Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Mine Subsidence Board v Jemena Ltd and Jemena Gas Networks (NSW) Ltd [2013] NSWCA 465
• Hearing dates: 25 October 2013
• Decision date: 20 December 2013
• Before: Beazley P at [1]; Macfarlan JA at [2]; Meagher JA at [3]

Decision

Appeal dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: ENERGY AND RESOURCES - mining - interpretation of Mine Subsidence Compensation Act 1961, ss 12A(1)(b), 15(5)(b) - respondents claim compensation from Mine Subsidence Compensation Fund under s 12A(1)(b) for expense incurred to prevent or mitigate damage to pipeline from subsidence - pipeline erected in "mine subsidence district" without approval in contravention of Act - s 15(5)(b) provides that "no claim shall be entertained or payment made" by the Board "in respect of damage caused by subsidence" to unapproved improvements unless certificate issued by Board - whether claim under s 12A(1)(b) a claim "in respect of damage caused by subsidence"
• Legislation Cited: Mine Subsidence Act 1928; Mine Subsidence Compensation Act 1961, ss 2, 4, 5, 6, 10, 11, 12, 12A, 13, 13A, 13B, 14, 14A, 15, 15B; Mine Subsidence Compensation (Amendment) Act 1969, s 2; Mine Subsidence Compensation Regulation 2007, Reg 6
• Cases Cited: Alinta LGA Ltd v Mine Subsidence Board [2008] HCA 17; 82 ALJR 826; Australian Education Union v General Manager of Fair Work Australia [2012] HCA 19; 246 CLR 117; Clyne v Deputy Commissioner of Taxation [1981] HCA 40; 150 CLR 1; Commissioner of Police v Eaton [2013] HCA 2; 87 ALJR 267; Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd [1995] HCA 44; 184 CLR 435; Commissioner of Taxation of the Commonwealth v Scully [2000] HCA 6; 201 CLR 148; Jemena Gas Networks (NSW) Ltd v Mine Subsidence Board [2011] HCA 19; 243 CLR 558; Lacey v Attorney-General of Queensland [2011] HCA 10; 242 CLR 573; McGraw-Hinds (Aust) Pty Ltd v Smith [1979] HCA 19; 144 CLR 633; Newcastle City Council v GIO General Ltd [1997] HCA 53; 191 CLR 85; The Queen v Khazaal [2012] HCA 26; 86 ALJR 884; Wentworth Securities Ltd v Jones [1980] AC 74; Workers' Compensation Board (Qld) v Technical Products Pty Ltd [1988] HCA 49; 165 CLR 642
• Texts Cited: New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 2 October 1969
• Category: Principal judgment
• Parties: Mine Subsidence Board (Appellant); Jemena Limited (First Respondent); Jemena Gas Networks (NSW) Ltd (Second Respondent)
• Representation: Counsel: N C Hutley SC, N L Sharp (Appellant); R J Ellicott QC, J R Williams (Respondents; Solicitors: I V Knight, Crown Solicitor (Appellant); Herbert Smith Freehills (Respondents)
• File Number(s): 2012/391795

Decision under appeal

• Jurisdiction: 9111
• Citation: Jemena Ltd v Mine Subsidence Board [2012] NSWSC 1509
• Date of Decision: 2012-11-29 00:00:00
• Before: Rein J
• File Number(s): 2009/298135

Judgment

1 BEAZLEY P: I agree with Meagher JA.

2 MACFARLAN JA: I agree with Meagher JA.

3 MEAGHER JA: The issue in this appeal is whether s 15(5)(b) of the Mine Subsidence Compensation Act 1961 (the Act) prevents the appellant Board from entertaining and paying claims under s 12A(1)(b) for payment from the Mine Subsidence Compensation Fund (the Fund) of amounts to meet proper and necessary expense incurred by the respondents (separately and collectively Jemena) in preventing or mitigating subsidence caused damage to a gas pipeline, in circumstances where that pipeline was erected in a mine subsidence district without the Board's approval under s 15 and is not the subject of a certificate issued under s 15B(3A). This question was adverted to but did not arise in Alinta LGA Ltd v Mine Subsidence Board [2008] HCA 17; 82 ALJR 826 at [56].

The factual background

4 The respondents are the owners of the natural gas pipeline running from Wilton to Horsley Park which forms part of the Moomba to Sydney gas pipeline. That pipeline is within the Appin Mine Subsidence District, which was proclaimed as such in March 1968. The Appin and West Cliff Collieries are located in that district and the extraction of coal from those mines has resulted in subsidence in the vicinity of the pipeline.

5 The pipeline was constructed in 1974 by the Australian Gaslight Company Ltd (now Jemena Ltd, the first respondent) and is an "improvement" within s 4 of the Act. Under s 15 the Board's approval was required for the erection or alteration of improvements in an area proclaimed to be a mine subsidence district. In March 2003 the Board informed Jemena that it could not identify any documented approval for the erection of the pipeline. In April 2003 Jemena applied to the Board for a certificate under s 15B(3A) with respect to the pipeline. That subsection was enacted and commenced in 1989. A further application was made by letter dated 24 March 2004. The Board advised of its refusal to issue such a certificate by letter dated 29 July 2005. Its reasons for doing so included its belief that the issue of that certificate would mean that the entertainment and payment of a compensation claim from Jemena would not be precluded by the operation of s 15(5)(b).

6 Between October 2003 and October 2009 Jemena undertook preventative and mitigatory works to avoid anticipated subsidence caused damage to the pipeline; the reference in this context always being to subsidence due to the extraction of coal or shale or the prospecting for coal or shale. It made claims on the Board for compensation in respect of those works on 28 September 2004, 9 March 2006, 17 April 2007 and 19 April 2010. As at April 2010 those claims, excluding interest, totalled $14,000,266.

7 The Board's position, both before and after its decision not to grant a s 15B(3A) certificate, has been that s 15(5)(b) of the Act prevents the entertaining of any claim and making of any payment under s 12A(1)(b). That subsection relevantly provides:

"15 Mine subsidence districts

...

(5) Where any improvement has been erected or altered or subdivision has been made in contravention of this section:

(a) such contravention shall not invalidate any instrument intended to affect or evidence the title to any land but a purchaser may cancel any contract for sale and recover any deposit or instalment of purchase money paid together with reasonable costs and expenses where such contravention relates to the land purchased,

(b) no claim shall be entertained or payment made under this Act in respect of damage caused by subsidence to any such improvement or to any improvement upon land within any such subdivision, unless a certificate is issued under section 15B(3A) in respect of the improvement or land."

The proceedings below

8 There have been two appeals to the High Court in relation to aspects of those claims. The first, Alinta LGA v Mine Subsidence Board, concerned whether the Board's refusal to entertain the first claim to compensation was a decision against which an appeal lay to the Land and Environment Court under s 12B(b) of the Act. The second, Jemena Gas Networks (NSW) Ltd v Mine Subsidence Board [2011] HCA 19; 243 CLR 558, concerned the construction of s 12A(1)(b), and in particular whether it permitted a claim to be made for payment from the Fund of an amount to meet expense incurred in preventing or mitigating anticipated subsidence caused damage even though, at the time that expense was incurred or proposed, or later when the Board was assessing the claim for payment, there had not been either subsidence or damage. That question was answered in the affirmative as contended for by Jemena.

9 Jemena then brought proceedings challenging the Board's decision that s 15(5)(b) prevented the entertainment and payment of claims under s 12A(1)(b). It also challenged the Board's decision not to grant a certificate under s 15B(3A). The primary judge (Rein J) concluded that, as a matter of construction, s 15(5)(b) did not prevent the entertainment and payment of Jemena's claims and made a declaration to that effect. He also held that the Board had made legal errors in its decision to refuse to issue a certificate under s 15B(3A): Jemena Ltd v Mine Subsidence Board [2012] NSWSC 1509.

10 This appeal is brought from the first of those decisions. It is concerned with the proper construction of s 15(5)(b), and specifically whether a claim for payment under s 12A(1)(b) is one "in respect of damage caused by subsidence to any such improvement".

11 Before summarising and addressing the arguments of the parties, it is convenient to refer to the scheme and significant provisions of the Act.

The scheme and relevant provisions of the Act

12 The Act repealed the Mine Subsidence Act 1928, which established a Mine Subsidence Insurance Fund and provided a scheme for the insurance of property in areas likely to be affected by subsidence caused by the extraction of minerals (s 2). It constituted the Board as a body corporate (ss 5, 6) and constituted the Fund to which colliery owners are required to make contributions based on the land value of their colliery holdings (ss 10, 11). That Fund is under the direction and control of the Board (s 10).

13 Claims for payment from the Fund are made under ss 12 and 12A. Those sections (with the parts introduced by amendments in 1969 italicized), at the times relevant to the respondents' claims, were as follows.

"12 Claims for damage arising out of subsidence

(1) Claims may be made under this Act for payment from the Fund of:

(a) compensation for any damage to improvements that arises from subsidence, except where the subsidence is due to operations carried on by the owner of the improvements,

(b) an amount to meet the proper and necessary expense incurred or to be incurred as a result of such damage in:

(i) building retaining walls or bolting together or underpinning or otherwise supporting, raising or repairing buildings and walls,

(ii) altering the approaches to or the levels of lands or buildings,

(iii) raising, lowering, diverting or making good roads, tramways, railways, pipelines, bridges, fences, sewers, drains or other improvements,

(c) an amount equal to the rent which would have been payable for such period as may be prescribed in respect of any buildings or works which by reason of such damage are untenantable, under repair or in the course of construction, or where such buildings or works or any part thereof are or is occupied by the owner thereof such sum in lieu of rent as the Board deems just,

(d) compensation for any damage to household or other effects that arises from subsidence, except where the subsidence is due to operations carried on by the owner of the household or other effects,

No claim shall be entertained or payment made under this Act in respect of any improvement which was the subject to a conditional right to insure ...

...

(1A) Notwithstanding anything contained in subsection (1) or (2), or section 12A, or any approval given under section 15, where:

(a) improvements or household or other effects used in connection with the carrying on of an extractive industry or operation were damaged by subsidence ...

(b) expense referred to in section 12A(1)(b) was incurred before that commencement ...

the Board may refuse to entertain a claim, or make a payment, in respect of that damage or expense where it is satisfied that the cause of the subsidence that caused the damage or necessitated the expense was the carrying on of that industry or operation.

(2)

(a) The owner of any improvement or any household or other effects which have been damaged by subsidence may notify the Secretary of the Board in a form approved by the Board and within the prescribed time of the details of such damage

...

(b) Any such notification received shall be recorded and investigated by the Board, an officer of the Board or some other officer ... and on receipt of a report of such investigation the matter shall be placed before a meeting of the Board for a decision as to the payment, if any, to be allowed in respect of the damage to which such notification relates.

(3), (4) (Repealed)

(5) Payments may be made under and in accordance with the provisions of this Act notwithstanding any covenant, condition, stipulation or restriction ... for damage arising from subsidence to improvements or household or other effects in respect of which a claim for such payment has been made.

12A Claims arising out of actions to prevent or mitigate damage

(1) Subject to this section, claims may be made under this Act for payment from the Fund of:

(a) compensation for damage incurred as a result of the exercise by the Board of its powers under section 13A, and

(b) an amount to meet the proper and necessary expense incurred or proposed by or on behalf of the owner of improvements or household or other effects in preventing or mitigating damage to those improvements or household or other effects that, in the opinion of the Board, the owner could reasonably have anticipated would otherwise have arisen, or could reasonably anticipate would otherwise arise, from a subsidence that has taken place, other than a subsidence due to operations carried on by the owner.

(2) A claim under subsection (1):

(a) ...

(b) shall be made, in the case of a claim for payment of an amount under subsection (1) (b), within three months after the day on which the expense to which the claim relates became known to the claimant or ... within the time so prescribed,

(c) shall specify the location of the land or improvements, or the description of the household or other effects, to which the claim relates, the amount claimed, the nature and extent of the damage or, as the case may be, the matters in respect of which the expense was, or is to be, incurred, and

...

(3) The provisions of section 12 (2) (b) and (5) shall, mutatis mutandis, apply to and in respect of claims and payments under this section in the same manner as they apply to and in respect of notifications and payments under section 12."

14 The Board is given power to purchase damaged improvements instead of making payments under ss 12 or 12A(1)(a) (s 13). It is also given power to carry out works for prevention or mitigation of damage if to do so would, in its opinion, "reduce the total prospective liability of the Fund" (s 13A). The Act relieves the owners of collieries who make contributions to the Fund from liability for damage to improvements occasioned by subsidence other than damage due to negligence (s 14). The rights which s 14 takes away are the right to damages at law, the right in equity to a negative injunction against conduct causing subsidence in future, the right in equity to a mandatory injunction compelling an owner to take positive steps to prevent subsidence caused damage and the entitlement to seek damages in addition to or instead of an injunction in respect of threatened injury: Jemena Gas Networks v Mine Subsidence Board at [33], [34]. In Alinta LGA v Mine Subsidence Board, the High Court described, at [18], the release worked by s 14 as the "statutory quid pro quo for the contributions of colliery proprietors to the Fund". The Act also provides for the proclamation of areas as "mine subsidence districts" and makes it an offence to erect or alter an improvement within a mine subsidence district without the approval of the Board (ss 15(1), (7)).

15 Finally, s 15B(3A) permits the board to issue a certificate in respect of a non-approved improvement which "would have met the requirements of subsection (3) had the Board's approval been obtained" provided the Board is satisfied that "it is appropriate having regard to the circumstances of the case to do so". The "requirements" referred to are that the Board would have been satisfied that the improvement was erected in accordance with any approval which it would have given.

The arguments of the parties

16 The Board argues that the words "damage caused by subsidence" in s 15(5)(b) describe a kind of damage; namely (and taking account of the definition of "subsidence" in s 4) damage arising from subsidence due to extraction of coal or shale. Both damage which has occurred and damage which is anticipated, although its happening may be uncertain, are capable of answering that description. The words "in respect of" refer to a relationship or connection between the claim for payment and payment from the Fund and damage of that kind. Claims and payments under s 12A(1)(b) answer that description because they are for expense incurred or proposed in preventing or mitigating such damage. Section 15(5)(b) should be construed broadly so as to give effect to the manifest policy of s 15, which is to ensure that improvements in mine subsidence districts are only erected or altered with the Board's approval.

17 Jemena supports the analysis and construction of the primary judge. The words "in respect of" refer to the subject matter of the claim and payment, namely damage caused by subsidence. A claim under s 12A(1)(b) does not answer that description. The subject of that claim is expense incurred or proposed for the purpose of preventing or mitigating anticipated damage. Other provisions of the Act (in particular ss 10(3)(a), 12(1A), 12A(2)(c) and 14A(2)) recognise the different subject matter of the two types of claim, which were correctly characterised in Alinta LGA v Mine Subsidence Board, at [19], as being "one in respect of damage (s 12) and the other for preventative or mitigatory works (s 12A)".

18 Jemena submits that the entitlement given by s 12A(1)(b), as a substitute for rights taken away by s 14(1), should not be denied by s 15(5)(b) in the absence of clear words. In argument before the primary judge (see [57](1)), the Board submitted that the words "in respect of damage" should be construed as referring to "damage caused by or anticipated to be caused by subsidence". Jemena says that this involves reading words into the provision which may be done only where there has been an omission by the text to deal with something which must be dealt with if the purpose of the legislation is to be achieved. The relevant principle is that stated in Wentworth Securities Ltd v Jones [1980] AC 74 at 105-106; and cited with approval by McHugh J in Newcastle City Council v GIO General Ltd [1997] HCA 53; 191 CLR 85 at 113. The Board says that it is not seeking to read words into the text.

Relevant principles

19 The task of construction begins with a consideration of the text and its context. The text ordinarily is to be read as speaking continuously in the present so that where, as here, it has been amended, the statute and amending statute are to be read together as a combined statement of the will of the legislature: per Gageler J in Commissioner of Police v Eaton [2013] HCA 2; 87 ALJR 267 at [97] citing Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd [1995] HCA 44; 184 CLR 435 at 463. The context includes not only the other provisions of the statute but also its purpose, "which may appear from an express statement in the relevant statute, by inference from its terms and by appropriate reference to extrinsic materials": Lacey v Attorney-General of Queensland [2011] HCA 10; 242 CLR 573 at [44]. If those other provisions include the same or similar expressions to that being construed, the presumption that words are used consistently may apply. However, that presumption yields readily to differences in language and context: McGraw-Hinds (Aust) Pty Ltd v Smith [1979] HCA 19; 144 CLR 633 at 643; Clyne v Deputy Commissioner of Taxation [1981] HCA 40; 150 CLR 1 at 10, 15.

Discussion

20 The primary judge did not hold, and neither party contends, that there is any middle ground in relation to the construction of s 15(5)(b). Either it includes claims and payments made under s 12A(1)(b) or it does not: [67], [69]. A claim for compensation for damage falls under s 12(1) and a claim for expense incurred in preventing or mitigating damage is made under s 12A(1)(b). That will be so even if the anticipated damage may be the outcome of subsidence which has already occurred and caused some damage.

21 Section 15(5)(b) prevents claims being "entertained" and payments "made". The language of "entertain" and "payment" is also used in the penultimate paragraph of s 12(1) and in s 12(1A). As s 12(1A) expressly acknowledges, and as the High Court held in Alinta LGA v Mine Subsidence Board, that language is capable of applying to a claim for payment of compensation for damage under s 12(1)(a) and a claim for payment of an amount to meet expense incurred or proposed under s 12A(1)(b).

22 The prohibition is directed to claims and payments characterised as being "in respect of damage caused by subsidence to [an] improvement". As French CJ observes in The Queen v Khazaal [2012] HCA 26; 86 ALJR 884 at [31] the words "in respect of" are ambulatory words which, in their general use, cover a variety of subjects and a variety of relationships between those subjects. They take their meaning from the context in which they appear and the nature and breadth of the relationship in any particular case depends upon that context: Workers' Compensation Board (Qld) v Technical Products Pty Ltd [1988] HCA 49; 165 CLR 642 at 653-654; Commissioner of Taxation of the Commonwealth v Scully [2000] HCA 6; 201 CLR 148 at [39].

23 The "claim" is a claim under the Act made by or on behalf of the owner of an improvement or household or other effect. The "damage" is damage of a particular kind, namely that caused by subsidence due to extraction of coal or shale. In ordinary language, a claim or payment "in respect of damage caused by subsidence" is one for the loss or detriment incurred as a result of such damage and its consequences.

24 When s 15(5)(b) was first enacted (Act No 22 of 1961) the only claims to which it could apply were those made under s 12(1)(a) to (c). Those were claims for payment of compensation for damage to improvements, claims for payment of expenses incurred or to be incurred in undertaking works as a result of such damage and claims to recover an amount equivalent to rent or the value of use of premises which was lost by reason of such damage. Later, claims for payment of compensation for damage to household or other effects were added by s 12(1)(d).

25 With the enactment of s 12A in 1969, two further claims could be made. One was introduced with the grant of power to the Board to carry out preventative works. The other, as explained by the Minister for Mines, Mr Fife, in the Second Reading Speech, was to encourage the undertaking by landowners of works designed to prevent or mitigate damage arising from subsidence "as the costs of prevention are often cheaper than of cure": New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 2 October 1969 at 1551.

26 A claim under s 12A(1)(a) could be brought for compensation for damage incurred "as a result of" the exercise by the Board of its powers under s 13A. Those powers permitted the carrying out of works which, in the Board's opinion, would reduce the total prospective liability of the Fund by preventing or mitigating subsidence damage anticipated to otherwise occur. Such a claim would not be for payment of compensation for subsidence damage, and accordingly would not be precluded by s 15(5)(b). It is unlikely, however, that such works would be carried out by the Board to prevent or mitigate damage to an improvement which had not been approved because the carrying out of such work would not reduce the prospective liability of the Fund (because of the application of s 15(5)(b)) so as to permit the Board to form the opinion required by s 13A. There would remain the possibility of such claims by the owner of that improvement in relation to damage caused to it by works carried out to prevent damage to other improvements.

27 A claim under s 12A(1)(b) is for payment of an amount to meet proper and necessary expense incurred or proposed. The requirement that it be incurred or proposed "in preventing or mitigating damage" means that the object or purpose of the expense must be that of preventing or mitigating subsidence damage. No such payment can be made unless, in the opinion of the Board, the owner could reasonably have anticipated that the damage sought to be prevented or mitigated would otherwise have arisen or would otherwise arise: Jemena Gas Networks v Mine Subsidence Board at [48].

28 The occurrence of damage and its detrimental consequences to the claimant are not the subject of or justification for claims brought and payments made under s 12A(1)(b). The subject of and justification for those claims and payments is the expense incurred or proposed for preventative or mitigatory work in circumstances where it could reasonably be anticipated that subsidence damage would otherwise occur. The claim is brought for recompense in respect of that preventative or mitigatory work.

29 Looking at the matter broadly, claims under s 12(1) and under s 12A(1)(b) both bear a relation to damage caused by subsidence. For claims under s 12(1) that relation is to damage which has occurred. In the case of claims under s 12A(1)(b) it is to damage which was or is anticipated as likely to have arisen or to arise in the absence of preventative or mitigatory work. There are, however, important differences of substance between the two types of claim and payment. The subject matter of and justification for the former (s 12(1)) is the occurrence of subsidence damage and its detrimental consequences to the claimant. For claims under 12A(1)(b) it is the incurring or proposed incurring of expenditure in the face of anticipated subsidence damage and its detrimental consequences. A payment made in satisfaction of a claim under s 12(1) is directed to compensating for damage and its detrimental consequences and will be assessed on that basis. In contrast, the assessment of the payment to be made under s 12A(1)(b) is by reference to the expense incurred or proposed; which is the cost of prevention and may bear no relationship to the cost of compensating for the avoided damage, had it occurred.

30 The notification provisions which apply to the claims take account of their different subject matter. Claims under s 12(1) must be notified "within the prescribed time", which is a period commencing on the day on which the owner knew, or the Board determines the owner should have known, that the damage was caused by subsidence: s 12(2) and Regulation 6 of the Mine Subsidence Compensation Regulation 2007. Similarly, claims under s 12A(1)(a) must be notified within three months after the day on which the extent of "damage to which the claim relates" becomes apparent. On the other hand, in relation to claims under s 12A(1)(b), that notification period is within three months after the day on which the "expense to which the claim relates" becomes known to the applicant: s 12A(2).

31 The owner of an improvement or household or other effect which has been damaged must provide "details of such damage; the location of the improvement damaged; the description of the household or other effects damaged; and the amount claimed from the Fund": s 12(2)(a). In s 12A, a distinction is drawn between claims under s 12A(1)(a) and claims under s 12A(1)(b). In relation to the former, which are for compensation for damage occurring as a result of an exercise by the Board of its power under s 13A, the claim must specify "the location of the land or improvements, or the description of the household or other effects, to which the claim relates, the amount claimed, [and] the nature and extent of the damage". For the latter what must be specified is "the matters in respect of which the expense was, or is to be, incurred": s 12A(2)(c). Those matters are the completed or proposed preventative or mitigatory works.

32 In support of their argument that claims for the expense of such works are not "in respect of" subsidence damage, the respondents draw attention to other provisions of the Act in which that or similar expressions are used. They emphasise that, where used, the references are to damage which has already occurred as distinct from damage which is anticipated. In particular, they rely upon the amendment to the language of s 10(3)(a) made by the Mine Subsidence Compensation (Amendment) Act 1969 which inserted ss 12(1A), 12A, 13A and 13B.

33 Before that amendment, s 10(3) provided that there "shall be paid out of the Fund: (a) all amounts payable under this Act in respect of damage caused by subsidence". Section 2(a)(i) of the amending Act inserted after those words the words "or payable under section 12A of this Act" to accommodate the addition of claims under that section. The respondents submit that the addition of these words is consistent only with claims and payments under s 12A not being "in respect of damage caused by subsidence". In response, the Board points out that some additional authorisation was required to make payments from the Fund because claims under s 12A(1)(a) would not be claims "in respect of damage caused by subsidence". In my view that is correct. Notwithstanding the respondents' submission to the contrary, a claim and payment made under s 12A(1)(a) is for compensation for damage caused by works undertaken by the Board. That being the position, it was necessary to amend s 10(3) to authorise the payment of such claims from the Fund. Nevertheless it remains of some significance, as the respondents point out, that when doing so the draftsman did not use an expression such as "or otherwise payable under s 12A", which would have given an indication that payments under 12A(1)(b) were already authorised as payments "in respect of damage caused by subsidence".

34 The respondents also point to the distinction made in the provisions of s 12(1A) between claims under s 12(1) and those under s 12A(1)(b). As originally enacted, the Act excluded from the improvements in relation to which payments might be made, buildings and works used in connection with the mining of coal. The 1969 amendments extended the application of that exclusion to claims under s 12A(1)(b). They also, by s 12(1A), introduced a new exclusion (to be applied at the discretion of the Board) with respect to improvements used in connection with the carrying on of any extractive industry or operation. Section 12(1A) deals separately with claims under ss 12(1) and 12A(1)(b) and does so by reference to their being "in respect of" "damage" (s 12) and "expense" (s 12A); in the same way as do the provisions, referred to earlier, which specify the information which must be provided in support of those claims. That it deals separately with those claims is partly explained by the need to make clear that the exclusion may be applied to damage occurring and expense incurred before the commencement of the 1969 amendments: s 12(1A)(a) and (b). Having done so it gives the Board a discretion, where it is satisfied that the cause of the subsidence was the carrying on of an extractive industry or operation, to refuse to entertain a claim or make a payment "in respect of that damage or expense". As appears from the express language used in paragraphs (a) and (b), that reference to "damage" is to actual damage and the reference to "expense" is to expense which has been incurred or is proposed.

35 Account must also be taken of s 14A(2)(a) which deals with actions which may be brought by the Board to recover payments made from the Fund in the case of unlawful mining operations. It applies where improvements or household or other effects are damaged by subsidence and, in providing for the recovery of such payments, draws a distinction between payments made under s 12 "in respect of the damage" and those made "in respect of the subsidence" under s 12A(1)(b). The introductory words make clear that the reference to "damage" is to actual damage. In light of the decision in Jemena Gas Networks v Mine Subsidence Board the reference to "subsidence" is probably to be understood as to subsidence, whether actual or anticipated. For present purposes what is significant is that the description "in respect of the damage" is used in relation to payments made under s 12 and that a different description is used in relation to payments made under s 12A(1).

36 The Board argues that s 15(5)(b) should be construed broadly and as applying to claims and payments "in respect of" anticipated subsidence damage as well as subsidence damage which has occurred. It points out that the policy behind s 15 is preventing the erection or alteration of improvements within a mine subsidence district without its approval. As the High Court observes in Alinta LGA v Mine Subsidence Board at [50], one of the means of giving effect to that policy is to place persons who contravene s 15 in a position where they are unable to recover compensation from the Fund for damage caused by subsidence. This consideration suggests that s 15(5)(b) should be construed broadly so as to give effect to that policy; because otherwise a landowner who is unable to recover compensation under s 12(1)(b) might pre-empt the operation of s 15(5)(b) by incurring expense and making claims under s 12A(1)(b). That opportunity is restricted to some extent by the requirements of s 12A(1)(b) that the expense be "proper and necessary" in preventing or mitigating subsidence damage and that, in the opinion of the Board, the owner could reasonably have anticipated that such damage would otherwise have arisen or would otherwise arise.

37 There is also a countervailing consideration to be taken into account. As the majority in Jemena Gas Networks v Mine Subsidence Board observe at [37], ss 10, 12 and 12A provide to the owners of improvements substitutes for rights taken away or lost by reason of s 14. To that extent the provisions creating those rights are to be construed generously and as giving to those owners rights "broadly commensurate with what they lost by reason of s 14". That principle applies to s 12A as much as it does to s 12(1). In my view it follows that if those rights are to be denied, albeit to give effect to the policy manifest in s 15, that must be done by clear language; the relevant principle upon which the statutory language is to be interpreted being that if Parliament intends to infringe or deny rights it will use clear language: Australian Education Union v General Manager of Fair Work Australia [2012] HCA 19; 246 CLR 117 at [30].

38 There is nothing in the extrinsic materials concerning the 1969 amendments which explains why the Parliament might have intended that the prohibition in s 15(5)(b) not include or extend to claims under s 12A(1)(b). On the other hand, there is no such material which makes plain that the Parliament's intention was to do so. Nor can it be said that it is necessary that s 15(5)(b) extend to such claims if the manifest purpose of s 15 is to be achieved: cf Newcastle City Council v GIO General Ltd at 113 (McHugh J). The conditions which must be satisfied for the recovery of expense under s 12A(1)(b) make it unlikely that a landowner who is unable (because of the application of s 15(5)(b)) to recover compensation under s 12(1) could always and effectively prevent the occurrence of any subsidence damage to improvements. It follows that s 15(5)(b) continues to discourage contraventions of s 15, albeit with less effect than it would if it also applied to claims under s 12A(1)(b). For that reason, the construction of s 15(5)(b) as not extending to claims or payments under s 12A(1)(b) does not mean that the purpose of s 15 cannot be sufficiently achieved. To the extent that it exposes the Fund to a potential liability it is likely to be a lesser liability than that under s 12(1) for the reasons explained in Jemena Gas Networks v Mine Subsidence Board at [40].

39 Drawing these various considerations together, the construction contended for by the respondents and found by the primary judge is to be preferred. It gives effect to the natural meaning of the language used and is harmonious with other provisions of the Act.

40 The expression "damage caused by subsidence to any such improvement" describes a particular kind of damage which is identified by its cause. It does not of itself say anything as to whether that damage has occurred. A claim or payment under the Act will answer the description of being "in respect of" damage of that kind if the subject matter of the claim and payment is such damage and its detrimental consequences. For that reason, claims under s 12(1) are within that description and subject to the prohibition in s 15(5)(b). Such a claim is brought for recompense for loss or detriment of the relevant kind.

41 A claim brought or payment made under s 12A(1)(b) relates to expense, incurred or proposed, for the purpose of preventing or mitigating damage caused by subsidence. In such a claim the significance of that damage is as something which was or is anticipated as likely to have arisen or to arise in the absence of the preventative or mitigatory works. It is not, however, either the subject matter of the claim or the justification for it. Nor is the claim to be assessed by reference to the nature or consequences of such damage or payment made in recompense for them.

42 In various of its provisions the Act draws a distinction between the two species of claim - one relating to damage which has occurred and the other to expense which has been incurred or is proposed. That distinction is one of substance.

43 The construction contended for by the Board is that the claim and payment under s 12A(1)(b) sufficiently relate to damage of the relevant kind because the expense is incurred or proposed to prevent or mitigate such damage. The difficulty with this construction is that neither the subject matter of the claim nor of the payment is damage or anticipated damage; and the relevant provision requires that the claim and payment made be "in respect of damage".

44 If the right created by s 12A(1)(b) was to be denied so as to give effect to the policy manifest in s 15 that could have been done by clear language. For example, the penultimate paragraph of s 12(1) excludes certain improvements from the scheme for payment of compensation unless certain conditions are satisfied. It does so by providing that "no claim shall be entertained or payment made under this Act in respect of any improvement" which was the subject of a conditional right to insure under the 1928 Act. The expression "in respect of" is used to identify the subject matter of the claim or payment which is precluded. That subject matter is the improvement rather than damage of a particular kind to the improvement. The same or similar language could have been used in s 15(5)(b) if it was intended that it should cover any claims made in respect of improvements which had not been approved.

45 Whilst there remains a tension between the policy of s 15 and the construction of s 15(5)(b) as not extending to claims under s 12A(1)(b), the outcome is not such as to defeat that manifest purpose or require that the text not be given its natural meaning.

Proposed order

46 The primary judge was correct to conclude that s 15(5)(b) does not preclude the making and payment of claims under s 12A(1)(b) of the Act for expense incurred or proposed in preventing or mitigating damage to improvements erected or altered in contravention of s 15 and which are not the subject of a certificate under s 15B(3A). The appeal should be dismissed with costs.

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Amendments

23 December 2013 - Minor grammatical corrections
Amended paragraphs: 34 and 43

05 November 2014 - the word "Insurance" added before the word "Fund"
Amended paragraphs: 12

Decision last updated: 05 November 2014