Broken Hill Cobalt Project Pty Ltd v Lord

WARD P: This matter involves an appeal pursuant to s 57(1) of the Land and Environment Court Act 1979 (NSW) (LEC Act) from a decision of Duggan J in the Land and Environment Court of NSW (David Anthony Lord v Broken Hill Cobalt Project Pty Ltd [2021] NSWLEC 126) determining an application by the respondents (Mr David Lloyd and Mr John Lloyd) pursuant to s 155 of the Mining Act 1992 (NSW) (Mining Act) for review of the final arbitral determination in relation to a land access arrangement arbitration concerning Exploration Licences (ELs) 6622, 8143 and 8891 held over rural land near Broken Hill, New South Wales. The review determination included the assessment of the compensation payable for any “compensable loss” as defined in s 262 of the Mining Act (extracted in due course); and it is only this aspect of the primary judge’s determination that is here the subject of challenge.

The appellants (Broken Hill Cobalt Project Pty Ltd, to which I will refer as Broken Hill Cobalt, and Cobalt Blue Holdings Ltd, to which I will refer as Cobalt Blue) hold the three ELs in question, those being licences issued under part 3 of the Mining Act, covering about 7,000 hectares of land forming part of what is known as Thackaringa Station.

The respondents, as their family has done for over a hundred years, carry on sheep farming on Thackaringa Station, the title to which is comprised of a number of freehold and leasehold titles. The leases in question are Crown leases (permitting use of the surface of the land for grazing only) and the ELs are held only over Crown leasehold land.

The proceeding before the primary judge for review of the arbitrator’s final determination was by way of a rehearing, with fresh material able to be adduced in addition to the material considered by the arbitrator (see s 155(6A) of the Mining Act). On such a review, the court has the functions of the arbitrator under Pt 8, Div 2 of the Mining Act, in addition to its other functions. The court is required to specify the compensation for any “compensable loss” as assessed in accordance with Pt 13, Div 1 of the Mining Act (see s 141(2) of the Mining Act).

The filing of the respondents’ application for review of the arbitral determination operated to stay the effect of any related access arrangement (s 155(5) of the Mining Act); and that hearing before the primary judge was expedited in those circumstances. Ironically, perhaps, there is no equivalent stay in place pending determination of this appeal. The appellants therefore have the benefit of the determination of the access arrangements for the purposes of their ELs but are challenging the compensation assessed to be payable in relation thereto.

The appellants filed a notice of appeal on 11 February 2022. An amended notice of appeal was filed on 13 September 2022.

The appeal from her Honour’s decision is limited to questions of law and hence the appellants accept that they are unable to challenge the merits of her Honour’s findings (which no doubt explains at least in part the emphasis placed by the appellants in submissions on this appeal on the issues of adequacy of reasons and denial of procedural fairness; and the fact that the initial ground 2, challenging a finding of fact, was not pressed).

As adverted to above, Thackaringa Station is a sheep farming property located near Broken Hill, comprising both freehold and leasehold title (the latter being Crown leases under the Western Lands Act 1901 (NSW)). Thackaringa Station occupies in total approximately 64,610 hectares.

For completeness it may be noted that, in addition to the ELs, Broken Hill Cobalt holds two mining leases over parts of Thackaringa Station for which it separately pays compensation to the respondents (in the agreed sum of $3,000 per annum). However, nothing turns on those mining leases for present purposes.

The ELs held by the respective appellants (“prospecting titles” for the purposes of Pt 8 Div 2 of the Mining Act) confer exclusive rights upon the appellants to explore for “Group One” minerals (defined in Schs 1 and 2 of the Mining Regulation 2016 (NSW) (the Mining Regulation) to include mineral deposits of cobalt) within the areas designated in each EL. As the respective appellants’ names indicate, the mineral for which the appellants are prospecting under the ELs is cobalt. The ELs do not permit mining, nor do they guarantee that a mining or production lease will be granted; rather, exploration for minerals is a preliminary step to ascertain the location, quality and quantity of a mineral prior to making an application for a Mining Lease under Pt 5 of the Mining Act.

The appellants are not permitted to access Thackaringa Station for the purposes of exercising rights under the prospecting authority (i.e., the ELs) without an access arrangement determined under Pt 8 Div 2 of the Mining Act. Hence, the need for determination of the proposed access arrangement. The access paths in relation to the ELs (as are the ELs themselves, as noted above) are located only on the land the subject of the Crown leases.

The appellants’ proposed exploration activities on Thackaringa Station are described in an “Indicative Work Program” provided to the Resource Regulator for approval of exploration activity; that program relevantly describing entry by personnel and equipment onto the property seven days a week for 365 days a year during daylight hours. As will be explained below, the intensity of use is a factor that the primary judge took into account on the application for determination of the access arrangement.

The appellants applied pursuant to s 140 of the Mining Act for an access arrangement for the purposes of prospecting minerals over defined portions of Thackaringa Station. As the parties were unable to agree to the terms of an access agreement, the access arrangement fell to be determined by an arbitrator in accordance with Pt 8 Div 2 of the Mining Act. Following an unsuccessful mediation, an arbitration took place under s 141 of the Mining Act to determine whether (and on what terms) the appellants (the prospecting title holder) would be permitted to have access to the land.

The Arbitrator (Robert Angyal SC) delivered his final determination on 29 August 2021, determining an access arrangement and fixing compensation for the activities of drilling, track making, bulk sampling and “costeaning” (that being a process by which a trench is dug in order to enable access to mineral samples on the horizontal axis – AT 5.17-28). The Arbitrator did not award compensation for access to the property per se; rejecting the proposition that the respondents were entitled to any amount of compensation for non-economic loss.

The respondents then applied to the Land and Environment Court under s 155 of the Mining Act for a review of the Arbitrator’s final determination. As noted above, the making of that application had the effect of staying the operation of the access arrangement.

In the Land and Environment Court proceeding, the parties agreed that orders should be made requiring the parties to enter into an access arrangement pursuant to s 143 of the Mining Act. However, the terms of the access arrangement and the assessment of “compensable loss” remained in issue.

On 12 November 2021, the primary judge determined that the appellants could have access to Thackaringa Station in relation to the three ELs on the terms of the access arrangement annexed to her Honour’s reasons; fixed compensation for the specific activities of drilling, costeaning, bulk sampling and track making (see Annexure F to the access arrangement); and awarded a lump sum payment of $20,000 per annum for each EL. It should be noted that the application was dealt with on an expedited basis. The application was filed on 8 September 2021, expedited on 30 September 2021 and heard over three days on 20-22 October 2021, her Honour handing down judgment three weeks later on 12 November 2021.

The appellants here contend that the primary judge has erred on questions of law and they seek an order for the judgment to be set aside and for an order to be made in lieu of the order made by the primary judge (deleting one of the clauses – cl 10.8 – of the approved access arrangement and replacing it with the version for which the appellants had contended) or, in the alternative, remitting the matter to the Land and Environment Court (but before a different judge).

Under the relevant statutory regime under the Mining Act governing ELs, the respondents are entitled to compensation for any “compensable loss” suffered, or likely to be suffered, by them as a result of the exercise of the rights conferred by the ELs or by an access arrangement in respect of the ELs.

Section 262 of the Mining Act defines “compensable loss” as follows:

Section 272(1)(a) provides that the assessment of compensation payable under Pt 13 of the Mining Act is to be made in the manner prescribed by the regulations. Clause 91 of the Mining Regulation requires the making of such an assessment that has regard to the following factors: the nature, quality, area and particular characteristics of the land concerned; the proximity of the land to any building, structure, road, track or other facility; the purpose for which the land is normally used; and the use of the land that is approved under any development consent that is in force in respect of the land.

Although there was some debate at the hearing of this appeal as to where the persuasive or evidentiary onus may lie (and as to the applicability or otherwise of rules of evidence), this arose in the context of argument as to the content of the primary judge’s obligation to give reasons (see below). It appeared to be accepted that the onus of proving compensable loss that is caused, or likely to be caused, by the exercise of rights conferred by an EL or by an access arrangement in respect of an EL rests with the landholder (here, the respondents). Thus, the appellants emphasise that the respondents were required to demonstrate the facts relevant for any liability to be incurred by the appellants.

In evidence before the primary judge were competing versions of the parties’ proposed access arrangements, as well as expert evidence – the respondents’ expert (Mr Hopcraft), an expert valuer; and the appellants’ expert (Mr Ivey), a forensic accountant with expertise in agro-economics – and evidence from Mr David Lord (some of which was admitted as to his opinion rather than as evidence of the fact – see at T 179 for example).

At the hearing before the primary judge, the appellants conceded that (contrary to the Arbitrator’s opinion) compensable loss for the purposes of s 262 of the Mining Act could include non-financial loss (see [19] of her Honour’s reasons). The primary judge recorded her agreement with that concession (see [20]ff of her Honour’s reasons) and the appellants do not take any issue with this on appeal.

The access arrangement proposed by the appellants ultimately incorporated three elements of compensation: first, what was described as an ex gratia payment; second, compensation for damage to the surface, and deprivation for the use of grazing, of the land; and, third, compensation for the impact on management. Those are explained in more detail below. (I say “ultimately” because the third element of the compensation proposed under the appellants’ proposed access arrangement was only proffered after debate during the course of the hearing as to the potential impact on management of the proposed access.)

As to the so-called ex gratia payment, cl 10.8 of the appellants’ proposed access arrangement provided for a ‘one off’ payment of $3,000 per EL (i.e., a total sum of $9,000). The appellants in their oral submissions say that there was no mathematical precision, nor science, behind that amount; rather, that the proposed one-off payment per EL was an amount that the appellants were willing to pay in order to obtain the access arrangement. The appellants note that the primary judge referred to this ex gratia payment (at [31]-[32]) and rejected that amount as not adequate (at [51]); and instead her Honour allowed a larger lump sum per annum per EL (see below). The appellants complain that it was not for the primary judge in effect to amend an ex gratia payment of this kind.

As to the second component of the compensation payments proposed by the appellants, this reflected the appellants’ acceptance that their use of the land pursuant to the ELs would have the likely consequence of damaging the surface of the land and (to the extent that they exist) the trees, grasses or other vegetation on the land. It was accepted that damaged land would not be used by the respondents for grazing purposes.

The appellants’ expert, Mr Ivey, derived a rate to be paid, as “compensable loss” referable to the disturbed land, by reference to the profit able to be generated from the land. Under the appellants’ proposed access arrangement (Pt 10), the derived rate was to be paid by reference to the land that suffered both direct and indirect impacts from the various activities carried out pursuant to the EL (see Annexure F, cl 4 of the court approved access arrangement); and this payment was to continue until the disturbed land had been rehabilitated to the satisfaction of the Resources Regulator (cl 10.10 of the proposed access arrangement; cl 10.8 of the court approved access arrangement).

In contrast, the respondents’ expert (Mr Hopcraft) took a different approach to the assessment of loss for damage to the land (until rehabilitated), adopting a process of comparing market arrangements to arrive at a market price analysis. Mr Hopcraft quantified both the non-financial and financial losses as a single sum. Her Honour noted (at [49]) that the premise underlying Mr Hopcraft’s determination of the quantum of compensation was that a comparison of amounts paid to both the respondents and other landholders in other access arrangements permitted the determination of a “market price”.

The primary judge rejected Mr Hopcraft’s market price approach (for the reasons set out at [49]-[50]) and instead imposed a requirement to pay compensation for the disturbance, as identified by the appellants and at the rates identified by the appellants, until the land was rehabilitated.

As to the third component of the compensation payment regime (compensation for the impact on management), as adverted to above, this appears first to have arisen following cross-examination by the respondents of Mr Ivey as to the potential impact on the management of the farm of use or access to the land.

In cross-examination Mr Ivey accepted that it might be appropriate for there to be a nominal amount by way of a payment for inconvenience or loss of amenity (Mr Ivey suggesting that a single $5,000-$10,000 “one off” payment for the three ELs, collectively, might be appropriate). There was also an issue raised by the primary judge as to extra time that would be taken by management to take into account the impacts of the ELs on the operation of the farm and of any necessity to move the stock. Mr Ivey then prepared a document (which became Ex 9) containing a calculation of financial loss consistent with that evidence (which then became cll 10.9 and 10.10 of the appellants’ proposed access arrangement). On appeal, the appellants say that this evidence was at least implicitly rejected by the primary judge, noting that there was no mention in the judgment of Ex 9, nor of Mr Ivey’s evidence as to how the financial impacts on the management of the farm might be calculated.

Turning to the manner in which the primary judge approached the issue of compensable loss, her Honour first (from [18]-[21]), under the hearing “[i]dentification of items of compensable loss”, addressed the issue as to whether the only compensable loss that could arise under the provisions of Pt 13 of the Mining Act was financial loss (an issue that had been determined in the affirmative by the Arbitrator at [34] of the Final Determination). Her Honour noted that the appellants had abandoned that construction but recorded that had she been required to determine that issue she would not have taken the same approach to the legislative language of the statute for the reasons there set out ([20]). Her Honour concluded (at [21]) that the compensable loss defined in s 262 was not limited to financial losses and could include other, non-financial losses provided such losses were likely.

In the course of addressing that issue, her Honour commented (at [20](4)) that the types of considerations set out in cl 91(2) of the Mining Regulation 2016 (NSW) brought to mind “factors that can generally fall within the broad term “loss of amenity” as well as identifying any financial cost”. Thus, her Honour had in mind at this point a general concept of “loss of amenity” as one that could form part of the consideration of compensable loss.

Her Honour next turned (from [22]-[27]) to the quantification of compensation for items of compensable loss.

At [23], her Honour noted that there was agreement between the experts as to the items and quantification of financial losses (which were dealt with in cll 10.1, 10.2 and Annexure F cll 1-8 of the appellants’ proposed access arrangement). With one exception (which related to a distinction for use of existing tracks “which do not require construction but have been rehabilitated” – such as tracks that had been created by other miners and were required to be rehabilitated but would be used by the appellants and not rehabilitated until the completion of their prospecting operations), her Honour considered that the appellants’ proposed terms were appropriate. There is no appeal from that conclusion.

Her Honour noted (at [24]) that, as a consequence of the evidence, the appellants had prepared further provisions enabling the limitation of areas of disturbance as a means of quantifying the actual areas disturbed (cl 10.3 of the appellants’ proposed access arrangement) and considered that it was appropriate that such provision be included in the access arrangement as it provides certainty as to the calculation of financial losses and the ability for the respondents adequately to identify the compensation amounts to be paid to them.

As to non-financial losses, the primary judge noted (at [25]) that the respondents had identified, through Mr Hopcraft’s report, non-financial losses that they contended would comprise compensable loss as defined in the Mining Act, namely, the impact on Thackaringa Station “and its management” of five things: intrusion of light and heavy vehicles onto the property for extended periods of time; that a large number of mining personnel associated with the exploration would be working on Thackaringa Station for an extended period of time; the risk that security deposits, if called upon, might be insufficient to rectify or rehabilitate exploration works; that the presence of heavy exploration equipment and other items might give rise to intrusion of criminals or unauthorised persons; and that there would be additional work and supervision by management in relation to the management of livestock within the exploration areas.

At [26], her Honour said:

This concept of inherent damage (considered in due course) was referred to at times in submissions as damage per se.

After addressing the evidence from the respective valuers (at [27]-[32]), her Honour then set out her findings on the quantification of compensable loss (from [33]-[55]).

Relevantly, her Honour noted (at [33]), that the financial losses (i.e., those that had been agreed and dealt with earlier in the judgment) take account only of the fact that a portion of the respondents’ land will be physically occupied by the appellants and thereby unavailable for economic exploitation by the respondents; and said that it was necessary to determine whether there would also be non-financial losses capable of comprising a compensable loss within the meaning of the statute. (The appellants here point out that the access arrangement as approved continues to make provision for compensation for financial losses even after physical occupation has ceased, since it continues until rehabilitation of the land; and also that the compensation for indirect disturbance encompasses areas of land not physically occupied.)

At [38], the primary judge rejected certain of the factors identified by the respondents’ expert (Mr Hopcraft) as factors giving rise to a compensable loss within the meaning of s 262, namely: the mining works and equipment acting as an attraction for unauthorised and criminal persons to enter the land; and the adequacy of the quantum of security deposits paid pursuant to the terms of the ELs (those being the factors set out in her Honour’s reasons at [25](4) and [25](3) respectively). Her Honour considered that those matters fall outside the ambit of the definition of compensable loss but in any event said that she did not have any evidence to permit a finding that the prospect of such losses was “likely” (and for that reason also those would fall outside the ambit of s 262) ([39]).

The primary judge went on to identify the remaining matters related to the loss as being (at [40]) those that would arise as a consequence of the intensity of the use of the land by the appellants (intensity of use) and the physical damage to the surface of the land and the vegetation on such land as a consequence of the occupation and use by the appellants (this being the concept of inherent damage to the land beyond that for which compensation was to be awarded for financial loss – see below).

The primary judge noted (at [41]) the contention that the intensity of use had the consequence that farming decisions would always have to be made in the context of the appellants’ presence (and that this intensity was reflected by: the number of days; the number of people; the number of movements of machinery and vehicles; and the number of locations upon which the prospecting operations would occur).

Her Honour said (at [42]) that:

The factors to which her Honour was there referring seem in context to be those referred to in [41] (not the second of those referred to in [40] i.e., relating to physical damage to the land). The appellants complain that no explanation is given for the finding (and they say there is no evidence or submissions referred to or relied upon by the primary judge) for the finding that “the loss is more than the mere inability to graze the land”.

At [43], the primary judge concluded that:

Pausing here, the sentence italicised in the extract above received no little attention in the course of submissions on the appeal. The appellants say that, although no reference is here made to it, this paragraph ([43]) could be a consideration by her Honour of Ex 9 and Mr Ivey’s evidence in relation thereto. It certainly seems to be an implicit reference to the calculation set out by Mr Ivey in what became Ex 9, which included an hourly rate for those involved in the handling of stock (one hour every three months for management planning and an hourly amount for farm hands or the like). As I read it, what her Honour was there saying was that the “loss” represented by the management time that would be taken up by making management of land decisions in the context of the appellants’ presence would extend to more than the fact that decisions would have to be made as to stock handling that would not have had to be made but for the presence of the appellants on the land. That reading would be consistent with her Honour accepting the premise of Ex 9, to the extent that it contemplates that the impacts on management may be compensated by reference to hourly rates of those involved in management, but her Honour considering it to be an under-estimate of the time that would be involved.

Complaint is made by the appellants that the reasoning in this paragraph is opaque, and that no grounds for the rejection of Ex 9 and Mr Ivey’s evidence are given; nor is any alternative evidence, or submissions, relied upon for the conclusion that the loss by reference to the impact on management decisions was more than the inability to graze the land. (The appellant says that the primary judge’s approach to quantification of the loss for this impact on management is contained solely within [53] and [54] of the reasons – see below.)

The primary judge then turned to the second of the factors identified at [40], namely the concept of damage to the surface of the land “inherent in the carrying out of the Prospecting Operations. At [44], her Honour accepted the respondents’ submissions “based upon the evidence” that it was inherent in the carrying out of the prospecting operations that there would be damage to the surface of the land (arising from the disturbance to the surface of the land and the vegetation upon it). Her Honour gave, as a non-exhaustive example of such disturbances, the drilling platforms and the existing and proposed use of access tracks.

Her Honour said (at [45]-[46]) that:

Pausing here, there was some evidence of the fragility of the surface of the land and the possibility of damage to the “cryptogamic crust” or erosion. However, it is not apparent how that is to be or has been measured (noting that physical damage that has the consequence of precluding grazing on the land must be within the compensation provided for that financial loss). The appellants say that the damage here being assessed is something in addition to the financial loss for damage that her Honour has already accepted. Complaint is made that one cannot discern from the judgment what this additional compensation is for. The appellants say that if it is the mere fact of damage then it is unclear why the respondents are to be compensated for that fact (in addition to the impacts on the respondents’ use of the land). It might potentially be some form of compensation for loss of amenity (as perhaps foreshadowed earlier at [21]) but, if so, the appellants complain that there has been a denial of procedural fairness (see below) in that there was no claim made for loss of amenity.

The primary judge candidly acknowledged that there was difficulty in determining the appropriate compensation for such non-financial losses as had been found (i.e., the impact on management decisions and the inherent damage to the land or damages per se), saying at [47] that:

Complaint is here made by the appellants that the primary judge appeared to consider that she was obliged to make a determination as to compensation (as opposed to the position that if her Honour was not satisfied on the evidence as to the appropriate quantum for compensable loss then the respondents would not have satisfied their onus and in those circumstances either there might be no order for compensation for such losses or the application might simply be dismissed).

Her Honour rejected (at [48]-[50]) the “market price” approach of Mr Hopcraft but said (at [51] that the written evidence of Mr Ivey was of little assistance (as it only considered the financial losses) and that his oral evidence (determining a lump sum payment “for inconvenience or loss of amenity”) did not encompass the totality of the losses that her Honour had identified as compensable losses. Her Honour thus did not accept that a single lump sum payment of $3,000 per EL was an adequate sum for compensation for the non-financial losses.

Her Honour’s ultimate conclusion as to the question of compensation for the non-financial losses was set out at [53]-[54]:

The appellants say that the language here used (of “doing the best” that her Honour could) is that which is frequently adopted by judges in the Land and Environment Court when approaching the task of the judicial valuer in the assessment of compensation under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) but that this was not her Honour’s role in the present case. The appellants also argue that the language (at [54]) of synthesising the additional losses into a lump sum may be a reference to the instinctive synthesis process used to determine penalty in criminal proceedings (see, for example, Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25) but, again, they say that this was not her Honour’s role.

Her Honour then went on to address provisions in the access arrangement to facilitate the payment of the sum for non-financial loss (see at [55]); and then turned to the issues raised as to disputed provisions of the proposed access arrangement (from [56]ff). It is not necessary here to consider those.

More pertinently, complaint is made that it is not possible to determine how the synthesised lump sum of $20,000 per annum per EL is calculated, noting that this lump sum represented the assessment of compensation both for the impact on management and the inherent damage or damage per se. Complaint is made that it is not possible to determine how the lump sum is apportioned as between those two heads of compensable loss.

The appellants say that whatever component relates to management, it is unclear why it would relate to each EL, rather than to the operation of the single farm; and that although (at [54]) her Honour appears to have regard to a farm manager’s wages (see Mr Ivey’s evidence and Ex 9) it is not possible to determine how her Honour has used that evidence. Further, the appellants say that whatever component relates to the inherent damage, it is unclear why it is an annual amount, and not a one-off payment.

Complaint is also made that, in relation to each additional head of compensable loss, it is difficult to understand why the lump sum would be the same for each EL as they were of varying sizes (EL8891 was 11 units; EL8143 was 4 units, and EL6622 was 17 units, being approximately 2,220m2 per unit), and each EL had significantly varying scopes of proposed exploration activity with the bulk of drilling activity concentrated within the area of EL 6622.

By amended notice of appeal filed on 13 September 2022, the appellants raise the following grounds of appeal

The orders sought by the appellants (if the appeal is allowed) include for the judgment of the primary judge to be set aside and, in lieu thereof, an order be made in the following terms:

In the amended notice of appeal, alternative orders are included in the event that the appeal is allowed but the matter is to be remitted to the Land and Environment Court. As noted earlier, the appellants seek an order that any remitter be to a judge other than the primary judge.

It is convenient to address the grounds of appeal in the order in which the appellants proceeded in their oral submissions, namely, by focussing first on ground 6 (the adequacy of reasons ground).

The appellants appear to accept that the duty to give reasons did not require the primary judge to undertake “a tedious examination of detailed evidence or a minute explanation of every step in the reasoning process” but they say that there needs to be an adequate description of the process undertaken to address the principal contested issues (citing Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (Soulemezis)). The appellants maintain that the identification of the “new” grounds of loss (i.e., the loss referable to the impact on management and the inherent damage or damage per se) were matters for which the primary judge was required to give adequate reasons and that, once her Honour had identified those additional heads of compensable loss, it was then similarly necessary for her Honour to provide adequate reasons for the approach to the assessment of compensation for those additional heads.

The appellants refer to the recognised purpose for the giving of adequate reasons (namely that it is to enable the parties to see the extent to which their arguments have been understood and accepted, as well as the basis for the relevant decision), citing Soulemezis at 279; and noting that in Alexandria Landfill Pty Ltd v Transport for New South Wales (2020) 103 NSWLR 479; [2020] NSWCA 165 (Alexandria Landfill) at [29], this Court said that:

The appellants complain (in relation to what is referred to as the impacts on management head of compensable loss) that it is not possible from the reasons to determine why it is that her Honour concluded (at [43]) that the loss was not one that could be measured by time spent in handling the stock and, in particular, that the reasons do not disclose what is the loss going beyond the handling of stock which is to be measured; nor how that additional loss is to be quantified. Complaint is made that there is no attempt to explain why the appellants’ approach, supported by Mr Ivey’s evidence and Ex 9, does not capture that loss.

Similarly, as to the compensation for the damage referred to at [46], complaint is made that, other than describing that damage as one that is “additional” and that it arises from “damage relating to disturbed areas and consequential damage”, the primary judge does not disclose what that damage amounts to; nor how it is to be assessed.

The appellants say that, to the extent either of those additional heads of compensable loss was available, the primary judge does not identify: any evidence that she has rejected in order to arrive at the findings (including the implicit rejection of Mr Ivey’s evidence); the evidence relied upon in order to inform the conclusion; and, or alternatively, the submissions of the parties, either for or against, the conclusion which was reached.

As adverted to earlier, the appellants complain that, as to the quantification of those additional heads of compensable loss, they are not able to discern from the reasons: how it was that her Honour arrived at the $20,000 lump sum for each EL; how it was that $20,000 is to be allocated between the two additional heads of compensable loss; why the additional management loss is referable to each EL and not the one farm that is being managed; why the additional damage head is annual and not a single lump sum payment; and why the additional lump sum is the same for each EL when they are materially different areas, with significantly varying scopes of proposed exploration activity (the bulk of drilling activity being concentrated within the area of EL 6622).

The appellants say that the primary judge appears to have rejected an approach to quantification of loss likely to be caused by impacts on management (that being the approach of Mr Ivey); conflated it with some general concept of inconvenience; and then (in a manner which they complain was left unexplained) provided for it in a lump sum.

It is submitted that the decision has been reached arbitrarily and that, by failing to provide adequate reasons in relation to these principal contested issues, her Honour has erred on a question of law. The appellants submit that this ground is sufficient to warrant the decision being set aside.

The respondents contend that the statutory context and the particular circumstances of the case indicated that the standard to be discharged by the primary judge as to the provision of reasons was relatively undemanding; and that, applying that standard, the primary judge’s reasoning was sufficient and involved no error of law.

Insofar as the duty to give reasons is concerned, the respondents emphasise that this was a review pursuant to s 155 of the Mining Act and they say that this has consequences for the scope of the duty, pointing out that Pt 8, Div 2 of the Mining Act provides for a scheme of mediation and arbitration in respect of access arrangements for prospecting titles and that in conducting a review of the arbitrator’s determination, the court has the functions of an arbitrator (in addition to its other functions). It is noted that the review is by way of rehearing; that fresh material or material in addition to, or in substitution for, the material considered on the making of the determination by the arbitrator may be given on the review and taken into consideration by the court; and that the decision reached by the court is to be given effect as if it were the determination of the arbitrator. The respondents say that this involves the court conducting a de novo hearing, standing in the shoes of the arbitrator.

Emphasis is placed on the fact that the review proceedings are governed by s 148(2) of the LEC Act, which requires the court to act according to “equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms”; and that it has been recognised that this confers a “deal of procedural flexibility” (see Rosane Pty Ltd v Clarke (2009) 3 ARLR 123; [2009] NSWLEC 1282 (Rosane) at [6]). It is noted that in Rosane (at [7]) it was said that an “arbitrator is in a position analogous to that of a non-lawyer Commissioner of [the Land and Environment] Court exercising a merit review jurisdiction in classes 1, 2 or 3 of the Court’s jurisdiction”. (The respondents say that this view is reinforced by the “[l]and access arbitration procedure” made, by order published in the gazette, under s 148A of the Mining Act, referring to various provisions of that procedure – see [3.1]; [21.2](b); and [25.6].

The respondents argue that the informality and flexibility in the manner which the court exercises the functions under s 155(6) of the Mining Act are indicative that the function is other than judicial power; as, they say, are the provisions of the LEC Act which permit that function to be exercised by one or more Commissioners of the Court. The respondents point in this regard to the description of the function as “arbitration”.

The respondents also note that the more particular function which the court was called upon to exercise in this case concerned the requirement to specify the compensation to which the respondents are entitled under Div 1 of Pt 13 of the Mining Act. They say that the identification of elements of compensable loss involves predictive components (as to loss likely to be caused by specific actions or damage likely to arise from prospecting or mining operations) and that the definition of compensable loss is not a narrow gateway; that it embraces potential effects which are capable of being foreseen at the time the access arrangement is determined. The respondents argue that, necessarily, the assessment of the loss likely to be caused by such matters will involve a degree of imprecision and evaluative judgment; and that this is particularly so when (as they point out is now common ground) that provision is properly construed as extending to compensation for non-financial losses.

The significance that the respondents attach to the above relates to this Court’s recognition that the content of the obligation to give reasons turns, in part, upon the statutory context and the nature of the function performed by the relevant tribunal (citing Alexandria Landfill per Macfarlan JA at [294] and Leeming JA at [404]); and that the adequacy of reasons is not to be judged as against a standard of perfection (rather, the question is whether the reasons attained the minimum acceptable standard) (citing New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 (Orr) at [66] per Bell P (as his Honour then was). The respondents say that in the present case the minimum standard was relatively undemanding for the following reasons.

First, that the particular function to be exercised by the Court was akin to that of a “judicial valuer” (citing Alexandria Landfill at [318] per Macfarlan JA for the proposition that cases involving substantial subjective and evaluative elements; and that such cases are not able to be, and should not be attempted to be, addressed with mathematical precision; and referring to Valuer-General v Perilya Broken Hill Ltd (2013) 195 LGERA 416; [2013] NSWCA 265, per Leeming JA (with whom Preston CJ of LEC agreed) at [92]-[93]).

Second, that both the statutory scheme (particularly s 148(2)) and the “[l]and access arbitration procedure” gazetted under s 148A of the Mining Act contemplate that the proceedings will be conducted efficiently, and with minimal technicality or formality.

Third, that the proceedings involved the exercise of a non-judicial or quasi-judicial function (noting the analogy drawn in Rosane with the merit review jurisdiction of the Land and Environment Court). (In this regard, the respondents say that performance of a function of that nature is a further contextual matter which suggests that the duty is attenuated; and that in Rosane what was said to be required in that context of an arbitrator was the giving of “sufficient reasons for any decision that they make as part of their conduct of those proceedings so as to provide an explanation to the parties of the reasons why they have reached a particular conclusion” but that those reasons do not need to be extensive. The respondents argue that this informs the understanding of the nature of the duty applicable to a judge exercising the functions of an arbitrator on a s 155 review.)

Fourth, that the content of that duty must depend on the circumstances of the individual case; that the test of adequacy is relative; and that that due allowance must be given for the pressure on the court to deal with the cases that come before it (citing Hassoun v Wesfarmers General Insurance Ltd t/a Lumley General [2015] NSWCA 233 at [89]; [92]). In the present case, it is noted that the hearing had been expedited (see at [2] of the primary judgment) and that the primary judge was dealing with a relatively large volume of evidentiary material for a proceeding conducted with that degree of expedition (a number of expert reports and a hearing conducted over three days).

The respondents contend that the reasons of the primary judge readily satisfied the standard applicable.

As to the complaint that the primary judge did not give sufficient reasons for accepting that the consequential impacts identified by Mr Hopcraft (identified at [43] and [46] of the reasons) in respect of lost management time and consequential damage from exploration activities fell within s 262 of the Mining Act, the respondents say that special caution is warranted where the challenge concerns a factual determination made by the court. They point out that Mr Lord gave evidence of concern that he had to conduct farming activities so as to manage livestock around the exploration activities, noting that the respondents had sought terms to require access to cease during the lambing season and that evidence of the impacts on stock was canvassed during argument with the appellants’ counsel at the hearing.

The respondents say that the primary judge’s reasoning proceeds upon the basis that Mr Ivey’s calculations for the loss of access to land and known incidents of interaction between the landholder did not express the entirety of compensable loss that is likely to arise as a consequence of exploration activity. The respondents point out that the table provided by Mr Ivey identified only management planning for one hour per three months and two days movement of stock, but that it was not put to Mr Lord that this was the amount of time that was actually spent on those matters; and that this evidence came late in the hearing and represented a calculation provided as a result of Mr Ivey’s hypotheses.

The respondents argue that it was, in those circumstances, open to the primary judge to find that the impact identified by Mr Hopcraft of the respondents accommodating their farm practices to exploration activities of some intensity involved a greater compensable loss in relation to the consequences of disturbance than Mr Ivey’s evidence acknowledged. The respondents say that those impacts are set out at [43] of the judgment and are obviously based upon the evidence of Mr Lord; and that they were found to be losses likely to arise as a consequence of exploration activities.

The respondents cavil with the proposition that this involved the rejection of the evidence of Mr Ivey; rather, they say that Mr Ivey’s evidence was accepted and deployed in the access arrangement but that Mr Ivey’s calculations did not go far enough (nor did they fully express the totality of impacts on the landholder).

It is submitted by the respondents that the judgment makes clear that her Honour accepted that the evidence of the impacts on both the land and the management of Thackaringa went beyond compensation on a “unit basis” per square metre for projected loss of profitability alone. In that regard it is said that Mr Lord gave unchallenged evidence in chief by reference to video recordings of the sites visited in the course of the arbitration concerning the consequential impacts on soil and vegetation of the activities, and the increased risk of erosion arising before sites were rehabilitated; and the respondents contend that these elements are not “heads” of compensation, or matters requiring apportionment between them, if the evidence justifies a conclusion that the impacts will require continuing attention during the course of the term of the exploration authorities.

In this context, the respondents say that (particularly having regard to the nature of the hearing, the requirements for the court to exercise the arbitrator’s functions, and the expedited nature of the hearing), the reasons given by the primary judge are sufficient to explain that her Honour considered the compensable loss to exceed the loss of profitability of the land and the actual hours taken up with direct consultation. It is submitted that the primary judge correctly identified the effects of the activities that engaged s 262; and explained that the Mining Act required the determination of some monetary amount, even in respect of losses that might not be precisely quantifiable, or may be prospective.

It is noted that her Honour identified that issue in the course of argument and asked each valuer to give their response to the issues of both direct economic impacts and consequential impacts that may not be precisely defined (see T 55-56).

The respondents accept that the primary judge did not arrive at a precise calculation for compensation in respect of the non-financial compensable loss but they say that that degree of precision is not required by the statutory scheme; and that the primary judge set out the considerations that had informed her assessment at [54], namely: the intensity of the exploration program; the time that the landholders would need to take to account for the presence of the exploration equipment and personnel, and the activities they carried out; the average wage for station hands and farm managers (supplied by Mr Ivey) and associated vehicle and equipment costs, and other wage costs; the extent of damage caused by the creation of tracks; and the extent of damage caused by continuing use of existing tracks, and drilling locations.

The respondents say that none of that concealed some form of double compensation (noting that Mr Ivey calculated his compensation amount purely on loss of productivity of the land and did not take into account damage to the land continuing, or any consequential effects of that damage) (the respondents in this regard say that the land was in fact damaged; and that that damage caused consequential harm through erosion, reduction in regeneration potential, and long-term damage which may not be fully rehabilitated). It is submitted that these were all additional matters that the primary judge was entitled to consider as loss that the appellants had not taken into account, and which should be properly the subject of compensation as non-economic loss (i.e., as loss which is predicted to occur yet cannot be precisely calculated). The respondents say that the same is true of the loss associated with interference to management and influence upon management decisions identified in [42] (which it is said were not fully accounted for in Mr Ivey’s calculation).

Thus, the respondents submit that the reasons given by the primary judge are sufficient in the context of the decision-making framework provided by the Mining Act and having regard to the fact that the hearing was expedited because they expose the process of reasoning that led to the determination that a lump sum was appropriate, and identified the factors (by reference to the legislation) that had informed that conclusion.

Insofar as the appellants say that they do not know why $20,000 was awarded instead of $3000, and why that should be per licence, the respondents say that this is a complaint about the quantum (as Mr Ivey had identified a lesser sum, but by reference to each of the licences, in his evidence).

The appellants in their reply and oral submissions cavil with the respondents’ suggestion that there is a very low bar for the scope and content of the duty to give reasons by a Commissioner in the Land and Environment Court, referring to decisions as to appeals (on matters of law – see s 56A of the LEC Act) from decisions of lay Commissioners. In particular, reference is made to Botany Bay City Council v Farnworth Holdings Pty Ltd [2004] NSWCA 157, where it was said that the duty of a Commissioner to give reasons is no less onerous than that of a judge and to Kirby P’s observations in Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367, while disavowing “double standards” that the decision of a lay Commissioner should not be examined as if written by a lawyer.

The appellants submit that a proper analysis of the functions of the Commissioner both in Class 8 of the court’s jurisdiction and in Class 1, 2 and 3 reveals that the functions in Class 8 (for the consideration of the scope and content of reasons) are relevantly the same as that of Commissioners in merit appeals (Classes 1, 2 and 3), save for two matters: first, that in appeals in the Court’s Class 1, 2 and 3 jurisdiction, the Commissioners are not required to be an Australian lawyer (though they may be), cf matters in Class 8, which may only be heard by a judge, or by a subset of Commissioners (Commissioners for Mining, who must be an Australian lawyer) and, second, that the rules of evidence do not apply to the review by the Land and Environment Court in relation to “small-scale titles”.

It is not necessary here to set out the matters raised by the appellants as to the similarities in the procedure and powers of the Land and Environment Court in Class 1, 2 and 3 proceedings governed by ss 38 and 39 of the LEC Act or the matters on which the respondents rely (as to the non-applicability of the rules of evidence and the requirement that the proceedings be conducted with as little formality and technicality, and with as much expedition, as the statutory requirements and the proper consideration of the matters permit). In essence the position of the appellants is that the scope or content of the duty to provide reasons is relevantly no different to that of a judge and the appellants cavil with the proposition that this could be described as undemanding or relatively undemanding.

The appellants also argue that the fact that the proceedings were expedited does not affect the obligation to give adequate reasons; that the rules of evidence do apply but that even if that is not the case the respondents had both an evidentiary onus and a persuasive onus; and that there is a vast difference between the role of the Land and Environment Court determining compensation in Class 3 (as a “judicial valuer”) and the Court’s functions in Class 8 (to determine an actual loss that has been or is likely to be incurred). The appellants say that the respondents were required to articulate the asserted loss and the primary judge was then to determine the compensation payable for that loss.

Further, the appellants cavil with the suggestion that their complaint is one about factual findings. Rather, they say that the primary judge appears to have rejected an approach to quantification of loss likely to be caused by impacts on management; conflated it with some general concept of inconvenience; and then provided for it in a lump sum (on an unexplained basis) and applied the lump to each of the ELs.

Judicial officers are bound by a general duty to give reasons for their decisions (see Flannery v Halifax Estate Agencies Ltd [2000] 1 All ER 373 (Flannery)). The duty to give reasons is a manifestation of the principle that not only must justice be done, but it must also be seen to be done (see Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 431 per Mason P). The duty is a function of due process, and thus of justice, insofar as fairness requires that the parties (particularly the unsuccessful party) should be left with no doubt as to why they were or were not successful (see Flannery at 377-378 and 381-382 per Henry LJ). One of the purposes served by a judicial decision (and thus of the obligation to give reasons) is that it enables the parties to see the extent to which their arguments have been understood and accepted (see Soulemezis at 279 per McHugh JA, his Honour then sitting in this Court)

In Soulemezis (where the trial judge had given no reasons) McHugh JA said that:

Further, McHugh JA noted that the extent of the duty to give reasons is related to the function to be served by the giving of reasons; that more elaborate reasons are required where legislation gives a right of appeal against a decision than where no appeal lies; and that in a case where a right of appeal is given only in respect of a question of law, different considerations apply from the case where there is a full appeal. It was there said that:

See also Mifsud v Campbell (1991) 21 NSWLR 725 at 728 per Samuels JA, with whom Clarke JA and Hope AJA agreed. There are no absolute rules as to the requirement that a judge give reasons (see Moylan v Nutrasweet Co [2000] NSWCA 337 per Sheller JA with whom Beazley JA (as her Excellency then was) and Giles JA agreed). A minimum requirement, however, is that the reasons be given in a form that will enable the losing party to understand properly the grounds on which the case was lost, and will not frustrate the losing party’s right of appeal (see Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 666-667).

In the context of appellate review of the adequacy of reasons, the function of an appellate court is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard (see Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 (Resource Pacific) at [48] per Basten JA). The standard is not one of perfection (see Bisley Investment Corporation v Australian Broadcasting Tribunal (1982) 40 ALR 233 at 255). Nevertheless, consideration of the content of the reasons is necessary in determining the adequacy of those reasons.

The observations of Fitzgerald P in Cypressvale Pty Ltd v Retail Shop Leases Tribunal [1996] 2 Qd R 262 at 477 (citing Strbak v Newton [1989] NSWCA 202) are, in this context, germane. There, his Honour said that while a tribunal

More recently, in Orr, at [65]-[66], Bell P said:

His Honour also referred (at [68]) to what was said in Wainohu v New South Wales (2011) 243 CLR 181; [2011] HCA 24 at [56] by French CJ and Kiefel J, as her Honour then was. His Honour noted that:

In the present case, ultimately, it is not necessary to enter into the debate as to the nature of the functions being exercised by the primary judge (although it is to my mind clear that her Honour was sitting as a judge (and exercising her judicial functions) when carrying out a review of the Arbitrator’s final determination in which capacity she was standing in the shoes of the Arbitrator albeit that her decision was to have effect as if it were the decision of the Arbitrator). That is because even if a lesser (and more undemanding) test were to be applied, the difficulty in the present case is as to the sufficiency of reasons for the quantification of compensable loss for the additional items of non-financial loss.

I consider that sufficient reasons were given for the finding that the impacts on management amounted to a compensable loss within the meaning of s 262 (see at [43]), in that what her Honour was clearly accepting was that management time would be diverted (or there would be interference occasioned in the management of the farm) consequent upon the fact that the appellants were present on the land and that was a loss that could not be measured simply by time spent in the handling of stock (cf Ex 9, which simply set out rates for the handling of stock and consultation).

What is less clear are the reasons for the finding of inherent damage to the surface of the land (see [44]) that being not loss otherwise compensated for by reference to the loss in the inability to graze the land. Ultimately, however, I consider that the reasons at [46] provide enough to demonstrate that what her Honour had in mind was damage to the fragile surface of the land (the cryptogamic crust) that would be inherent in the prospecting or mining operations and would not simply have the consequence of an inability to graze on the land. My view in this regard is reinforced by the fact that there was evidence before the primary judge (albeit admitted as Mr Lord’s opinion not as fact) as to the fragile nature of the land and concern as to erosion of the land.

While I consider that loss of amenity may well have been a compensable loss in its own right, on reflection I do not see the reasons as extending to such a loss and hence it is not necessary to consider this further. Nor do I see the reasons as encompassing any compensation for stress or distress.

I have concluded (see grounds 4 and 5 below) that the losses identified as to the impacts on management and the inherent damage are losses that would fall within sub-s (f) of s 262 of the Mining Act and are therefore compensable losses. The difficulty, as adverted to above, is that there is no identification of the lump sum amount of $20,000 per annum per EL that is attributable to each of those two categories of compensable loss. It is impossible to know how much of the lump sum was referable to the impacts on management and how much to the inherent damage (let alone how each was quantified). In this regard, I have some sympathy for the primary judge, in that her Honour appears to have been led into error in the fixing of a global sum by virtue of the fact that both parties adopted an arbitrary figure (see T 188.23-24); and the appellants did not appear to cavil with the proposition that their proposed $3,000 (ex gratia) payment was itself an arbitrary figure; yet complaint is now made as to just such an exercise being taken by the primary judge (and I accept the force of the respondents’ submission to the effect that the quarrel that the appellants have is the amount of the lump sum rather than the grant of a lump sum per se, though I note that there is also complaint as to a lack of reason for the fact that it is awarded on an annual basis per EL).

While I accept that her Honour did not accept the overall calculation in Ex 9, I am not persuaded that there was necessarily a wholesale rejection of Mr Ivey’s calculations (her Honour simply being of the stated view when considering the impacts on management that the loss went well beyond the time spent in the handling of stock). However, there is nothing to suggest how the ultimate figure was reached (by reference to Mr Ivey’s calculations or otherwise) and to the extent that the compensation for impacts on management related to additional work to be done by existing farm employees or their diversion from other tasks there might well be a question as to how to quantify that loss.

It is clear from Soulemezis that one needs to be able to discern the rationale of the relevant decision even if it not be necessary to spell the whole of the reasoning process out in tedious detail. True it is, that in Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768; [2003] HCA 10, it was made clear that in an evaluative decision all that is required in the calculation of damages is that the plaintiff prove its entitlement to damages with as much precision as the subject matter reasonably permits (the requisite level of precision being lower where the exercise is substantially evaluative) (see Hayne J at [37]-[38]). In such cases, Hayne J noted that it may well be the case that a plaintiff cannot adduce precise evidence of what has been lost. This may provide an explanation for the lack of expert evidence adduced by the respondents as to some of the aspects of the claimed losses (and the need for her Honour to determine the figure in a more global way). However, it is difficult in the absence of further reasons to understand how the calculation of compensation for those aspects of the compensable loss has been carried out; and I do not accept that it was sufficient for her Honour to nominate a global figure without explaining how it was reached. I accept that the primary judge made reference to the matters that had been taken into account in that regard (see at [53]) but the difficulty remains that it is not possible to ascertain how those matters resulted in the calculation of the lump sum figure for those aspects of compensable loss. In those circumstances, ground 6 has been made good.

By these grounds, the appellants contend that neither of the additional heads of compensable loss (what I have referred to as impacts on management decisions or inherent damage to the surface of the land) is compensable pursuant to the statutory scheme. To a large extent, however, these grounds appear to relate to the complaint as to inadequacy of reasons (as the appellants in their written submissions make clear at the outset when discussing these grounds).

In their written submissions, the appellants point out that, in order for the loss to be compensable, it must pass through the s 262 “gateway” and be assessed in accordance with cl 91 of the Mining Regulation. The appellants argue that there is no (and no adequate) explanation by the primary judge as to how either of the additional heads of loss can be said to fall within the statutory scheme. The appellants maintain that, in order to understand if either of the heads of loss is compensable, it must first be necessary clearly to identify the trigger for the assessment of compensation.

As to the “impacts on management”, the appellants say that as the management head is not referable to the additional time effort and cost incurred by management (on the basis that they say that this is already allowed for) then it must be for something else. The appellants argue that the additional compensation must be for some unquantified, and unquantifiable, emotional stress, or distress, upon management because of the carrying out of operations pursuant to the ELs; and that, if that is the approach to compensation adopted by her Honour, then it is not one which conforms to the statutory scheme.

Similarly, in relation to the “inherent damage” to the land, the appellants say that, to the extent the damage causes a quantifiable loss to the operation of a farm, that is already captured; and therefore this must be compensation for something else. The appellants say that it appears to be compensation for stress, or distress, caused to the respondents because of their attachment to the land and that, if that is the correct approach to an understanding of her Honour’s basis for the assessment of compensation, then again it is not one which conforms with the statutory scheme.

The appellants thus argue that neither of the additional heads of compensation arises upon a proper construction of the statutory scheme. They say that if the two additional heads of compensable loss do not accord with the statutory scheme, then it would be unnecessary for the matter to be remitted. Rather, the Court could: amend the access arrangement to include the ex gratia payment contained in cl 10.8 of the appellants’ version of the access arrangement; and provide for the payment of the additional management costs assessed in accordance with Ex 9, contained in cll 10.9 and 10.10 of the appellants’ version of the access arrangement.

That said, in the course of oral argument, the appellants quite fairly conceded that the language in s 262(f) (see above as extracted at [20]) is very broad and, accordingly, if, under s 262(a), there was damage to the surface of the land then it was conceivable that there could be a quantifiable loss (say for hurt or loss of amenity) that could be said to be damage consequential upon the damage to the surface of the land which would be capable of falling within the statutory scheme (in which case, for example, ground 5 would be rejected) (see AT 15; AT 26.25-44).

As to grounds 4 and 5, the respondents say that the primary judge provided a clear account of her findings on the “management head of compensable loss” and “damage head of compensable loss” (to use the appellants’ terminology) and that those findings were referrable to the statutory scheme under the Mining Act and sufficiently reasoned. They say that these findings were tied to the precise language of s 262 of the Mining Act.

As to the “management head of compensable loss”, the respondents say that the reasons at [43] pick up the statutory language of sub-ss (b), (e) and (f) of s 262 of the Mining Act (extracted at [20] above); indicating the precise sub-provisions (s 262 (b), (e) and (f)) under which the loss is identified. The respondents say that none of this involved any form of compensation for “emotional stress, or distress, upon management” (and that the appellants’ suggestion to the contrary is conjecture and not supported by her Honour’s reasons).

As to the “inherent damage” head of compensable loss, the respondents cavil with the proposition that “to the extent that the damage causes a quantifiable loss to the operation of the farm, that is already captured” and they reject the proposition that the compensation appears to be for stress, or distress, caused because of the respondents’ attachment to the land. The respondents say that the conclusions in [44]-[46] should be read against sub-s (a) of s 262 of the Mining Act (see as extracted at [20] above); and that the primary judge identified the basis on which she accepted the respondents’ submissions as to the damage (at [44]-[45]). It is noted that the primary judge then elaborates on her reasons for concluding that “compensable loss” will be “caused”, or is “likely to be caused”, by the identified “damage to the surface of the land” (s 262(a) of the Mining Act) by reference to the fragility of the land and it being subject to erosion at [46].

The respondents say that it is a mischaracterisation of the primary judge’s reasoning to read this as relating to some form of emotional “stress” or “distress”; and they say that the appellants identify no basis for asserting that her Honour’s reasoning misunderstood or misapplied the terms of the statute.

In my opinion (as indicated above) her Honour has provided sufficient reasons for the conclusion that the additional items of compensable loss fall within s 262 of the Mining Act (as set out in [43]-[46]), namely, that the prospecting or mining operations would be likely to have an impact on management decisions that would cause loss (in essence by reason of management having to make decisions having regard to the presence of the appellants on the land – and, it would seem, this diverting management or farm hands from work that would otherwise have been done or requiring more attention to tasks than would otherwise have been necessary; and that the prospecting or mining operations would be likely to cause damage to the fragile surface of the land (beyond causing a mere inability of sheep to graze on that land)) – and, it would seem, this damage (say by erosion) not being able readily to be rehabilitated.

I am also of the opinion that there has been no error in the conclusion so drawn by her Honour. The definition of compensable loss includes damage consequential on any matter referred to in paragraphs (a)-(e) of the definition; and hence consequential on any damage to the surface of the land (which could encompass the concept of inherent damage or damage per se as understood in the present case, i.e., damage to the cryptogamic crust or erosion (see T 43); as well as any damage caused by or which may arise from prospecting or mining operations or by the deprivation of the possession or use of the surface of the land (which could encompass the impacts on management arising by reason of the presence of the appellants on the land).

Hence, in my opinion grounds 4 and 5 are not made good.

Complaint is made that the primary judge has done “the best she could” to “synthesise” a lump sum, without disclosing the basis upon which that lump sum has been estimated; and that no evidence is relied upon in order to derive the lump sum or to determine whether that lump sum should be referable to each EL or a one-off payment.

It is noted that the primary judge rejected the respondents’ expert evidence at [50]; that Mr Ivey’s evidence did not address either of these topics; and that, to the extent the respondents’ lay evidence may have been able to provide some assistance (even though not relied upon by her Honour), for the assessment of compensation the respondents relied upon Mr Hopcraft.

As to the reference in [54] to the fact the exploration activity might take place 365 days per year, and also that a manager might be paid $50 per hour, the appellants say that the reasoning is opaque as to how that evidence may have been used in order to determine the lump sum. Further, it is noted that when Mr Ivey prepared Ex 9 he expressed the view that there might be “an extra hour every two or three months to take into account the activities, or to think about some of the issues”. The appellants say that although that evidence was implicitly rejected, there is no identification of the evidence relied upon for her Honour’s synthesis.

Thus, it is submitted that, by arriving at her conclusion in relation to the lump sum without making clear the evidence upon which her Honour was relying (if any), the primary judge has erred on a question of law.

As to ground 1, the respondents say that the “no evidence” ground requires that there is “not a skerrick” of probative evidence, citing Mason CJ in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33 at 356:

The respondents argue that analysis of the reasoning of the primary judge at [53]-[54] demonstrates that the high bar necessary to make out the “no evidence” ground is not met. It is said that the primary judge clearly indicated that the lump sum upon which she settled was based on an evaluative exercise “doing the best [her Honour] can with the evidence that is before [her]” (at [53]).

The respondents say that evidence identified by the primary judge as being relevant to the conclusion that an annual lump sum payment should be payable comprised “the nature, quality, area and particular characteristics of the Land, together with the use of the Land for grazing purposes, the Prospecting Operations, and the periods on which Cobalt will have the right under the Access Arrangement to enter upon the Land” (at [53]); and that the evidence identified by the primary judge as being relevant to the quantum of such compensation comprised: the appellants’ entitlement to access the land for 365 days of the year; “the time that the landholders will need to expend each day in their farming activities to account for the presence of Cobalt on the Land”; “the award wage for a farm manager of $50/hour together with potential additional costs for vehicle and equipment, together with other wage costs for farm hands”; and “the extent of damage to the Land caused by the creation of tracks, the continuation of use of existing tracks and the drilling locations in the context of the totality of the Prospecting Operations that Cobalt has identified in its works program” (at [54]).

It is submitted that the lump sum arrived at represents a synthesis of these identified evidentiary factors, which were plainly more than a “skerrick”. In reply to this, the appellants submit that the approach that her Honour’s task involved a synthesis was flawed. The appellants say that if the reasons did expose the process by which the $20,000 annual lump sum per EL was derived then there might be a skerrick of evidence for one, or some, of the steps in that process, but their complaint is that there is not a skerrick of evidence for the ultimate finding (i.e., the $20,000 annual lump sum per EL).

The respondents also say that there was evidence of impacts other than the effect of deprivation of the surface of the land on the carrying capacity of Thackaringa Station; that the primary judge dealt with these impacts in the judgment (rejecting some of the impacts identified by Mr Hopcraft (at [39]) because they fell outside the elements of s 262, but accepting the remaining matters he identified fell within s 262 because they arose as a result of the carrying on of exploration activities). It is said that they were thus impacts that arose (or may arise) from damage to the surface of the land, or to vegetation, as a consequence of mining activities within s 262(1)(a). The respondents say that the effect of the use of the tracks, although not specifically identified in the judgment, falls within s 262(1)(d) as damage caused by, or as a consequence of, the surface tracks necessary to conduct the exploration activities. In those circumstances it is submitted that it was necessary for the primary judge to address those matters and make a determination as to compensation (see their submissions in relation to ground 3 below).

Strictly speaking, it may not be necessary to address this ground since it is bound up with ground 6 which has been determined above. Suffice to say that I do not accept that there was a total absence of evidence to support the finding that the so-called non-financial losses should be compensated by way of a lump sum per annum of the kind ordered (there was, at the very least, evidence from Mr Hopcraft as to the impact on management issues which, coupled with Mr Ivey’s calculation of hourly rates, provided some basis for calculation of an amount of compensation – although that exercise was not sufficiently explained in the reasons). Although there was Mr Lord’s evidence as to the likelihood of damage to the surface of the land, I accept that there was no evidence of what the cost of remediation of, say, erosion or leakage from the cryptogamic crust would be. The real difficulty was the absence of reasons to demonstrate how those impacts sounded in a lump sum amount as ordered (as has been discussed above). Thus, while I would be inclined to the view that ground 1 was made good in relation to the aspect of compensation for inherent damage, nothing turns on this until the primary judge’s reasoning process has been more fully articulated.

By appeal ground 3, the appellants contend that they were denied procedural fairness by not being given notice of an intention to value non-financial losses in a manner and with an outcome materially different to the evidence advanced by the parties.

The appellants complain that the primary judge’s approach to adopt a lump sum payment of compensation for the two new heads of loss was not based upon any submissions of the parties; and they say that the parties were not given the opportunity to address whether the approach was available at all and, if it was available, how the court should approach it.

It is submitted that if the court was to embark upon this approach to the assessment of compensable loss being one that was different to the case run by each of the parties, not supported by the evidence nor by any submissions, the court should have invited the parties to address upon it.

The appellants say that the denial of procedural fairness is a material one, pointing out that the lump sum payment forms the most significant component of the assessed compensation (by a very considerable margin). The appellants say that the denial of procedural fairness amounts to an error of law.

As to ground 3, the respondents say that there was no denial of procedural fairness in the primary judge’s adoption of a lump sum payment of compensation, pointing out that: the question of a lump sum payment was ventilated during the hearing and addressed by the respondents in submissions; that Mr Ivey advanced the concept of a nominal lump sum for compensation; and the respondents made submissions about the elements of any amount of compensation involving a lump sum amount. The respondents say that the parties were provided with adequate notice of the possibility that the primary judge might adopt a lump sum approach.

The respondents submit that the effect of the primary judge’s finding as to the consequential damage was that the appellants’ proposed compensation payment (based only on the loss of use of the surface area of actual activity) did not address important consequential impacts of the exploration activities on Thackaringa Station; and (as noted above) that the primary judge was bound to address these matters in performing the statutory obligation to determine compensation. It is submitted that the alternative (canvassed in argument at T 172.16-49 and T185.37-47), was that the inability to make a determination on the amount of compensation would require the court to dismiss the application (and it is noted that the appellants did not embrace that possibility).

It is noted that Mr Hopcraft referred in his report to the management issues (and the respondents say that it cannot be said that there was no opportunity to address those issues).

The respondents point out that the appellants argued that the way in which the loss would be assessed would be to “identify from Mr Lord’s evidence what it is that the non-monetary disadvantage is that he is suffering and then look at the reasonableness of that in the context of the Act and the particular circumstances that are set out in the factors in Clause 91 of the Regulation”.

Emphasis is placed on the exchange between the primary judge and counsel for the appellants (at T 186.16-18) in which the primary judge raised the possibility that it might be determined that there was a loss caused by the fact that the appellants would be occupying land that would otherwise be available to the respondents (albeit not for financial gain) but simply because it was their land and queried whether, if that factual finding were to be made, Counsel was suggesting that her Honour “would then pick a number that is reasonable” having regard to the factors in cl 91 of the Mining Regulation. Her Honour posed the question as to what was to be done if Mr Ivey’s purely financial costs approach were to be rejected; and whether she could “come up with a figure” higher than that put forward by Mr Hopcraft (see T 186.18-21).

Significantly, there was no suggestion that the primary judge could not do so because there was no evidence; nor was it said that there was no opportunity to address this. Rather, Counsel for the appellants said that she did not think that there was an end number but that it needed to be a number referable to a number of factors and that the $3,000 figure, going through those factors, was a reasonable number in the circumstances. The respondents say that this is the very approach that her Honour ultimately took (although not accepting the appellants’ arguments as to quantum). In those circumstances, it is submitted that the appellants cannot argue that they did not have a fair opportunity to address the possibility of a lump sum claim, or its quantum.

As to this last submission, in reply submissions, the appellants emphasise that their complaint is that the award of compensation for two new heads of loss as part of an annual lump sum per EL was neither based upon the submissions of the parties, nor upon the evidence led by either of them. The appellants argue that the fact that a lump sum was raised during the hearing does not assist the respondents. The appellants say that the primary judge was asking questions in relation to the existing heads of compensation that the parties had addressed (in both evidence and submissions) and raising the concern as to what was to be done if both experts’ evidence was rejected. The exchange between the primary judge and Counsel for the appellants (on which the respondents rely) did not raise for consideration the possibility of an annual lump sum per EL for two new heads of compensation and thus the appellants maintain that they were denied procedural fairness.

The difficulty for the appellants on this submission is that the issue of how compensation was to be determined was squarely raised in submissions during the hearing and it is accepted by the respondents (see at T 31.5-11) that they were given the opportunity to address upon the lump sum (albeit in the context of the ex gratia payment they had proposed). However, the appellants say that their complaint as to the denial of procedural fairness is more nuanced; and that it relates to the two additional grounds or heads of compensation – as to which the appellants maintain that they did not have the opportunity to address whether those heads of compensation were available or how they were to be calculated; and that her Honour then came up with a higher global number (without explanation of how that was quantified).

As noted above, Mr Hopcraft had referred in his report to management issues; and Mr Lord had given evidence as to concern in respect of damage to the fragile surface of the land. It cannot therefore be said that the appellants were not on notice of those aspects of the loss that the respondents were contending had been caused in addition to the financial loss. Moreover, her Honour raised these issues in submissions with Counsel and there was no complaint as to an inability to respond to them; nor any suggestion that it would be necessary to adduce evidence as to the figure to be adopted – rather, there was in effect simply an insistence that the figure proffered by the appellants (the one-off $3,000 payment) was a reasonable figure. Tellingly, in the course of an exchange as to whether the figure was an arbitrary one, her Honour made the comment that both Mr Hopcraft and Mr Ivey appeared to have “just picked a number”, that is, that both the figures provided appeared arbitrary (see at T 188.23-24); and there was no suggestion that there would be any lack of procedural fairness if her Honour proceeded to apply her own assessment as to a reasonable lump sum in those circumstances.

Gaudron J in Re Association of Architects of Australia; Ex parte Municipal Officers Association of Australia (1989) 63 ALJR 298, at 305, said that:

In Chaina v Alvaro Homes Pty Ltd [2008] NSWCA 353 at [3], Giles JA said:

In the circumstances, in my opinion there was no denial of procedural fairness (and ground 3 is not made good) but in any event nothing turns on this given the conclusion reached in relation to ground 6, namely that the matter should be remitted on the determination of the compensation payable for the additional aspects of compensable loss identified by the primary judge. The appellants will no doubt have the opportunity there to address the calculation of those amounts.

Finally, I note that the appellants submit that if (as is the case) grounds 4 and 5 are not made good, then it will be necessary for the decision to be set aside and the matter remitted. The appellants say that, in the particular circumstances of this case, the matter is one appropriate for an exclusionary remitter (i.e., that the matter be remitted with a direction that the matter is not to be heard by the primary judge).

It is noted that this Court’s power on the hearing of an appeal under s 57(2) of the LEC Act is to remit the matter to the primary judge for determination in accordance with the decision of this Court or to make such other order in relation to the appeal as seems fit. The appellants say that the broad power in s 57(2)(b) permits an exclusionary remitter to the Court below so the proceedings are remitted to a judge (other than the primary judge) or to a Commissioner that meets the qualifications in s 33(2A) of the LEC Act.

In the appellants’ submission, an exclusionary remitter is appropriate if either or both of ground 1 or ground 3 succeed(s) because the primary judge has already expressed a clear view that a lump sum per annum per EL payment should be payable. The appellants do not suggest that there would be any concerns about actual bias but they submit that, having regard to the approach already adopted by her Honour, a reasonable person might think that her Honour might not bring an impartial mind to the matter upon remitter; and that, in those circumstances, an exclusionary remitter is appropriate. Further, in relation to the denial of procedural fairness ground, it is submitted that if there was a denial, that circumstance is one which would give rise to an exclusionary remitter.

The Court’s power to remit a matter to a different judicial officer is to be exercised sparingly, and by reference to the interests of justice in the particular case (see Aloi Holdings Pty Ltd v John Nominees Pty Ltd [2019] WASC 270 (S) per Quinlan CJ at [14]). The “interests of justice” relevant to this exercise include the appearance of justice (see McKay v Commissioner of Main Roads [2013] WASCA 135 at [362] per Murphy JA, Martin CJ and Buss JA, as his Honour then was, agreeing). This necessarily involves the existence of a broad discretion.

In Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518; [2003] HCA 11 Kirby J (at 556), opined that a direction to remit to a fresh decision maker:

Considerations bearing upon the exercise of that broad discretion were the subject of exposition by Mason P in Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208 (Seltsam), in which his Honour said (at [12]-[16]):

In that case, Basten JA dissented, expressing caution with respect to the exercise of the discretion to remit a matter to a different judicial officer. His Honour said (at [239]):

As to Basten JA’s dissent, Ipp JA said the following (at [142]):

While the Full Federal Court in Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39 took the contrary view as to the need for caution in remitting a matter to a different judicial officer (see at 42 per Davies and Foster JJ), I consider the view taken by this Court in Seltsam to be preferable as to the caution to be shown.

In Caratti v Mammoth Investments Pty Ltd (No 2) [2018] WASCA 6, the Court (Buss P and Murphy JA) held (at [125]) that the application that a matter be remitted to a judge other than the primary judge involves the proposition that the primary judge is disqualified from continuing to hear the action on the ground of apprehended bias, and that therefore such bias must be demonstrated.

Insofar as the appellants raise the issue of apprehended bias, the test is well-known (whether a fair-minded lay observer might reasonably apprehend that the judicial officer might not bring an impartial and unprejudiced mind to the resolution of the question that he or she is required to decide). The application of this test requires: first, identification of what it is said might lead the decision-maker to decide a question other than on its merits; and, second, articulation of the logical connection between the matter identified and the feared deviation from the course of deciding the question other than on its merits (see Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 at [16], confirmed by the High Court in Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 (Michael Wilson) at [31]).

All the relevant circumstances of the particular case may be taken into account in applying the test, though only such knowledge of matters of legal or other specialist practice and process as can reasonably be attributed to the lay observer (including, perhaps, matters of which the observer would inform him or herself before reasonably forming any firm apprehension) will be taken into account (Vakauta v Kelly (1989) 167 CLR 568; [1989] HCA 44 at 584-585 per Toohey J; Najjar v Haines (1991) 25 NSWLR 224 at 239-240 per Rogers JA). (See also Webb v The Queen (1994) 181 CLR 41; [1994] HCA 30 at 47; Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507; [2001] HCA 17 at 541.)

Relevantly, for present purposes, appellable error is not of itself grounds for an apprehension of bias (see Michael Wilson, where the suggestion that the making of an erroneous finding might be evidence of the “thing” that might be said to lead the Court into error was seen as involving fallacious reasoning – see at [67] per Gummow A-CJ, Hayne, Crennan and Bell JJ). In the present case I am not persuaded that the fact that the primary judge reached the conclusion that a lump sum amount was the appropriate compensation for the “non-financial” compensable loss is something that would lead a fair minded observer reasonably to conclude that her Honour might be unable to perform her judicial task on the remittal of the matter when considering any further submissions and providing further reasons for that or any other conclusion that her Honour might then reach as to the compensation amount.

Bearing in mind that the issue on which the matter is to be remitted is as to adequacy of reasons and the caution with which the discretion to remit a matter to a different judge is to be exercised, I am of the view that the matter should not be remitted to a different judge. Rather, any deficiencies in the reasons of the primary judge can be rectified by the remittal of the matter to the primary judge for further consideration and the provision of additional reasons. Indeed, such was the relief granted in, inter alia, Dadashy v Scholte [2021] VSC 246 per Gorton J; Husband v Public Guardian [2016] NSWSC 1720 per Slattery J; and Supple v Building Appeals Board [2015] VSC 83.

Finally, I consider that the overriding statutory mandate for the just, quick and cheap resolution of the real issues in dispute (see s 56 of the Civil Procedure Act 2005 (NSW) reinforces the above conclusion and provides a compelling reason for the matter to be remitted to a judge with a familiarity with the issues involved in the matter (i.e., the primary judge) particularly where the access arrangement is, as I understand it, already in operation and it is undesirable that the issue of compensation for compensable loss remain unresolved.

As to costs, the respondents indicated at the hearing that they would seek to be heard on costs regardless of the outcome of the appeal and that they considered that this could be addressed by short written submissions once the reasons were delivered. The appellants acceded to that course. Accordingly, costs will be reserved and directions will be made for the filing of brief written submissions on costs with a view to that issue being determined on the papers.

For the above reasons I propose the following orders:

MITCHELMORE JA: I have had the advantage of reading Ward P’s judgment in draft. I agree with the orders that her Honour proposes and with her Honour’s reasons.

KIRK JA: I agree with Ward P.