Neale v Mine Subsidence Board

Evidence 8The affidavit of Mr Cole-Clark CEO of the Board dated 3 December 2012 was read in part. Mr Cole-Clark stated that in July 2009 he instructed the Board's legal representatives that the Board was unable to accept the "fourth" claim under s 13A of the MSC Act and would treat the claim as under s 12. The Board's solicitor wrote to Mrs Neale's solicitor advising the "fourth" claim made pursuant to s 12 of the MSC Act was rejected on 25 August 2010. 9Mr Cole-Clark stated that the Neales made a further claim dated 1 September 2012 under s 12A(1)(b), s 13 (not the subject of this appeal) and s 12(1)(c) of the MSC Act. On 5 September 2012 Mr Cole-Clark formed the view that the Board was unable to accept this claim. In accordance with instructions, the Board's solicitors advised Mrs Neale's solicitor by letter dated 6 September 2012 that the Board was unable to accept the claim. The letter of 6 September 2012 stated that the matters addressed in the letter were not decisions that may be appealed under s 12B of the MSC Act. 10The affidavit of Mrs Neale dated 10 January 2013 was also read in part. It states that the contract to purchase the property was entered into in 2004 and that the Neales first became aware of subsidence in 2007. Mrs Neale stated that she and her family moved out of the property because of the risk of further subsidence in May 2008. Mrs Neale also detailed the measures taken to pursue a claim against the Board. Mrs Neale stated that she and her family moved back to the property in November 2011 because they could not afford paying both the mortgage of the property and rent. 11Mrs Neale's claim application dated 1 September 2012 is in the following terms: 1. A claim is made pursuant to section 12A(1)(b) of the Mine Subsidence Compensation Act 1961 (NSW) (Act) for payment from the Fund of an amount sufficient to pay for the proposed preventative or mitigatory works. 2. Alternatively, a claim is made, pursuant to section 13 of the Act that the MSB purchase the land. [not subject of this appeal] 3. A claim is also made, pursuant to s 12(1)(c) of the Act, for the rent paid by the owner from May 2008 to 26 November 2011 in the amount of $60,750 being the equivalent amount of rent paid by the Owner for the period in which the property has been untenantable. 12A quotation from Keller Ground Engineering dated 24 July 2012 was attached to the application in support of the s 12A(1)(b) claim. 13The letter dated 6 September 2012 from the Board's solicitors to Mrs Neale's solicitors set out the reasons Mrs Neale's claims were not accepted as follows: RE: Mine Subsidence Board and Kylie NEALE Claim Application dated 1 September 2012 We refer to the above Claim Application lodged on behalf of your client with our client, the Mine Subsidence Board (the "MSB"). On behalf of the MSB, we are instructed to advise that none of the claims set out in the Claim application are accepted for the reasons set out below. Claim item B(1) of the Schedule This purports to be a claim "pursuant to section 12A(1)(b) of the Mine Subsidence Compensation Act 1961" (the "Act"), being a claim for payment of an amount to meet your client's "proper and necessary expense" to prevent or mitigate possible damage to improvements resulting from subsidence. Section 12A(2)(b) of the Act relevantly provides that a claim under section 12A(1)(b) "shall be made ... within three months after the day on which the expense to which the claim relates became known to the claimant or, where some other time within which such a claim may be made is prescribed by the regulations, within the time so prescribed". We note that no such "other time" has been prescribed by the regulations for the purpose of section 12A(2)(b) of the Act. We note that the expense to which the claim relates (for the purposes of section 12A(1)(b)) is the work set out in "the estimate provided by ... Keller Ground Engineering on 24 July 2012 ... to fill the voids left by former workings" which is "estimated to cost between $3.1M and $3.8M" (the "Expense"). We also note that, on page 16 of Dr Pells' report dated 11 June 2008 (the "Pells Report"), Dr Pells estimates the cost to "[fill] the voids ... beneath the house, and beneath the property (sic)" to be between $400,000 and ">$6M". This estimate is for work which is substantially identical to the Expense. Accordingly, the Expense became known, or should have become known, to your client at least as early as the date of receipt of the Pells Report, being on or about 11 June 2008 and which is more than three months prior to the Claim Application being lodged. This claim, therefore, was made outside of the time prescribed in section 12A(2)(b) of the Act, notwithstanding that your client has obtained a further estimate from Keller Engineering. This claim is not accepted by the MSB. ... Claim Item B(3) of the Schedule This is a claim for rent and is a reiteration of part of the claim made by your client to the MSB on 19 May 2008, being a claim for, inter alia, "Rent from May 2008". That claim was rejected by the MSB on 16 September 2010. Accordingly, the MSB considers this claim to be a request that it exercise its discretion under section 7A of the Act to reconsider a matter which has already been dealt with. The MSB declines to exercise that discretion. 14The issue crystallises around whether the Board's letter dated 6 September 2012 constitutes a decision of the Board for the purposes of founding an appeal to this Court under s 12B of the MSC Act.

Board's submissions 15No decision for the purposes of s 12B has been made for the claims under s 12A(1)(b) and s 12(1)(c) so that no appeal right arises. In Alinta LGA Ltd v Mine Subsidence Board [2008] HCA 17; (2008) 244 ALR 276 the High Court unanimously interpreted the jurisdiction of the Court under s 12B and that interpretation applies squarely to these proceedings. The condition precedent to the Court's jurisdiction is whether there is a decision of the Board against which Mrs Neale can appeal. 16The letter of 6 September 2012 expressly states that it is not a decision of the Board. The refusal to accept the application did not constitute a decision of the Board for the purposes of s 12B.

Applicant's submissions 17In Jemena Gas Networks (NSW) Ltd v Mine Subsidence Board [2011] HCA 19; (2011) 243 CLR 558, also a claim for compensation under s 12B, the majority of the High Court at [37] referred to the need to construe legislation amply where it provides substitutes for private interests lost, as occurred with the establishment of the Mine Subsidence Compensation Fund. This resulted in the extinguishment of valuable rights relating to property. The right of Mrs Neale to sue the collier responsible for creating the mine workings is such a right. Alinta should be distinguished on its facts as identified in [64] of the judgment. 18The Board's reasoning for its decision in relation to the prevention claim under s 12A(1)(b) is as follows: (a)s 12A(2)(b) of the MSC Act requires the claim to be made within three months after the day the expense to which the claim relates become known to the claimant; (b)the expense is the work set out in the Keller estimate; (c)Dr Pells gave an estimate of $400,000 to more than $6M on 11 June 2008 (the Pells estimate); (d)the work in the Keller estimate and the Pells estimate are substantially identical; (e)the expense was known or should have been known to Mrs Neale on about 11 June 2008 such that the claim was not made within the prescribed time 19While the Board's response was couched in a way that coloured it as a decision based on whether the claim was brought within time, the question of whether the decision is appellable turns on the substance of the response not its form. The substance of the response was consideration of the expense in the Keller estimate, which meets the terms of s 12A(1)(b) and s 12B(b). 20The rent claim pursuant to s 12(1)(c) of the MSC Act was refused on the following reasoning: (a)the claim formed part of a rent claim made on 19 May 2009; (b)that claim was rejected on 16 September 2010; (c)the MSB therefore takes the claim as a request to exercise its discretion under s 7A to reconsider a matter already dealt with and declines to exercise that discretion. 21The substance of the response, rather than the form, is whether rent is payable from the Fund which satisfies the description in s 12(1)(c) and s 12B(b). Accordingly the Board made a decision for each claim which is appellable under s 12B.

Consideration 22The scope of the Court's jurisdiction to consider appeals relying on s 12B of the MSC Act is in issue. The statutory scheme in s 12, s 12A and s 12B was addressed in Alinta. Section 12B does not provide for unlimited appeal rights, as considered in Alinta. The High Court at [58] - [64] unanimously stated: 58 Three observations may be made about the text of s 12B. First, there must be a decision of the Board on a claim under ss 12 or 12A for the right of appeal provided by s 12B to be enlivened. The Board's decision on an application for approval under s 15 or certification under s 15B will not meet the statutory description called for by the section. It may thus be observed at the outset that not every decision of the Board will be the subject of an appeal to the LEC. 59 The second observation is that the Board's decision on the claim must be a decision "as to" one of two classes of subject matter (identified in pars (a) and (b) of s 12B) for the right of appeal to be enlivened. 60 The third observation is that the subject matter prescribed in pars (a) and (b) is identified and delimited by the language of ss 12 and 12A. This proposition is elucidated by a textual comparison. The disjunctive expression "arisen from subsidence or could reasonably have been anticipated" in par (a) corresponds to the language used to prescribe causal elements of claims under ss 12 and 12A respectively. Under s 12(1), compensation may be claimed for damage which "arises from subsidence" (s 12(1)(a) and (d)) (emphasis added). That language is adopted by the first limb of s 12B(a) which refers to a decision "as to whether damage has arisen from subsidence" (emphasis added). By way of example, the Board may decide on a claim under s 12(1)(a) that there is no damage or less damage than is claimed or that the relevant damage pre-existed the alleged subsidence or has some other cause. Those decisions would be decisions as to the subject matter identified by s 12B(a). Similarly, a claim may be brought under s 12A(1)(b) in respect of an amount to meet the expense of preventing or mitigating damage that, in the opinion of the Board, the owner could "reasonably have anticipated would otherwise have arisen, or could reasonably anticipate would otherwise arise" from a subsidence that has taken place (emphasis added). This language is reflected by the second limb of s 12B(a). This provides a right of appeal against a decision "as to whether damage ... could reasonably have been anticipated". Pursuant to s 12B(a), an appeal lies to the LEC against the Board's decision as to that subject matter on a claim under s 12A. 61 As to par (b) of s 12B, claimants under ss 12(1) or 12A(1) must specify the "amount claimed" from the Fund in their application (ss 12(2)(a) and 12A(2)(c)) (emphasis added). Sections 12(1)(b) and 12A(1)(b) confer the right to make a claim for an "amount to meet the proper and necessary expense" of undertaking certain works (s 12(1)(b)) or preventing or mitigating damage (s 12A(1)(b)) and s 12(1)(c) confers the right to make a claim for an "amount equivalent to the rent which would have been payable" (emphasis added). The Board may also reduce "the amount of compensation" where the damage caused by subsidence is greater because of the negligent or improper manner in which an improvement is constructed or maintained (s 12(1), ultimate paragraph) (emphasis added). The Board's decision as to the quantum of payment from the Fund pursuant to these provisions would be a decision "as to the amount of the payment from the Fund" within s 12B(b) of the Subsidence Act. 62 The Board submits that, if a broader construction of s 12B(b) be accepted, s 12B(a) would be rendered redundant. This would be because any adverse decision by the Board on the question of causation which leads to the refusal of a claim and hence "no payment" or a reduced payment is appealable under s 12B(b). Hodgson JA recognised the force of this submission but observed that [19]: "It seems to me unlikely that the legislature intended that the availability of an appeal, and the availability or need to approach the Supreme Court, should depend upon capricious distinctions ... so although there is force in the contention that a broad construction of s 12B(b) would render s 12B(a) otiose, I think the broad construction of s 12B(b) is preferable." 63 However, there may be a number of reasons for the distinction drawn by the text of s 12B. One is that s 12B reflects an intention to limit the liability of the Fund under s 10(3)(b) to the costs of a rehearing in the LEC on any decision of the Board that goes on appeal. Another is that the legislature left to the Board the determination of jurisdictional facts, subject to scrutiny only on judicial review in the Supreme Court. That state of affairs is more readily understood where, as here, the jurisdictional impediment was in the alleged absence of approval and the absence of a certificate respecting Alinta's improvement. On the other hand, the legislation left for determination by the LEC de novo such questions as the determination of causation and quantum of compensation in claims competently made against the Fund. 64 The right of appeal to the LEC is restricted to appeals against decisions of the Board as to the subject matter identified in s 12B(a) and (b). The outcome of "no payment" in this case followed not from a decision as to either of those subject matters, but from the Board's application of the statutory requirement that no claim be entertained in the circumstances prescribed by s 15(5)(b). In these circumstances, there was no decision of the Board "as to the amount of the payment from the Fund" under s 12B(b) against which an appeal would lie to the LEC. The jurisdiction to hear and dispose of an appeal under s 12B of the Subsidence Act is not enlivened by Alinta's application. 23In Alinta the refusal of certification under s 15B of the MSC Act for an improvement resulted in the application of s 15(5)(b). No claim could be considered under the Act for damage to improvements from subsidence if no certificate had been issued under s 15B. The Board's decision was held not to meet the statutory description in s 12B so that a right of appeal to this Court was not enlivened. The High Court observed that not every decision of the Board would be the subject of an appeal at [58]. The Board's decision must be a decision "as to" the subject matter in s 12B(a) or (b); at [59]. At [60] the High Court identified that the subject matter in s 12B(a) and 12B(b) was delimited by the language of s 12 and s 12A. Section 12B(a) was considered in relation to claims under s 12(1)(a), 12(1)(d) and s 12A(1)(b). The High Court was considering the meaning of s 12B in the context of "arisen from subsidence or could reasonably have been anticipated". 24The Board's refusal of a claim, in relation to causation, and therefore no payment from the Fund, could result in many appeals under s 12B(b) if that section was broadly interpreted. The Board submitted such an approach would render s 12B(a) redundant in [61] - [62]. The High Court's acceptance of that submission and the observations in [63] are particularly pertinent where the High Court concluded that the legislation leaves for determination by this Court questions of determination of causation and quantum in claims competently (emphasis added) made against the Fund. The legislature left to the Board the determination of jurisdictional facts, subject only to scrutiny of judicial review in the Supreme Court. The High Court adopted a narrow approach to the scope of s 12B(b) in the reasoning in [63] and [64]. The no payment outcome was held not to give rise to a decision as to the subject matters of s 12B(a) or (b) in [64]. 25Jemena was decided after Alinta. The facts in Jemena vary from this matter and Alinta. In Jemena the majority of the High Court (French CJ, Gummow, Hayne, Heydon, Crennan and Kiefel JJ, Bell J dissenting) was considering a claim for payment from the Fund of expenditures made in relation to subsidence-caused damage to those improvements under s 12A(1)(b). At issue was the meaning of the phrase "damage...from a subsidence that has taken place" in s 12A(1)(b). In the course of its determination the majority of the High Court identified at [37] that there is a common law rule of statutory interpretation requiring that "clear and unambiguous words be used before there will be imputed to the legislature an intent to expropriate or extinguish valuable rights relating to property without fair compensation." Legislation is commonly construed not to expropriate or extinguish rights unless just terms are provided instead. The High Court referred to Alinta but not in relation to those aspects relied on by the Board in this case. This was no doubt because the scope of the appeal under s 12B did not arise for consideration in Jemena in the same manner. The reasoning in Alinta, which is unaffected by the reasoning in Jemena, must be applied to the facts of this case. 26As already stated, the facts in this matter vary from those in Alinta. The application by Mrs Neale is directed to the subject matter in s 12B being a claim for rent under s 12(1)(c) and for prevention costs under s 12A(1)(b). That is clear from the application for compensation made to the Board. The opening words of s 12B refer explicitly to a claim for compensation under s 12 or s 12A. The same notification process applies to both claims as identified in s 12(2)(b) for the rent claim and adopted in s 12A(3) for the prevention claim. The issue for decision in this case is whether a claim for compensation on two bases having been made under s 12 and s 12A, is a decision made by the Board as to the subject matter of s 12B(a) and/or (b). Mrs Neale's counsel relied particularly on s 12B(b). 27The Board through its CEO determined in relation to the prevention claim under s 12A(1)(b) that the claim was not made within time under s 12A(2)(b) because the expense became known, or should have become known, to Mrs Neale as early as the date of the Pells report, being 11 June 2008. That I am informed was an earlier report provided to the Board by Mrs Neale. The reasoning of the Board, set out in the letter from its solicitor in par 13 above, was that the expense claim under s 12A(2)(b) (claim item B(1)) of the schedule) had already been made in 2008. The claim for expenses based on the later Keller report was therefore out of time. Section 12A(2)(b) is expressed in mandatory terms as a statutory time limit for the making of claims and is similar in that regard to s 15(5)(b) considered in Alinta, in that it is a mandatory provision which must be complied with if making a claim. The decision that the claim is time-barred under s 12A(2)(b) is a decision whether Mrs Neale's claim was competently made. Section 12A(2)(b) was not therefore complied with. Mrs Neale's counsel submitted that if form is considered the Board did have before it an expenses claim which came within s 12A(1)(b). Section 12A(1)(b) is qualified by s 12A(1)(c) which is in mandatory terms and determines the competency of an appeal in relation to a statutory time bar. 28The High Court's reasoning in Alinta that the Court's jurisdiction is enlivened by claims competently made under s 12B in [63] and a narrow approach to a no payment outcome under s 12B(b) in [64] applies squarely. I am bound by it in concluding that the Board's letter dated 6 September 2012 does not provide a decision from which an appeal can be made under s 12A(1)(b) for the prevention claim. 29As identified in the solicitor's letter in par 13, the Board considered the rent claim made under s 12(1)(c) (claim item B(3) of the schedule) was a reiteration of part of a claim already made in May 2008 and rejected in September 2010. Such claims are limited by the time frame specified in cl 5 of the Regulation of six months or no more than three years if the Board is satisfied that there are special circumstances. The claim was considered by the Board as a request under s 7A for the consideration of a previous decision on the same topic. While Mrs Neale's counsel sought to render the substance of the decision as a claim as to payment from the Fund, the decision of the Board was on the competency of the claim. That decision which resulted in a no payment outcome cannot be characterised as a decision as to the payment from the Fund in accordance with s 12B(b). That the result of the Board's response is a non-payment from the Fund does not result in it being a decision as to the subject matter identified in s 12B(b) per Alinta at [64]. 30I am mindful of the observations in Jemena that legislation which appropriates property rights is frequently construed as not extinguishing rights unless fair compensation is provided. I agree with the Board that Alinta is unable to be distinguished however. It follows that I am bound to apply the reasoning to the facts here which raise squarely the scope of an appeal enabled by s 12B. Based on the reasoning in Alinta, only competent appeals may be brought before the Court and the determination of competence remains with the Board, subject to judicial review proceedings in the Supreme Court of NSW, reflecting the specific nature of the appeal rights in s 12B. My reasoning is also consistent with the recent decision of Craig J in Venn v Mine Subsidence Board [2013] NSWLEC 30 at [24], [40] - [41]. My conclusion means that Mrs Neale's appeal cannot proceed. 31The Board's notice of motion is successful and I find that this Court lacks jurisdiction to hear this appeal.

Orders 32The Court makes the following orders: (1)Proceedings are dismissed for want of jurisdiction as disclosing no reasonable cause of action under r 13.4 Uniform Civil Procedure Rules 2005. (2)Costs reserved.

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: 21 March 2013