Ulan Coal Mines Limited v Minister for Mineral Resources & Anor

Ulan Coal Mines Limited v Minister for Mineral Resources & Anor - [2007] NSWSC 1299 - NSWSC 2007 case summary — Zoe

[269]

239 On 29 May 2007 Mr J G Lane inspected those parts of Ulan's land covered by MLAs 264 and 290 and furnished a report dated 19 July 2007. His description of the poor quality soils includes: "The sodic nature of the sandstone derived soils predisposed them to erosion when disturbed by clearing, cultivation and overgrazing. They have hard setting surface characteristics, low water holding capacity and low fertility. The native grasses and shrubs that colonise these areas following clearing are generally tolerant of low fertility conditions however, their survival is influenced by the combination of drought and overgrazing." 240 Mr Lane wrote that his inspection confirmed the status of the infrastructure as described by Mr McMichael and continued: "The boundary fences adjacent to the roads that dissect the subject lands are stockproof however, fences adjacent to timbered land where there was no grazing available required repair to make them stockproof. The water sources were adequate for normal seasons and require desilting to store more water for dry periods." 241 Mr Lane further wrote that a cattle enterprise based on agistment which is the current land use is the most appropriate enterprise for land of this nature. 242 Mr Lane thought that there should be intermittent grazing on the various paddocks. This would help avoid land degradation and assist progressive repair of past damage. He also wrote that there were a number of items that met the requirements to conduct a cattle agistment exercise and that these included water supply including dams, boundary fences, internal fences, cattle yards, drainage lines and access roads. To the extent that they facilitated a cattle enterprise based on agistment they were valuable improvements. To better conduct the enterprise he recommended managing the land in five parcels and improvements costing between about $25,000 and $30,000. 243 Moolarben submitted that the Court should adopt the approach taken by Mr Austin namely that many of the claimed improvements are non-functioning and therefore cannot have any value and that even the minority of improvements which were functional or could readily be made so were so insignificant in the overall scheme of things that they were not valuable in the sense of adding measurable value to the land. Moolarben also submitted that the view confirmed the force of Mr Austin's opinion that none of the claimed improvements added any value or any appreciable value to the land as a whole. 244 Mr Austin's opinion depended in part on his agreement with Mr McMichael's assessment of the claimed improvements. 245 I return to Mr Baguley's report of 4 May 2007. At p 7 he wrote: "After inspection of the cleared areas it is my opinion the areas within the determined boundaries of both MLA 264 and 290 have been previously cultivated. Current areas are reasonably clear of debris (sticks and rocks) and indicate that rock and stick picking operations were previously undertaken as part of the cultivation process. Current pastures consist mainly of the native grasses. Sifton bush re-growth is present in small areas and these areas have been excluded from my calculations of cleared land but confirm that land clearing of these areas did take place. …" I regard this assessment as accurate save that I was not able to determine whether the cleared areas had been previously cultivated. 246 I do not accept that Mr Baguley's replacement approach is the correct one but his calculations and costings based on quotes as at 20 July 2004 from local operations did provide some evidence that some of the claimed improvements were valuable.

[299]

269 As to cls 23A and 23B the Explanatory Note read: "This item provides for a procedure for the making of claims to the effect that a particular work or structure is a valuable work or structure, for the making of objections to such a claim, and for the determination of a claim (where an objection is made) by a warden." 270 The Mining Amendment Act 1999 effected a minor amendment which is incorporated in s 23A. During the Second Reading Speech of the Minister for Mineral Resources it was stated: "… there are a number of provisions in the legislation which protect the interests of landholders. These are the right to be notified of any mineral claim, … the right to veto mining on land on which there are improvements, such as sheds, contour banks and dams …" 271 By the Mining and Petroleum Legislation Amendment Act 2000 cl 23A(2) was amended so as to require a claim to identify the nature and location of the work or structure. 272 The history of the Mining Legislation shows that over many years the procedure for making objections or claims as to the granting of mining leases has been refined and developed. Time limits have been fixed for the making of claims by the landholder and objections to those claims by the applicant. This also applies to objections in respect of agricultural lands. Further, notification by Gazette of the application for a mining lease has been extended so that now landholders are served with notice of the application. Wardens conduct enquiries and make a report, the finding and purport of which are revealed and the Minister makes a decision on the basis of the Warden's report. 273 Section 62(1) is not directly linked with s 62(6) and (8) and cls 23A and 23B of Sch 1 but they are part of the one statutory scheme for dealing with MLAs and protecting the rights of landholders. Disputes are likely to arise between potential miners and landholders as to whether an item is an improvement and whether it is valuable and/or substantial. There is a procedure for the timely and orderly resolution of disputes. MLAs involve the expenditure of large sums and have wide ranging economic implications. The history of the Mining Act reveals continued protection of the rights of landholders and the development of procedures to facilitate mining of the State's minerals (most of which are owned by the State) and the resolution of disputes between potential miners and landholders. 274 Section 62 should be read as a whole and should not be split into self contained and mutually exclusive compartments. Regard should be had to the scheme which has been propounded. While common law and proprietary rights are important so are the rights of the Crown as the owner of the coal and those of the mining lease applicants who expend large sums to explore and mine the coal and then pay royalties to the Crown. 275 Based on the terms of s 62 and Schedule 1 and having regard to the history of the Mining Act 1992 I am of the opinion that Ulan was required to lodge its claim within the specified time; that disputes as to whether a particular improvement is substantial or valuable must be referred to the warden and that the Minister decides the issue on the basis of the warden's report. Over a considerable period the legislation has tightened the procedures and fixed time limits. It is part of the landholder's entitlement to make a claim that it be lodged within the time specified. 276 Section 62(1)(c) imposes a prohibition and it is not expressly stated that the prohibition ceases to apply if not made within the specified time. However, cls 23A and 23B of Schedule 1 are incorporated by s 62(8) into the scheme of the legislation. They in turn follow on from the provisions of cls 20 and 21 of Schedule 1. It does not change matters that these provisions also apply to objections to granting the lease on the ground that the land is agricultural land. Clauses 22 and 23 deal with agricultural land and objections. Clauses 23A and 23B deal with claims that certain items situated on the land constitute a valuable work or structure. 277 Where no claim is made by the landholder within the time specified that a particular improvement is a valuable work or structure the Minister is not precluded by the terms of s 62(1)(c) from granting a lease over the surface of the land the subject of the lease application.

[328]

(d) As a consequence of the cl 21(3) notices in relation to both MLA 264 and 290 not being served in accordance with the Act, the Minister cannot grant a valid mining lease. The reasons are as follows: (i) Important documents are generally required to be served on registered offices of corporations which may have many places of business and operate in diverse localities. (ii) The notices are important documents and must contain important information as to rights and must be served in accordance with the Act. Service other than by posting the notice to or by leaving it at the company's registered office does not comply with the Act. A notice required to be served under cl 21(3) of Schedule 1 to the Act is therefore not served in accordance with the Act when, rather than being mailed to a company's registered office it is posted to a private mailbag, (iii) No question of substantial compliance arises. Strict compliance is required with cl 21(3) and (4) of Schedule 1 and s 383. The service of such notices like the contents of those notices is in the category of an "essential preliminary to the exercise of statutory power": Project Blue Sly at [92]; Sandvik Australia v Commonwealth (1989) 89 ALR 213 at 226. (iv) Provisions like cl 21 and s 383 are, in combined effect, intended to ensure that persons know that they have rights of objection (or to make a claim). Such provisions are obligatory and substantial compliance - like service by mailing to a private mail bag - will not suffice. Improper service of the notices renders nugatory the important and essential purpose of cl 21 of Schedule 1. (v) Even if s 383(1)(b) was a directory provision, mailing such a notice to a coal mine's private bag is not substantial compliance with a requirement that a company's registered office be served. 307 Moolarben submitted: (a) "person" in s 383 includes corporations. (b) s 383(1) is permissive. (c) Natural or corporate persons which have more than one place of business may be served at any of those places (d) Ulan's submission: (i) requires the permissive language of s 383(1) to be construed so that it is mandatory; (ii) requires the disjunctive paragraphs of (a) and (b) of s 383(1) separated by "or" to be read in such a way that in the case of corporate persons (a) is not available; and (iii) is irreconcilable with s 383(4) (e) Both the notice of MLA 264 and MLA 290 were received. The statutory purpose of notifying landowners of their rights was fulfilled. 308 The words "any person" where appearing in line 2 of subs (1) refers to both a natural person and a corporation. This is so because the section proceeds to deal with service both personally and on a corporation. Service by post is permitted. Subsection (1)(b) enlarges the methods of service on a natural person. He or she may be served by leaving the document with a person apparently of or above the age of 16 years at the person's place of business or posting the document to the person's place of business. Service by leaving a document with a person apparently of or above the age of 16 years at the registered office of a corporation or posting a document to the registered office of a corporation are both common and permissible methods of service. A corporation's registered office is fixed and required to be recorded. It can be readily ascertained. A place of business does not necessarily have these attributes.

[341]

322 About 6 July 2005 Mr Callow met with Messrs G Robinson and Tony Mason. Mr Callow has listed a number of issues he wished to raise. Mr Callow said that all matters discussed at that meeting related to the airstrip. Mr Callow has noted: "5. Exploration Drilling - cleared sites for drilling along ridge line abs clear 6. Access on site through Phil Orr & Hans (Richter) (illegible) working very well." 323 Mr Callow said that the meeting in July 2005 was a Transgrid meeting involving the transmission line. 324 It was also stated that Dronvisa attended the meeting in July 2005. 325 Mr Callow agreed that there were additional meetings. He said that in November 2004 his managing director Mr Flannery and he met with Mr Buffier, Operations Manager for Xstrata Coal, New South Wales and Mr G Robinson, General Manager of technical services. This explored the potential for Ulan and Moolarben to work together to develop the Moolarben area. Messrs Callow and Flannery were aware that Messrs Buffier and Robinson could make decisions on matters such as sharing facilities between the two operations. There was an issue of sharing water between the two sites, using a dragline, wash plant capacity and use of the rail balloon loop to turn trains around, coal contracts, future contracts a possible joint venture and the validity of the 1985 development consent for what was known as Underground 4 (an underground mine). There were subsequent meetings involving these four men about 5 May 2005. Mr Callow's note of the latter meeting contains this entry: "S 62 improvements in U/G4" 326 It may be that "U/G4" reads "2/64." It is unclear. It does not seem that the question of MLA 264 or any s 62 improvements on that area were discussed. 327 Mr Callow said that at the meeting on 6 July 2005 with Messrs Robinson and Mason the question was asked whether Moolarben had submitted the MLAs. Mr Callow replied "not yet". Mr Callow's notes support this assertion. Mr Callow said that Moolarben had previously told Mr Robinson that it was preparing MLAs. Because Moolarben had obtained exploration licences and carried out drilling, MLAs by Moolarben would have been anticipated by Ulan. Many of the topics discussed at the various meetings related to the coal mining operations, actual or proposed of Ulan and Moolarben. 328 Mr Callow said that on Friday, 22 July 2005 he telephoned Mr Robinson and advised him that White Mining Limited had lodged MLAs (for 264) on Wednesday/Thursday this week His notes support the statement.

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