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Preventing damage from mine subsidence.

08/07/2011

After a High Court decision, property owners can seek compensation from Mine Subsidence Board for preventative works if there is a threat of subsidence from mining operations.

Jemena Gas Networks owns the gas pipeline from Moomba to Sydney.  The pipe suffered some minor subsidence damage from an existing underground mine.   A study predicted that future longwall mining operations would probably cause further subsidence.  As a result, it undertook works to protect the pipeline from damage.  It made a claim under section 12A(1)(b) of the Mine Subsidence Compensation Act 1961 no. 22 (NSW) to recover the cost.  The Mine Subsidence Board declined the claim on the basis that Jemena had incurred the expense before the subsidence had occurred.  It relied on the decision in Mine Subsidence Board v Wambo Coal Pty Ltd [2007] NSWCA 137 that the Act requires the repair cost to be caused by actual subsidence.

Linguistic problems in the legislation make it difficult to understand. The interpretation in Wambo leads to perverse results; namely that impecunious property owners are worse off than under the general law and cannot prevent the damage except by persuading the Board to take action under section 13A.  The judges also pointed out that “Prevention may be cheaper than cure, and more efficient than cure“.

The High Court held that the Act should be interpreted to allow payment from the Fund of the cost of preventing further predictable damage damage from mine subsidence, so long as some degree of subsidence has already taken place.

Read the High Court’s decision in Jemena Gas Networks (NSW) Limited v Mine Subsidence Board.

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