Mangoola Coal Operations Pty Limited v Muswellbrook Shire Council

1. [1]

   BELL P: I agree with the reasons of Macfarlan JA and the additional observations of Brereton JA.

2. [2]

   MACFARLAN JA: For the rating years 2016/17 and 2017/18 the respondent Council categorised two parcels of rateable land in its Local Government Area owned by the appellant company (“Mangoola” or “the Company”) as mining land. As the parcels had previously been designated as farmland, the rates payable by Mangoola were substantially increased. Mangoola’s appeal to the Land and Environment Court (“LEC”) was rejected by a judgment of Moore J of 11 June 2020 ([2020] NSWLEC 66). Mangoola then appealed to this Court under s 57(1) of the Land and Environment Court Act 1979 (NSW) on questions of law in relation to which it alleges that the LEC erred in its decision concerning the larger of the two parcels.

3. [3]

   In its written submissions on appeal Mangoola contended that there were three “fundamental defects” in the LEC’s reasoning.

   1. (1)

      The LEC failed to have regard to the fact that in the rating periods grazing activities on the subject parcel were “significantly subdued” due to an extended drought.

   2. (2)

      The LEC erroneously treated the existence of an easement for an underground water pipe and above ground electricity supply over the subject parcel to an adjacent mine as requiring characterisation of the parcel as mining land.

   3. (3)

      The LEC erroneously attached significance to the presence on the subject parcel of air quality, dust, noise and other monitoring devices and detectors which were installed for the adjacent mine and erred in treating parts of the subject parcel reserved for environmental or conservation reasons as favouring categorisation of the subject parcel as mining land.

4. [4]

   For the reasons given below, Mangoola’s appeal should be allowed. Both parties agreed that in these circumstances the proceedings should be remitted to the LEC for redetermination.

RELEVANT PROVISIONS OF THE LOCAL GOVERNMENT ACT

1. [5]

   The following provisions of the Local Government Act 1993 (NSW) are of relevance to the appeal:

THE PARCELS OF RATEABLE LAND

1. [6]

   The land in question surrounds an open-cut coal mine operated by Mangoola and is situated some 18 kilometres to the west of Muswellbrook in the Hunter Valley in New South Wales. As a result of the aggregation process permitted by s 26 of the Valuation of Land Act 1916 (NSW), there were two rateable parcels adjoining the mine that were required to be categorised by the Council by reference to their dominant use in the relevant years.

2. [7]

   The larger parcel had an area of approximately 6,617 hectares in the 2016/17 assessment year and 6,581 hectares in the 2017/18 assessment year. The smaller parcel, which is not a subject of the present appeal, had an area of approximately 727 hectares in the earlier year and 578 hectares in the later year.

3. [8]

   In the relevant years the two parcels were subject to an access licence agreement between Mangoola and Colinta Holdings Pty Ltd (“Colinta”), a cattle-grazing enterprise operating at a number of locations in Australia. The primary judge described these locations as ones “generally (if not exclusively) on lands in the vicinity of coal mines operated by Glencore, the parent company to the Company [Mangoola] and to Colinta”.

4. [9]

   The access licence agreement in force in the relevant years was dated 7 September 2012. It granted Colinta a licence to access the two parcels and other adjoining land owned by Mangoola (“Mangoola Station”) for the purposes of “[c]arrying on a primary production business of agistment of cattle and other livestock (and incidental uses such as production of hay and/or silage) and occupying the residential premises on the [p]roperty” identified in the agreement. It referred to agricultural improvements on the property, including cattle yards, irrigation pumps, horse yards, loading race sheds, wells and irrigators.

5. [10]

   Mangoola submitted that the evidence established that in 2016 Colinta grazed between 1,182 and 1,132 cattle on Mangoola Station with 1,113 to 916 grazed in 2017 and 830 to 650 grazed in 2018.

THE PRIMARY JUDGMENT

1. [11]

   The primary judge examined the use of the larger parcel by reference to three different sections of it, stating that in doing so he adopted a submission made by counsel for Mangoola that the dominant use of rateable parcels of land may differ between different parts of them.

2. [12]

   To this end, his Honour identified the following three different sections of the larger parcel:

   1. (1)

      “The various offset areas within the larger assessment parcel;

   2. (2)

      The land within the Colinta access licence area located generally to the north of Wybong Road (and called, by Mr Hinze [the manager of Mangoola Station], the Wybong lands) … and

   3. (3)

      The areas which are the subject of the Colinta access licence which are generally to the east and south of the principal mining lease area (ML1626 within which the Company’s active coal extraction operations are taking place).” (At [326]; emphasis added.)

The First Section – the offset areas

1. [13]

   His Honour’s reference to the “offset areas” was to areas of the larger parcel, totalling in the order of 1,697 hectares (that is, approximately 25% of the area of the larger parcel), required by the project approval given for the adjacent mine under Part 3A of the Environmental Planning and Assessment Act 1979 (NSW) to be set aside and used as Aboriginal Cultural Heritage Offset and Habitat Enhancement Offset areas.

2. [14]

   His Honour concluded that the “purpose served by [the uses of the offset areas required by the project approval] is satisfaction of the conditions permitting the Company’s coalmine to exist. Consistent with [Peabody Pastoral Holdings Pty Ltd v Mid-Western Regional Council [2013] NSWLEC 86; (2013) 211 LGERA 337], they are uses for the purpose of the coal mine”. His Honour thus concluded that the only relevant use of the offset lands was that which was “mandated by the relevant conditions and incorporated documents from the Company’s consent to conduct its coal mine” and that there was no evidence of any other use.

3. [15]

   Having referred to Council of the City of Newcastle v Royal Newcastle Hospital (1957) 96 CLR 493; [1957] HCA 15 and Shire of Perth v O’Keefe (1964) 110 CLR 529; [1964] HCA 37, his Honour continued:

The Second Section – the Wybong lands

1. [16]

   His Honour said that, as indicated by Mr Hinze’s oral evidence, the Wybong lands comprised paddocks of Mangoola Station numbered 20 to 26. They constituted approximately 25% of the area of the subject parcel as a whole. After considering Mr Hinze’s evidence, his Honour concluded at [411] that during the relevant assessment years “Colinta did not use the Wybong lands for grazing purposes” and continued:

2. [17]

   In concluding that Colinta did not use the Wybong lands for grazing purposes, his Honour was of the view that Mr Hinze ultimately reverted “to the position of adopting the accuracy of [49] of his affidavit”, despite having taken some steps away from it in his cross examination. This paragraph of the affidavit is in the following terms:

3. [18]

   Immediately after quoting paragraph [49], his Honour referred to cross examination in which Mr Hinze accepted that “Wybong grazing is broadly speaking paddock 20, 21, 22, 23, 24, 25 and 26”, that is, not simply the three paddocks referred to in paragraph [49].

4. [19]

   His Honour went on to refer to mine-related activity that occurred on the Wybong lands in the relevant years. First he referred to the presence on the lands of monitoring equipment and the maintenance of, and data harvesting from, that equipment. Secondly, he referred to some mining exploration activity and concluded:

The Third Section – access licence areas to the east and south of the mine

1. [20]

   The Third Section constituted approximately 50% of the total area of the subject parcel. In considering this Section, his Honour again referred to the impact of the drought on Colinta’s grazing activities. He referred to what he said he had concluded “was the abandonment by Colinta of grazing in the Wybong lands during each of the relevant years” (emphasis added). His Honour had not however earlier used the word “abandonment”, or any derivative of it, to describe what Colinta had done. Rather, he had simply concluded that in the relevant years Colinta “did not use the Wybong lands for grazing purposes” (see Judgment [411] quoted in [16] above).

2. [21]

   His Honour then quoted, and implicitly accepted, the following parts of Mr Hinze’s affidavit evidence which referred to the impact of the drought on Colinta’s grazing operations generally (at [452]):

3. [22]

   His Honour then reached the following conclusions concerning the use of the Third Section, that is, the eastern and southern area:

4. [23]

   His Honour’s reference to the “water and electricity supply uses” in the 2016/17 year and their “removal” in the following year was to the facts that in the earlier year, but not in the second year, the Third Section had included land subject to the easement for an underground water pipe and above ground electricity supply to the adjacent mine (see [3(2)] above).

5. [24]

   In the 2017/18 year, the land subject to the easement was part of the smaller parcel (which is not a subject of the present appeal). In dealing with that parcel, his Honour had said the following:

6. [25]

   His Honour had earlier explained that although “the intensity of Colinta’s activities for grazing purposes was diminished” because of the drought, the use of the eastern and southern areas [the Third Section] for those activities, when taken with Colinta’s limited cropping activities, constituted a significant use.

Overall conclusions as to the larger parcel

1. [26]

   His Honour stated the following overall conclusions:

GROUNDS OF APPEAL

1. [27]

   Mangoola relied upon the following grounds of appeal:

Grounds 1 and 2 – failure to take account of the drought and finding that no grazing occurred on the Wybong lands

1. [28]

   The primary judge found that there were “no grazing activities on the Wybong lands during the relevant years”, the “Wybong lands” comprising paddocks 20 to 26. His Honour concluded that this was the effect of Mr Hinze’s evidence after a detailed consideration of Mr Hinze’s both affidavit and oral evidence. That evidence contained some ambiguities and inconsistencies, but was not in my view so plainly inconsistent with his Honour’s finding that it could be said that the finding was not open. In these circumstances, Mangoola’s challenge to the finding, made through Ground 2, raises only a question of fact, that is, although the finding was open to be made, was it correct? As its right of appeal is limited to grounds concerning questions of law, Ground 2 should be rejected.

2. [29]

   Ground 1 is not limited in terms to Colinta’s use of the Wybong lands (the Second Section). The issue that it raises is relevant also to the primary judge’s consideration of the Third Section of the larger parcel, that is, the access licence areas to the east and south of the mine. Its significance on appeal in relation to the Third Section is less than in relation to the Second Section because his Honour accepted that the former was used for grazing activities during the relevant years, albeit that they were not the dominant activities in the 2016/17 year.

3. [30]

   The primary judge treated his conclusion that Colinta did not graze cattle in the Wybong paddocks in the relevant years as dictating the conclusion that they were not able to be classified as “farmland” for the purpose of s 515 of the Act. His Honour accepted that the absence of grazing in the relevant years, as distinct from what occurred in earlier years, was due to the drought in the region, which dried up water sources and resulted in a lack of pasture. He did not however treat this causative factor as of any significance. Ground 1 challenges that approach.

4. [31]

   It should be noted that in dealing with the Third Section of the larger parcel, the primary judge, as I have earlier noted (see [20] above), referred to an earlier conclusion he reached concerning the Wybong lands that there was an “abandonment by Colinta of grazing” (emphasis added). His Honour had not however earlier gone this far in his reasoning. “Abandonment” refers to an intended permanent cessation of a relevant activity. Mr Hinze’s evidence did not support a conclusion that this occurred in relation to cattle grazing on the Wybong lands. On the contrary, his evidence referred to the reduction or cessation of grazing in parts of Mangoola station as part of the necessary “rotation of pastures generally”. He said that “[t]his is to allow for the regrowth of pasture contained within the paddocks and is dependent [on] the seasonal conditions and rainfall”, and said that “severe drought over the period 2016 to 2019” limited the amount of pasture and water in some paddocks and consequently limited Colinta’s ability to use them for grazing. He did not give evidence that grazing on the Wybong lands was intended to cease permanently, nor was that suggested to him.

5. [32]

   Consistently with this evidence, the primary judge found that in the Third Section (the south and east areas) the “intensity of Colinta’s activities for grazing purposes was diminished” because of the drought but did not find that they had ceased (or had been abandoned).

6. [33]

   On appeal, Mangoola submitted, as it had in the LEC, that it was important in determining categorisation for a rating year to have regard, as it said the primary judge failed to do, to uses of the land “before and after the rating year”. Authorities relied on by Mangoola included the following.

7. [34]

   In Longford Investments Pty Ltd v Commissioner of Land Tax (NSW) (1978) 8 ATR 656; 78 ATC 4264, the issue was whether as at the relevant date, which was 31 December 1974, the subject land was exempt from land tax because it was used for primary production. In his judgment Sheppard J described the activities on the land in the approximate 4 years prior to the relevant date during which the plaintiff had owned it. His Honour then said that “the facts here must be looked at as they were in or about the latter months of 1974 and the earlier months of 1975” and continued:

8. [35]

   In Saville v Commissioner of Land Tax (1980) 12 ATR 7; 81 ATC 4373 (“Saville”), the issue was whether the subject land was being used for primary production as at 31 December in each of four relevant years. Roden J held that it was not. Having referred to the expression “land used primarily for” in the relevant legislation, his Honour continued at 11:

9. [36]

   In Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue (2010) 79 NSWLR 724; [2010] NSWSC 867 (“Leda Manorstead”) there was again an issue of whether certain land was exempt from land tax because it was being used for primary production at the relevant date. On that date there were between 268 and 279 cattle depastured on the land. However, the owner of the land then intended to develop the land as a residential subdivision and had expended $12.4 million on earthworks for that purpose. In rejecting the owner’s appeal against the Commissioner’s rejection of the claim for exemption from the applicable land tax, Gzell J referred to the number of cattle depastured on the property on the relevant date as between 268 and 279 and added:

10. [37]

    In another decision concerned with the primary production exemption in respect of land tax, Rainn Pty Ltd v Commissioner of State Revenue [2016] VSCA 338 (“Rainn”), the Victorian Court of Appeal endorsed the approach in the court below of considering whether inactivity on the subject land at the relevant date “could nevertheless be shown to have been connected to any prior or subsequent activity, such that the land could still be said to have been ‘in use’ at the assessment date” (at [34]; emphasis added) and continued:

11. [38]

    Chief Commissioner of State Revenue v Metricon Qld Pty Ltd [2017] NSWCA 11 was yet another case concerned with the primary production exemption from land tax. In the course of examining the meaning of the word “use” in the legislation, Barrett AJA (with whom Ward JA and I agreed) said:

12. [39]

    In its written submissions in the present case, the Council accepted that the “[u]se of the assessment parcel in prior years… was never examined by the primary judge” and that the authorities referred to above “describe how some of the fact finding could have been approached” (emphasis added). It submitted however that that was “only one available approach” and that “[w]hether to put any weight on the use of the land before and after the relevant periods was a matter for the primary judge”. Apart from submitting that the decision in Leda Manorstead was expressly limited to its facts and that in that case Gzell J treated the determination of “use” as “a question of fact and degree”, the Council did not engage with the authorities to which I have referred.

13. [40]

    Those authorities in my view indicate, for sound reasons, that in a land tax context, where the issue is use on a particular day, that what occurred on that day cannot sensibly be looked at in isolation from what had previously occurred on the land and what could be inferred was intended to occur after the particular day. The necessity for the broad approach is particularly obvious when the use on only one day is in question. The underlying principle is however no different where, as here, use in a longer period, such as a year, is in issue. No doubt, the period for which use is to be determined may in some circumstances be so lengthy that a “before and after” approach is of little assistance. That was not however so in relation to the two separate years in question in the present case.

14. [41]

    As indicated by Roden J in Saville, there may be many reasons why a hiatus in activity on land may not indicate that a prior use has ceased. His Honour gave examples such as an owner leaving land to lie fallow before and after periods of cultivation and chance occurrences (such as disease) requiring replacement of grazing stock. His Honour contrasted those examples with a situation “in which a person gives up a particular use of the land for a period for a reason, with the intention of resuming it at a later date”. In this last instance, it would, as his Honour indicated, be difficult to conclude that the relevant use was made of the land in the subject period.

15. [42]

    The evidence in the present case did not suggest that there was any reason other than the drought for grazing not occurring on the Wybong lands in the relevant years. It followed that, in the absence of any evidence indicating otherwise, it could be, and should have been, inferred that grazing was intended to be resumed when the drought eased. The Council did not submit the contrary. Evidence of abandonment of the prior years’ use would dictate a different conclusion but, as I have said, there was no such evidence. The primary judge’s use, late in his judgment, of the word “abandonment” when describing his earlier finding concerning the absence of cattle grazing on the Wybong lands in the two assessment years was not a considered, separate finding and was not relied upon by the Council on appeal as a finding of abandonment.

16. [43]

    In these circumstances, the primary judge in my view erred in not taking into account the grazing use of the Wybong lands in prior years and what could be inferred from the evidence as to their intended use after those years. It was not, as the Council contended on appeal (see [39] above), simply an option open to his Honour to consider the two years in their context, without him being required to do so. His Honour’s failure to consider the years in their context led him to misapply the statutory requirements as to the determination of dominant use and therefore gave rise to an error of law.

17. [44]

    Alternatively, on the facts as established in the LEC it was unreasonable, and therefore not open, for his Honour to hold that there was no use of the Wybong lands for farming in the relevant years (Hope v Bathurst City Council (1980) 144 CLR 1 at 10; [1980] HCA 16).

18. [45]

    Ground 1 should therefore be upheld but that finding in Mangoola’s favour only goes part of the way towards it obtaining a favourable decision on the rating issue. Whether farming, as distinct from mining, was the dominant use of the Wybong lands in the relevant period remains to be considered in the context of the other grounds of appeal. In any event, I note that there remains a matter not determined by the primary judge which would have to be determined on remitter to the LEC before a finding that farming was the dominant use could be made. That is the question of whether the conditions stated in s 515(1)(a) and (b) (see [5] above) were satisfied. His Honour specifically noted that he did not determine that question.

Grounds 3 and 4 – the easement for utilities

1. [46]

   I have described at [23] and [24] above the easement to which portion of the Third Section (the east and south areas) of the larger parcel was subject in the 2016/17 year. As I have noted, the land subject to the easement became part of the smaller parcel (with which this appeal is not concerned) in the 2017/18 year.

2. [47]

   In considering the smaller parcel, the primary judge referred to the pumping station and pipeline for water situated on that part of the easement which traversed the smaller parcel as “essential to permit the Company’s mine to function - no water from the Hunter River, no mine!”. He expressed the same view in respect of the transmission line over the easement which supplied electricity to the mine. His Honour then said that he attached “great” weight to the use of the easement for water and electricity supply in considering the dominant use of the smaller parcel. His Honour said that Colinta’s right to graze cattle on the surface of the easement was “interrupted only to a trifling extent by the presence of the various power poles and concrete access portals to the water supply pipeline” (emphasis added) but that “is of limited utility in offsetting this coal mine use”. He then reiterated that “the use of this easement for the purposes of supplying services to the coal mine, without which it would not be possible for the mine to operate, is a significant factor” in determining the smaller parcel’s dominant use, which he found to be mining.

3. [48]

   Consistently with this reasoning, the primary judge treated the mine’s use of the easement as of considerable significance in categorising the dominant use of the Third Section of the larger parcel, that is, the land to the east and south of the mine. His Honour seemingly regarded the mine’s use of the easement as determinative of the dominant use of this Section in both assessment years. In respect of the 2016/17 year, when the Third Section included the land subject to the easement, his Honour found that the coal mine usage of the area was greater than the farming use. For the subsequent year, when the easement land did not form part of the Third Section, he concluded that farming was the dominant use.

4. [49]

   Mangoola submitted on appeal that by reasoning in this way the primary judge “asked the wrong question, namely the importance of the subject parcel to the adjacent mine and in doing so made an error of law”. It referred to evidence that less than 1% of the larger parcel was used “for mining infrastructure of any kind (including the Hunter River Pipeline)” and submitted that the primary judge’s error was “akin to characterising and rating a suburban residential lot on which a dwelling stands as ‘business’, because there is a shop next door that enjoys a drainage or water supply easement over it”.

5. [50]

   In response, the Council submitted that his Honour’s observations concerning the easements “did not critically inform his conclusion” concerning the dominant use and that “[a]n activity on an assessment area may, in quantitative terms, only occupy a small parcel of it but, in qualitative terms, may be fundamental in determining the dominant use”.

6. [51]

   In Peabody Pastoral Holdings Ptd Ltd v Mid-Western Regional Council [2013] NSWLEC 86; (2013) 211 LGERA 337 at [77], Preston CJ said the following concerning the expression “for a coal mine …” in s 517(1):

7. [52]

   Accepting the correctness of this approach, as I do, it follows that land that is not itself a “mine” within the meaning of the Dictionary to the Local Government Act may, in whole or in part and whether dominantly or otherwise, nevertheless be used “for a coal mine or metalliferous mine” as referred to in s 517(1). Accordingly, the use by the adjacent mine in the present case of the easement over Mangoola’s land for the purpose of conveying water and electricity to the mine was a use of that land for mining purposes. The importance of that use in determining the dominant use of the land is however another matter altogether.

8. [53]

   The primary judge attached considerable significance to the importance, and indeed essentiality, to the mine’s operations of it obtaining water and electricity supply through the easement (see [23]-[24] and [48] above). That approach was however in my view erroneous. The question for his Honour’s determination was the “dominant use” of the subject parcel, or more particularly when the easement is under consideration, its Third Section. The mine’s use of the easement over that land was relevant to that determination but rather than effectively confining his attention to how important the use was to the adjacent mine, his Honour should have focussed on the nature and extent of the use, and its impact on, the Third Section as a whole.

9. [54]

   In doing this, he should have attached determinative significance to the following:

   1. (1)

      The portion of the Third Section which was subject to the easement appears to have been no more than 40.22 hectares, being only a little over 1% of the area of that Section (see [7] and [20] above referring to the size of the Third Section relative to the subject parcel). Apart from some limited environmental monitoring and roadside screen plantings, the only mining use of the Third Section was confined to this easement.

   2. (2)

      Colinta’s right to graze cattle on that limited portion of the Third Section the subject of the easement was, on his Honour’s finding, “interrupted only to a trifling extent by the presence of the various power poles and concrete access portals to the water supply pipeline” (Judgment [304]).

   3. (3)

      Although he found the use was not the dominant use in the 2016/17 year, his Honour found that in both relevant years the Third Section was used by Colinta for grazing and cropping (subject to the “trifling” interference just referred to).

10. [55]

    The mining activities on the Third Section constituted by use of the easement were thus confined to a very small portion of it and did not in any event impact to any significant extent on the landowner’s use of the land over which the easement ran. Whilst what occurred on that small portion was important to the easement holder, it was not important to the landowner whose property rights were only marginally qualified by the easement. The grazing and cropping uses extended over nearly all of the Third Section. The mining use was however confined to a small portion of it and could not reasonably be regarded as the dominant use of the Third Section as a whole.

11. [56]

    Ground 3 should therefore be upheld because the primary judge erred in his approach to determination of “dominant use” by treating the importance of the mining use of the land to the mine owner as of decisive importance. Likewise, Ground 4 should be upheld because his Honour’s approach went beyond a mere issue of weight to the point where it was not open to him to reach the decision he did.

Grounds 5 and 6 – whether mining use

1. [57]

   Ground 5 should be rejected because, as I have concluded, there was a mining use in the use of the mine’s easement, albeit that that use was of limited significance in considering the dominant use of the Third Section as a whole. As I indicate below, there were also other mining uses, albeit limited, as a result of the presence on Mangoola’s land of environmental monitoring devices and of mining exploration on it.

2. [58]

   Contrary to the assertion embodied in Ground 6, the “source of the requirement to carry out the use” cannot be disregarded when determining what use has been made of land. As Kitto J (with whom Menzies and Owen JJ relevantly agreed) said in Shire of Perth v O’Keefe (1964) 110 CLR 529; [1964] HCA 37, use for a “purpose” is a reference to “the end which is seen to be served by a particular use of premises” (at 534). As is apparent from what I said above, it was thus relevant in considering whether use of the electricity cables and water pipes was for mining purposes to know that those services were as a matter of practicality central to the operation of the mine. Likewise, if a use is essential, not simply for practical reasons, but because there is a legal requirement for that activity to occur, that will be relevant to characterising the activity. For example, the environmental monitoring devices on the subject parcel are required by the terms of the mine project approval. As a result, they are an integral part of the mining activities and therefore constituted a use of the subject parcel for mining purposes.

3. [59]

   Ground 6 should accordingly be rejected.

Ground 7 – biodiversity conservation and Aboriginal cultural heritage protection areas

1. [60]

   It is relevant to consider why these areas existed but doing so does not lead to the conclusion that they existed or were used for mining purposes. Although their existence is a condition of the mine’s operation, the point of their existence is that they are not used for mining purposes. Instead, they are an offset designed to counter the perceived adverse effects on the environment and on Aboriginal cultural heritage of operating the mine in the place that it is situated. In effect, their use is for purposes that are the antithesis of mining. They are in my view distinguishable from the environmental monitoring devices which perform an active role in relation to the mine’s operations.

2. [61]

   The primary judge therefore erred in finding that the use of these areas was “for a coal mine”. Ground 7 should be upheld.

Ground 8 – environmental monitoring devices and exploration activities

1. [62]

   As with use of the easement for water and electricity supply on the Third Section, the placement and servicing of the environmental monitoring devices had very little impact on the subject parcel generally. The devices occupied very small areas and their accessing by mine personnel gave rise to little, if any, interference with Colinta’s farming activities. The importance of the environmental monitoring to the mine cannot be ignored but it is of limited significance in determining the dominant use of Mangoola’s land as the importance is only to the holder of the easement to which only a small part of the land is subject.

2. [63]

   Exploration activities are in my view capable of being characterised as activities for mining purposes, in this case coal mining. Their significance in comparison to any other uses may however be low, depending on the scale of the activities. In the present case, the exploration activities were extremely limited, rendering them of no present significance.

3. [64]

   In these circumstances, Ground 8 should be upheld.

Conclusions

1. [65]

   The primary judge’s overall conclusions are recited at [26] above.

2. [66]

   The effect of my conclusions stated above is that:

   1. (1)

      The primary judge was in error in finding that the First Section of the subject parcel (the Wybong lands) were not used for grazing purposes in the relevant years. He ought to have found that the grazing use of the lands predominated over any limited mining use that may have occurred through environmental monitoring or exploration activities.

   2. (2)

      The Second Section of the subject parcel (the biodiversity conservation and Aboriginal cultural heritage offset lands) were not used for mining purposes (nor were they used for farming purposes).

   3. (3)

      In respect of the Third Section (the east and south areas), his Honour ought not to have found that use of the easement in the 2016/17 year for mining was a significant use for present purposes. As a result, he should have found that farming was the predominant use of the Third Section in both of the relevant years.

   4. (4)

      In these circumstances, the only conclusion reasonably open was that the First and Third Sections were used for farming in both years and that the Second Section was in both years used neither for farming nor mining. The parties accepted that a single overall categorisation of the dominant use of the subject parcel was to be arrived at. In light of the findings that ought to have been made, this was clearly farming.

Orders

1. [67]

   As noted earlier (see [4] above) the parties agreed that the consequence of upholding the appeal would be remittal to the LEC. I accordingly propose the following orders:

   1. (1)

      Appeal allowed.

   2. (2)

      Set aside orders 1 and 2 made on 11 June 2020 in the matter 2018/242761.

   3. (3)

      Set aside any costs orders made in the LEC following delivery of the LEC judgment dated 11 June 2020.

   4. (4)

      Remit the proceedings to the LEC for determination according to law.

   5. (5)

      Order the respondent to pay the appellant’s costs of the appeal.

2. [68]

   BRERETON JA: I have had the benefit of reading in draft the judgment to be delivered by Macfarlan JA. I agree that grounds of appeal 1, 3, 4, 7 and 8 succeed, for the reasons given by his Honour. Below, I add some supplementary observations, which assume familiarity with his Honour’s judgment, as to why I also agree that the only conclusion reasonably open on the evidence before the primary judge was that the dominant use of the subject parcel as a whole was farming.

3. [69]

   The First Section was required by the project approval for the adjacent mine to be set aside and used as Aboriginal Cultural Heritage Offset and Habitat Enhancement Offset areas. In other words, on its face, the condition of the approval required that this section be used for non-mining purposes. To conclude, counter-intuitively, that it was used “for a mine”, the primary judge reasoned that the purpose served by the required uses of the offset areas was satisfaction of the conditions permitting the Company’s coalmine to exist, and that consistent with Peabody Pastoral Holdings Pty Ltd v Mid-Western Regional Council (‘Peabody’), [1] they were uses for the purpose of the coal mine.

4. [70]

   However Peabody, far from supporting that conclusion, points the other way. Peabody Pastoral Holdings Pty Ltd, like Mangoola, was or was related to a mining company, and owned 120 parcels of rateable land in the vicinity of its mine, the project approval for which required the mine operator to ensure that the noise generated by the project did not exceed specified noise assessment criteria and, if it did, upon written request for acquisition from the affected landowner, to acquire their land. The relevant Council recategorized the 120 parcels from “farmland” and “residential” to “mining” for rating purposes. Preston CJ summarised the Council's reasons for categorising Peabody's parcels of land as mining as: [2]

5. [71]

   His Honour proceeded to reject each of those propositions, holding that:

   1. (1)

      Mere noise affectation by a mine was insufficient to constitute use for a mine. Affectation of land by adverse impacts such as noise from land on which a coal mine is operated does not cause the affected land to be used for the purpose of a coal mine. Affectation of land is to be distinguished from use of land. [3]

   2. (2)

      Change in ownership of the noise-affected land did not change the use of the land. Thus, acquisition of the parcels by the mining company did not of itself effect a change in the use of the land, such that it became used for a mine. [4]

   3. (3)

      The purpose of an acquisition does not cause a change in use. The Council contended that acquisition by Peabody of the parcels of rateable land because they were affected by noise from the coal mine meant that those lands were thereafter used for the coal mine. [5] The reasons for rejecting that argument included (emphasis added):

   4. (4)

      The mere holding of land for mining purposes is not a use of that land for a mine. [6] It was in this context that his Honour said:

6. [72]

   What Preston CJ was rejecting was the proposition that, for the purposes of s 517(1) of the Local Government Act 1993 (NSW), the definition of mine meant that the words “used or held for any mining purpose” were imported into s 517(1), with the consequence that land was used for a mine if it was “used or held for any mining purpose”. His Honour proceeded to conclude that the mere holding of land for a mining-related purpose did not mean that it was used “for a mine”, a fortiori if it was used for any other purpose: [7]

7. [73]

   Thus the use of the First Section lands did not become “for a mine” by reason that, as a condition of the mine’s approval, they were required not to be used for a mine.

8. [74]

   As to the Second Section, being land located generally to the north of Wybong Road and referred to as the Wybong lands, the finding that there was no active grazing on the Wybong lands during the relevant years was barely open on the evidence, which included photographs of cattle on those lands; but ultimately I agree that this is a finding of fact beyond the remit of this Court in an appeal confined to questions of law.

9. [75]

   However, the finding that grazing on those lands had been abandoned was not open. Exigencies, such as fire, flood, or drought, or the routine rotation of paddocks, may result in a hiatus in a particular active use of particular parts of land, but that does not mean that the use has ceased, so long as there is an intention to resume it when the circumstances permit. The evidence permitted no other conclusion in this case than that, at the highest, active grazing in the Wybong lands was not possible due to the exigencies of the drought. The presence of intermittent and/or isolated mining-related activities (exploratory activity and monitoring stations) did not convert its dominant use into use for a mine.

10. [76]

    The primary judge accepted that the Third Section was used in 2017 predominantly for grazing, but found that in 2016, when approximately 1% of it was affected by an easement appurtenant to the mine for a water pipeline and electricity, its use was dominantly mining. The use of land which is a servient tenement is not determined by the use of the easement by which it is burdened; however important that easement and its use is to the adjacent dominant land, it will at least usually say little of the use of the servient land, particularly if it occupies only a very small portion of the servient land. The fact that land is held or used for mining-related purposes (such as a buffer zone and/or monitoring for, and/or to provide access for personnel or services to, a mine), does not dictate that it is being used dominantly “for a mine”.

11. [77]

    Division of the parcel into the three sections may be permissible as an aid to an en globo assessment, but it is critical that the exercise does not cause one to lose the overall view of the wood for the individual trees. The question is not ‘what was the dominant use of any one part of the property?’, but ‘what was the dominant use of the whole property?’. The fact that a part of a property is either permanently (such as the First Section) or temporarily (such as the Second Section during the drought) not used for farming does not detract from the conclusion that the property, viewed as a whole, is used for farming. Many farms will have parts which either permanently or temporarily are not used for a farming purpose; yet the dominant use of the property viewed as a whole is nonetheless farming. Here, the grazing use was ubiquitous and continuous, albeit that the First Section lands were reserved for conservation and the Second Section lands were not utilised for active grazing during the drought; on the other hand, no mining was performed on the land, and the mining-related activities that were conducted on it were confined to limited locations which formed a very small proportion of the total land (the easement and the monitoring stations), and/or were intermittent (such as exploration). In those circumstances, it was not reasonably open to conclude that the dominant use of the land as a whole was for a mine.

12. [78]

    For myself, I doubt that it follows from Preston CJ’s conclusion in Peabody – that the word "mine" is not used in s 517(1) to refer to a particular type of land but is concerned with the purpose of the use of the land, and that the purpose is the end to which the use of the land is seen to serve – that land on which no mining activities are conducted can nonetheless, by reason of the conduct on them of what might be called activities ancillary to mining, acquire the character of land that is used “for a mine”. However, that question need not be resolved, as the ancillary activities conducted on the subject land were of such a relatively minor scope, scale, and duration, when compared to the grazing activities, that on no reasonable view could they be said to have constituted the dominant use. The only conclusion reasonably open was that the dominant use of the subject parcel as a whole was for farming.

13. [79]

    I agree with the orders proposed by Macfarlan JA.