclusion may be applied to damage occurring and expense incurred before the commencement of the 1969 amendments: s 12(1A)(a) and (b). Having done so it gives the Board a discretion, where it is satisfied that the cause of the subsidence was the carrying on of an extractive industry or operation, to refuse to entertain a claim or make a payment "in respect of that damage or expense". As appears from the express language used in paragraphs (a) and (b), that reference to "damage" is to actual damage and the reference to "expense" is to expense which has been incurred or is proposed.
35Account must also be taken of s 14A(2)(a) which deals with actions which may be brought by the Board to recover payments made from the Fund in the case of unlawful mining operations. It applies where improvements or household or other effects are damaged by subsidence and, in providing for the recovery of such payments, draws a distinction between payments made under s 12 "in respect of the damage" and those made "in respect of the subsidence" under s 12A(1)(b). The introductory words make clear that the reference to "damage" is to actual damage. In light of the decision in Jemena Gas Networks v Mine Subsidence Board the reference to "subsidence" is probably to be understood as to subsidence, whether actual or anticipated. For present purposes what is significant is that the description "in respect of the damage" is used in relation to payments made under s 12 and that a different description is used in relation to payments made under s 12A(1).
36The Board argues that s 15(5)(b) should be construed broadly and as applying to claims and payments "in respect of" anticipated subsidence damage as well as subsidence damage which has occurred. It points out that the policy behind s 15 is preventing the erection or alteration of improvements within a mine subsidence district without its approval. As the High Court observes in Alinta LGA v Mine Subsidence Board at [50], one of the means of giving effect to that policy is to place persons who contravene s 15 in a position where they are unable to recover compensation from the Fund for damage caused by subsidence. This consideration suggests that s 15(5)(b) should be construed broadly so as to give effect to that policy; because otherwise a landowner who is unable to recover compensation under s 12(1)(b) might pre-empt the operation of s 15(5)(b) by incurring expense and making claims under s 12A(1)(b). That opportunity is restricted to some extent by the requirements of s 12A(1)(b) that the expense be "proper and necessary" in preventing or mitigating subsidence damage and that, in the opinion of the Board, the owner could reasonably have anticipated that such damage would otherwise have arisen or would otherwise arise.
37There is also a countervailing consideration to be taken into account. As the majority in Jemena Gas Networks v Mine Subsidence Board observe at [37], ss 10, 12 and 12A provide to the owners of improvements substitutes for rights taken away or lost by reason of s 14. To that extent the provisions creating those rights are to be construed generously and as giving to those owners rights "broadly commensurate with what they lost by reason of s 14". That principle applies to s 12A as much as it does to s 12(1). In my view it follows that if those rights are to be denied, albeit to give effect to the policy manifest in s 15, that must be done by clear language; the relevant principle upon which the statutory language is to be interpreted being that if Parliament intends to infringe or deny rights it will use clear language: Australian Education Union v General Manager of Fair Work Australia [2012] HCA 19; 246 CLR 117 at [30].
38There is nothing in the extrinsic materials concerning the 1969 amendments which explains why the Parliament might have intended that the prohibition in s 15(5)(b) not include or extend to claims under s 12A(1)(b). On the other hand, there is no such material which makes plain that the Parliament's intention was to do so. Nor can it be said that it is necessary that s 15(5)(b) extend to such claims if the manifest purpose of s 15 is to be achieved: cf Newcastle City Council v GIO General Ltd at 113 (McHugh J). The conditions which must be satisfied for the recovery of expense under s 12A(1)(b) make it unlikely that a landowner who is unable (because of the application of s 15(5)(b)) to recover compensation under s 12(1) could always and effectively prevent the occurrence of any subsidence damage to improvements. It follows that s 15(5)(b) continues to discourage contraventions of s 15, albeit with less effect than it would if it also applied to claims under s 12A(1)(b). For that reason, the construction of s 15(5)(b) as not extending to claims or payments under s 12A(1)(b) does not mean that the purpose of s 15 cannot be sufficiently achieved. To the extent that it exposes the Fund to a potential liability it is likely to be a lesser liability than that under s 12(1) for the reasons explained in Jemena Gas Networks v Mine Subsidence Board at [40].
39Drawing these various considerations together, the construction contended for by the respondents and found by the primary judge is to be preferred. It gives effect to the natural meaning of the language used and is harmonious with other provisions of the Act.
40The expression "damage caused by subsidence to any such improvement" describes a particular kind of damage which is identified by its cause. It does not of itself say anything as to whether that damage has occurred. A claim or payment under the Act will answer the description of being "in respect of" damage of that kind if the subject matter of the claim and payment is such damage and its detrimental consequences. For that reason, claims under s 12(1) are within that description and subject to the prohibition in s 15(5)(b). Such a claim is brought for recompense for loss or detriment of the relevant kind.
41A claim brought or payment made under s 12A(1)(b) relates to expense, incurred or proposed, for the purpose of preventing or mitigating damage caused by subsidence. In such a claim the significance of that damage is as something which was or is anticipated as likely to have arisen or to arise in the absence of the preventative or mitigatory works. It is not, however, either the subject matter of the claim or the justification for it. Nor is the claim to be assessed by reference to the nature or consequences of such damage or payment made in recompense for them.
42In various of its provisions the Act draws a distinction between the two species of claim - one relating to damage which has occurred and the other to expense which has been incurred or is proposed. That distinction is one of substance.
43The construction contended for by the Board is that the claim and payment under s 12A(1)(b) sufficiently relate to damage of the relevant kind because the expense is incurred or proposed to prevent or mitigate such damage. The difficulty with this construction is that neither the subject matter of the claim nor of the payment is damage or anticipated damage; and the relevant provision requires that the claim and payment made be "in respect of damage".
44If the right created by s 12A(1)(b) was to be denied so as to give effect to the policy manifest in s 15 that could have been done by clear language. For example, the penultimate paragraph of s 12(1) excludes certain improvements from the scheme for payment of compensation unless certain conditions are satisfied. It does so by providing that "no claim shall be entertained or payment made under this Act in respect of any improvement" which was the subject of a conditional right to insure under the 1928 Act. The expression "in respect of" is used to identify the subject matter of the claim or payment which is precluded. That subject matter is the improvement rather than damage of a particular kind to the improvement. The same or similar language could have been used in s 15(5)(b) if it was intended that it should cover any claims made in respect of improvements which had not been approved.
45Whilst there remains a tension between the policy of s 15 and the construction of s 15(5)(b) as not extending to claims under s 12A(1)(b), the outcome is not such as to defeat that manifest purpose or require that the text not be given its natural meaning.