Daunis v Usher Pastoral Company Pty Ltd [2023] QLC 24

LAND COURT OF QUEENSLAND CITATION: Daunis v Usher Pastoral Company Pty Ltd [2023] QLC 24 PARTIES: Caroline Jane Daunis (applicant) v Usher Pastoral Company Pty Ltd (respondent) FILE NO: MRA199-23 DIVISION: General PROCEEDING: Determination of compensation payable for renewal of mining lease DELIVERED ON: 8 December 2023 DELIVERED AT: Brisbane HEARD ON: Submissions closed 10 November 2023 HEARD AT: On the papers MEMBER: JR McNamara ORDERS: 1. In respect of the application for renewal of ML60069, compensation is determined in the total amount of One Hundred and Thirty-Two Dollars ($132) as a lump sum for the 10-year term of renewal. This amount is for the diminution of the use made or which may be made of the land including 10% reflecting the compulsory nature of the mining lease. 2. The applicant must pay the amount set out in order 1 to the respondent within one (1) month of the date of the grant of the renewal of ML60069 by the Department of Resources. CATCHWORDS: ENERGY AND RESOURCES – MINERALS – MINING FOR MINERALS – COMPENSATION – where the applicant applied for the renewal of a mining lease situated on the land of the respondent – where the lease area will be -- 1 of 11 -- 2 used for opal mining – whether and, if so, what compensation was payable under s 281 of the Mineral Resources Act 1989 Mineral Resources Act 1989 s 281 Mitchell v Oakhill & Mitchell (1998) 19 QLCR 66; [1998] QLC 25 Theuerkauf v Usher Pastoral Company Pty Ltd [2023] QLC 23 APPEARANCES: Not applicable Background The applicant, Ms Caroline Daunis holds Mining Lease 60069 (the ML). ML60069 and part of its access track is located on Lot 447 on SP196201, Mount Margaret Station. Mount Margaret Station is owned by the respondent, Usher Pastoral Company Pty Ltd. ML60069 expired on 30 June 2023. ML60069 was first granted in 1993, has been renewed a number of times. Prior to its expiry, on 1 December 2022, Ms Daunis lodged a renewal application with the Department of Resources. On 9 August 2023, Ms Daunis filed an application under s 279 of the Mineral Resources Act 1989 for this court to determine the amount of compensation for the renewal term of 10 years. According to the public resource authority report, the lease is used as living quarters/camp and to mine opal. The access track from Telephone Bore Road to ML 60069 is approximately 400 metres in length, 3 metres wide and an area of .12 ha. The lease area of 2.81 ha is situated within a 70,000 ha paddock “known locally as Bush Paddock”.1 The criteria The following paragraphs also appear in my decision, Theuerkauf v Usher Pastoral Company Pty Ltd [2023] QLC 23 (‘Theuerkauf’).2 The assessment of compensation is not arbitrary, and it is not calculated in the way a commercial agreement might be. 1 Applicant’s compensation statement filed 13 October 2023, 1. 2 Theuerkauf v Usher Pastoral Company Pty Ltd [2023] QLC 23, 4 [11]-[13]. -- 2 of 11 -- 3 A landholder is to be compensated for: • the deprivation of possession of land – (will the landowner be physically deprived, will the deprivation be temporary or permanent?); • the diminution of the value of the owner’s land (the diminished value of the property: will the value of Mount Margaret Station be devalued?); • the diminished use of the land (will the applicant’s activities diminish the landholders enterprise by occupying and using the land?); • any severance of the land from other parts; • any surface rights of access; and • all loss or expense that arises. A landholder is also entitled to an additional amount to reflect the compulsory nature of action taken, which shall not be less than 10% of the aggregate amount determined.3 Applicant’s material - Compensation statement and evidence In support of the originating application, the applicant filed: the ML60069 Resource authority public report; a GeoResGlobe map showing ML60069 and access track; a renewal application for the lease dated 1 December 2022; a satellite image map of ML60069 on Mount Margaret Station; and a cadastral map of ML60069 access track with a handwritten note that says, ‘track from gazetted Road to lease is approximately 400m’. Pursuant to the Court’s orders of 29 September 2023, the applicant filed its compensation statement on 13 October 2023, and its reply statement on 9 November 2023. 3 Mineral Resources Act 1989 (Qld) s 281(4)(e)(‘MRA’). -- 3 of 11 -- 4 Map of ML60069 surface area in Applicant’s supporting documents to the application filed on 9 August 2023. Information included in the applicant’s reply submissions indicate that ‘Mount Margaret property holding’ occupies an area of 470,506.0068 ha. The real property description lists multiple lot on plan descriptions including Lands Lease 447/SP196201 within which the ML lies. The applicant says the area is “long renown as opal producing country”.4 She says ML60069 consists of rocky ridges, gibber terrain and an ephemeral creek and not densely populated with plant life. The applicant’s compensation statement, says that the lease area is dotted with gidyea trees, the occasional gum, as well as some smaller shrubs, and that patches of herbage occur along the creek and flats, with limited 4 Applicant’s compensation statement filed 13 October 2023, 1. -- 4 of 11 -- 5 growth in the hilly area. Photographs were provided. The ephemeral creek runs through the northern boundary. A workers’ camp on the ML consists of two structures on an area of .05 ha. The applicant estimates that approximately half the ML area is suitable landscape for mining opal. The disturbance area at any given time would be approximately 50 x 50m (.25 ha) with “backfilling and tidying of the area” occurring progressively. The ML area is not fenced. Other than the workers’ camp and the excavation area, all land within the ML is accessible to livestock. Mining operations will occur irregularly from April to October, due to work commitments and environmental factors. The applicant submits that there is limited potential for regular, reasonable pasture growth within the boundary of the ML. The applicant considers that $5/ha per annum would be reasonable compensation. Respondent’s material – Response to compensation statement The respondent complied with Court orders of 29 September 2023 by filing its Response statement on 27 October 2023. The statement attaches: 1. a Managers Impact Statement; 2. a map showing damage to the property from mining leases; 3. a letter from Worldmin Pty Ltd confirming a compensation amount of $80/ha; 4. an email elaborating on the Worldmin compensation calculation method; 5. a letter to Ms Daunis; 6. a map of ML60069; and 7. a map showing both the Worldmin Pty Ltd lease and Ms Daunis’ lease. The respondent’s Response statement and documents 1 to 4 were also filed in the Theuerkauf mining compensation application.5 The respondent considers $80/ha as appropriate compensation based on, among other things, the Managers Impact Statement. The ‘Land Manager’s Impact Statement’ signed by Usher Pastoral Company Pty Ltd Manager, Alun Hebbes (the Hebbes Statement) says that: “as a result of the mining lease, there are continuous cost involved with monitoring and inspecting mines to ensure appropriate maintenance procedure is being followed through within the mining lease parameters.”6 5 Theuerkauf v Usher Pastoral Company Pty Ltd (Land Court of Queensland, MRA139-23, commenced 12 July 2023). 6 Respondent’s response statement filed 27 October 2023, 2 [2]. -- 5 of 11 -- 6 Because the respondent has filed the same material in the Theuerkauf compensation application, the observations I make in that matter apply equally. I said at [24] in Theurekauf: The statement addresses the impact of “prior mining” as the basis for submitting there would be ongoing costs to monitor and inspect mines “to ensure appropriate maintenance procedure is being followed through within the mining lease parameters”. This sets up a claim for “loss or expense” – which is developed in paragraph 5 of the statement where it says: “The lessees have noticeably failed to attend to these issues on their part which therefore increases the need to continuously monitoring [sic] which results in valuable time and energy being diverted from more profitable work on the lessor’s pastoral properties”. However, the respondent has not quantified the monitoring time required nor the cost. In Theuerkauf at [26] I said: The Hebbes statement also says that because of the particular ecosystem in the area, “specialised rehabilitation is required to prevent erosion and restore nature positive growth”. It says that “access tracks require water diversion works and continuous maintenance”. In Theuerkauf, I concluded at [29] that there appeared to be two bases of claim – that is a claim for “loss or expense” (s 281(3)(a)(vi)) to monitor and management impacts on the land and the business of Mount Margaret Station, and a claim for deprivation of possession of the land, that is, a claim that the ML area is lost to the respondent – a s 281(3)(a)(i) claim. The image marked ‘2’ in the Response shows an aerial image of a site. The image is labelled by the respondent as ‘map showing damage to the property from mining leases’. It does not confirm this is the ML60069 lease site. This is also the same image filed by the respondent in the Theuerkauf compensation application. The correspondence from Worldmin Pty Ltd indicates how Worldmin arrived at $80/ha as the compensation amount with the respondents. In an email marked ‘4’7 Brian Hennessy, representative of Worldmin Pty Ltd says that: “We have in the last couple of years, executed compensation agreements with $80 per hectare as the compensation amount, for mining leases on a similar property to Mt Margaret in size, type of country etc and also in the Eromanga district… 7 Respondents statement, 6 (Email of 20 Sep 2023 from Worldmin to V Ho). -- 6 of 11 -- 7 The $80 figure in these agreements was reached and agreed to, mainly on the basis of values achieved in property sales in the Eromanga area over the last 3 or 4 years.” Mr Hennesy’s email goes on to list valuations of other properties deemed comparable and located around Eromanga. He says that these sales and valuations reinforce the belief "that the $80 figure is in the ballpark as far as fair and reasonable compensation for opal bearing terrain in the Eromanga district”. This Court assesses compensation against the criteria in s 281 of the MRA. The Statutory Criteria Will there be deprivation of possession of the surface of the land? s 281(3)(a)(i) In contrast to Theuerkauf, there is information from the applicant regarding the applicant’s activities on the ML and the impact it might have on the Mount Margaret Station pastoral business. The combined area of the ML and access track is approximately 3 ha, which sits within a 70,000 ha paddock, on what might be an over 470,000 ha enterprise. A workers’ camp including 2 structures covers an area of approximately 0.05 ha and the applicant says that a total area of 0.25 ha at any given time will be impacted by open cut and surface diggings. The area is unfenced. I repeat comments made in Theuerkauf at [31]-[33]: The $80 per hectare amount is presented as a “full and final” proposal, that is, it would incorporate compensation under any of the other criteria, including “loss or expense” such as management time. No additional compensation amount was put forward by the respondent. What is not clear from the Worldmin correspondence is whether the $80 per hectare (which was an amount agreed between the parties, not an amount assessed by the court) is a ‘one off’ payment, or an annual payment. If the basis for the compensation is the deprivation of possession of the surface of the land, because the value is determined on an expected sale price, then it is likely that the amount is a one-off payment. If it is in fact an annual payment, it is unclear why compensation at the market price would be awarded year after year. The agreement itself might make this clear. -- 7 of 11 -- 8 If a land valuation approach (or an approach based on sales data) is to be adopted, I have little detailed information to work with. The comparable sales are expressed in dollars per acre, rather than hectare, and there is insufficient evidence to explain why those sales would be comparable to Mount Margaret Station. There are many components to be considered in determining comparability. Property valuation is an area of expertise. On the evidence presented, I do not consider compensation is payable for deprivation of possession of the surface of the land under s 281(3)(a)(i) … The MRA does not prescribe a method of valuation for the purposes of assessing compensation. Unless a claim for deprivation of possession of the land or diminution of the value of the land is made out, a land valuation approach might not be necessary in order to determine compensation. The other s 281 criteria concern the impact of the activities on the landholder’s land. In the context of a pastoral enterprise, matters relevant to those criteria might include for example a reduced herd because productive land cannot be accessed. However, each case will depend on its own facts and circumstances – and in that regard I am reliant upon the evidence presented by the parties. Will there be diminution of the value of the land? s 281(3)(a)(ii) The applicant says that a total area of 0.25 ha at any given time will be impacted by open cut and surface diggings. Backfilling and tidying of the area will occur on a regular basis.8 There is no evidence to support a claim that the value of Mount Margaret Station will be diminished as a result of the renewal of the ML, which has operated on the property since 1993. Will there be diminution of the use made or which may be made of the land? s 281(3)(a)(iii) The land is currently identified as being used for ‘grazing’.9 8 Applicant’s compensation statement filed 13 October 2023, 3. 9 Applicant’s supporting documents: Renewal application of 1 December 2022, 5 (Land parcel details). -- 8 of 11 -- 9 The applicant provides photographs of the vegetation within the lease boundaries at Figures 3 to 8 in the applicant’s compensation statement of 13 October 2023. Figure 7 shows the current excavation area. Vehicle markings and refilled holes can be seen in Figure 7. The applicant contends that the nature of the land within the lease boundaries have limited potential for regular and reasonable growth.10 In my view, the respondent will not be permanently deprived of the land the subject of the ML, and there is no evidence that the productivity of the land will be permanently diminished, apart from concerns with the quality of rehabilitation and their relevance to the applicant which are not adequately specified. For that reason, compensation should be assessed under s 281(3)(a)(iii) for diminution of use. I have formed the view that although not all the land the subject of the ML and access will be unavailable for pastoral purposes, it is likely that during mining operations cattle might be less likely to access the ML area for the term of the ML. The applicant provided some data concerning stocking rates using the Meat and Livestock Australia stocking rate calculator. The mining operations is likely to have minimal impact on land availability for grazing, stocking rates, or land value. I am offered no alternative methodology for the diminution of use and apply the same reasoning I did in Theuerkauf. If I accept that permanent loss might be valued at $80 per hectare, then taking account of the poorer quality of the land in question and the loss being for 10 years only, I am prepared to assess loss on a ‘one off’ basis at 50% of the amount claimed by the respondent. That is 3 ha at $40 per hectare for the term of the lease. A total of $120 for the term of the lease or $12 per annum. Given the small amount of compensation my order will be that the full compensation is paid within 1 month of the date of the grant of the renewal of ML60069. I must rely on evidence to determine compensation. This is the best I can do with the evidence before me. 10 Applicant’s compensation statement filed 13 October 2023, 7. -- 9 of 11 -- 10 Are there any surface rights of access? s 281(3)(a)(v) The access track is identified as being 400m in length and 3mwide. Access from the boundary fence follows Telephone Bore Road for approximately 700m, then approximately 400m of unmaintained track to the boundary of the lease. Compensation for access has been incorporated into the compensation determined under s 281(3)(a)(iii) above. Is there any other loss or expense that arises? s 281(3)(a)(vi) The respondent says that they have needed to pay costs and spend time on monitoring and inspecting the mining lease. The evidence does not specify what the monitoring and inspection activities are, or how much such activities actually cost the respondent. It is well settled that in determining compensation under the MRA it is not necessary to quantify an amount in respect of each of the matters referred to.11 In this case any compensation for loss or expense is included in the award under s 281(3)(a)(iii). Additional amount to reflect the compulsory nature of the payment: s 281(4)(e) 10% is added to reflect the compulsory nature of the payment. Conclusion Head of compensation Amount ($) Diminution of the use made or which may be made of the land: 281(3)(a)(iii) $12 per annum Additional amount to reflect the compulsory nature of the payment: s 281(4)(e) – 10% $1.20 per annum Total $13.20 per annum Total compensation for renewal term $132 11 Mitchell v Oakhill & Mitchell (1998) 19 QLCR 66, 71; [1998] QLC 25, 6–7. -- 10 of 11 -- 11 Orders 1. In respect of the application for renewal of ML60069, compensation is determined in the amount of One Hundred and Thirty-Two Dollars ($132) as a lump sum for the 10-year term of renewal. This amount is for the diminution of the use made or which may be made of the land including 10% reflecting the compulsory nature of the mining lease. 2. The applicant must pay the amount set out in order 1 to the respondent within one (1) month of the date of the grant of the renewal of ML60069 by the Department of Resources. -- 11 of 11 --