Australian Asiatic Gems Pty Ltd v Grabbe & Anor [2021] QLC 25

LAND COURT OF QUEENSLAND CITATION: Australian Asiatic Gems Pty Ltd v Grabbe & Anor [2021] QLC 25 PARTIES: Australian Asiatic Gems Pty Ltd (applicant) v Anthony Grabbe (respondent) Lynette Grabbe (respondent) FILE NOs: MRA500-20 MRA096-21 PROCEEDING: Determination of compensation payable for renewal of mining leases DELIVERED ON: 3 August 2021 DELIVERED AT: Brisbane HEARD ON: Submissions closed 14 July 2021 Matter allocated 23 July 2021 HEARD AT: Heard on the papers MEMBER: JR McNamara ORDERS: 1. I determine that Australian Asiatic Gems Pty Ltd must pay Anthony Grabbe and Lynette Grabbe compensation in respect of ML 60459 as follows: (a) Five hundred and eighty-three dollars and ninety-one cents; plus (b) Five hundred and fifteen dollars and fifty- nine cents per year for the term of the renewal, indexed to CPI. 2. I determine that Australian Asiatic Gems Pty Ltd must pay Anthony Grabbe and Lynette Grabbe compensation in respect of ML 60135 as follows: -- 1 of 6 -- 2 (a) Six hundred and nine dollars and ninety- five cents; plus (b) Five hundred and fifteen dollars and fifty- nine cents per year for the term of the renewal, indexed to CPI. 3. Should either ML 60459 or ML 60135 cease to exist prior to the other, the holder of the live mining lease must provide the combined annual payment identified in orders 1(b) and 2(b). CATCHWORDS: ENERGY AND RESOURCES – MINERALS – MINING FOR MINERALS – COMPENSATION – where the underlying facts and circumstances are similar to Land & Anor v Grabbe & Anor [2021] QLC 1– where there was a problem with the originating application – where the valuation report from the Land matter was ‘recycled’ – where there is no factual basis for the Court to depart from a number of findings in the Land decision Mineral Resources Act 1989 s 281 Land & Anor v Grabbe & Anor [2021] QLC 1 Lonergan v Friese [2020] QLAC 3 APPEARANCES: Not applicable [1] In January this year the Land Court handed down the decision Land & Anor v Grabbe & Anor [2021] QLC 1 (the Land decision). That decision concerned a mining claim renewal application and provided a strong guide for the parties as they attempted to negotiate a compensation agreement in this matter. Surprisingly, agreement was not reached. [2] The applicant in this matter is obviously different. The location and tenement areas, although nearby, are a little different but the underlying facts and circumstances are very similar. [3] In this matter there was a problem with the originating application in that it referenced the renewal of one mining lease (ML 60459) when it was intended to reference two contiguous mining leases (ML 60459 and ML 60135). It was apparent from the material filed that the parties were negotiating compensation for the renewal of the two mining leases and all submissions reference the two tenements. When brought to the attention of the parties a further originating application was filed. The parties in -- 2 of 6 -- 3 correspondence were satisfied that the two matters could, and it was their expressed preference that they should be dealt with together, without the need for further material to be filed. [4] The material filed on behalf of the respondent ‘recycled’ some key material submitted in the Land matter, in particular the valuation report of Mr Dennis Cupitt. Member Stilgoe at [13] to [19] of the Land decision sets out her consideration of the report and her conclusion regarding compensation for the deprivation of possession of the surface of the land,1 which she accepted at $100/ha in circumstances of total loss. There is no evidence before me to suggest that a different conclusion is justified in these matters. The resource authority public report informs me that the area of ML 60459 is 15.14 ha and the area of ML 60135 is 15.85 ha. [5] Like the Land matter these are renewal applications. Like the Land decision I accept the conclusion of Member Stilgoe that the appropriate liability for the applicant would be one third of the value of the land. Because the two mining leases are contiguous and access is via the same track (a total area of 1.57 ha), compensation in that regard should be apportioned evenly between the two tenements. [6] In relation to the diminution of the value of the land,2 Member Stilgoe in the Land decision at [21] to [24] again considered Mr Cupitt’s report and concluded that in the absence of evidence demonstrating that the value of the balance of the property is diminished by the renewal, no compensation is payable for this head of loss or damage. There is no factual basis for me to reach a different conclusion in these matters. [7] Regarding compensation for management time,3 in the Land decision Member Stilgoe at [26] to [31] sets out her reasons for determining the increase in inspection time (over that already undertaken by the landholder) is modest at one hour per month at an hourly rate of $78.12 (the basis for which is set out at [27] of the Land decision). In this case, the two tenements are contiguous. In my view, there would be no increase to the inspection time required as a result of a second tenement. The applicant must 1 The corresponding provision of Mineral Resources Act 1989 (Qld) concerning mining leases is s 281(3)(a)(i). 2 The corresponding provision of Mineral Resources Act 1989 (Qld) concerning mining leases is s 281(3)(a)(ii). 3 The corresponding provision of Mineral Resources Act 1989 (Qld) concerning mining leases is s 281(3)(a)(vi). -- 3 of 6 -- 4 pay the respondents a total of $1,031.18 ($78.12 x 12 + 10% uplift), annually and indexed to CPI. The resource authority public reports inform me that the “renewal term end date” for ML 60459 is 28 February 2025, and for ML 60135 the end date is 31 August 2035. In the orders I will apportion the compensation equally between the two tenements while both exist. If, however one mining lease ends prior to the other and is not renewed, the holder of the remaining tenement is responsible for payment of the full amount under s 281(3)(a)(vi) while it remains current. [8] Legal expenses were not claimed in the Land decision, but costs associated with the valuation report were, and were denied as Member Stilgoe concluded that the report is a cost of litigation, not an expense incurred because of the application for renewal. [9] In these matters, legal expenses claimed are said to be those “incurred prior to the commencement of Land Court proceedings.” Expressed this way, I understand that the respondent is saying that these legal costs are not claimed costs of litigation. [10] In Lonergan v Friese [2020] QLAC 3 Crow J said in relation to a claim regarding the time and effort the respondent devoted to negotiations:4 “Ordinarily agreements cannot be reached in the absence of negotiation. Negotiation for compensation may prove advantageous to a landowner. The time spent by a landowner negotiating with a mining lessee as to appropriate compensation cannot be properly characterised as “loss or expense that arises as a consequence of the grant of renewal of the mining lease” pursuant to s 281(3)(a) because the grant or renewal of the mining lease cannot occur until, pursuant to s 291, compensation has been determined by agreement or by determination of the Land Court. Furthermore, in the present case there is no evidence as to the time that was actually spent negotiating with Mr Friese. That ground of appeal is therefore dismissed.” (footnotes omitted) (emphasis added) [11] I cannot see a reason to distinguish the respondent’s expenses from their advisor’s (lawyer’s) expenses. The amount claimed cannot be categorised as “loss or expense that arises as a consequence of the grant of renewal of the mining lease” pursuant to s 281(3)(a) of the MRA. This is because the grant or renewal of the mining lease cannot occur until, pursuant to s 281, compensation has been determined by agreement or by determination of the Land Court. [12] Further, in this matter the claim is ambit, it is not itemised in any way to enable me to consider it further and the claim for legal expenses ought to be dismissed. 4 Lonergan v Friese [2020] QLAC 3 [56]-[57]. -- 4 of 6 -- 5 Conclusion [13] In respect of ML 60459: Head of compensation Calculation Amount Deprivation of possession s 281(3)(a)(i) 15.14 ha + (50% of 1.57 ha) x $100/ha/3 $530.83 Diminution of value s 281(3)(a)(ii) nil Amount to reflect compulsory acquisition s 281(3)(a)(v) – on s 281(3)(a)(i) only 10% x $530.83 $53.08 Compensation $583.91 Loss or expense s 281(3)(a)(vi) management time 50% x $1,031.18 $515.59 Annualised compensation $515.59 [14] In respect of ML 60135: Head of compensation Calculation Amount Deprivation of possession s 281(3)(a)(i) 15.85 ha + (50% of 1.57 ha) x $100/ha/3 $554.50 Diminution of value s 281(3)(a)(ii) nil Amount to reflect compulsory acquisition s 281(3)(a)(v) – on s 281(3)(a)(i) only 10% x $554.50 $55.45 Compensation $609.95 Loss or expense s 281(3)(a)(vi) management time 50% x $1,031.18 $515.59 Annualised compensation $515.59 Orders I determine that Australian Asiatic Gems Pty Ltd must pay Anthony Grabbe and Lynette Grabbe compensation in respect of ML 60459 as follows: (a) Five hundred and eighty-three dollars and ninety-one cents; plus (b) Five hundred and fifteen dollars and fifty-nine cents per year for the term of the renewal, indexed to CPI. I determine that Australian Asiatic Gems Pty Ltd must pay Anthony Grabbe and Lynette Grabbe compensation in respect of ML 60135 as follows: (a) Six hundred and nine dollars and ninety-five cents; plus -- 5 of 6 -- 6 (b) Five hundred and fifteen dollars and fifty-nine cents per year for the term of the renewal, indexed to CPI. Should either ML 60459 or ML 60135 cease to exist prior to the other, the holder of the live mining lease must provide the combined annual payment identified in orders 1(b) and 2(b). -- 6 of 6 --