The compensation claims of 18 homeowners in Collingwood Park west of Brisbane arising out of the collapse of disused coal mine shafts deep beneath the surface of their suburban streets in April 2008, came to an abrupt close today in Brisbane’s Supreme Court.

In December the court ruled that the State was liable for failing to impose adequate conditions in the mining lease granted for the Westfalen No 3 mine in 1967.

Coal was hauled from the shafts from 1967 to 1972 by an extraction process that left pillars of the coal seam remaining between the bored out “drives”.

The mine was abandoned after the January 1974 floods when a wave of water rushed through with so much force that the velocity of air it pushed through the shafts destroyed buildings on the surface as it vented upward.

Queensland Housing Commission, as owner of most of the land in 1967, objected to the Wardens Court as to the grant of the mining lease. It was thus refused but that decision was overruled by the then mines Minister, with the support of the Nicklin coalition Cabinet.

The State had already paid for repairs to the homes damaged by the subsidence and taken steps to underpin the area. The plaintiffs were suing for loss in value to their residences they claimed to have suffered by reason of the stigma that associated their locality with the sink hole event.

The court found that the coal pillars were weakened by the rush of water.  In December 1988, an area approximately 250 metres from the 2008 event, suffered a similar collapse. It was concluded then that the stability of the north-east corner of Duncan Street and Collingwood Park Drive – exactly where the 2008 catastrophe occurred – was at serious risk.

Investigations also established that the operator had over-mined the drives by extracting more than the 60% of the coal seams as permitted, causing the remaining pillars to be smaller than specified.

The mines department had failed to enforce the pillar requirement “despite having access to accurate mine plans which evidenced the non-compliance and performing monthly inspections.”

But did the State owe a duty of care to the owners whose land values were allegedly affected by the 2008 sink hole event?

This depended, so ruled the court, on “the degree and nature of control exercised by the authority over the risk of harm that eventuated and the degree of vulnerability of those who depend on the proper exercise by the authority of its power.

In this case, “Yes,” the department owed a duty to impose mining restrictions appropriate for safety of the community including surface owners and to monitor, supervise and enforce them. (On the other hand there was no duty in respect to whether or not a lease were granted in the first place.)

Because mining “inspectors knew that pillar stability was dependent upon the size of the pillar and that a failure to supervise and enforce compliance with conditions gave rise to a foreseeable risk of subsidence of the surface land.”

“Statutory powers must be exercised with reasonable care and an act done pursuant to statutory powers is not necessarily immune from an action in negligence,” ruled Supreme Court Justice Boddice. “If those who exercise them could, by reasonable precaution, have prevented a likely injury, damages for negligence may be recovered”.

But the court also ruled that a diminution in value caused by the sink hole “blight” was only shown in respect of those six properties directly adjacent to the 2008 subsidence event.

The trial judge was critical of valuer John Kendall, whose opinion he considered “fundamentally flawed” and “unreliable” because – among other things – Kendall failed to consider “general market forces”, namely the GFC induced property crash that had an undeniable widespread impact on property values.

His Honour preferred Herron Todd White’s Tom Gillespie – called for the defence – whose evidence he thought was “cogent, reasonable and logical” and who applied “orthodox valuation principles with no hint of any preconceived” bias.

As a consequence, the court ruled that not only were there just six properties whose values had been affected, the impact on even them was only temporary “with any change in the value of the remaining properties being attributable to market forces from 2010 unrelated to the 2008 subsidence event”.

Todays ruling concerned the issue of costs with the State ordered to pay the costs of the six successful plaintiffs and the 12 who were unsuccessful, being ordered to pay those of the State in defending their failed claims.

Butler & Ors v The State of Queensland [2013] QSC 354; [2014] 03 QLR Brisbane Boddice J 19/12/2013  and 24/01/2014


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