Agnew & Ors v DWAJ Pty Ltd [2020] QLC 14

LAND COURT OF QUEENSLAND CITATION: PARTIES: FILE NO: DIVISION: PROCEEDING: DELIVERED ON: DELIVERED AT: HEARD ON: HEARD AT: MEMBER: ORDER: CATCHWORDS: Agnew & Ors v DWAJ Pty Ltd [2020] QLC 14 Alan David Agnew (applicant) Helen Joyce Gaudion (applicant) Mary Magdalene Rodrigues-Agnew (applicant) v DWAJ Pty Ltd (respondent) MRA704-19 General division Determination of compensation payable for grant of mining lease 10 March 2020 [ex tempore] Mareeba 10 March 2020 Mareeba PG Stilgoe OAM I determine compensation in respect of ML 40084 in the sum of Two Hundred and Thirty-One Dollars ($231) per annum for the term of the lease, indexed annually according to the Consumer Price Index. ENERGY AND RESOURCES – MINERALS – MINING FOR MINERALS – COMPENSATION – where the applicants owned a mining lease situated on the land of the respondent – whether and, if so, what compensation was payable under s 281 of the Mineral Resources Act 1989 – where the applicants were represented by an agent and the respondent was represented by a director of the company -- 1 of 6 -- 2 Mineral Resources Act 1989 s 281 Corella Valley Corporation Pty Ltd v Campbell [2019] QLC 44, cited Cross v Barrett [2020] QLC 6, followed APPEARANCES: C Mackney (agent), Avoca Tenement Consulting Pty Ltd, for the applicants W Johnson, a director of the respondent [1] Alan Agnew holds a mining lease that is part of the Mount Gibson Station.1 That property is owned by DWAJ Pty Ltd. Ray Johnson is a director of that company. The parties cannot agree on the compensation that Mr Agnew should pay DWAJ. It is fair to say that previous mining operations, in which Mr Agnew may or may not have participated, have created an atmosphere of distrust between the parties. [2] Mr Johnson wants to impose strict conditions on the operation of the mining lease. However, as I have already pointed out to Mr Johnson, firstly, I must assume that Mr Agnew will comply with the conditions of the mining lease when assessing compensation and, secondly, my power in this Court is limited to assessing compensation only, and I cannot impose conditions. [3] Mr Agnew has offered $10.20 per hectare over 16.1, I think, hectares, which represents the unimproved value of the land on a per-hectare basis. Mr Johnson wants $20 per hectare. He has a number of grounds to justify that amount, and I will consider each of them separately. Loss of cattle [4] Firstly, the loss of cattle. Section 281(3)(a) of the Mineral Resources Act 1989 contemplates compensation for loss and expense incurred during or because of mining operations. And it is entirely conceivable that stock may be lost by being, for example, stuck in a tailings dam. But I am not going to preload compensation on a possibility. If a beast is lost because of the operation of the mining lease, then Mr Johnson can claim that compensation by appropriate reference to the costs of the replacement beast at the time of the loss. 1 The rest of this judgment erroneously refers to the station as ‘Mount Garnet Station’. The correct name of the station is Mount Gibson Station. -- 2 of 6 -- 3 [5] As I have already mentioned, I must assess compensation on the basis that Mr Agnew will comply with his obligation to rehabilitate. Again, I cannot build in a “what if” component to compensation on the basis that Mr Agnew may or may not rehabilitate the lease at the end of its term. I also note that Mr Agnew gave sworn evidence that he intends to rehabilitate the lease when he has finished mining. Value of the land [6] As to the value of the land, Mr Johnson submitted that $10 per hectare is an average for the property, much of which is hilly and poor country. He said that he was offered $3.5 million three days ago, but I am taking no account of that because there is no real evidence of that before me. [7] As to the $10 per hectare being an average for the property, I accept that the river flat area is much more valuable than the balance land. By contrast, however, Mr Agnew stated that although his mining lease covered about 16 hectares of Mount Garnet Station, little of that area will, in fact, be subject to mining. In fact, Mr Agnew gave sworn evidence that he intends to mine only the alluvial area, almost none of which is on Mount Garnet Station. Looking at exhibit 1, that proposition appears to be correct. [8] Mr Johnson also argued that, because Mr Agnew pays $60 per hectare to DNRME for the right to mine, that is an indication of the value of the land. There is no basis for that proposition. The licence fee payable to the government bears no relationship to the value of the land. Biosecurity, water and access concerns [9] Mr Johnson submitted that the mining operations scared the cattle away from waterholes that existed off-lease. When I invited Mr Johnson to indicate where those watering points are, he marked waterholes on exhibit 1 that are, in fact, on-lease. Mr Agnew says that the mining operations do not deter cattle from using these watering points and, in fact, the cattle are using watering points created by the mining operations. [10] Mr Johnson submitted that the mining operations created dirty water. That is probably true, but Mr Agnew is required to ensure that sediment is contained and -- 3 of 6 -- 4 dealt with appropriately under the conditions of his mining lease. Mr Agnew submitted that cattle had been drinking dirty water. I suspect that in the recent severe drought conditions, cattle would drink just about any available water. But I am not persuaded that access to water is an issue that in this case requires compensation. [11] Mr Johnson told me he was concerned about damage to his access roads, but Mr Agnew does not require access to the lease through Mount Garnet Station. Mr Johnson is also concerned that he will be unable to use a road that runs through the mining lease. Mr Agnew says that if such a road exists, Mr Johnson can access it provided that the usual safety requirements are observed. On that basis, I see no reason to give any compensation for access or an impedance to access. [12] Mr Johnson says that there are weeds and feral cats on the mining lease. It is not clear to me that those issues arose because of Mr Agnew’s mining lease or even whether they arose due to Mr Agnew’s predecessors. There are a number of leases on Mount Garnet Station, and there has been European activity in the area for a long time. I cannot make Mr Agnew responsible for the whole of a problem which seems to have predated him. [13] Mr Johnson also says that because Mr Agnew deals in cattle off-lease, Mr Johnson has extra obligations in the way that he deals with his cattle. I accept that this is so. But I am constrained in giving compensation by the requirements of s 280(3)(a)2 of the Mineral Resources Act 1989. Deprivation of possession of the surface of land of the owner [14] And when I go through them, subparagraph (i),3 I am not persuaded that there is any deprivation of possession of the surface of the land which requires compensation. Diminution of the value of the land of the owner or any improvements thereon [15] There is no evidence of the value of the land to the owner or any improvements thereon being diminished by the mining operations as required by subparagraph (ii).4 2 This should be s 281(3)(a) of the Mineral Resources Act 1989, not s 280(3)(a). 3 Mineral Resources Act 1989 s 281(3)(a)(i). 4 Ibid s 281(3)(a)(ii). -- 4 of 6 -- 5 Diminution of the use made or which may be made of the land of the owner or any improvements thereon [16] I am not satisfied that there is any diminution of the use made or which may be made of the land of the owner or any improvements thereon in accordance with subparagraph (iii).5 Severance of any part of the land from other parts thereof or from other land of the owner [17] There is no severance of any part of the land from other parts of the land. Any surface rights of access [18] There is no loss of any surface rights of access. Loss or expense [19] I am satisfied that there may be loss and expense that arises out of the operation of the mining lease, in that it will require additional biosecurity compliance by Mr Johnson. The difficulty is that Mr Johnson has not provided any evidence of what that compliance might look like, how long it might take, and what value I might give to it. [20] Compensation is not a licence calculated per hectare if there is no loss of possession or diminution of the value. Previous compensation decisions of this Court have, unfortunately, created a false expectation. However, if there is no evidence before the Court, then the Court cannot provide compensation. That proposition has been clearly expressed in a number of cases but most recently in Corella Valley v Campbell.6 I have, however, accepted a degree of additional supervision that may be required, as I did in the case of Cross v Barrett.7 [21] Without any evidence of a rate or an amount of time required, it is difficult for me to assign a value to that aspect of the compensation. Mr Agnew has offered $164.22 per annum based on the rate-per-hectare calculation. To me that seems a little low. 5 Ibid s 281(3)(a)(iii). 6 Corella Valley Corporation Pty Ltd v Campbell [2019] QLC 44. 7 [2020] QLC 6. -- 5 of 6 -- 6 Instead, and on a purely arbitrary basis, adopting the Cross v Barrett8 rate of $35 per hour, and assuming an additional one hour per month in the dry season of six months, I have calculated the annual compensation to be $210 per annum. I add the usual 10 per cent, which takes account of the compulsory nature of the mining lease, which brings it to $231 per annum, and it will be subject to CPI for the balance of the lease. Order: I determine compensation in respect of ML 40084 in the sum of Two Hundred and Thirty-One Dollars ($231) per annum for the term of the lease, indexed annually according to the Consumer Price Index. PG STILGOE OAM MEMBER OF THE LAND COURT 8 Ibid. -- 6 of 6 --