In brief

What has happened?

On 10 May 2016, the Land and Environment Court decided Martin v Hume Coal Pty Ltd.1 This is the first time that the scope of ‘any significant improvement’ has been tested by a Court. The decision significantly expands what has previously been held to be a ‘significant improvement’ for the purposes of the Mining Act 1992 (NSW) (Mining Act) and as a result may limit the ability of the holder of an exploration licence to undertake activities on land on which there is any ‘significant improvement’.

The Court held that, while the scope of the activities which can be permitted by an exploration licence is broader than previously thought, so is the scope of the activities for which an access arrangement under the Mining Act is required before exploration activities can be carried out. In particular, driveways, improved pastures and agricultural land are ‘valuable work’ and fall within the definition of ‘significant improvements’ for which an access arrangement is required.

The decision is of particular importance because, under sections 31 and 49 of the Mining Act, the owner of land on which there is any ‘significant improvement’ has absolute discretion to withhold consent to the exercise of rights conferred by an exploration licence or an assessment lease. Also, under section 62 of the Mining Act, the owner can withhold consent to the grant of a mining lease over the land if the owner has identified the ‘significant improvement’ in a claim made in accordance with clause 23A of Schedule 1 of the Mining Act. If dispute arises over these matters, any party to the dispute may apply to the Land and Environment Court to determine it.

Who needs to know?

Miners who have or are seeking to obtain exploration licences or access arrangements, under the Mining Act.

Key elements of the decision

The Court made its decision on an appeal from an earlier decision of the Commissioner for Mining (Mining Commissioner). Four Southern Highlands landowners had sought from the Commissioner a declaration that Hume Coal, the holder of exploration licence A349 under the Mining Act (Exploration Licence A349), was not permitted to exercise rights under that licence on certain areas of land on which the landowners considered there to be ‘significant improvements’. The Mining Commissioner refused the declaration. The Court overturned that refusal.

The Court accepted the landowners’ submissions that certain roads and driveways, pastures with improved paddocks, equestrian courses, cattle laneways and irrigation piping and fences on their lands could fall within the scope of ‘significant improvement’ under section 31 of the Mining Act and, therefore, needed to be the subject of an access arrangement.

Things to do now

The Court’s decision will not affect the validity of existing access arrangements under the Mining Act.

However, miners will need to review existing agreements for the adequacy of their coverage of areas on which there are ‘significant improvements’ such as formed roads and driveways, paddocks with improved pastures or agricultural land.

Miners will also need to ensure, when negotiating future access arrangements, that these things are addressed and covered.

Background to the Decision

Hume Coal Pty Ltd (Hume Coal) is the holder of Exploration Licence A349 which authorises exploration for coal in certain parts of the Southern Highlands in NSW. Mr Martin and four others (Applicants) owned land within the area of Exploration Licence A349. The Applicants sought a declaration from the Mining Commissioner that Hume Coal, was not permitted to exercise rights under Exploration Licence A349 on certain areas of land on which the landowners considered there to be ‘significant improvements’. The Mining Commissioner refused the declaration. The Applicants appealed the decision of the Commissioner of Mining under section 56A of the Land and Environment Court Act 1979 (NSW) on the grounds that she had misdirected and misconstrued the relevant provisions of the Mining Act and their application. The Applicants submitted that formed roads and driveways, paddocks with improved pastures and lucerne, an equestrian cross-country event course, cattle laneways, irrigation piping and fences fell within the meaning of ‘significant improvement’ and that Hume Coal was therefore precluded from exploring those areas of their property without the written consent of the landowners.

Regulatory requirements

Section 31 of the Mining Act limits an exploration licence holder from exercising its exploration rights on land, on which or within certain distance of which, are dwelling-houses, a garden or any significant improvement to the land. The term ‘significant improvement’ is defined in the Dictionary to the Mining Act as ‘any substantial building, dam reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work or other valuable work or structure’.

Section 140 of the Mining Act requires the holder of an exploration licence to put in place an access arrangement under Division 2 of Part 8 of the Mining Act in order to carry out prospecting operations. Section 142 of the Mining Act puts in place a regime for advance notice to a landowner where the holder seeks access.

Decision of the Commissioner

In Martin & Ors v Hume Coal Pty Ltd [2015] NSWLEC 1461 the Mining Commissioner held that none of the contested land, works or structures were captured by the scope of ‘any significant improvement’. The Mining Commissioner also found that a right of vehicle access over land was not a right conferred under an exploration licence, and she therefore did not consider whether roads and driveways were significant improvements to the land. In considering the scope of ‘any significant improvement’ the Mining Commissioner decided that pastures and lucerne, the equestrian cross-country event course and irrigation pipes under cattle laneways were not significant improvements. The Mining Commissioner also found that section 31 of the Mining Act did not apply to fences which were erected after the date on which Hume Coal gave notice under section 142 of the Mining Act and, therefore, did not decide whether fences erected prior to the notice were ‘significant improvements’.

The Court’s findings

a) The rights conferred by the licence:

Before the Mining Commissioner, Hume Coal had argued, and the Mining Commissioner had accepted, that the right to prospect conferred by an exploration licence does not include any right of access over relevant land and that therefore section 31 of the Mining Act does not prevent access to that land even if there are ‘significant improvements’ on the land. The Court rejected this argument. It accepted instead the Applicants’ submissions that, having regard particularly to sections 22 and 29 of the Mining Act and the power in those sections to impose conditions in an exploration licence, the right to prospect conferred by the exploration licence must by implication include a right of access over the land, including by vehicles. In any event, access to areas of the Applicants’ land by vehicle was an express condition of Exploration Licence A349. Therefore the Mining Commissioner was incorrect in finding that the rights under Exploration Licence A349 did not include a right of access over the relevant land.

b) Significant improvements:

Before the Mining Commissioner, Hume Coal had argued, and the Mining Commissioner had accepted, that it conflicted with orthodox principles of statutory interpretation to find that paddocks with improved pastures and lucerne were ‘significant improvements’. The Court rejected this argument. The Court also held that the Mining Commissioner had erred in considering whether the concept of ‘improved pastures’ fell within the definition of a ‘significant improvement’, rather than making factual findings about the particular paddocks in question.

The Court also rejected the Mining Commissioner’s finding that an equestrian cross-country event-course was not a ‘significant improvement’. The Court accepted the Applicants’ submissions that the Mining Commissioner had failed to ask whether the substantial work involved in creating and preparing the equestrian course for events was a work or structure that was ‘substantial’ or ‘valuable’. The Court also held that the Mining Commissioner had failed to consider the potential uses of the equestrian course in determining whether it was ‘valuable’.

In relation to the cattle laneways and irrigation pipes the Court found that the Mining Commissioner had erred in several respects. First, in finding that section 31 of the Mining Act did not apply to Hume Coal’s access by vehicle on the cattle laneways. Second, in deciding that irrigation piping was not a ‘significant improvement’ as it was not ‘on’ the land. Third, by failing to consider the irrigation piping system as a whole. The Court held that the correct question was whether the water reticulation system, of which the piping was a component, was a significant improvement and as a whole was substantial and valuable.

The Court also held that the Commissioner erred in failing to consider whether fences were a ‘significant improvement’ and in finding that the date for determination of a ‘significant improvement’ was the date of the issue of a relevant notice under section 142 of the Mining Act. The Court held that a ‘significant improvement’ is to be determined at the date on which the rights under the relevant exploration licence are exercised, rather than at the time of such a notice. Further the Mining Commissioner was in error in finding that Hume Coal’s intention to cut fences for access purposes was not the exercise of a right under the exploration licence. It was necessary for the Mining Commissioner to consider whether each of the fences on the Applicants’ properties were ‘significant improvements’. If the fences were ‘substantial and valuable’ structures, Hume Coal would not be permitted to cut those fences without the Applicants’ consent.

The Court also remitted the decision of whether roads or driveways fall within the definition of ‘significant improvement’ to the Commissioner.

The Court’s interpretation of ‘any significant improvement’ significantly extends the areas and types of land for which miners will require written consent from landowners to access. The Court outlined that ‘any significant improvement’ extends to paddocks with improved pastures and lucerne, equestrian event course, cattle laneways and irrigation pipes and may also extend to formed roads, driveways and fences. In particular, the Court’s finding is significant that the date of determination of ‘any significant improvement’ is the time of exercise of rights under the exploration licence.