Central Gold Mines Pty Ltd v Terry & Ors [2019] QLC 34

LAND COURT OF QUEENSLAND CITATION: Central Gold Mines Pty Ltd v Terry as personal representative under Instrument No. 712177810 & Ors [2019] QLC 34 PARTIES: Central Gold Mines Pty Ltd (applicant) v Peter Gerard Terry as personal representative under Instrument No. 712177810 (first respondent) and Richard Cob Terry as personal representative under Instrument No. 712177810 (second respondent) and Simon Brosnan Terry as personal representative under Instrument No. 712177810 (third respondent) FILE NO: MRA193-18 DIVISION: General division PROCEEDING: Determination of compensation for renewal of mining lease DELIVERED ON: 23 August 2019 DELIVERED AT: Brisbane HEARD ON: Heard on the papers HEARD AT: Submissions closed 7 June 2019 Matter allocated on 7 May 2019 MEMBER: WL Cochrane ORDERS: 1. In respect of the application for renewal of ML 3374, compensation is determined in the amount of One Thousand Three Hundred and Sixty Three Dollars -- 1 of 9 -- 2 ($1,363) per annum, which is Thirteen Thousand Six Hundred and Thirty Dollars ($13,630) for the life of the lease. 2. Central Gold Mines Pty Ltd (now known as Kempton Minerals Pty Ltd) is to pay to Peter Gerard Terry as personal representative under Instrument No. 712177810, Richard Cob Terry as personal representative under Instrument No. 712177810, and Simon Brosnan Terry as personal representative under Instrument No. 712177810 compensation in the amount set out in Order 1, namely, One Thousand Three Hundred and Sixty Three Dollars ($1,363), within thirty (30) days from the notification of the renewal of the mining lease by the Department of Natural Resources, Mines and Energy and annually thereafter on or before the anniversary of the issuing of the lease. CATCHWORDS: ENERGY AND RESOURCES – MINERALS – MINING FOR MINERALS – COMPENSATION – where no material provided by either party – where the Court relies on previous determinations to reach a compensation figure Land Court Rules 2000 r 36A Mineral Resources Act 1989 s 279, s 279A, s 281 Alphadale Pty Ltd v Dore & Ors [2016] QLC 15, considered Aurum Vale Pty Ltd v Struber & Anor [2018] QLC 19, considered Eacham Abrasive Blasting Pty Ltd v Gundersen & Anor [2014] QLC 38, considered Fitzgerald v Struber & Anor [2018] QLC 18, considered Fitzgerald v Struber & Anor [2019] QLC 6, considered International Parts & Equipment Pty Ltd v Struber & Anor [2018] QLC 23, considered Keyse v Phillipson & Ors [2016] QLC 40, considered Markert v Struber & Anor [2019] QLC 7, considered Pavey & Anor v Struber & Anor [2017] QLC 63, considered Plethora Pty Ltd v Struber & Anor [2018] QLC 26, considered Skrzypczynski & Ors v Hutchinson [2017] QLC 4, considered Thomsen v Struber [2017] QLC 33, considered -- 2 of 9 -- 3 Unimin Australia Limited v Freeman [2007] QLC 76, cited Wallace & Ors v Bottomer & Ors [2015] QLC 23, considered Wills v Minerva Coal Pty Ltd (No. 2) (1998) 19 QLCR 297, considered APPEARANCES: Not applicable [1] This matter is a referral by the Chief Executive of the Department of Natural Resources, Mines and Energy (DNRME) to the Land Court pursuant to the then s 279A of the Mineral Resources Act 1989 (reprint current as at 31 August 2017) (MRA) for the determination of compensation in respect of the grant of a renewal of a mining lease ML 3374. Background [2] On 4 May 2018 this Court received the referral from DNRME. [3] The referral seeks that compensation be determined for therenewal of ML 3374. The referral document provided by DNRME reveals that the renewal term sought is for ten (10) years. Mining lease 3374 expired on 31 January 2018. [4] The subject ML 3374 is located on property owned by the respondents, Peter Terry, Richard Terry, and Simon Terry as personal representatives under Instrument No. 712177810, (hereafter referred to as “the Terry land”) and on a road owned by the Etheridge Shire Council. The Terry property is described as Lot 1 on SP 242983 and the Etheridge property as Percyvale Road (within Lot 1 on SP 242983), respectively. [5] While nothing in particular turns on it, it would seem that the Messrs Terry acting as personal representatives do so either as the executors, administrators and successors, or as the holders of a power of attorney in respect of Harold Byrne Terry who is referred to in an earlier compensation agreement to which I shall refer later. [6] The total area of the mining lease is 128 ha of which 125 hectares is located on the Terry land. Three hectares (0.6 km in length by 50 metres wide) of the 125 ha of the Terry land is for access purposes. Accordingly, 122 hectares of the Terry land is mining lease proper as distinguished from use for access. Three hectares of the 128 ha belongs to the Etheridge Shire Council and has already been the subject of proceedings before this Court (MRA192-18). The Council and the respondent apparently reached agreement and lodged a compensation agreement with DNRME -- 3 of 9 -- 4 with respect to those 3 hectares on 29 May 2019. Thus this decision relates only to the Terry land. [7] The lease area is rectangular in shape and the south eastern section is severed by the Etheridge Council road. That severing road is part of the mining lease. [8] Included in the filed material provided by DNRME is a compensation agreement reached by a previous holder of ML 3374 and Harold Byrne Terry. [9] That compensation agreement provided for the following: (1) A once only payment of $5,100 calculated at the rate of $40 per hectare of the surface area of ML 3374 (ie 128 hectares). This payment shall be made within sixty (60) days of the renewal date of ML 3374. (2) A once only payment of $200 per kilometre with respect to any access roads constructed by the Miner on the Property [sic]. Any such payment shall be made within sixty (60) days of the completion of the subject access road. [10] I am, I believe, entitled to assume that that agreement was an arm’s length agreement reached between parties cognisant of the impact (including economic impact) of the proposed mining operation on their property on the one hand and the likely financial rewards of the proposed mining operation on the other. I also note that the agreement was entered into more than a decade ago. [11] Applying simple mathematics, that decade old agreement reflected compensation of $4 per hectare per annum for the mining lease and $2 per kilometre per annum for the access. Using the current figure for access area, as opposed to length, the previous agreement represents $20 per year and thus $6.65 per hectare. A figure which I note is higher than the per hectare figure for the mining lease land. Relevant legislation [12] This decision is made to satisfy the requirements of s 279 of the MRA which provides that a mining lease shall not be granted or renewed unless an agreement in relation to compensation has been filed or, in the absence of such an agreement, a determination of compensation has been made by the Land Court. [13] In the present case, no agreement has been lodged with the relevant Department and consequently, the matter has been referred to the Land Court for determination. [14] Section 281 of the MRA sets out those matters which must be considered by this Court when determining the compensation. -- 4 of 9 -- 5 [15] Section 281(3)(a) provides that an owner of land is entitled to compensation for: (i) deprivation of possession of the surface of land of the owner; (ii) diminution of the value of the land of the owner or any improvements thereon; (iii) diminution of the use made or which may be made of the land of the owner or any improvements thereon; (iv) severance of any part of the land from other parts thereof or from other land of the owner; (v) any surface rights of access; (vi) all loss or expense that arises; as a consequence of the grant or renewal of the mining lease… [16] Further s 281(4)(e) provides that in assessing the amount of compensation payable under s 281(3): (e) an additional amount shall be determined to reflect the compulsory nature of action taken under this part which amount, together with any amount determined pursuant to paragraph (c), shall be not less than 10% of the aggregate amount determined under subsection (3). [17] How the assessment of compensation is to be determined is not fully explained in the MRA itself. Rather, the MRA identifies matters to be taken into account without prescribing any particular method of valuation.1 [18] The usual process reflected in a number of decisions of this Court is that the parties to a determination for compensation provide evidence, often expert evidence, which seeks to demonstrate what the appropriate amount of compensation should be. This is done often by reflecting the productivity of the land lost to the mining lease, the likely revenue to be gleaned from uninhibited use of that land, stocking rates for livestock or yield rates for cultivation and various items of disamenity caused by the inevitable intrusion into a landholder’s property by machinery and vehicles. In some cases, valuers and agronomists are engaged. [19] It must be recognised, however, that the cost of such an exercise often results in a cost which far exceeds the revenue to which the dispossessed landowner may be entitled. The conduct of these proceedings [20] This Court gave notice to the parties that a directions hearing was proposed to be heard by Member Stilgoe. 1 See Wills v Minerva Coal Pty Ltd (No.2) (1998) 19 QLCR 297, 305–16 (particularly at 315). -- 5 of 9 -- 6 [21] On 15 June 2018, a directions hearing was conducted at the Brisbane Courthouse by Member Stilgoe. Member Stilgoe then reviewed the matter on 24 August 2018, and again, on 27 March 2019. [22] At the last review, no material had been filed by either party setting out their approach or their preferred options for the determination of compensation. [23] Accordingly, Member Stilgoe made orders for the filing of material. [24] Since those orders, this Court has received no correspondence or any filed material. [25] The Court is left in the position of having to provide a decision about compensation based upon no evidence whatsoever from either party. [26] Unfortunately, notwithstanding that, in correspondence sent to DNRME seeking forgiveness for late lodging of the application for renewal, the Applicant makes reference to “14 mining leases in Georgetown area which constitute Georgetown Gold Project [sic]”, the Respondent did not see fit to assist the Court by revealing what compensation is being paid in respect of those leases which are, even though not contiguous with ML 3374, in the same area and arguably on similar land. [27] The material available on the Court file such as it is suggests that the subject property is used either exclusively or predominantly for grazing purposes. There is no information about the quality of the land, of stocking rates, or the impact of the proposed mining activity on the predominant pastoral utilisation of the land. Accordingly, any decision about compensation can only be made on the basis of wild speculation. [28] The mining lease area, as indicated above, is 128 hectares of which 125 hectares is the subject of this compensation decision. [29] As unsatisfactory as it may be, and in lieu of simply declining to determine any compensation whatsoever, the Court, on previous occasions has resorted to other decisions from throughout Queensland as offering guidance as to the figure that should be settled upon. [30] In this case the mining district is in the Georgetown area that is to say that it is in the inland area of Cape York in far north Queensland. -- 6 of 9 -- 7 [31] There have been recent decisions made in respect of land in the Charters Towers mining district in which the Court has settled upon a figure of $4 per ha per annum and $5 per ha per annum for access,2 and $8 per annum and $10 per annum respectively for mining lease areas.3 [32] The table set out below shows the various awards of compensation for both leases and access that have been made in recent times. No. Case Location & Land use Evidence? Compensation per hectare of ML Compensation per hectare of access 1 Fitzgerald v Struber & Anor [2018] QLC 18 Far north Qld Grazing use - $10/ha (see [13] to [15]) $5/ha (see [13] to [15]) 2 Aurum Vale Pty Ltd v Struber & Anor [2018] QLC 19 Far north Qld Grazing use No evidence relied upon by JR $10/ha (see [17]) $5/ha (see [17]) 3 International Parts & Equipment Pty Ltd v Struber & Anor [2018] QLC 23 Far north Qld Grazing use - $10/ha (see [16]) $5/ha (see [16]) 4 Pavey & Anor v Struber & Anor [2018] QLC 24 Far north Qld Grazing use - $10/ha (see [16] to [18]) $5/ha (see [16] to [18]) 5 Plethora Pty Ltd v Struber Far north Qld - $10/ha (see [15]) $5/ha (see [15]) 2 See Alphadale Pty Ltd v Dore & Ors [2016] QLC 15; Keyse v Phillipson & Ors [2016] QLC 40. 3 See Thomsen v Struber [2017] QLC 33; Pavey & Anor v Struber & Anor [2017] QLC 63; Skrzypczynski & Ors v Hutchinson [2017] QLC 4. -- 7 of 9 -- 8 & Anor [2018] QLC 26 Grazing use 6 Fitzgerald v Struber & Anor [2019] QLC 6 Far north Qld Grazing use - $10/ha (see [16]) $5/ha (see [16]) 7 Markert v Struber & Anor [2019] QLC 7 Far north Qld Grazing use - $10/ha (see [14]) $5/ha (see [14]) 8 Eacham Abrasive Blasting Pty Ltd v Gundersen & Anor [2014] QLC 38 Far north Qld Use not disclosed - $10/ha (see [16]) $5/ha (see [16]) 9 Wallace & Ors v Bottomer & Ors [2015] QLC 23 Far north Qld Use not disclosed - $10/ha (see [16]) $5/ha (see [16]) [33] His Honour Judge Jones of the District Court of Queensland (sitting as Member Jones of this Court as he then was) made the following observations in Unimin Australia Limited v Freeman: “I realise that my determination of compensation in this case is the result of little more than calculated guesswork or speculation. However, in circumstances where the parties have elected to provide little or no material to the Court concerning their position about compensation there is not much more that the Court can do.”4 [34] A large number of previous decisions of this Court referred to above demonstrate that the Court has felt compelled (I think appropriately) to determine some positive figure as appropriate compensation, rather than, observing that the landowners have not seen 4 [2007] QLC 76 [14]. -- 8 of 9 -- 9 fit to nominate any figure, simply awarding them nothing in line with their assistance to the Court. [35] In the present case, I am inclined to determine compensation at the rate of $10 per ha per annum in respect of the mining lease area of 122 hectares and $6 per ha in respect of the area proposed to be used for access. [36] In this case the determination in respect of ML 3374 is as follows: 1. Area covered by access 3 hectares at $6 per ha = $18 per annum; 2. Area covered by the mining lease 122 hectares at $10 per ha = $1,220 per annum; 3. Section 281(4)(e) of the MRA component of $125 per annum making $1,363 per annum or $13,630 for the life of the lease (10 years). [37] I direct that the compensation for the lease period of 10 years be paid annually within 30 days of notification by the Department of Natural Resources, Mines and Energy of the issue of the mining lease and annually thereafter on or before the anniversary of the issue of the mining lease. Accordingly, the miner is to pay to the landowners the total sum of $1,363 per annum. [38] Therefore, the orders of the Court are: 1. In respect of the application for renewal of ML 3374, compensation is determined in the amount of One Thousand Three Hundred and Sixty Three Dollars ($1,363) per annum, which is Thirteen Thousand Six Hundred and Thirty Dollars ($13,630) for the life of the lease. 2. Central Gold Mines Pty Ltd (now known as Kempton Minerals Pty Ltd) is to pay to Peter Gerard Terry as personal representative under Instrument No. 712177810, Richard Cob Terry as personal representative under Instrument No. 712177810, and Simon Brosnan Terry as personal representative under Instrument No. 712177810 compensation in the amount set out in Order 1, namely, One Thousand Three Hundred and Sixty Three Dollars ($1,363), within thirty (30) days from the notification of the renewal of the mining lease by the Department of Natural Resources, Mines and Energy and annually thereafter on or before the anniversary of the issuing of the lease. WL COCHRANE MEMBER OF THE LAND COURT -- 9 of 9 --