Arco Coal Australia Incorporated & Ors v United Plantations (Australia) Pty Ltd [1998] QMW 19

Arco Coal Australia_ML70110 REPORT AND RECOMMENDATION OF WARDEN PURSUANT TO SECTION 269 OF THE MINERAL RESOURCES ACT 1989 IN THE MATTER OF: APPLICATION FOR MINING LEASE NUMBER 70110 IN THE EMERALD MINING DISTRICT BEFORE: J D COSTELLO, ACTING MINING WARDEN APPLICANT: ARCO COAL AUSTRALIA INC (50%) ARCO RESOURCES LTD (30%) MITSUI GORDONSTONE INVESTMENT PTY LTD (15%) MLC COAL INVESTMENT PTY LTD (5%) (“ARCO”) OBJECTOR UNITED PLANTATIONS (AUSTRALIA) PTY LTD (“UPAL”) REPORT: This application for a mining lease pursuant to Section 232 (part 7) of the Mineral Resources Act 1989 (“the Act”) for the purpose of mining coal is for an area for 3789 hectares, situated on land (as described in schedule 12) located about 35 kilometres north east of Emerald. The application is referred to as the “Gordonstone Extension”. Power to grant such a lease is vested in the Governor in Council pursuant to Section 234 of the Act after recommendation by the Minister pursuant to Section 271(1)(a). All minerals are the property of the Crown (Section 8). The grant of a lease does not create any estate or interest in the land (Section 10) although, there is power to determine title pursuant to Section 363(5). The application was lodged at the office of the Mining Registrar on 22 December 1994 and a Certificate of Application issued on the same date. (Section 252(2)). Objections were lodged by UPAL by notice on 19 January 1995 which happened to be the last day for receipt of objections. [1998] QMW 19 -- 1 of 44 -- 2 It is appropriate to set out the grounds of objection: “The Mining Lease should not be granted at all, or until the following matters have been heard and determined. 1. Compensation should be determined in accordance with Section 7.36 of the Mineral Resources Act 1989 prior to the grant of the mining lease. 2. An application for compensation under Section 7.38 is hereby made to the mining registrar. 3. Surface Area is required for the Mining Lease. 4. (a) The term of the lease sought is inappropriate in that it is inconsistent with the period referred to in a letter from “Gordonstone Management” dated 20 December 1994. (b) The operations will not allow for sound land use management. (c) Adverse environmental effects. (d) Detrimental affectation of the current and prospective uses of the surface land will occur as a result of the grant of the mining lease. 5. A condition should be put in the mining lease whereby the applicant be restricted from bringing any chemical upon the land or use any chemical adjacent to it which may come onto the land and which may compromise the current organic certification of the arable farming land. 6. The grant of any Mining Lease pursuant to the application is invalid on the grounds that United Plantations is entitled at law to the exclusive possession of the subjacent titles and subjacent surface areas for support. 7. The objector requests a conference under section 7.19 be convened by the registrar with the applicant.” The response of ARCO to the Notice of Objection was to bring an application seeking to strike it out in its entirety because it was sent by facsimile. Alternatively, ARCO sought to strike out grounds 1, 2, 4(d), 6 and 7 of the Notice of Objection. During argument, grounds 1, 2 and 7 were struck out by consent. The application to strike out the Notice of Objection in its entirety was dismissed by me on 28 March 1995. As to the alternative application, ground 6 was struck out partly because it was not a proper objection and partly because any point sought to be raised was already contained in 4(d). I refused to strike out 4(d) because it fairly raised the question of subsidence in terms of Section 269(4)(h), (i), (k) and (l) of the Act. During the hearing of this interlocutory application UPAL applied for an order for discovery. ARCO also brought an instanter application for further and better -- 2 of 44 -- 3 particulars. Both applications were dismissed. I will make further comment upon these matters at page 32 and following. The hearing at this application was commenced on 24 April 1995. On 26 April 1995, UPAL initiated proceedings in the Supreme Court by writ number 692 of 1995 seeking declaratory and injunctive relief against ARCO. UPAL then sought an adjournment of the Mining Lease Application which was vigorously opposed by ARCO. The application for adjournment was refused and the hearing of the application proceeded on 2 May, 22-26 May, 30 May, 25 & 27 July 1995. It will be recalled that the application was adjourned on 20 October 1995 for the reasons set out in the ruling of that date. Arising from that ruling was a directions hearing on 13 and 17 June 1996. I should say in this context that a site inspection was carried out on 18 May 1996. It was important for all parties concerned to be aware that any resumed hearing would not be a wide ranging exercise covering ground that had already been thoroughly litigated by the parties. Therefore, on the 17 th of June 1996, the court ordered that evidence at any resumed hearing would be confined to the following matters:- “1. The results of the restoration and/or installation of horizontal and perpendicular contour banks on panels 201 and 202 including any evidence of the following:- (a) any greater vulnerability of those banks to a significant rainfall event; (b) whether there is any and if so to what extent, ponding within 201 and the mined portion of 202; (c) whether within 201 and 202 ground water hydrology has been otherwise affected in terms of bores or the potential for any change in creek direction; (d) whether there is any and if so to what extent loss of nutrients from the soil or salinity with respect to 201 and the mined portion of 202; (e) whether there is any and if so to what extent changes to the particular watershed area governing 201 and 202; (f) whether 201 and the mined portion of 202 can be farmed and if so what kind of farming and using what kind of machinery. 2. From the foregoing what inferences or conclusions if any can be drawn when applying this data to the application area having regard to:- (a) the differences in the differential between the application area and 201 and 201; (b) the varying depths of coal to be mined on the application area; (c) the varying depths of soil on the application area; -- 3 of 44 -- 4 (d) the system of crop rotation presently in existence.” The proceedings commenced by UPAL by writ number 692 of 1995 was determined at first instance by Justice Helman on 17 September 1996 in favour of ARCO. UPAL took the matter on appeal to the Court of Appeal which delivered judgement on 7 November 1997. I will deal with that judgement in greater detail below. There were other proceedings instituted by UPAL. By writ number 1696 of 1996, UPAL sought to restrain ARCO from entering its land based upon an interpretation of Section 182 of the Act. The main thrust of ARCO’s claim was that at the time of the Chief Executive’s acceptance of the lodgement of an application for a Mineral Development Licence by ARCO, the relevant area was already included in an earlier application by ARCO for a mining lease. The effect of Section 182(2) was that if the Chief Executive accepted lodgement of an application for a Mineral Development Licence for particular land which was already covered by an earlier application for a mining lease, the land included in the latter application would be excluded from the land sought to be covered by the Mineral Development Licence application. Section 182(2) came about by an amendment effective 1 May 1995. The judgement of Justice Derrington of 20 September 1996 favoured ARCO on the basis that the Section as expressed has no reference at all to the Mineral Development Licence application. For convenience sake, reproduced hereunder are extracts from my ruling of 20 October 1995. BACKGROUND OF ARCO The application area (3,789 hectares) adjoins Mining Lease 1978 (“Gordonstone Mine”) which occupies an area of approximately 5,840 hectares and is owned and operated by the ARCO as a coal mine. This lease was granted in April 1990, effective 1 May 1990 for a term of 21 years. This area was previously owned by UPAL until purchased by ARCO in 1989. Pursuant to the terms of a Licence Agreement between ARCO and UPAL, certain areas are available to UPAL to farm. Mining is carried out in the German Creek Seam which seems to be the only coal seam of economic significance in the area. The depth of cover ranges from 100 metres to about 350 metres with the seam thickness averaging about 3 metres. -- 4 of 44 -- 5 Gordonstone Mine is designed as a Retreat Longwall Operation. Within the boundaries of the mine are 4 mining areas called “Domains”. Thus, you have Domains 1 to 4. Within each Domain there are “Panels”. The first two Panels in Domain 1 are numbered Panels 101 and 102 and are approximately 200 metres wide. Subsequent Panels (example Panels 201 and 202 in Domain 2) are 250 metres wide. These panel lengths vary from 1 kilometre to 2.5 kilometres. Longer panels of up to 4 kilometres were planned by ARCO. Between Panels, there are remaining (unmined) pillars of about 25 metres in width. It is noted that “larger” Panels are possible in the future based on technology improvements and economics [see Application P 12]. Longwall production commenced in April 1993 and but for recent closure, would have continued for the life of the mine which ARCO projected to be 29 years if the present application area is included [see Application P 12]. In 1996, it was expected to operate alternating longwall mining machines [see Application – Long Range Plan]. Recoverable coal, as from 1995, from M.L. 1978 was 92 million tonnes [T116]. It is noted that this figure is in contrast to the figure stated in the Application [P 15] of 179 million tonnes. Saleable coal extracted in 1993 was 2.4 million tonnes and in 1994, 4.0 million tonnes. Projections for 1995, 1996 and 1997 were 4.5 million tonnes per year respectively [Application P 12]. The Gordonstone Mine employed up to 500 people until recent closure. It was an international exporter of quality coking and steaming coal. It has obviously promoted considerable growth in surrounding community and support services and provided export revenue and revenue to the State Government in terms of rail freights, royalties and port user charges. The Applicant has, over the past several years also been presented with a number of awards for high standards in environmental management at its Gordonstone Mine: (a) ”Highly Commended Award” from Atlantic Richfield (parent company of two of the applicants) for innovative and early attention to environmental management (1992); -- 5 of 44 -- 6 (b) “Highly Commended Award” from the Queensland Government in recognition of the high standard of environmental management (1993); and (c) “Award for Excellence” from the Queensland Government in the planning, design and implementation of environmental management systems (1994). In (b) above, the commendation stated, inter alia – “Sustainable development and multiple land use have guided the development and operation of the project so that underground coal mining is compatible with large scale agricultural production.” In (c) above, the commendation stated, inter alia – “The principles of multiple land use and sustainable development are inherent in ARCO Coal’s approach to mining. The mine infrastructure has been specifically located on an area unsuitable for agricultural cropping. Ground subsidence, soil erosion and water quality are all managed so as to minimise the impact on the environment and disturbance to the agricultural operation.” Mining operations are integrated with agricultural production. This is achieved by ceasing agricultural production until surface and underground subsidence is complete, managing the land in the interim by sewing a cover crop and removing contour banks and then replacing banks and them recommencing agricultural production following the completion of subsidence.” These worthy commendations are of some note. They are also consistent, according to ARCO’S material, with the mining industries approach in incorporating the principles of Ecologically Sustainable Development in the planning and operational management of exploration and mining. These principles involve, it is said, more effective integration of environmental, economic and social factors into decision making, integration of environmental management with mine planning, taking along term approach to environmental management and dealing cautiously with risk and uncertainty in line with the precautionary principle [see Commendation 1994 (c) above]. BACKGROUND OF UPAL UPAL owns and operates the application area which forms part of “Gordon Downs”, Australia’s largest wheat farm and Australia’s largest certified organic farm -- 6 of 44 -- 7 [T374]. By world standards, the uncontradicted evidence is that Gordon Downs is also one of the world’s largest organic grain farms. Mr. Arne Pedersen is the on-site General Manager and has been since 1982. He holds a Diploma of Agriculture from Lyngby College, Denmark [Exhibit 42 P1]. The present farmable area of Gordon Downs is about 10, 522 Ha [Exhibit 42 P 6 and T419]. About 75% of the original area (15,000 Ha) had to be cleared [T400]. The development and clearing costs to bring the farm to organic farm status (excluding acquisition costs) was about $7 million. The area in general, is considered to be a “new” area in terms of agricultural farming. I must say with tree clearing guidelines presently existing, it is difficult to see how this farm could ever be easily replicated. That aspect might assume ever greater significance it one were to consider the provisions of Section 281(4) of the Act. Soil Some of the soils on Gordon Downs are very friable, that is, easily crumbled. The best description I could find of the soil is – ”A cracking, self-mulching black clay soil which is prone to soil erosion in high rainfall events.” [see ARCO Environmental Achievement Award Nomination 1992 P 5 – Affidavit of Armstrong Exhibit 11]. From an agricultural view point the cover of soil is in parts quite shallow [T65]. Depths range from about 25-60 centimetres [T60]. Some areas may be deeper. The soils on the application area are described as “relatively deep” ie. in excess of 50 centimetres and represent some of the better soils on the farm. [McGarity P 7 – Exhibit 55]. There are two limiting features of the soil at Gordon Downs: (a) Ability of the soil to store and release water for crop production; and (b) Depth of solum, that is, the upper part of the soil profile. These two features contribute, I think, to the “fragile” nature of the soil in general, although, it must be said that the physical condition of the soil is regarded as “excellent” as at April 1995 [McGarity P 6 – Exhibit 55]. -- 7 of 44 -- 8 The excellent physical and chemical fertility of the black soil at Gordon Downs is widely recognised [Pedon Consultants, P 30 – Exhibit 56]. There are however, inherent problems of chemical fertility. These are related most commonly to the levels of available plant nutrients such as nitrogen, phosphorous, sulphur and zinc. In summary, I accept on the evidence that the soils at Gordon Downs including the application area have physical and chemical fertility comparable with other highly valued and productive soils in the district [Ibid P 35]. Perhaps a good indicator of the quality of the soil is that the organic wheat produced to date has a unique feature – it has an unusually high protein content of 14%-17%. Whilst no referred to in evidence (see Section 268(3) of Act), it is a fact that the protein levels in Australian wheat are falling because of progressive depletion of nitrogen in the soil. It is said that approximately 20,000 tonnes of nitrogen are lost with every 1,000,000 tonnes of harvested wheat. Nitrogen is not always easily replaced. It may, in some circumstances, be either expensive or its application can possibly have damaging environmental side effects. Yet, as an illustration of the point, it is becoming increasingly common for importing nations to set minimum protein levels (example 10.5%) for the wheat that they purchase. I accept that most farmers are “battling to get 13% protein”. Hence, any soil degradation accidental or intentional with respect to a wheat farm in my view is a serious matter. [“A Question of Balance” – David Mercer 2 nd ed P 255: Annexure 4 to Affidavit Pedersen Exhibit 42 and T699.6]. The quality of organic grain may be maintained trough effective integrated crop rotation which I will deal with below. Contour Banks The landscape on Gordon Downs including the application area is erosion prone. It is relatively flat having a slop of around 1%-3%. Contour banks are therefore necessary to minimise erosion. As Mr. Morawitz said [Exhibit 67 P 6] – “Contour banks are designed to act as a break to a source of water.” and -- 8 of 44 -- 9 “The banks are engineered and constructed on the principle of flatness of fall on the contour until getting near the discharge area for the contour banks where is it drained onto a grassed or rock waterway area. The reason for this tapered fall is to increase the velocity of the water as you approach the discharge point. This assists in the flushing from the contour bank waterway, grass and debris washed from the field onto the contour bank. By increasing the velocity as it nears the exit from the contour bank you enable the grass and debris being carried by the water to be flushed away and not to clog the contour bank waterway thus making a dam. Dams are dangerous because water then seeps through the bank weakening the bank and enabling it in future downpours to be washed away with consequent erosion problems.” The starting point for the installation of contour banks at Gordon Downs was a survey in conjunction with the Department of Primary Industries (“DPI”) at Emerald. What followed was a recommended design by DPI and then construction, much of which was undertaken by Mr. Morawitz. A Government grant of $30,000 was made to assist construction. In that context, it is noted that Gordon Downs formed part of a Soil Conservation Programme set up by DPI Emerald in the early 1980’s. Perhaps, it may be more accurately described as a trial and error programme, which is an indication of the state of knowledge at that time[May-T366-367]. To date, approximately 308 kilometres of contour banks have been constructed on Gordon Downs. As a rough guide, 1.5 kilometres of contour banks could be constructed in a day. I accept that contour banks have been successful in minimising erosion. Soil loss on the application area is of the order of 12 tonnes per annum per hectare. Waterways have also been constructed in conjunction with contour banks and these are grassed. The construction of these waterways as such, has to be done with a mind to the actual water shed prevailing in that vicinity. It is a careful and time consuming exercise. Contour banks play an integral part in sustainable agriculture referred to below. Organic Farm As indicated previously, Gordon Downs is Australia’s largest certified organic farm [May-T374]. Farming in this case means both agriculture and stocking the land. There is a significant advantage in this certification in that a premium is charged for agistment -- 9 of 44 -- 10 of stock and crops and presently earns a 20%-25% higher price compared to crops without certification [Pedersen Exhibit 42 P 5]. Produce leaving Gordon Downs is certified “CERTIFIED LEVEL A ORGANIC BY NASAA”. This certification is recognised worldwide [Pedersen Exhibit 42 P 6]. Organic farming-Level A prerequisites means a system of farming that eliminates the use of all synthetics, fertilisers and pesticides, growth regulators, antibiotics, hormone stimulants or intensive livestock systems. However, an organic system cannot be defined as “chemical free”. An organic farming system is one where a dynamic ecosystem has been achieved or is clearly being developed. “In an organic farming system we do not expect to see sole reliance on “organic” inputs (eg. sprays), merely because they are permitted. We expect that the grower will be aiming to understand the dynamics of the cropping or livestock system and to develop management techniques which will reduce dependence on even the permitted substances. The degree to which the permitted inputs can be eliminated will vary for different enterprises, geographic environments and crops.” An organic farming system must show regard for broader concepts of sustainability. An organic farm would display appropriate land care and conservation techniques. Use of windbreaks, shelter-belts, soil conservation and cultivation practices, and responsible irrigation, which are appropriate to the soil type and topograph of the land.” “Demonstration of attempts to both conserve and establish biological diversity using trees and other vegetation is a prerequisite for Level “A” [Exhibit 43- The National Association for Sustainable Agriculture Australia Ltd. – p 8]. Organic certification does not go with the land. It goes with the crop in production [May-T409]. It is also the case, that organic food enjoys a growing market in Europe and Asia [May-T373.9]. I accept that an area of 1200 hectares was planned for irrigation of “Green Cotton”. This is cotton produced free of any use of chemicals and is in very high demand. The price for a bale of green cotton is around double or one and a half times the price of conventional cotton. [Pedersen Exhibit 42 P 5]. Crop Rotation Gordon Downs is operated as an “integrated farm”, ie. as a whole. It is not in my view to be seen as the sum of its constituent parts. To see it as such would be -- 10 of 44 -- 11 to misconstrue the facts and in my new, to misunderstand the fundamental nature of the system. To maintain Level “A” certification, crop rotation is essential. Crop rotation is important for these reasons: If the same crop is grown each year on the same piece of land, nutrients are extracted from the soils, which as a consequence, becomes less fertile and is productive of less healthy crops and creates a permanent reservoir of pests specific to that crop. By rotating crops, a good pool of supply of most nutrients can be expected in the soils at Gordon Downs and without the same pest problems. On the evidence, I accept that nitrogen is likely to be the most limiting nutrient element in certain circumstances. However, under the crop rotation system practised, nitrogen has been generally maintained by introducing a legume such as soya bean into the rotation after four successful grain crops. That is, three wheat, one sunflower or sorghum [McGarity P 4 Exhibit 55]. The practices in place are a form of sustainable agriculture. Sustainable agriculture does four things: (a) Stabilises the soil against erosion; (b) Builds up nutrients; (c) Decreases toxins; (d) Increases organic matter [May-T711-712]. It is true that over the past several years, the ruinous drought has forced UPAL to adopt a “patchwork” approach to crop rotation. However, I accept that it came “close” to achieving the desired rotation in the late 1980’s [May-T420-421]. On the evidence, I accept that to operate Gordon Downs as an integrated farm and to maintain Level “A” certification referred to above, is a job requiring a considerable amount of skill, know how and in particular long term planning. In that sense, it is no different to the Applicant. Application Area I accept that the application area consists of the following:- (a) (i) 2,800 Ha – area set aside for cultivation and of that approximately 2,000 Ha is presently under crops; (ii) 920 Ha – grassed country; (iii) 60+ Ha – other. -- 11 of 44 -- 12 (b) 64 kilometres of contour banks; (c) 18 kilometres of in-field waterways; (d) Main waterways; (e) Farm roads and tracks; and (f) Fences [Exhibit 42 P 16, Exhibit 54, May-T377, T430 and T448]. Mining Lease 1978 Part of the surface area of Mining Lease 1978 forms part of Gordon Downs. Pertinent facts are as follows: (a) UPAL originally owned the present surface area of Mining Lease 1978 until purchased by ARCO in 1989 [Pedersen P 8 ]. (b) By License Agreement, UPAL is permitted to farm certain farmable areas of Mining Lease 1978 for a total of about 21 years (excluding an option) of which nearly 6 years have elapsed [May-T392]. (c) Unmined areas may still enjoy organic farm certification [May-T374]. (d) Such Certification on Mining Lease 1978 diminishes in direct proportion to the area mined [May-T375]. The following matters have been taken into account and considered in making my recommendation pursuant to Section 269(4): A. HAVE THE PROVISIONS OF THE ACT BEEN COMPLIED WITH? The material indicates that ARCO consists of a number of corporations and therefore are eligible persons as defined in Section 5 and are thus entitled to make the application under Section 233 of the Act. Section 273 of the Act provides:- “A mining lease over land shall not be granted unless- (a) it includes such an area of the surface of that land; or (b) where it does not include an area of the surface of that land, the applicant is the holder of such an adjoining mining lease; as will enable the holder to carry out the purposes for which the first mentioned mining lease is granted.” Objection number three of the Notice of Objection referred to previously provided:- -- 12 of 44 -- 13 “Surface Area is required for the Mining Lease.” ARCO’s case has always been that it did not require any surface area for the purposes of any grant. In context, it asserted that it had no need to use the surface area for the purposes of any infrastructure. As a consequence of the Court of Appeal decision delivered on 7 November 1997, this argument is academic. However, out of deference to the parties and the vigorous conduct of this aspect of the case, I consider this area deserves further comment. UPAL’s theme was that ARCO’s omission to apply for surface area was a sham and that the mine plans submitted in support of the application (demonstrating that no surface area was required) was nothing less than a contrivance in support of the application. ARCO, vigorously refuted that argument. It must be said, at the outset, that ARCO would have every reason not to include the surface area in the application if it believed it had no physical need for it. Further, anyone with knowledge of land values would consider that having regard to the current use of the surface area, any compensation agreed or determined might be considerable. However there is more to that proposition. I think it is true to say that in 1995 there was an uneasy question, not so much as to whether but rather when any compensation might be paid by ARCO in the event a mining lease was granted on the basis sought with subsidence occurring sometime after the year 2004. Apart from the contrivance theory, UPAL supported the argument that surface area was required by an analysis of the following:- (i) man access and travel time; (ii) dewatering bores; (iii) production rates; (iv) coal clearance; (v) bore holes for gas drainage and ventilation. The view I have taken is that to a large extent, the contrivance theory merges with the alleged need for surface area. As suggested above, it is clearly understandable that ARCO might not be anxious, for reasons based in part on compensation, to apply for surface area if the Gordonstone Extension could be reasonably undertaken without it – albiet with exposure to greater cost (see also Court of Appeal decision Dowsett J. p10). -- 13 of 44 -- 14 UPAL was unable to present a positive case that ARCO knew the mine plan was uneconomic [May-T39-40]. ARCO relied upon evidence from Sly and Fawcett. UPAL relied chiefly upon cross examination of Sly and evidence from Patterson. The latter’s evidence was guarded on issues such as changes to mine layout including access points from the surface, man access, dewatering and gas drainage. UPAL has pointed out to the court unusual features of the Gordonstone Extension namely:- (a) the construction of the mine pursuant to the plan has not been costed (May-T36); (b) the provision for the dewatering of the mine was twice that of any existing mine (May-T37); (c) the mine as proposed would be one of the half dozen deepest mines in the country (May-T53); (d) there were few identified mines with longer travel times to the face (May- T65); (e) mining was to commence at the furtherest part of the Gordonstone Extension. No other mine in Australia commences mining at the furtherest extremity (May-T104); (f) the Gordonstone Extension had 4 kilometre panels. No mine in Australia has 4 kilometre panels the largest panel experienced in Australia as at 1995 was approximately 3.2 kilometres (May-T276); (g) there was no long wall mining under agricultural land in Australia (May- T228). The foregoing unusual features as pointed out by UPAL are substantially correct observations. It is also true that with respect to the 4 kilometre panels referred to in (f) above, Sly was less than convincing when it came to the issue of whether the mine plan proposed by ARCO would be adequate in terms of the provision of ventilation shafts (May-T155-156). On the question of the origin of the contrivance theory, counsel for ARCO submitted that the evidence was clear - that it was Mr Sly’s decision that surface access for mine dewatering or ventilation was unnecessary. In this respect, he was not instructed (for example by Mr Fooks) to make a mine plan to fit a criteria. The following passage appears in the April transcript at page 143:- -- 14 of 44 -- 15 “So..you understood then from the conversation with Fooks that if at all possible surface area was not to be involved?” “No Sir. I was told that if I required surface area to let people know so we could make the appropriate applications.” There is a further passage in Sly’s evidence that appears in the May transcript at page 111 that reads:- “The direction to me was to put together a practical mine plan. And if it required surface area let people know and [it] would be applied for.” The weight to be given to the foregoing evidence must be considered also in the light of Sly’s other evidence and in particular appearing at page 14 of the May transcript where the following passages appear in cross examination by Mr Douglas QC:- “..would you say Mr Sly that the plan that you produced to the court constitutes a final fit and proper feasibility study for the mine extension?” “The plan is the extension to the existing mining plan and will give us direction towards our future drilling in the fault areas and subject to the current drilling program.. a lead to the future yes.” “Was the answer to my question no?” “Yes” Sly described the mine plan as a “dynamic document” (May-T128). It would be unrealistic to expect otherwise. UPAL has used or adopted terms as “contrivance”, “sham” or lack of “good faith” to describe the animus behind the application for the mining lease. Following upon these expressions, other words come to mind such as “conspiracy” and “fraud”. I have adopted the standard of proof as is appropriate to fraud in considering this issue. In Bater v Bater 2 All ER 458 at 459, Denning LJ said:- “A civil court, when considering a charge of fraud, will naturally require for itself a higher degree of probability than that which it would require when asking if negligence is established. It does not adopt so higher degree as a criminal court, even when it is considering a charge of a criminal nature: but still it does require a degree of probability which is commensurate with the occasion.” (See also Rejfek v McElroy 112 CLR 517 at 521) -- 15 of 44 -- 16 Whilst the Notice of Objection is not strictly a pleading as such, it should be noted that nowhere on the document is there a hint of fraudulent conduct. Such claims should of course be expected to be clearly and distinctly made even if the word “fraud” is not specifically used. (See Brisbane Unit Development Corp Pty Ltd v Robertson [1983] 2 QdR 105 at 109) On a consideration of all of the evidence, whilst there were some worrying aspects with respect to the mine plan and ventilation, it has not been established to the applicable standard of proof that the inadequacies and unusual features as represented by the mine plan, demonstrated the application (not seeking surface area) was a contrivance or sham. As referred to above, the Court of Appeal on 7 November 1997, ruled that ARCO needed surface area in order to carry out mining. The approach of the Court of Appeal may be summarised in the words of Justice Demack at page 9 of his judgement:- “The Appellant [UPAL] emphasises the concluding words of Section 273- “as will enable the holder to carry out the purposes for which the firstmentioned mining lease is granted. In this present case it is an inherent characteristic of carrying out the purposes for which any lease would be granted that the land above the mined area, including the surface, will collapse. Thus the surface is needed to enable the applicant for the lease to carry out mining.” Justice Demack also referred to Section 269(4)(b) of the Act:- “the area of land applied for is mineralised or the other purposes for which the lease is sought are appropriate.” Whilst mineralisation was not an issue His Honour pointed out (page 9) that when all the relevant Sections of the Act are brought together with the longwall mining proposed, “it is clear that the purpose for which the proposed lease would be granted would include the filling of the void left after the removal of 3 metres of coal by collapsing the stratas of soil above the area mined including the surface stratum. Dealing with the void may be seen as part of the effective carrying on of the mining. Further, as the roof over the void is apparently unable to support itself over an area measuring up to 200 metres by 2500 metres, the collapse of the roof following the extraction of the coal is part and parcel of the mining. Once the stratum immediately above the coal collapses subsidence of the surface inevitably follows”. -- 16 of 44 -- 17 As determined by the Court of Appeal majority no lease can issue on this application. ARCO has not complied with the provisions of the Act in the sense that the nature of the mining proposed necessitated that it apply for surface area. Objection 3 is upheld. (B) IS THE LAND APPLIED FOR MINERALISED OR ARE THE OTHER PURPOSES FOR WHICH THE LEASE IS SOUGHT APPROPRIATE? I am satisfied that the mineral sought, namely, coal is a “mineral” as defined in Section 5 of the Act. No objection was lodged with respect to mineralisation. I am satisfied the drilling has revealed within the boundaries of the Gordonstone Extension a measured coal resource of 64 million tonnes, an indicated resource of 61 million tonnes and an inferred resource of 17 million tonnes. (see Exhibit 11 and Exhibit 12) However, I would draw to the Minister’s attention that no satisfactory evidence of mineralisation was offered with respect to that area of the application represented by the intersection of gridlines 632500 and 7425143 (approximate), the western boundary line of ML1978 abutting the Gordonstone Extension and the boundary line of EPC389, all of the foregoing references appearing in map 2 – 2 of “ABA2” of Exhibit 11. (see also T118) Were any lease able to be granted, then I would recommend to the Minister in all the circumstances that this area be excluded from the area sought. I also point out to the Minister the provisions of Section 271(1)(c) of the Act which permits further evidence to be taken on such matters. I again refer to the Court of Appeal decision referred to above and in particular to the judgement of Justice Demack at page 9 in so far as it related to Section 269(4)(b) of the Act. Following upon the reasoning of His Honour, it might be said that if the purpose referred to in Section 273 of the Act for which the proposed lease would be granted includes the filling of the void left after removal of the coal for which surface area is required – but for which no surface area was applied for, then as a matter of logic, it might follow that the purpose for which the lease is sought is not necessarily appropriate. -- 17 of 44 -- 18 Historically, Section 269(4)(b) of the Act on another view might be seen as simply referring to two situations: the first situation speaks of whether or not the land applied for is mineralised. The alternate situation deals with a scenario where an Applicant seeks to use the area of land applied for as say a storage area or a tailings dam. Obviously, in that situation mineralisation has no relevance at all to the issue. I would respectfully suggest that the Minister seek advice from the Crown Solicitor on this point and in particular whether the view expressed by Justice Demack was supported or not by the president of the Court of Appeal or Justice Dowsett. It may be necessary to seek an amendment of this sub-section. (C) IF THE LAND APPLIED FOR IS MINERALISED WILL THERE BE AN ACCEPTABLE LEVEL OF DEVELOPMENT AND UTILISATION OF MINERAL RESOURCES WITHIN THE AREA APPLIED FOR? Following upon my comments immediately above, there is an argument that if the purpose is not appropriate then it would follow that there could be no acceptable level of development. I have not adopted that view. Gordonstone Extension is divided into:- (a) Domains 5 and 6 which are to be mined by the Retreat Longwall Mining; and (b) an area to the north of Domain 5 which is not mapped by ARCO for any obvious mining activity. Development was not proposed to begin on the Gordonstone Extension until around mid-year 2004. The timing of the application was consistent with good mining practice to plan ahead. The evidence of Fawcett (May – T199-200) should be accepted. Domain 5 was proposed to be developed by longwall blocks 4 kilometres long with 250 metre faces. Domain 6 was proposed to be developed by longwall blocks up to 3.5 kilometres and also with 250 metre faces. Whilst the area to the north of Domain 5 is not mapped for any obvious mining activity, the evidence indicates that substantially, there would be an acceptable level of development and utilisation of mineral resources within the total area applied for. As reported above, I would recommend to the Minister that but for the Court of Appeal decision were there a grant of lease, the area to the north of Domain 5 be excluded from any grant. -- 18 of 44 -- 19 (D) IS THE LAND AND THE SURFACE AREA OF THE LAND IN RESPECT OF WHICH THE MINING LEASE IS SOUGHT AN APPROPRIATE SIZE AND SHAPE? ARCO seeks and area of 3,789 hectares. UPAL made no objection on this matter. ARCO asserts that the size and shape of the land applied for is appropriate in that it is bounded by the existing lease ML1978 on the eastern boarder, by another joint venture’s Exploration Permit for coal to the south and in the west, by a structural feature known as the “Woolshed Fault”. I refer to my comments under “B” with respect to the area north of Domain 5. The apparent explanation for the lack of drill results in this area was inadequate. In his affidavit (exhibit 12) Sly simply states:- “Further drilling and exploration in the future will better define the sub-crop line and potential limit of mining in this area.” The area in question is not insignificant and forms part of the organic farm operated by UPAL. In the circumstances, the land in respect of which the mining lease is sought is not an appropriate size and shape and I would recommend to the Minister but for the decision of the Court of Appeal any grant be reduced accordingly. (E) IS THE TERM SOUGHT APPROPRIATE? ARCO seeks the term of the lease to 30 April 2011 – a term of approximately 16 years and 8 months from the date of application. The purpose behind this term is to have it coincide with the expiry of ML1978. UPAL objected to the term on the following basis:- “The term of the lease sought is inappropriate in that it is inconsistent with the period referred to in a letter from “Gordonstone Management” dated 20 December 1994.” The letter in question is annexure 7 to the affidavit of Armstrong – Exhibit 11. This documentation refers to the anticipated life of the mine up to 2022 when the terms sought is 2011. The substance of the objection seems to be that the expiry date applied for by ARCO is less than the mine life anticipated above. The rationale for adopting the expiry date of 2011 is in my view reasonable. Objection 4(a) is struck out. -- 19 of 44 -- 20 (F) HAS THE APPLICANT THE NECESSARY FINANCIAL AND TECHNICAL CAPABILITIES TO CARRY ON MINING OPERATIONS UNDER THE PROPOSED MINING LEASE? There is no objection on this matter. The present Gordonstone Mine is conducted by way of a joint venture consisting of the following companies:- ARCO Coal Australia Inc (50%) ARCO Resources Ltd (30%) Mitsui Gordonstone Investment Pty Ltd (15%) MLC Coal Investment Pty Ltd (5%) Mining activity commenced on ML1978 in the second quarter of 1991 with development production. Longwall production commenced in April 1993. I have noted the financial data with respect to the above corporations in the Annual Reports attached to the application. The ultimate holding company of ARCO Coal Australia Inc and ARCO Resources Limited is the Atlantic Richfield Company (“Atlantic Richfield”) of the United States. Atlantic Richfield, in the 1993 financial year had total revenues of US$19.183 billion, net income of US$269 million and total assets of US$23.894 billion. In the 1994 financial year, Atlantic Richfield had total revenues US$17.199 billion, net income of US$919 million and total assets of US$24.563 billion. The ultimate holding company of Mitsui Gordonstone Investment Pty Ltd is Mitsui and Co Ltd (“Mitsui”). For the year ended 31 March 1994 Mitsui had total revenues of US$4.8 billion, net income of US$150.186 million and total assets of US$72.5 billion. MLC Coal Investment Pty Ltd is a subsidiary of Lend Lease Corporation (“Lend Lease”). Lend Lease for the 1994 financial year had total revenues of A$1.769 billion, net income of A$232 million and total assets A$3.084 billion. Further, by reason of the past operations at the Gordonstone Mine, there is ample evidence that the applicant, as represented by the corporations referred to above has the necessary financial and technical capabilities to carry on mining operations under the proposed mining lease. (G) HAS THE PAST PERFORMANCE OF THE APPLICANT BEEN SATISFACTORY? -- 20 of 44 -- 21 ARCO has been conducting mining operations on ML1978 since 1991. The standards put in place at this mine were said to challenge the best practices for Australian Mines and uses “Worlds Best Practice” as its benchmark. (see T123-126 and Exhibit 12) All of the evidence indicates that the past performance of ARCO has been satisfactory. (H) DOES DISADVANTAGE RESULT TO THE RIGHTS OF:- (i) HOLDERS OF EXISTING EXPLORATION PERMITS OR MINERAL DEVELOPMENT LICENCES; OR (ii) EXISTING APPLICANTS FOR EXPLORATION PERMITS OR MINERAL DEVELOPMENT LICENCES? This amendment was inserted in May 1995. I accept the evidence of ARCO that the entities comprising the applicant hold all the exploration permits and mineral development licences or applications. There is no person who might be disadvantaged on the evidence before me. (I) WILL THE OPERATIONS TO BE CARRIED ON UNDER THE AUTHORITY OF THE PROPOSED MINING LEASE CONFORM WITH SOUND LAND USE MANAGEMENT AND (J) WILL THERE BE ANY ADVERSE ENVIRONMENTAL IMPACT CAUSED BY THOSE OPERATIONS AND, IF SO, THE EXTENT THEREOF? UPAL objected in the following terms:- “4 (a) The operations will not allow for sound land use management; (b) Adverse environmental effects; (c) Detrimental affectation of the current and prospect of uses of the surface plan will occur as a result of the grant of the mining lease.” ARCO’s Case – Land Use, Environment and Detriment ARCO (unlike its approach to Mining Lease 1978) have not opted to purchase the application area from UPAL. Nor did it seek any of the surface area of the application area based on the premise that it has no need of it. That issue was contested. However, by far and above the most important and contested issue to arise in this application was the effect that longwall mining would have on the application area, i.e. subsidence of the surface. -- 21 of 44 -- 22 It was this issue that assumed special significance. The source of evidence for ARCO on subsidence was Armstrong [Exhibit 11], Fawcett [Exhibit 22] and to a lesser degree Sly, ARCO’s Technical Services Leader [Exhibit 12]. The qualifications and experience of those persons are set out in the material referred to. As stated previously, the application area is divided into:– (a) Domains 5 and 6 which are to be mined by Retreat Longwall method of coal extraction; and (b) An area to the north of Domain 5, which is not mapped by ARCO for any obvious mining activity [Map 2-2 Exhibit 12]. Within the application area, there is a total coal resource estimated at 141million tonnes. Extraction from the application area would not actually commence until mid year 2004. However, ARCO pointed out that decisions were required to be made in 1995 towards facilitating the drivage at the required time [Para. 15 Affidavit of Sly-Exhibit 12]. ARCO, far from denying any serious impacts on the application area, freely admited that the obvious impacts of mining would be:– (a) Subsidence of surface area; and (b) The potential for the accumulation of poorer quality water. Subsidence would produce a differential across the existing surface of the application area. As each panel was mined sequentially, it created a steep profile of subsidence on its eastern side and on its western side, the subsidence from it overlapping with the subsidence trough from the previous panel. However, the pillar left between panels offered resistance to the subsiding overburden and created a “hump” in the subsidence profile. The process was to be repeated as each successive panel was worked. The final outcome was that the surface affected by the longwall panel and intervening pillar mining had a corrugated form similar in principle to that of ridges and furrows on ploughed land [Wardell – Exhibit 62 P23]. There seemed no argument as to the mathematical equation to actually measure subsidence. These are the critical ingredients:– (a) Extraction width; (b) Extraction thickness; (c) Nature of cover; -- 22 of 44 -- 23 (d) Strain; (e) Angle of draw [Fawcett – Exhibit 22 P 16]. There have been estimates of subsidence on the application area producing an “average” of at least 1 to 1.5 metres across the existing surface [T-45]. Mr. Fawcett was been more exacting in his calculations. For example, in the north of Domain 5 subsidence would range from 1.8 metres to 2.7 metres and in the south of Domain 5, subsidence would range from 1.6 metres to 2.00 metres. In the north of Domain 6, subsidence would range from .6 metres to 1.7 metres and in the south it was estimated at .4metres only. In summary, subsidence was estimated to range from .4 metres to 2.7 metres [see Fawcett Exhibit 22 P 18]. It should be noted that as cover increases and the seam of coal thins, subsidence reduces. This accounts, for the most part, for the fact that subsidence was measured at .4 metres in the south of Domain 6. ARCO had, I must say, an elaborate method of subsidence measurement consisting of surface survey, strata control and predicted modelling [see para. 11.3 EMOS-Affidavit Armstrong Exhibit 11]. ARCO had positively asserted and it was an important part of its case, that the proposed mining in the application area would have no long term detrimental effect on the agricultural and grazing land of UPAL. It said that the application area is simply an operational extension of the Gordonstone Mine and although there would be a short term restrictive effect on cultivation and grazing, there was no long term substantial effect or impact caused thereon by mining and the subsequent subsidence of the surface land. The short term restriction on land use, it was argued, was the result of managing actively subsiding land in a way that minimised soil loss and soil erosion. This was achieved by:- Firstly: Prediction of when subsidence of the surface would occur and notifying UPAL so that cattle could be removed from the actively subsiding areas. Secondly: Subdividing the surface to be affected by a subsidence into Surface Management Units which were delineated on the basis of surface drainage and water ways. Those areas were to be removed from cultivation and the pasture established which would provide protection to the surface soil -- 23 of 44 -- 24 from the risk of soil erosion during active subsidence when surface slopes may be at their greatest extent. Thirdly: Cattle would be removed from area which are actively subsiding and this could be for a period of up to six months. Fourthly: the original contour banks would be removed for the period of active subsidence in each Surface Management Unit. Fifthly: After subsidence the contour banks would be redesigned and reconstructed according to the new surface contours. Sixthly: Cultivation could then be resumed on areas which have ceased subsiding after mining and this could be after six months. As at October 1995, ARCO had completed 3½ mining panels on Mining Lease 1978 which it argued had provided the opportunity to monitor subsidence and develop a predictive capacity for future subsidence. Further, it said that the experience on Mining Lease 1978 could be extrapolated directly to the application area because of the similar land characteristics of the application area. The only exception to this is that the coal is generally deeper in the application area. ARCO detailed its monitoring programme with respect to the surface Management Units, namely Surface Management Unit 1 and Surface Management Unit 2. With respect to Surface Management Unit 2 described, mining was due to be completed in December 1996. Then, according to its plan, it was then intended to reinstate the contour banks 3 months after completion of mining within the Unit. It should be noted that Surface Management Unit 2 approximately corresponds with longwall Panel 201 and 202 of Domain 2. The Unit, it was said, was closely aligned to a water subcatchment area. A perusal of the EMOS detailing ARCO’s work with respect to Surface Management Units, also indicated past involvement by the Department of Primary Industries at Emerald and future anticipated involvement with respect to the Surface Management Units. For example, at page 23 of the EMOS the ARCO asserts that one of the key elements of the management of subsidence programme was:- “Construction of new soil erosion control structures such as contour banks and water diversion banks in accordance with the Department of Primary Industry recommendations along the new surface contour.” -- 24 of 44 -- 25 Other examples of confidence can be found without difficulty. For example, at page 6 of the ARCO Environment Achievement Award Nomination 1992 [“ABA8” – Exhibit 11], the following passage appeared:- “The subsidence management program is the result of a cooperative and outcomes – oriented approach by the land owner, the Queensland Government and Gordonstone to control the surface effects of mine subsidence. Regular contact between the Gordon Downs farmer and the Gordonstone Environmental Officers has, and will, ensure that the program meets its objectives.” The disinterested observer might be forgiven for thinking that the “subsidence management program” has the “stamp of approval” of the Queensland government and a-fortiori is therefore proven. Coal extraction of course, did not actually begin until April 1993. As another measure of confidence, at page 31 of the transcript appears the following extract of evidence from Mr. Armstrong:- “… We took an undertaking, no only to United Plantations, but also through the EMOS to the … Department of Mineral and Energy … that one of the meters (sic) of success in environment management at Gordonstone would be the maintenance of private property … of the organic certification.” (See also P 6 ARCO application for award 1993, “ABA6” Exhibit 11.) ARCO also adduced evidence with respect to subsidence and farming at Gunnadar. This was simply referred to as the “Gunnadar Experience”. Sly referred to the Gunnadar experience (May-T188). It was not, however, as evidence in chief but rather in re-examination. Mr. Fawcett also made some reference to the Gunnadar experience but that was qualified by the fact that the method of mining was not longwall mining. More significantly in my view, excepting for Gordonstone, he was not aware of anywhere in Australia where longwall mining had been undertaken under crops [May-T229]. As to the “potential for the accumulation of poorer quality water”, ARCO relied upon the EMOS commencing at section 4 page 33 and 57 of Annexure “ABA2”, Exhibit 11, and commencing at page 22 of Annexure “ABA3”, Exhibit 11. I will also have something further to say about the relevance of this material to the question subsidence, below. UPAL’s Case – Land Use, Environment and Detriment UPAL relied upon Mr. Arne Pedersen [Exhibit 42], Dr McGarity [Exhibit 55], numerous papers [Exhibits 56-59; Exhibit 61 and 62], Mr. Morawitz [Exhibit 67] and -- 25 of 44 -- 26 Professor Roberts [Exhibit 72]. There were also numerous photographic exhibits and plans relied upon by UPAL. UPAL’s case, insofar as it is relevant, was based upon adverse environmental effects of a subsidence namely:- 1. Observable ponding in area adjacent to Homestead Gully. A consequence of this could be loss of nitrogen and leaching of nutrients from the soil. 2. Cracking of soil surface as a result of (1). 3. Cracks (40cm width in places) above and below Junction Gully diversion channel. These cracks ran diagonally across the slope and created the potential for gully erosion. 4. Increased risk of erosion not only for the area of subsidence but for the subcatchment as a whole. 5. Reinstatement of contour banks may prove ineffective or impossible in a soil landscape where a series of troughs, basins, steps and crack structures greatly affect natural topography. 6. Ground water hydrology may be affected which could in turn affect bores and potential irrigation development. 7. Excision of Surface Management Units may leave remaining area difficult to work (including machinery problems) and otherwise seriously interfere with the rotation programme [McGarity Exhibit 55, p 1-25]. Professor Roberts concluded:- 1. Subsidence would eliminate the potential income from the irrigation development of the farming land adjacent to Crinum and Belcong Creeks. 2. The loss of organic crop gross income from irrigation and dry land farming over the next ten years could be estimated at $17 million. 3. Subsidence if repeated in the application area, would create a landscape of unstable “man-made melonholes” and would make conservation farming impossible. 4. UPAL would not be able to operate an integrated system of conservation farming on land which is subject to progressive subsidence. Mr. Arne Pedersen listed what he considered to be the impacts of subsidence as:- -- 26 of 44 -- 27 1. Farming and grazing land would go out of production some two years before subsidence was due to start. 2. 80% of subsidence would take place within the first year. 3. The balance of subsidence would take place in succeeding years, up to five years after the initial subsidence. 4. Redevelopment of the land would be required including the installation of new contour banks, if that was possible at all, along with new drainage patterns. The land would be out of production for some eight to ten years. On the mining operations being carried out on Mining Lease 1978 at present, up to 1,000 hectares were out of production at any one time with no guarantee that it could ever be returned to production, particularly organic grain production. Arising out of the foregoing, UPAL’s major theme was that the environmental impact of the proposal by ARCO had not been measured and the proposals for management of the environmental impact on the application area were ill researched and completely inadequate to justify recommendation. Observations on Evidence Whilst ARCO’s case was well presented, there were a number of concerns I had:- 1. Ms Catherine Brosnan, an employee of ARCO and an environmental coordinator was not called to corroborate Armstrong. 2. Mr George Bourne, a soil conservationist with DPI Emerald was not called. He gave evidence at the hearing of ML1978 in 1986 and subsequently played a prominent role in the original installation of contour banks at Gordon Downs. 3. The impact of mining on the application area was also stated to include “potential for accumulation of poorer quality water”. That issue was never satisfactorily addressed by ARCO in terms of the impact that subsidence may have on ground water hydrology. The court with some reluctance exercised its power under Section 268(3) of the Act and called Mr Bourne as a material witness. Under court subpoena, Mr Bourne appeared in court on 27 July 1995 and was cross examined. He held a degree in Agricultural Science and a Masters of Engineering specialising in hydrology. Mr Bourne had 18 years experience in soil -- 27 of 44 -- 28 conservation issues in the Central Highlands and had specific experience in erosion control. His expertise was never challenged. This witness directed the courts attention, inter alia, to an area not specifically addressed by either ARCO or UPAL. That is:- “The central issue is not how much the land above the panel subsides, but how much the land above the pillars subsides i.e. how flat the pillars crush out. If the difference between the amount of subsidence over the panel and the amount of crush out of the pillar is greater than 0.6m there will be severe limitations to the workability of contour bays on the mined land.” [Exhibit 76] What evidence existed as to the extent of “crush out” over the pillars or putting it another way, the “differential” – that is the difference between subsidence at the lowest point and the pillar (after crush out) at its highest point? The summary of the evidence was that the range of subsidence over the pillar was 0.1-1.5 metres [Exhibit 11 Table 11-3]. Mr Bourne surmised from material provided to him by UPAL, the crush out over Panels 101, 102 and 103 was 50 centimetres. [T34- Bourne]. ARCO’s own witness, Fawcett gave evidence as to the expected subsidence in the northern and southern part of Domain 5 and the northern and southern part of Domain 6 [Exhibit 22 p18]. On the best case scenario for ARCO, these figures did not paint an encouraging picture for Domain 5 nor for a sizeable portion of Domain 6 [T26-Bourne]. Having considered carefully the evidence of Bourne and the contents of his two statements, even if the argument was that only 10% of the application area would be lost to farming as a result of subsidence, that figure was still not a scenario based on any empirical data. Further, it took no account of possible farming difficulties especially with respect to the use of farm machinery and the like [T30- Bourne]. Nor did it take into account the degree in extent of ponding that may occur on the application area as a result of subsidence in which the witness had already observed at Homestead Creek [May-T379 and T16,33-Bourne]. Nor did it take into account the prospect of any change in creek direction and consequences that might follow [T34-Bourne]. The test of any restoration of contour banks on ML1978 would come when it is attempted to replace those banks running perpendicular to the panels in Domain 2 [T22-Bourne]. -- 28 of 44 -- 29 In summary, I found the concerns expressed by UPAL whether in writing or in evidence not only honestly held but supported by credible argument. The “Subsidence Management Program” or the “Subsidence Management Technique”, so far as relates to the application area was little more than a theory. That is, the evidence offered by ARCO fell far short of proving anything other than there was a long way to go in establishing on the best evidence, what one can reasonably expect on the application area or at least part of it. As Bourne has said in his statement [Exhibit 76]:- “There is no evidence, I am aware of, that proves that the installation and farming of contour banks on land subsided by longwall mining can be successfully carried out.” Doctor McGarity said pretty much the same thing:- “The effects of these impacts on (sic) longwall mining on agricultural land are not well documented for Australian Environment. Indeed a search of world literature had failed to provide any significant hard data which might usefully assist in providing a predication as to what occurs in the farming landscape of Gordon Downs.” [Exhibit 55-P8] It was also a sobering thought and a demonstration perhaps of how high the stakes are that:- “If the farm land has to be returned to permanent pasture, it represents a loss of valuable farming country. If other mines are to use the longwall technique to mine under farm land, the State’s agricultural farming resources will be significantly reduced.” [Exhibit 76] I was even in some doubt that ARCO actually believed that the land could be restored to pre-mining status. In answer to a question by Mr Douglas QC as to the need for contour banks to be re-established Armstrong said:- “It will be redone .. we plan to do that and there is no question that if it can be done it will be done .. and it is standard practice in that agricultural land.” [ T45] ARCO has to its credit invested a great deal of time and money on the monitoring process. Site visits were carried out by me on 1 June 1995, 25 September 1995, 18 May 1996 and 25 February 1997. As at the latter date, it was expected that mining of Panel 202 (ML1978) would be completed in total around the end of March 1997. Further, at this latter visit, inspections were carried out of the area of installation of contour banks and areas of severe surface cracking on ML1978. If it is the case that -- 29 of 44 -- 30 cracking is simply limited to topsoil then that in itself may not present a serious problem. If the cracking continued into the strata, then rectification may prove to be extremely difficult. Cracking could undermine contour banks and form a conduit under them rendering banks totally ineffective at those points. It should also be noted that the area of cracking was mined around April 1996. The cracking seemed to run generally in the direction of mining and was situated over the hump. [Exhibit 39 marks the points of inspection] When this matter was adjourned on 20 October 1995, I indicated that ARCO may in time be able to demonstrate that the Subsidence Management Technique actually worked. The undisputed evidence was that the best evidence would derive from Panels 201 and following as to what might reasonably be expected to occur on the application area or at least part of it. Even so, care would still need to be required for two reasons:- 1. The differences in the differential between Panels 201 and 202 and the panels at the northern part of Domain 5 would still be around 0.8 metres. 2. The contour banks as reshaped on Panels 201 and 202 would need to be tested for any greater vulnerability to a significant rainfall event. Panels 201 and 202 are now ready to be tested. Unfortunately, there has not been any significant rainfall on Gordon Downs for some years and as of the date hereof, these banks still remain to be tested. It would be particularly important to ascertain whether or not the contour banks running perpendicular to the panels have been successfully restored. The absence of significant rain also leaves a great deal of uncertainty as to whether or not cracking would be precipitated and to what extent. Whilst ARCO did not establish that the proposed mining lease would conform with sound land use management and that there would not be any adverse environmental impact caused by those operations, to be totally dismissive of the Subsidence Management Technique would in the circumstances be unjust. The purpose of the adjournment was therefore to allow empirical data to be gathered and most importantly, this information would be gathered and submitted in an atmosphere of an open court where it would be subject to critical analysis. In the context of information gathering, it must be said that this course of action was also considered necessary by virtue of the fact that the Department’s Preliminary Environmental Assessment Report dated 9 February 1995 indicated that no such -- 30 of 44 -- 31 analysis had ever been undertaken by the Department and more to the point, none appeared likely in the immediate future. It should also be noted, that no Environmental Impact Study was ordered pursuant to Section 261 of the Act. Such a study could have easily included all or most of those matters set out at page 3 and 4 hereof. That state of affairs, of course, relates to 1995. I have every reason to believe that the situation is now dramatically different. As a consequence of the Court of Appeal decision, there will be no resumption of the application and as a consequence, I am unable to conclude on the evidence presented, that the operations proposed would conform with sound land management or that there would not be any adverse environmental impact caused by these operations. Objections 4(b),(c) and (d) (in a technical sense) are upheld. In passing, Objection 5 is not strictly an objection although the point would be a valid one were any lease to be granted on this application. In the present circumstances, as an objection, Objection 5 is struck out. Future Course of Action At the directions hearing of 17 June 1996, I set out various matters to be the subject of further evidence. Those matters appear on pages 3 and 4 hereof. I would recommend to the Minister that the monitoring process with respect to ML1978 continue. It is submitted that the answer to whether or not the Subsidence Management Technique works lies in future monitoring and critical analysis of the data procured. It should also be remembered that other applications using the Longwall Retreat Mining method under farming land may arise in the future and it may be necessary to call upon the experience of Gordon Downs. The Minister might consider creating a Subsidence Management Board consisting of Farming, Mining and DPI expertise to monitor and report on ways and means of Subsidence Management. Such a gathering of expertise should include the Department whose contribution would be invaluable. There is nothing new in this approach. In the Mining Warden’s report (1986) with respect to ML1978, this idea was proposed but for reasons unknown never acted upon. Subsidence seems to be site specific. One hypothetical scenario is that Longwall Mining under agricultural land (crops) in Emerald where there are contour banks, may not be feasible (in terms of restoration of the surface) above a certain depth. Domain 5 might be suggestive of this outcome. Domain 6 (but as defined by watershed areas) might be suggestive in part of the opposite outcome. This is of course speculative at this point in time. -- 31 of 44 -- 32 (K) WOULD THE PUBLIC RIGHT AND INTEREST BE PREJUDICED BY ANY GRANT? There is presently a question whether or not ground water hydrology has been affected in terms of bores and the potential for change in creek direction. To this extent, the public right and interest might be prejudiced were that data to be forthcoming. It should also be considered that if in the future, large tracts of high quality agricultural land were permanently lost to Longwall Mining, that would represent a loss to the State and as a consequence, the public right and interest would be affected. Both miner and farmer have a significant interest in addressing this issue. At this point in time I am unable to conclude on the evidence presented that the public right and interest will not be prejudiced by any grant. (L) HAS ANY GOOD REASON BEEN SHOWN FOR A REFUSAL TO GRANT THE MINING LEASE? The Court of Appeal decision of 7 November 1997 determined that no mining lease can be granted on this application. The reason, as has been already indicated is that ARCO should have applied for surface area. The parties have agreed that I recommend to the Minister that the application should be rejected in whole. (M) TAKING INTO ACCOUNT THE CURRENT AND PROSPECTIVE USES OF THE LAND, IS THE PROPOSED OPERATION AN APPROPRIATE LAND USE? At this point in time, I am unable to conclude that after taking into account the evidence with respect to the current and prospective uses of the land, the proposed mining operation would be an appropriate use of land. PROPOSED CHANGES TO MINERAL RESOURCES ACT 1989 During the hearing of this matter, both parties engaged in what might be described as “preliminary skirmishes”. The issues were important ..:- 1. ARCO sought to strike out the Notice of Objection because it was sent by facsimile. 2. ARCO also sought Further and Better Particulars of an objection. 3. UPAL sought Discovery of ARCO’s records. All three applications were dismissed. However, there is still uncertainty remaining with respect to these three areas. Service By Facsimile and Generally -- 32 of 44 -- 33 In MLA80040-Monto Resources Pty Ltd (“Monto Resources”) the following occurred:- 1. The Department of Natural of Resources (“DNR”) objected to a grant of lease to Monto Resources. 2. The last date for objections was 11 October 1996. 3. On 11 October 1996 DNR sent by facsimile a letter to the Mining Registrar Rockhampton in which it advised that it objected to any such grant. 4. A letter was also sent by post being received by the Registrar on 15 October 1996. Monto Resources applied to have the Notice of Objection struck out on the basis that DNR had not complied with Section 260(1) of the Act in that it had not validly lodged its objection with the Mining Registrar on or before the last day for receipt of rejections and on the grounds that the objector had not complied with Section 260(4) of the Act in that it had not validly served the copy of the objection on Monto Resources. The application was heard before the Mining Warden who ordered the objection be struck out on 24 October 1996. DNR appealed under Section 383 of the Act, which appeal came on by way of re-hearing (Section 384(1)) before Judge McGill of the District Court (No. 4271 of 1996). The issues to be determined were:- (a) Whether the requirement of Section 260(1) had been complied with, specifically whether the Notice of Objection was “lodged” given that it had been sent by facsimile to the office of the Mining Registrar; and (b) Whether the Notice of Objection was in the approved form. In each case, there was a subsidiary argument as to whether, if Section 260(1) had not been complied with, nevertheless, there had been substantial compliance so that DNR’s position would be preserved either pursuant to Section 49 of the Acts Interpretation Act 1954 or Section 393 of the Act. Turning to (a), in finding in favour of DNR it is appropriate to simply quote from the relevant part of the judgement of Judge McGill appearing at pages 11 and 12:- “In my opinion a provision such as this involving as it does a time limitation is preferably construed on a basis which produces the result that it is satisfied if -- 33 of 44 -- 34 the person required to take the step has done what is required of that person before the time limit expires and the construction which would make satisfaction of the time limit dependent upon the action of some other person out of that persons control is undesirable and unsatisfactory. In my opinion it is necessary for the Mining Registrar to be physically put in possession of an objection within the time required, but it is not necessary for him to take any decision as to whether or not to accept it as an objection. In my opinion the objection may be lodged so long as there has been the sort of physical delivery contemplated by the majority of the Court in Angus Fire Armour Australia. I would note that in re Della and Repatriation Commission (1994) 19 AAR 483, a senior member of the Administrative Appeals Tribunal page 486 expressed the view that an application to the Administrative Appeals Tribunal may be lodged by facsimile transmission. In my opinion the same applies to section 260 of this Act provided that the facsimile is received in the office of the Mining Registrar before the time for objection has expired. I should say that although the section refers to lodging with the Mining Registrar as distinct from lodging in the Office of the Mining Registrar, I do not consider that this requires that a person wishing to lodge an objection must locate the Mining Registrar personally and physically deliver the objection to the Registrar and no on else. The Act contemplates that there may be an office of the Registrar see section 341. There is in my view nothing to suggest that the ordinary practice in relation to officers of Courts was not to be followed in relation to this particular section.” As to (b) in finding in favour of DNR, the court ruled that:- (i) Section 268(4) does not exclude the operation of Section 392 (substantial compliance); (ii) There had been substantial compliance with the requirement that there be a Notice of Objection in writing in the approved form. At page 20 of the judgement the following passage appears:- “If one considers the practical function which a notice of objection under section 260 is to serve in the context of the administrative inquiry which the Mining Warden was engaged upon it seems to me reasonably clear that the letter which was sent by facsimile to the Mining Registrar was adequate to -- 34 of 44 -- 35 convey the substance of what had to be conveyed had the approved from been complied with.” As to Section 260(4), the judgement is silent as Monto Resources abandoned the point which course of action Judge McGill considered to be “reasonable and appropriate”. Arising from this case and the Gordonstone Extension, in my view problems associated with the lodging of objections will continue in some shape or form. For example, questions of the form of an objection will always be determined according to the particular circumstances. However there is, it is submitted a compelling argument that following upon the above judgement, Section 260 could be amended and streamlined to simply provide:- 1. An objection need only be lodged by an objector with the appropriate Mining Registrar by the due date; 2. Lodgement by facsimile with the Mining Registrar shall be considered as compliance with the Section. The Mining Registrar could then on-forward Notices of Objection to the Applicant. To further give effect to the above, any application for a Mining Lease when served could clearly state the above requirement. Such a change as proposed, will enable the contested application process to proceed without undue delay and be less punitive to objectors. Further and Better Particulars, Discovery and Interrogatories The process of hearing an application for a Mining Lease is administrative in nature. The interlocutory steps referred to above, it is submitted, are inappropriate to an administrative hearing and only further delay the hearing, often at great expense to the parties. The mining lease application (once accepted) and the notice of objection are “stand alone” documents. In the case of an application for a mining lease. Section 250 of the Act permits the Registrar to reject such an application if it fails to meet requirements as set out in Section 245(1) of the Act. It will always be incumbent upon Mining Registrars to insist on compliance with this provision. -- 35 of 44 -- 36 There are no specific rules applicable to the practice and procedure in the Warden’s Court. It is submitted that there should be rules drawn for the guidance of the parties and legal practitioners pursuant to Section 367 of the Act (Governor in Council may make rules of court regulating practice and procedure). Whilst a complete set of rules is not something that could appear overnight, there is no reason a start could not be made including a provision that the Court shall have no discretion to grant any application by an applicant or an objector for Further and Better Particulars, Discovery or Interrogatories with respect to an application for a mining lease. GENERAL Wardens Court During the hearing of this mining lease application and subsequently, I was aware of criticisms levelled at the Wardens Court. Up until around 1990 it formed part of the Justice system performing valuable work, like any other court. The criticisms recently made have resulted in calls for significant changes which vary from complete abolition of the court to diluting in various ways its functions. The Mineral Resources Act 1989 as it presently stands, is a product of nearly a decade of debate and argument and is a very workable piece of legislation. There may well be shortcomings in the Act and in its implementation but where those short comings are established, amendments may be promptly made. In discussing the merits of proposals for change, the ultimate source of the problem should be clearly identified. That is, the change from funding the court from the Justice Department Budget to the Department of the Department of Mines and Energy Budget. This took place around 1989-1990. The potential for conflict of interest between the Court and the Department in my view was obvious. Fitzgerald, in his report summarised the point at page 134:- “The independence of the Judiciary is of paramount importance, and must not be comprised. One of the threats to judicial independence is an over- dependence upon administrative and financial resources from a Government department or being subject to administrative regulation in matters associated with the performance of the judicial role. Independence of the Judiciary -- 36 of 44 -- 37 bespeaks as much autonomy as is possible in the internal management of the administration of the courts.” In 1995 I am aware that vigorous (but unsuccessful) representations were made to change that situation. The problem at that time was compounded in that the court was physically located in the department’s premises which readily allowed for the perception that the court was part of the department the same way as say Tenures or Records branch. This matter was corrected in 1996 and the court moved to other premises. But the question of funding was left unresolved fermenting yet further discontent, suspicion and innuendo. This is the problem the Minister inherited.. There are other issues that also arise from the funding issue that also need to be addressed. The announcement by the Minister on 24 June 1997 that the Wardens Court was returning to Justice was decisive and very much to be applauded. Critics may suggest that this approach invites yet further problems. The real point is that had the court been left where it was, more likely than not, significant expertise would have developed and the trauma of recent times would have been avoided. It should not be forgotten that there was never any criticism of the court of the kind recently reported prior to the change in funding. I would submit the following proposals to the Minister to compliment the announcement of 24 June 1997:- 1. The civil and equitable jurisdiction of the Wardens Court (as part of the Justice system) be maintained; 2. The court be significantly elevated in status and further developed and funded as a specialist court; 3. Timely access to the Court on all mining matters is essential for interested parties. In practical terms and of particular importance, with respect to contested mining lease applications, once the objection process is complete, there should be a directions hearing (conducted if necessary by telephone as with some Tribunals) within 21 days of the close of objections at which time a hearing date for the application should be set. That hearing date ideally should not be more than three -- 37 of 44 -- 38 months from the date of the directions hearing. The amendments proposed compliment this process; 4. It is highly likely that if the “Wik amendments” are passed sooner or later, there will be an explosion of work in the Wardens Court. To meet the needs of all parties, the Minister might consider re-appointing a Northern Warden – situated in Townsville. When the Northern Warden retired around June 1993 he was not replaced. Townsville, has direct access to Mount Isa and is a major centre for servicing the North and “the North- West Minerals Province”. Neither applicants nor objectors can afford untimely delays in the hearing of contested mining lease applications. Any proposal to abolish the Minister’s discretion to recommend a grant of lease or reject same pursuant to Section 271 should be approached with great caution. The case for mining (conducted responsibly and regulated impartially) is a formidable one. The benefits are enormous not only to individuals but for the State. It is sometimes forgotten that historically speaking, mining on at least one occasion, rescued the State from bankruptcy. I should also mention that one of the benefits of returning the Wardens Court to the Justice system is that if the Warden has to go on circuit, he has automatic access to courts in every part of the State. The present situation is that access to any court is discretionary and has been the cause of embarrassment in the past. In addition to that, being part of the Justice system means that transcription facilities are automatically available. I will endeavour to take the foregoing matters up with the Minister at the first opportunity. APPENDICES The following documents are appended: (A) DOCUMENTS FORMALLY READ OR OTHERWISE RECEIVED INTO EVIDENCE • Mining Lease Application 70110; • Certificate of Application; • Declarations of Posting and Advertising (3); • Form of Objection (see Exhibit DBF(1)); -- 38 of 44 -- 39 • Preliminary Environmental Assessment Report; • Inspection Report; • Letter DME to Pedersen 20 January 1995; • Summons of ARCO dated 21 February 1995; • Affidavit of Darren Bradley Fooks sworn 21 February 1995; • Further Affidavit Darren Bradley Fooks sworn 27 February 1995; • Affidavit of Michael Kenneth Adrian Rhodes sworn 27 February 1995; • Affidavit of Arne Pederson sworn February 1995; • Notice of Discovery from UPAL to ARCO dated 23 February 1995; • Correspondence UPAL to ARCO dated 17 January 1995, 25 January 1995, 15 February 1995, 23 February 1995 and 28 February 1995; • Correspondence ARCO to UPAL dated 23 February 1995; • Summons of UPAL dated 22 January 1998; • Affidavit of Michael Kenneth Adrian Rhodes sworn 19 January 1998 (in relation to Costs). (B) LIST OF EXHIBITS 1. Colour Photograph 30; 2 Colour Photograph 31; 3 Colour Photograph 34; 4 Colour Photograph 14; 5 Colour Photograph 4; 6 Colour Photograph 5; 7 Colour Photograph 9; 8 Colour Photograph 6; 9 Colour Photograph 8; 10 Aerial May – 5.11.92 (Ref. 21890 – 1100) Gordonstone Coal Management P/L – Exploration & Mine Lease Areas PLUS transparent overlay; 11 Affidavit of Alexander Brown ARMSTRONG; 12 Affidavit of Wayne Kenneth SLY; -- 39 of 44 -- 40 13 “The Effects of Ground Subsidence from Longwall Coal Mining on Pole Type Overhead Power Lines” – T Line Consultants; 14 Letter dated 13 April 1995 from Aitken & Magney to Clayton Utz; 15 Facsimile Transmission dated 18 April 1995 from Clayton Utz to Aitken & Magney; 16 Writ of Summons – No. 692 of 1995 in the Supreme Court of Queensland; 17 Statement of Claim – delivered the 26 th day of April 1995; 18 Affidavit of Stephen John BRYANT dated 24 April 1995; 19 Affidavit of David Graham BARRETT dated 24 April 1995; 20 Plan of Proposed Extended Mining Area and Mine Layout Gordonstone Coal Management Pty Ltd; 21 Underground Ventilation Survey and Computer Modelling for Gordonstone Coal Mine – Report to Mr K M CAREY Ventilation Engineer; 22 Independent Opinion on Aspects of Gordonstone Colliery’s Lease Extension Proposals for ARCO Coal Australia – Dames & Moore; 23 Gas Drainage Options CAPCOAL’S EXPERIENCE by Bruce Robertson Bob Gallagher and Jeremy Busfield; 24 Chapter 25 – Seam Gas and Seam Gas Drainage by A J HARGRAVES; 25 Plan prepared by C W Edmonston & Associates – EPC 389 Property Description & Land Owners Plan; 26(a) Plan of Property Description & Land Owners Plan; 26(b) Plan of Proposed Extended Mining Area and Mine Layout; 26(c) Plan of Proposed Extended Mining Area; 27 Gordonstone West & Gordonstone Extension – Proposed Drill Hole Location (Preliminary Layout); 28 Facsimile Transmission dated 7 December 1994 from ARCO Coal Australia Inc. to United Plantations (Australia) Limited; -- 40 of 44 -- 41 29 Meeting with UPAL – 16 December 1994 – Gordon Downs Office; 30 UPAL Meeting 28 February 1995 – Soil Erosion Management; 31 Memorandum from Alex Armstrong dated 28 February 1995 – 1995 Drilling Program on Gordon Downs and Subsequent Compensation; 32 Facsimile Transmission from Gordonstone Coal Management Pty Ltd dated 3 March 1995; 33 Letter to Mr Arne Pedersen from Gordonstone Coal Management Pty Ltd dated 3 March 1995; 34 Facsimile Transmission to Arne Pedersen from Catherine A Brosnan dated 9 March 1995; 35(a) Colour Photograph No 9; 35(b) Colour Photograph No 10; 36 Colour Photograph No 4; 37 Colour Photograph No 7; 38 Colour Photograph No 6; 39 Plan of Longwall 201 Extraction – Gordonstone Coal Management P/L; 40 Colour Photograph No 3; 41 Note to file – Meeting at Gordonstone – 31 March 1994; 42 Statement by Arne Stig PEDERSEN dated 19 May 1995; 43 Standards for Organic Agricultural Production by NASAA; 44 National Standard For Organic And Bio-Dynamic Produce – Proposed Revised Draft; 45 Document on Organic Produce Advisory Committee (OPAC) dated 19 October 1994; 46 Stick on Certificate – Certified Level A ORGANIC by NASAA; 47 Coloured Transparency Plan; 48 Letter from Gordonstone Coal Management P/L to Mr A S Pedersen dated 3 September 1993; 49 Laminated Hand Drawn Plan – Contour Banks; -- 41 of 44 -- 42 50 Fourth Schedule – Conditions of License – Clause 5.2; 51 Aerial Colour Photograph; 52 Aerial Colour Photograph; 53 Aerial Colour Photograph; 54 Cellophane Overlay – Plan showing roads, contour banks, waterways etc; 55 A Report on the Effects of the Proposed Mining Lease Extension on Soils and Crop Management on Gordon Downs; 56 A Report on the Soils and Agricultural Capability of “Gordon Downs”, Capella with Respect to the Impact of Mining; 57 Land Subsidence – International Symposium 11-15/12/89; 58 Environmental Impact of Subsidence: A Case Study from JHARIA Coalfield, Eastern India; 59 Effects of Mining Subsidence on Environmental and Ecology – The Remedies (A K Chakraborty and K B Singh); 60 Form Ex A for Identification Letter from Area Director for Soil Conservation to Mine Subsidence Board dated 23 September 1983; 61(a) Coloured Photograph from Conservation Farming; 61(b) Coloured Photograph from Conservation Farming; 61(c) Coloured Photograph from Conservation Farming; 61(d) Coloured Photograph from Conservation Farming; 62 Statement by Kenneth Wardell (September 1987); 63 Notes of Meeting between ARCO Gordonstone & United Plantations 14 March 1995; 64(a) Coloured Photograph; 64(b) Coloured Photograph; 64(c) Coloured Photograph; 64(d) Coloured Photograph; 65 Report of Robin Eric PATERSON; 66(a) Plan of Mine Production Schedule (Figure No. 3.7-1); -- 42 of 44 -- 43 66(b) Plan of Gordonstone Colliery – General Mine Layout; 67 Statement by Carl Adolph MORAWITZ; 68 Form Ex B for Ident Plan – Figure 3 – Proposed Location of Ventilation Shafts; 69 Statement in Writing (W R ASH) Verifying Balance Sheet, Profit & Loss Account etc. of Foreign Company; 70 Mitsui Gordonstone Investment P/L FINANCIAL STATEMENTS – 31 March 1994; 71 Statements pursuant to The Life Insurance Act 1945 – MLC Coal; 72 Report of Professor Brian Ross ROBERTS; 73 Crop Economics – Pricelist and Tables; 74 “Gordon Downs” Management Map and Cashflow Spreadsheets; 75 Statement of George Fraser BOURNE dated 20 July 1995; 76 Further Statement of George Fraser BOURNE 24 July 1995; 77 List of material considered; 78 Southern Cross Line Subsidence Map – FS010; 79 Block 1 Contour Banks – ES004; 80 Mining Subsidence Engineering – Helmut Kratzsch (C) COURT RULINGS (a) Ruling dated 28 March 1995; (b) Ruling dated 4 May 1995; (c) Ruling dated 17 June 1995; (d) Ruling dated 20 October 1995; (e) Ruling dated 30 January 1998. (D) OTHER MATERIAL (a) Submissions of ARCO; (b) Submissions of UPAL; (c) Notes on site inspection; (d) Photographs taken 1 June 1995. -- 43 of 44 -- 44 RECOMMENDATION In view of the Court of Appeal decision of 7 November 1997, I recommend that mining lease application 70110 be rejected in whole. DATED at Brisbane this 19 th day of March 1998. J.D. Costello Acting Mining Warden -- 44 of 44 --