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Pembroke Olive Downs Pty Ltd v Namrog Investments Pty Ltd QLC 14
LAND COURT OF QUEENSLAND
Pembroke Olive Downs Pty Ltd v Namrog Investments Pty Ltd & Anor; Namrog Investments Pty Ltd v Pembroke Olive Downs Pty Ltd  QLC 14
Pembroke Olive Downs Pty Ltd
Balanced Property Pty Ltd
Pembroke Olive Downs Pty Ltd
Namrog Investments Pty Ltd
Namrog Investments Pty Ltd
Pembroke Olive Downs Pty Ltd
29 September 2023
18 August 2023 & 13 September 2023
PG Stilgoe OAM
EVIDENCE – ADMISSIBILITY – GENERAL PRINCIPLES – OTHER MATTERS – where the respondents seek to rely on an affidavit of the respondent’s sole director and shareholder – where the same sole director and shareholder has filed two previous affidavits – where the applicant states the affidavit is some nine months late – where both parties allege procedural fairness – whether the respondents should be allowed to rely on the late filed affidavit.
ENERGY AND RESOURCES – MINERALS – COURTS OR TRIBUNALS EXERCISING JURISDICTION IN MINING MATTERS – Queensland – what constitutes a ‘dam’ for the purpose of section 68 of the Mineral and Energy Resources (Common Provisions) Act 2014 – whether for the purposes of the act, an area used for a dam includes the catchment area of that dam.
Land Court Rules 2022
Mineral and Energy Resources (Common Provisions) Act 2014 s 68
S Holt KC (instructed by Allens) for Pembroke Olive Downs Pty Ltd
G Gibson KC, with K McIntyre (instructed by McCullough Robertson) for Namrog Investments Pty Ltd and Balanced Property Pty Ltd
- In these compensation proceedings, I have been asked to answer three questions. The first is relatively easy – whether Balanced Property Pty Ltd and Namrog Investments Pty Ltd (together, “the Landowners”) have leave to rely on an affidavit of James Mortimer Gorman filed 8 September 2023. The second question appears to be easy but is not – what is a dam for the purposes of section 68 of the Mineral and Energy Resources (Common Provisions) Act 2014 (“MERCPA”)? The third question is what is the meaning of an area used for a dam within the context of section 68? It is not the same question as “what is a dam?”.
Do the Landowners have leave to rely on the affidavit of Mr Gorman?
- The affidavit in question is the third substantive affidavit of Mr Gorman filed 15 June 2023 (“Third Affidavit of Mr Gorman”). Mr Gorman’s evidence relates to the amount of compensation to which the Landowners may be entitled as a consequence of the mining lease.
- The Landowners filed an amended compensation statement on 20 June 2022 in which they stated they were seeking $60 million in respect of “loss of business value over and above the value of the land”. The total claim for compensation is in excess of $125 million.
- In an affidavit filed 8 July 2022, Mr Gorman stated that he is the sole director of the Landowners and a company called Seamark Pty Ltd and that, through these three companies, he operates a “cattle enterprise”. Mr Gorman did not provide details of how the cattle enterprise operated and he did not annex any financial information to support his claim for $60 million.
- Unsurprisingly, on 29 July 2022 Pembroke Olive Downs Pty Ltd sought further and better particulars of the $60 million claim.
- The Landowners provided those particulars on 12 August 2022. The particulars identify 16 properties that form part of the cattle enterprise. It states that the properties the subject of the mining lease are used for breeding, the properties cannot be replaced and, therefore, the cattle enterprise would have to source approximately 5000 weaners each year from the market at large. The losses are particularised as $95 million of direct business losses (less the net realisable value of the breeding herd) plus the annual cost of replacing weaners (estimated at $9.5 million) plus the annual lost revenue ($2.2 million), and additional operating costs ($3.1 million per annum).
- On 25 August 2022, President Kingham ordered that the parties file any further lay evidence by 9 September 2022, the parties nominate their proposed expert witnesses by 23 September 2022 and the parties prepare and deliver a consolidated brief to experts by 4 November 2022.
- The Landowners filed a further affidavit of Mr Gorman on 15 September 2022. Once again, Mr Gorman gave no detail of the cattle enterprise, nor did he annex any financial material to support the $60 million claim.
- President Kingham referred this dispute to Court Managed Expert Evidence (CMEE) by order of 30 March 2023.
- On 17 May 2023, Member McNamara (as CMEE Convenor) ordered as follows:
By 4:00pm on Thursday, 8 June 2023, the Respondents must deliver to the Applicant an amended draft consolidated brief in respect of the field of forensic accounting, including any amended questions that the Respondents propose to ask the forensic accounting experts to address in a joint expert report and any additional material that the Respondents propose to include in the brief.
- The Landowners relied on this order to file the Third Affidavit of Mr Gorman. In this affidavit, he finally gives detailed evidence of the way in which the claim for $60 million is framed and provides supporting evidence.
- In the hearing on 13 September 2023, Mr Gibson KC suggested that the Third Affidavit of Mr Gorman was within Member McNamara’s contemplation when he made the orders of 17 May 2023.
- There are three things to be said about this submission. Firstly, Member McNamara cannot make an order in CMEE unless the parties consent. That means, secondly, that he is not required to draft an order to meet the parties’ needs, nor is he required to look behind the document to see what is in the parties’ minds. His task was, and is, to ensure that the order meets the needs of the Court. Thirdly, it must be patently obvious that a series of specific orders that parties file their lay evidence is quite different from an order that the parties provide “material” to the expert witnesses.
- The lay evidence sets out the ambit of the dispute. From that evidence, the parties have to decide which experts are required at the hearing. As Mr Holt KC pointed out, the evidence in the Third Affidavit of Mr Gorman points to the need for expert agronomist evidence. The spectre of that need may have been raised by the first two affidavits but there was nothing of substance on which an agronomist could form a view.
- Mr Gibson KC could not explain the Landowners’ failure to provide this evidence at an earlier time – or in compliance with President Kingham’s order – except to say that Pembroke was aware of the existence of the financial material for some time and the delay was occasioned by a disagreement about confidentiality. It is an inadequate explanation.
- Pembroke has acknowledged that mining on the subject properties is not due to commence until 2035.Therefore, the delay is frustrating but not fatal to Pembroke’s operations.
- The evidence Mr Gorman now provides is clearly relevant to a significant claim and the Landowners should be entitled to put it before the Court. Unfortunately, some expert reports have been completed or are well on their way. Those experts will have to revisit their opinions considering this evidence. The Landowners should pay the costs thrown away by the late provision of the evidence.
What is a dam?
- Section 68 (1)(b)(i)(A) of MERCPA defines restricted land as, inter alia land that is within 50 metres laterally of an artesian well, bore, dam or water storage facility.
- There are two common meanings of the word “dam”. One is the physical barrier installed to hold back water. The other meaning is the barrier and the water it contains. There are three reasons why I have determined that the preferable meaning of “dam” is the first and each reason is to found within the legislative intent. Firstly, section 68 of the MERCPA needs specific metes and bounds to operate effectively. Secondly, section 68 is directed towards infrastructure. Finally, section 68 is directed to the integrity of the infrastructure, not the use.
Specific metes and bounds
- Section 68 defines “restricted land” by reference to various things. They include: a permanent building used for a residence, an area used for a school or a prescribed environmentally relevant activity, stockyards and cemeteries. In all cases, the restricted land is identified as land within an area measured laterally from the reference point. In all cases, the reference point is static and can be easily identified.
- It is simply untenable that the reference point for measuring what is considered restricted land should be a point that fluctuates according to the seasonal rainfall of the area. A miner of open cut coal cannot reasonably be expected to plan its operations based on an area that might be dry one year and an expanse of water the next.
- It is no answer to that uncertainty to say that the Reduced Level (commonly known as RL) of the dam wall will solve the problem. Dam walls are commonly built with a margin for flood capacity. Recent experience in Southeast Queensland has shown that a dam wall might not be overtopped but still have devastating consequences upstream because the water has exceeded the design parameters of the dam.
- All the other water storage facilities referred to in section 68 such as an artesian well, bore or water storage facility require some form of infrastructure. An artesian well requires a standpipe. A bore requires a standpipe and pump. A water storage facility, if not a dam, requires a tank, or some other artificial means of storing water.
- The meaning of “dam” proposed by the Landowners can include naturally occurring bodies of water that a lay person might refer to as a dam. For example, over time, a watercourse may have been blocked, creating a pool of water behind a natural barrier, or a natural depression in the land may have been progressively widened and deepened by livestock use. Neither of these bodies of water can be considered a dam within the meaning of section 68.
Infrastructure, not use
- Mr Gibson KC submitted that there is an absurd result in taking the 50 metre limit from the artificial dam wall rather than the perimeter of the water contained because that would allow mining within the water body. He submitted that this action would also, potentially, destroy the efficacy of the dam in the future.
- Section 68 does not preserve access to any of the reference points it contains. Section 276(1)(e) of the Mineral Resources Act 1989 does protect access in that any mining lease must contain a condition that without the prior approval of the Minister, the holder shall not obstruct or interfere with any right of access had by any person in respect of the area of the mining lease.
- Mr Gibson KC referred me, in a general way, to the Land Access Code. It sets out the “best practice guidelines for communicating and negotiating with landholders and imposes mandatory conditions about conduct when entering and carrying out authorised activities on private land”. A resource holder must ensure that any access point, road or track is kept in good repair. A resource holder is not required to otherwise guarantee access. The Land Access Code does not assist the Landowners’ submissions.
- There is nothing in section 68 that guarantees access to dam water, save via a specific, existing, access track or road. Once open cut mining commences, the reality is that access to, and therefore use of, a dam will be unlikely for many years to come. Accepting that there might be an access track to the dams, it is entirely possibly, as Mr Holt glibly posited, that a piece of infrastructure with its surrounding buffer area might be a pimple with a “Lord of the Rings causeway”.
- Environmental Authority conditions are framed to protect sensitive places and commercial places. A sensitive place might be restricted land – a residence, a childcare centre, a school – but it need not be so. A buffer zone of 200 metres, without additional conditions, would not enable the use of a home, school or childcare centre next to an open cut mine. Similarly, a buffer zone of 50 metres would not ensure that dam water was free of contamination by dust or other particulates.
- The anomaly is explained by the understanding that section 68 responds to a number of resource authorities. It is entirely sensible to have a buffer zone around infrastructure for considering an exploration permit, an authority to prospect, a geothermal exploration permit or a GHG exploration permit. It makes no sense when the infrastructure is located within a mining lease of 16,300 ha of open cut coal mining.
What is “land used for a dam”?
- The Landowners submit that “land used for a dam” includes the land over which surface water runs and enters the dam. That means the area of water contained in the dam, any watercourse that services the dam and any catchment area.
- The Landowners’ amended originating application included Insert 4 from a plan prepared for Balanced entitled Feature Location Plan Restricted Land Main Page (Figure 1). I took Mr Gibson to that page and asked him whether the grey area on the left-hand side of the page represented “the area used for the dam”, noting that there were four dams shown within that area. Mr Gibson told me that there was only one dam, not four and that the grey area did not include the catchment for the dam.
- The aerial imagery for that area extracted from the affidavit of Blair Richardson filed 15 May 2023 (Figure 2), appears to contradict Mr Gibson’s submissions. Quite clearly, the north-western tail of the grey area is dry, it is a watercourse, not a body of water that fits within the expanded definition of “dam”.
- Mr Richardson demonstrates the issue with other dams on the properties. The Landowners nominate areas of dry land, in a relatively good season, as the dam, not the land used for the dam.
- The issue of uncertainty once again raises its ugly head. How far does a catchment extend? To the source of the water course? To any high ground which may shed water towards the dam?
- It is a simple thing to say that a catchment is easily ascertained by a hydrologist looking at a contour map, but I note the Landowners have not included a hydrologist in their proposed list of experts.
- The Landowners’ objections to the grant of the mining lease, to the extent that it related to surface water was “that mining coal in the application area will have a negative impact on surface water”. Its specific concerns were hazardous substances, increased sediment loads and mine water releases with high salt loads. They did not refer to the impact on the catchment.
- Sunland Cattle Co Pty Ltd did object to the mine’s potential effect on the catchment because it had a licence to take overland flow water. The agreed catchment for Sunland’s overland flow was 48.3 km2.Assuming a similar catchment area for the Landowners, it cannot be the intention of the legislature to protect almost 50km2 of land contained within a mining lease through the simple expedient of a 50 metre buffer from a dam. That issue should have been ventilated, and resolved, in the objections hearing.
- “Land used for a dam” includes the dam wall and the necessary works required to support the dam wall, perhaps any constructed lining of the dam area, and perhaps any infrastructure necessarily required to support the dam.
- That bird has flown.
- Balanced Property Pty Ltd and Namrog Investments Pty Ltd have leave to rely on the Third Affidavit of Mr Gorman filed 15 June 2023.
- Balanced Property Pty Ltd and Namrog Investments Pty Ltd pay to Pembroke Olive Downs Pty Ltd the costs thrown away by the filing of the Third Affidavit of Mr Gorman filed 15 June 2023.
- For the purpose of section 68 of Mineral Resources (Common Provisions) Act 2014 (Qld), a 'dam' is the artificially constructed wall or barrier built to obstruct the flow of, and impound, water.
- For the purpose of section 68 (1) of the Mineral Resources (Common Provisions) Act 2014 (Qld):
- the words “an area used for … [the purpose of a] dam” in section 68(1)(b)(i)(A)
- do not include:
- an area of land over the surface of which water flows and supplies water to a dam; or
- a watercourse along which water flows and supplies water to a dam; but
- do include:
- the dam wall and the necessary works required to support the dam wall.
First Affidavit of James Mortimer Gorman (filed 8 July 2022).
Orders of Member JR McNamara dated 17 May 2023 .
T2-38 to T2-39.
As defined under the Environmental Protection Act 1994.
Mineral and Energy Resources (Common Provisions) Act 2014 s 68(1)(b)(i)(A).
T1-30 to T1-31.
Land Access Code, June 2023, Department of Resources 1.
Ibid, Condition 5(3).
Mineral and Energy Resources (Common Provisions) Act 2014 s 68(4).
Applicant’s Originating Application (filed 22 February 2023) Attachment B, Insert 4.
T2-12 line 22 to T2-14 line 6.
Affidavit of Blair Richardson (filed 15 May 2023) 55.
Namrog Investments Pty Ltd, 'PEM.0010 – Response to Request for Particulars ‘, filed in Pembroke Olive Downs Pty Ltd v Sunland Cattle Co Pty Ltd & Ors  QLC 27 on 16 December 2019, [2(b)]; Balanced Property Pty Ltd, 'PEM.0010 – Response to Request for Particulars ‘, filed in Pembroke Olive Downs Pty Ltd v Sunland Cattle Co Pty Ltd & Ors  QLC 27 on 16 December 2019, [2(b)].
Pembroke Olive Downs Pty Ltd v Sunland Cattle Co Pty Ltd & Ors  QLC 27 .
Second Affidavit of James Mortimer Gorman (filed 15 September 2022).
T2-22 line 18; T2-22 lines 26 to 28.
- Published Case Name:
Pembroke Olive Downs Pty Ltd v Namrog Investments Pty Ltd & Anor; Namrog Investments Pty Ltd v Pembroke Olive Downs Pty Ltd
- Shortened Case Name:
Pembroke Olive Downs Pty Ltd v Namrog Investments Pty Ltd
 QLC 14
PG Stilgoe OAM
29 Sep 2023