Carabella Resources Limited v Goodwin [2016] QLC 32 (2016) 37 QLCR 64

LAND COURT OF QUEENSLAND CITATION: Carabella Resources Limited v Goodwin [2016] QLC 32 PARTIES: Carabella Resources Limited (applicant) v Patricia June Goodwin (respondent) FILE NO: MRA123-14 DIVISION: General Division PROCEEDING: Determination of compensation payable for mining lease DELIVERED ON: 27 May 2016 DELIVERED AT: Brisbane HEARD ON: 15, 16, 17, 18, 19 September 2014 19, 20, 21, 22 January 2015 12 March 2015 21 August 2015 Submissions closed 25 August 2015 HEARD AT: Rockhampton, Yeppoon and Brisbane MEMBER: PA Smith ORDERS: 1. Compensation payable by the applicant to the respondent for the grant of MLA 80194 is determined in the total sum of $1,394,819 which sum includes the items agreed between the parties and the additional amount pursuant to s 281(4)(e) of the Mineral Resources Act 1989 2. The compensation in order 1 of $1,394,819 is payable within 14 days of the grant of MLA 80194 save for the determined compensation for the relocated house related items which is payable within 14 days of the applicant being provided with a copy of a binding contract for the construction of a house on the land and not before 14 days after the grant of MLA 80194. -- 1 of 104 -- 2 CATCHWORDS: MINING – compensation for mining lease – s 281 Mineral Resources Act 1989 – method of valuation – no separate assessment for each head – no “doubling-up” – consider circumstances of each case MINING – compensation for mining lease – consideration of legal principles - highest and best use of land – similar legal principles to compensation available under the Acquisition of Land Act 1967 MINING – compensation for mining lease – consideration of comparison sales – conclusions of both sides valuers unreliable – court to do the best it can with what evidence it has before it – benefit given to landowner - check value against sale of neighbouring property to the miner MINING – compensation for mining lease – consideration of loss of resources (timber and non-mineral) in the proposed mining lease – loss of possible business activity – discounts applied MINING – compensation for mining lease – consideration of claim for depreciation/diminution to balance land – severance, noise and dust impacts discussed MINING – compensation for mining lease – loss of adjoining rental property – outside mining lease area – provides no basis for a claim of compensation MINING – compensation for mining lease – rental income – maintenance costs deduction – rental market evidence – no reasonable evidence of loss – quantum nil MINING – compensation for mining lease – forced sale of cattle – loss – doubling-up – timing of grant – lack of business and stock records – evidence vague – conjecture – quantum nil MINING – compensation for mining lease – claim items contended by applicant – not specifically claimed by respondent – stamp duty – livestock transport– settling costs – claims allowed MINING – compensation for mining lease – 10% value of land – s 281(a)(e) Mineral Resources Act 1989 – greater percentage not contended – additional amount allowed at 10% Acquisition of Land Act 1967 Land Act 1994 Land Court Act 2000, s 7A Land Court Rules 2000 -- 2 of 104 -- 3 Mineral Resources Act 1989, ss 46, 234, 279, 279(5), 281(3), (4), (5), 320(1), (3), 321 Mineral Resources Regulation 2013 Uniform Civil Procedure Rules 1999 Vegetation Management Act 1999 Australian Securities & Investment Commission v Rich (2005) 190 FLR 242 Barrett v Weir and Gregcarbil Pty Ltd [2009] QLC 182 Beard v The Director of Housing [1961] TAS SR 141 BHP Billiton Mitsui Coal Pty Ltd v Isdale & Ors [2015] QSC 107 Couper Essex v Local Board of Action (1889) 14 App CAS 153 Crisp & Gunn Co-operative Ltd v Hobart Corporation (1963) 110 CLR 538 Crompton v Commissioner of Highways (1973) 32 LGRA 8 Edinburgh Pty Ltd v The Minister (1963) 8 LGRA 45 Emerald Quarry Industries Pty Ltd v Commissioner of Highways [No 2] (1979-81_ 43 LGERA 273 Gold Coast City Council v Halcyon Waters Community Pty Ltd (2011) 32 QLCR 146 Gregcarbil Pty Ltd v Backus & Ors (No. 4) [2013] QLC 68 GWE Armstrong & Ors v Council of the City of Caloundra Unreported, 13 October 1998 Henry v ERO Georgetown Gold Operations Pty Ltd [2016] QLC 17 Horn v Sunderland Corporation [1941] 2 KB 26 Jones v Dunkel [1959] 101 CLR 298 Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11 Marcus Clark & Co Ltd v Commissioner of Railways (1949) 11 The Valuer 29 Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of NSW [2006] NSW CA 314 Mitchell v Oakhill & Mitchell (1998) 19 QLCR 66 Mitchell v Oakhill and Mitchell (10 March 1998) unreported Nelungaloo Pty Ltd v Commonwealth (1948) 75 CLR 495 Pastoral Association Ltd v The Minister (1914) AC 1083 Re Q Coal Pty Ltd v Watts [2006] QLRT 115 Vyricherla Narayana Gajapatiraju v The Revenue Divisional Officer, Vizagapatam [1939] AC 302 Realty Corporation Ltd v Commissioner of Main Roads (1940) 14 NSW LGR 204 Redeam Pty Ltd v South Australian Land Commission (1977) 40 LGRA 151 Reference Under The Electricity Commission (Balmain Electric Light Co. Purchase) Act 1950 (1956) 1 LGRA 49 Richardson v Barrett [2001] QLRT 89 -- 3 of 104 -- 4 Richardson v Roads and Traffic Authority of New South Wales (1996) 90 LGERA 294 Salmon v Armstrong (2002) QLRT 54 Savimaki v Sunshine Coast Regional Council [2013] QLC 33 Shaw v Heritage Holdings Pty Ltd (1992-93) 14 QLCR 139 Smith v Cameron (1986) 11 QLCR 64 Spencer v Commonwealth (1907) 5 CLR 418 Suntown Pty Ltd v Gold Coast City Council (1979) 6 QLCR 196 Sydney Harbour Foreshore Authority (2009) 233 CLR 259 Turner v Minister of Public Instruction (1956) 95 CLR 245 Van Byron Pty Ltd v Chief Executive, Department of Main Roads (2011) 32 QLCR 325 Waters & Ors v Welsh Development Agency [2004] 2 All ER 915 Wills v Minerva Coal Pty Ltd (1998) 19 QLCR 297 Zimmerebner v Hawkins (1999) QLCR 71 APPEARANCES: JS Brien of Counsel for the applicant GR Allan of Counsel and J Hammond of Counsel for the respondent SOLICITORS: McCullough Robertson for the applicant Sanderson Park for the respondent Background [1] Carabella Resources Limited (the applicant) has applied for Mining Lease 80194 (MLA 80194) situated at Bluff. MLA 80194 has a total area of 1106.9 ha and is primarily located on two cattle grazing properties, being Kalari owned by Patricia June Goodwin (the respondent) and Colorado formerly owned by Colin Goodwin. Kalari and Colorado are separated by a road. [2] As compensation between the applicant and the respondent has not been agreed, the determination of compensation was referred by the Coal Assessment Hub, Department of Natural Resources and Mines, to the Land Court pursuant to s 279(5) of the Mineral Resources Act 1989 (the MRA). [3] Pursuant to Land Court Practice Direction No. 6 of 2015, the referral by the Coal Assessment Hub resulted in the miner being deemed the applicant in this matter, and the landholder being deemed the respondent. [4] Of the total area of MLA 80194 of 1106.9 ha, 588.3 ha are located on Kalari, 462.6 are located on Colorado, 13 ha on Central Highlands Regional Council controlled land, and -- 4 of 104 -- 5 26.46 ha on Queensland Rail land. The Council matter has not been referred to the Land Court, while the Queensland Rail matter was referred and then settled. [5] The issues of compensation as between the applicant and Colin Goodwin relating to Colorado was referred to the Land Court pursuant to s 279(5) of the MRA. However, the applicant subsequently purchased Colorado resulting in that referral coming to an end. The sale of Colorado will be further discussed later in these reasons. [6] In addition to claims for compensation relating to Kalari, the respondent has also made a claim with respect to another property owner by the respondent, being a term lease of Lot 2 on HT 185 with an area of 0.8094 ha, granted for residential purposes, which is currently rented (the rental property). The rental property is leased by the respondent under the Land Act 1994. The lease commenced on 9 February 2000 and is due to expire, subject of course to rights of renewal, on 8 February 2020. [7] The rental property is bordered on three sides by Kalari and on the fourth side by railway land. The rental property is in close proximity to MLA 80194 but MLA 80194 is not over any part of the rental property and does not border the rental property. The respondent’s claim [8] Although in the lead up to the hearing and during the hearing itself, various amounts were sought by the respondent, the final figure which the respondent is seeking for compensation was ultimately fixed in the sum of $3,076,259. The applicant contends that compensation should be determined in the sum of $877,576. [9] The final claim of the respondent of $3,076,259 is made up as follows:1 Item Relevant section of the MRA Description of claim Amount of compensation 1 281(3)(a)(i), (ii), (iii) 588.3 ha @ $1,000/ha (assessed as a total loss) $588,300 2 281(3)(a)(i), (iii), (vi) Loss of added value of rosewood timber 6000 rosewood fence posts/annum @ $8/post $321,000 3 281(3)(a)(i), (iii), (iv) Loss of added value non-mineral resources (calculated by Dugald Gray mining engineer paragraphs 4.8 to 4.10 report filed 28.08.14) $815,000 4 281(3)(a)(iii), (vi) 281(4)(a) Loss of improvements – racehorse training track (1370m) $12,000 5 281(3)(a)(ii), (iii), (iv) Allow 20% depreciation to remaining area of Kalari in perpetuity due to severance (reduction in area) and the existence of mining lease and coal mine on property (incl. blot on title) 1969 ha $393,800 1 Note that the figures are taken from a compilation of the figures set out in both the applicant’s and respondent’s submissions. -- 5 of 104 -- 6 @ $200/ha 6 281(3)(a)(iii), (vi) 281(4)(d) Loss of value of 44 weaners/years @ $250/head due to reduced carrying capacity on 580ha: NPV of $11,000 pa for 15 years at 4% discount $122,302 7 281(3)(a)(iii), (vi) 281(4)(a) Loss of use of existing house, shed and stables:- Quantum of loss equates to construction cost of replacement: Dwelling Shed Stables $227,760 $21,500 $10,000 8 & 9 281(3)(a)(iii), (vi) 281(4)(a) Cost of connecting power to new house site: 4.7km @ $40,000/km and cost of connecting telephone service at new home $121,000 10 281(3)(a)(iii),(vi) 281(4)(a) Cost to provide a water supply to the new house site, construct a house dam, solar pump system, 5000 tank for the house supply and fences forming part of fences and water $50,000 11 281(3)(a)(v) 281(4)(a) Provision of new access road to new house 5.8km @ $15,000/km $72,000 12 281(3)(a)(iii), (vi) 281(4)(d) Loss of income from adjoining rental house property: NPV of $13,379.12 pa for 15 years @ 4% discount $148,754 13 281(3)(a)(iii), (vi) 281(4)(d) Loss of value of cattle through forced sale of drought stock onto a depressed market: 90 stock forced dale @ $224/head – market price in normal seasons ($750/head – loss of $526/head $47,340 14 281(3)(a)(vi) Legal and valuation expenses incurred prior to 27 May 2014 when matter referred to Land Court $27,293 15 281(4)(e) Plus additional amount of 10% on compensation on loss of land ($588,300) and diminution in value of balance land ($393,800) equals total compensation $982,100 x 10% $98,210 Total: $3,076,259 -- 6 of 104 -- 7 [10] A number of items were ultimately agreed between the applicant and the respondent. The agreed items are as follows: Item Claim Agreed Sum 4 Race track $12,000 7 House, shed and stables $259,260 8 and 9 Power and phone $121,000 10 Water supply and fences forming part of fences and water $50,000 11 Access $72,000 14 Legal and valuation $27,293 Total $541,553 [11] The position of the parties with respect to the eight outstanding items is as follows: Item Claim Applicant’s position Respondent’s position 1 Area affected by ML $235,320 $588,300 2 Rosewood Nil $321,000 3 Non-mineral resource Nil $815,000 5 Depreciation/diminution to balance land $32,992 $393,800 6 Reduction in cattle on 580 ha – dust Nil $122,302 12 Rental income Nil $148,754 13 Loss of value of cattle forced sale Nil $47,340 Stamp duty $14,189 NIL Cost to transport livestock $1,875 NIL Settling costs $5,000 NIL 15 10% of value of land $46,647 $98,210 Respective Totals $336,023 $2,534,706 The Hearing [12] The hearing of this matter commenced in Rockhampton on 15 September 2014 and continued in Yeppoon on 16 September 2014. A view of MLA 80194, Kalari, the rental property, Bluff, and various sales properties was conducted on 17 September 2014. The hearing then continued on 18 and 19 September 2014 in Rockhampton. As the matter was more complex than the parties (and in particular the respondent) anticipated, the matter was then adjourned. The hearing subsequently continued in Brisbane from 19 to 22 January 2015. Written submissions were then provided, and the hearing of oral submissions took place on 12 March 2015. [13] After the close of submissions, but before the decision is this matter had been finalised, the Supreme Court handed down its decision in the matter of BHP Billiton Mitsui Coal Pty Ltd v Isdale & Ors.2 The key finding of the Supreme Court in the BHP Billiton case was that an objection hearing under the MRA was not a “proceeding” for the purposes of 2 [2015] QSC 107. -- 7 of 104 -- 8 the Land Court Rules (LCR) which had the consequence that the Uniform Civil Procedures Rules 1999 (Qld) (UCPR) did not apply in the Land Court to such objections hearings. Although the current case is not an objection hearing, it is, like an objection hearing, a referral to the Land Court under the MRA. [14] Particularly in the first week of the hearing, there were significant objections to evidence and rulings made on those objections. It was the understanding of all concerned at the time that the UCPR applied to the matter unless there was a specific rule under the LCR. [15] In light of the uncertainties relating to the evidence as a consequence of the decision in BHP Billiton, the parties were called back before the Court on 21 August 2015. The parties were then given until 25 August 2015 to provide the Court with joint written submissions, if possible, as to the impact of the BHP Billiton case on the evidence received by the Court at the hearing of this matter. Other matters of relevance to be considered by the parties included amendments to the Land Court Act 2000 (LCA) made as a consequence of the BHP Billiton decision, together with Land Court Practice Direction 1 of 2015. [16] The solicitors for the parties included the following in their joint written submissions of 25 August 2015: “In accordance with the orders, the parties have reached a joint position as to the issues of admissibility raised by his Honour. Consequently, the parties jointly request that the Court makes its decision having regard to the totality of evidence adduced in the hearing and the submissions made by the parties.” [17] Accordingly, no party contends that the Land Court cannot have regard to the evidence at the hearing of the matter even though the Land Court arguably did not have power under the UCPR to make rulings on the admissibility of evidence. Importantly, however, the Land Court had at all relevant times, and still has, power under the LCA to make the rulings that it did. This position was confirmed in Henry v ERO Georgetown Gold Operations Pty Ltd3 where I found at paras 12-16 that mining compensation matters are proceedings and not administrative enquiries for the purposes of the LCA. [18] Throughout the hearing the applicant was represented by Ms JS Brien of Counsel, instructed by McCullough Robertson Lawyers. The respondent was represented for the first week of the hearing by Mr GR Allan of Counsel and Mr J Hammond of Counsel, instructed by Sanderson Park Solicitors. However, Mr Allan of Counsel withdrew from the case after the conclusion of the first week. The respondent was subsequently represented by Mr Hammond instructed by Sanderson Park Solicitors. 3 [2016] QLC 17. -- 8 of 104 -- 9 [19] The applicant relies upon evidence adduced from: (a) Mr William McLay – valuer (Ex 3 and Ex 4); and (b) Mr Bruce Robertson – mining engineer, executive manager for technical services and planning – Carabella (Ex 2). [20] The respondent relies upon evidence adduced from: (a) Mr Jack Cowie – valuer (Ex 8 and Ex 9); (b) Mr Alistair Byrom – surveyor (Ex 6); (c) Mr Dugald Gray – mining engineer (Ex 51 and Ex 52); (d) Dr Graham Shorten – geologist (Ex 7); and (e) Mr Selke – tenant (Ex 14). Principles of compensation under the MRA [21] Section 279 of the MRA provides that a mining lease shall not be granted or renewed unless an agreement in relation to compensation has been filed at the office of the mining registrar, or in the absence of such an agreement, a determination of compensation has been made by the Court. In this matter, no agreement has been lodged with the mining registrar and the matter has been referred to the Court for determination. [22] The issues which must be considered by the Court are set forth in s 281(3), (4) and (5) of the MRA which provides as follows: 281 Determination of compensation by Land Court … (3) Upon an application made under subsection (1), the Land Court shall settle the amount of compensation an owner of land is entitled to as compensation for— (a) in the case of compensation referred to in section 279— (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; and (b) in the case of compensation referred to in section 280— (i) diminution of the value of the land of the owner or any improvements thereon; (ii) diminution of the use made or which may be made of the land of the owner or any improvements thereon; (iii) all loss or expense that arises; as a consequence of the grant or renewal of the mining lease. -- 9 of 104 -- 10 (4) In assessing the amount of compensation payable under subsection (3)— (a) where it is necessary for the owner of land to obtain replacement land of a similar productivity, nature and area or resettle himself or herself or relocate his or her livestock and other chattels on other parts of his or her land or on the replacement land, all reasonable costs incurred or likely to be incurred by the owner in obtaining replacement land, the owner’s resettlement and the relocation of the owner’s livestock or other chattels as at the date of the assessment shall be considered; (b) no allowance shall be made for any minerals that are or may be on or under the surface of the land concerned; (c) if the owner of land proves that the status and use currently being made (prior to the application for the grant of the mining lease) of certain land is such that a premium should be applied—an appropriate amount of compensation may be determined; (d) loss that arises may include loss of profits to the owner calculated by comparison of the usage being made of land prior to the lodgement of the relevant application for the grant of a mining lease and the usage that could be made of that land after the grant; (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). (5) In any case the Land Court may determine the amounts and the terms, conditions and times when payments aggregating the total compensation payable shall be payable. [23] Although s 281 sets out the matters to be considered, it does not define any method of assessment. In Smith v Cameron,4 the Land Court held: “The section in my opinion merely identifies matters which shall be taken into consideration in making the assessment. It does not prescribe a method of valuation. No doubt each case will depend on its own facts and circumstances but it seems to me that either method is open to the valuer.” [24] In Shaw v Heritage Holdings Pty Ltd,5 the Land Court said: ‘The method of assessment remains a matter which will be governed by the facts and circumstances of each case in which event emphasis may shift from one method to another.” [25] In considering Mitchell v Oakhill and Mitchell,6 the then President of the Land Court, referring to s 281(3) of the MRA, found: “the latter section does not prescribe a method of assessment. In my view, as long as the amount of compensation finally determined sufficiently accounts for each of the matters referred to in the sub-section, it is not necessary to quantify an amount in respect of each of the matters referred to.” 4 (1986) 11 QLCR 64 at p 74 and 75. 5 (1992-93) 14 QLCR 139 at p 146. 6 (10 March 1998) unreported. -- 10 of 104 -- 11 [26] In determining compensation under s 281 of the MRA, I have adopted the same approach I took in Richardson v Barrett.7 This means that the matters set out in the section are concepts to be taken into account in determining compensation, not a notion of separate heads of compensation requiring separate and discreet treatment to arrive at an accumulated figure. [27] The overriding principle is of equivalence, ensuring that, so far as money can do it, the landholders are placed in the same position as if the mining leases were not granted.8 Of course, great care must also be taken to ensure that there is no “doubling up” of compensation.9 [28] Section 281 is concerned with ‘compensation’ to the affected landowner. The purpose of compensation is to provide the owner of the land with the full money equivalent of that of which the owner has been deprived.10 Compensation is assessed as the full monetary equivalent of the value to the owner of the land.11 This is to be achieved by valuing the land for its most advantageous purpose, namely its highest and best use. [29] For the purposes of s 281 of the MRA, the value of the land is to be ascertained in accordance with the Spencer test.12 The Spencer test provides that in assessing the amount of compensation, what is required is an estimate of the price which would have been agreed upon in a voluntary bargain between a properly advised vendor and purchaser, each willing to trade but neither of whom was so anxious to do so that they would overlook any ordinary business considerations.13 [30] Returning to Smith v Cameron a mining lease was described in the following manner:14 “I see an affinity and similarity between the imposition of an encumbrance on the appellants’ land by means of the grant of a mining lease and that of the compulsory taking of an easement over land for public purposes.” [31] Further, in Zimmerebner v Hawkins15 the Court stated: “The test to be applied in cases such as the present was set out by the Land Court in Smith v Cameron (1986) 11 QLCR 64. … In that case the court likened the use of land for mining purposes to compulsory acquisition of land for a limited period, and applied the various principles and 7 [2001] QLRT 89 at paragraphs 9, 10 and 14. 8 Horn v Sunderland Corporation [1941] 2 KB 26 at 43 per Jacobs J. 9 Gregcarbil Pty Ltd v Backus & Ors (No. 4) [2013] QLC 68. 10 Nelungaloo Pty Ltd v Commonwealth (1948) 75 CLR 495 at 571 per Dixon J, and Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2009) 233 CLR 259 at 271-272. 11 Turner v Minister of Public Instruction (1956) 95 CLR 245 at 264. 12 Wills v Minerva Coal Pty Ltd (1998) 19 QLCR 297 at 318. 13 Spencer v Commonwealth (1907) 5 CLR 418 14 Smith v Cameron at p 73. 15 (1999) QLCR 71 at 19. -- 11 of 104 -- 12 practices of valuation which are applied in determining compensation for the taking of limited right over land for public purposes.” [32] Once the Land Court makes a determination as to compensation or there is an agreement, the mining lease may be granted.16 In addition to any special terms and conditions as the MRA provides a general set of conditions that each mining lease is subject to.17 The general conditions include matters relating to obligations for restoration, access, payments of compensation and payment of royalties. [33] By s 235, the lessee is entitled to go on the mining lease for purposes connected with mining. The holder of the mining lease does not have a right of exclusive possession. The impact of the mining lease does not necessarily deprive the owner of the use of the whole of the lease area for the term of the lease.18 [34] Pursuant to s 235 of the MRA the grant of a mining lease entitles the holder to enter and be on the lease area for any purpose for which the mining lease is granted (relevantly in this case, coal mining) or for any purpose permitted or required under the lease or by the MRA and may do all such things as are permitted. Section 245(1)(k) of the MRA requires the identification of the mineral in respect of which the mining lease is sought. Mineral is defined in s 6 of the MRA. Section 6(3)(d)(i) of the MRA specifically excludes soil, sand, gravel and rock from the definition of mineral. A mining lease authorises the extraction of a mineral. [35] Compensation determined pursuant to s 281 is to compensate the owner of land in respect of the grant of the mining lease, that is mining for minerals and related purposes. Section 235 is expressed to be subject to s 236. Section 236 provides: 236 Entitlement to use sand, gravel and rock (1) Subject to compliance with any conditions specified in the mining lease and payment of the prescribed royalty to the person having the property in any sand, gravel or hold the holder of the mining lease may utilise, upon the area of the mining lease and for any purpose permitted under the mining lease, sand, gravel and rock occurring in or on the area of the mining lease except to the extent that an authority granted under any other Act prior to the grant of the mining lease or, with the consent of the holder of the mining lease, after the grant of the mining lease for the use or disposal applies thereto. … (3) For the purposes of chapter 11, sand, gravel and rock utilised by the holder of a mining lease pursuant to this section shall be deemed to be mineral mined by the holder. 16 Sections 279 and 234 MRA. 17 Section 276 MRA and s 22 and Schedule 1 Mineral Resources Regulation 2013. 18 Barrett v Weir and Gregcarbil Pty Ltd [2009] QLC 182 at [26]. -- 12 of 104 -- 13 [36] Section 236(1) of the MRA allows the use of sand, gravel and rock occurring in or on the area of the mining lease for any purpose permitted under the mining lease subject to compliance with any conditions specified in the mining lease and payment of the prescribed royalty to the person having the property in any sand, gravel or rock. For the purposes of chapter 11 only of the MRA, sand, gravel and rock utilised by the holder of the mining lease pursuant to s 236 is deemed to be a mineral mined by the holder and the royalty provisions in the chapter apply. [37] The holder of a mining lease under the MRA must pay royalties as prescribed to the person with the property in the deemed mineral.19 The MRA and the Mineral Resources Regulation 2013 (MRR) fix the royalty rates. The royalty rates for each tonne of material area, clay shale ($0.50), sand, gravel and rock, other than rock mined in block or slab form for building or monumental purposes ($0.50) and for a mineral for which a royalty rate is not otherwise stated in this schedule is 2.5% of the value of the mineral.20 [38] Having considered the relevant provisions of the MRA and the MRR, I now turn to consider each item of compensation claimed which is disputed. [39] In considering the claims for compensation, I have taken into account all of the evidence presented by the parties at the hearing. Where necessary, under each item I refer to specific evidence that I have taken into account and/or salient points with respect to the evidence. Item 1 – Area to be affected by MLA 80194 [40] The first item to be considered is that part of Kalari on which MLA 80194 is located. As already indicated, this is an area of 588.3 ha out of the total area of Kalari of 2,558 ha. [41] As indicated, the Court has the assistance of two expert valuers; Mr McLay called by the applicant, and Mr Cowrie for the respondent. Mr McLay assesses compensation under this item in the sum of $235,320 based on a value of the land on Kalari within MLA 80194 of $400/ha.21 Mr Cowie had valued all of the land at Kalara at $1,000/ha which results in his assessment for the loss of land on Kalari within MLA 80194 of $588,300. [42] The differences in the valuation for Item 1 arise as a result of each valuer having a different assessment of Kalari and also because of the different opinions as to comparable sales. 19 Section 320(1) and (3) MRA. 20 Section 321 MRA and s 46 and Schedule 3, part 2 MRR. 21 Ex 3 para 7.3. -- 13 of 104 -- 14 [43] Both valuers have agreed that a piecemeal valuation approach is appropriate for the assessment of the overall compensation in this matter. Both also agree that the highest and best use of Kalara is its current grazing use, although Mr Cowie also notes the relevance of the impact of the MLA on the harvesting of rosewood posts and rails and the quarrying of white clay and gravel.22 I will leave the rosewood and quarrying issues for consideration under Items 2 and 3 respectively. As regards to compensation under Item 1, both valuers have used a direct comparison method comparing sales of other properties. [44] The valuers also agree that the area of 588.3 ha should be viewed as a 100% loss. [45] I will now turn to examine the evidence of each valuer in some detail. Mr McLay [46] Mr McLay has this to say about Kalari:23 “2.2 Easements, Encumbrances and Interests A full list of encumbrances is retained on file. A list of encumbrances which may have a negative impact on value are listed below:  Rights and interests reserved to the Crown by Deed of Grant No. 30579102 (Lot 10 on CPHT547)  Rights and interests reserved to the Crown by Deed of Grant No. 40056120 (Lot 3 on SP136854)  Easement No. 602800209 burdening the land to The Capricornia Regional Electricity Board over Eastment B on HT384  Sec 174 Notation No. 711587462 The provisions of Section 174(1), Land Act 1994 apply to a Transfer of the whole or part of the land. This requires ministerial consent for transfer of whole or part of the land.  Mortgage No. 714364740 Kintail Farming Pty Limited Administrative Advices Dealing Type Lodgement Date Status 712781273 Vegetation Notice 08/10/2009 Current … 22 Ex 8 para 15. 23 Extracts from Ex 3 pp 2 – 7. -- 14 of 104 -- 15 4.1 Location Details Locality The subject is located approx. 1 km from the Bluff township, south of the Capricorn Highway. … Surrounding Development Surrounding land uses comprise similar type grazing enterprises. Bluff is a small rural/railway town of approximately 300 people, situated approximately 180 kilometres west of Rockhampton on the Capricorn Highway. Most employment is with Queensland Rail. The town has a post office, Primary school, hotel and shop. Housing construction dates back to 1900. 4.2 Country Description Area 2,558 hectares. Topography, Soils and Native Timber The land comprises harder lancewood ironbark gravely ridges in the northern part of the property, merging into sandy box, gum, ironbark and yapunyah in the central areas, and brigalow/box on the estern boundary. Sandy bloodwood, budgeroo and wattle forest in the southern areas, funning into range escarpments. Land Classification For valuation purposes the property has been apportioned into various land use components. Areas are approximate. Country Classification Area (ha) % Brigalow and associated softwood 260 10% scrub on clay soils. Buffel and native grasses. Pulled and semi open box, ironbark, 743 29% yapunyah, gum forest on sandy soils. Native and buffel pasture. Bloodwood, ironbark, budgeroo and 330 13% wattle forest on sandy soils in the south eastern corner. Native pastures. Hard lancewood, ironbark, wattle 1000 39% and gum tablelands, part pulled and seeded. Range escarpment and foothills. 225 9% Timbered. Total 2,558 100% Flooding None detrimental to the property. Road System and Access Access to the property is via the Capricorn Highway then earth and gravel roads to the homestead. Internal roads consist of periodically graded earth tracks providing fair dry weather access through the property. Services The following major services are connected: reticulated tank water, septic, telephone, electric power. -- 15 of 104 -- 16 Rainfall The Bureau of Meteorology rainfall mapping indicates that the property is located within an area with an annual rainfall range of between about 600 mm and 700 mm with an average of 650 mm. Pasture Buffel grass and stylos supported by native pastures in the developed areas. A property plan is attached at Annexure 3. 4.3 Productivity Operative Overview We have assessed the ongoing carrying capacity at 270 breeders taking progeny to weaner age. Steers are fattened in the brigalow country. … 4.5 Fencing Improvements Description Condition Boundary ‘Colorado’ – 3 barb wires on timber posts Fair/Good ‘Charlevue’ – natural range boundary Western boundary – new 4 barb wires and Rosewood post fence Northern boundary – 4 barb wires on steel posts Inernal The property is internally subdivided into Fair/Good 3 paddocks and a horse paddock with 3 barb wire on rosewood posts and 3 barb wires on mixed steel post fences. 4.6 Water Improvement Description Natural Permanent No permanent natural water Non Permanent Seasonal creek flows after local rain Artificial Condition Dams Top Walton Creek – 3,000 cubic metres Good/Fair Fisher’s Paddock Dam – 5,500 cubic metres fenced, walk-in water. This dam is equipped with a windmill, turkeys nest and trough. Share Dam – 7,000 cubic metres fenced and equipped with windmill, tank and 2 troughs North Dam – 2,500 cubic metres fenced ” -- 16 of 104 -- 17 [47] It should be noted that in Exhibit 4 Mr McLay sets out, although in different order, essentially the same description and opinions with respect to Kalari. One important addition though relates to his views on productivity where he has added the following in Exhibit 4 regarding 270 breeders: “This converts to about 350 adult equivalents (AE) at a rate of 1 AE:7.30 ha.” [48] Mr McLay relies on five sales in support of his valuation of Kalari. He has summarised those sales as follows:24 “6.1 Sales Commentary and Conclusions We have summarised the sales utilised in the valuation in the following table. Property Sale Price Land Area (ha) $/HA Ex- Structures $/BR Ex- Structures Comparison to Subject 1. ‘Lagoon Paddock’ $710,000 2,022 $351 $2,968 Smaller area – Comparable quality 2. ‘Karamea’ $600,000 908 $661 $3,319 Smaller area – Superior quality 3. ‘Yard Paddock’ $915,000 1,531 $489 $3,644 Smaller area – Superior quality. 4. ‘Timberoo’ $2,100,000 4,403 $441 $3,319 Larger – Superior quality 5. ‘Myimbarr’ $705,000 397 $1,360 $5,400 Smaller area – Superior quality ” Mr Cowie [49] For his part, Mr Cowie says the following about Kalari:25 “10. Kalari is adjacent to and immediately south from the Town of Bluff. The property adjoins the Capricorn Highway in the north-eastern corner with the Central Western rail line along the northern boundary of the property. The property is situated about 175km westerly from the City of Rockhampton Access 11. The property has frontage to the Capricorn Highway which is bitumen surfaced. Services 12. Rural power and telephone services are connected to the property. Zoning 13. The land is zoned ‘rural’ under the Central Highlands Regional Council town planning scheme. 24 Ex 3 p 11. 25 Ex 8 pp 6 – 8. -- 17 of 104 -- 18 Land Use 14. Kalari is used for grazing beef cattle. Historically, gravel and white clay have been extracted and sold from the reserves on the property. Rosewood timber fence posts have also historically been harvested from land within the mining lease area. Highest and Best Use 15. The highest and best use of Kalari assuming that the mining lease had not been applied for is the existing use. After the grant of the proposed mining lease the harvesting of rosewood posts and rails will be lost to the mining operation as will the quarrying of white clay and gravel and the grazing operation will be adversely affected because the carrying capacity will be reduced significantly by the mining operations. Water Facilities 16. Natural: Water lasts in gullies for short periods after rain. There is a small spring in the south-eastern part of the property which lasts throughout the year. Suitable underground water for stock is not available on the property. 17. Artificial: Artificially watered by four (4) dams plus a shared dam on the western boundary. Description of Country 18. The property comprises a mix of country from developed scrub to open undulating forest, areas of poor forest of lancewood-rosewood gravelly ridges with the southern boundary running into a steep escarpment range with vertical cliffs along the southern boundary. 19. There is an area of about 300 hectares of developed scrub in the south- western corner, with a brigalow regrowth on the area recently re-pulled. The area is well grassed with buffel. 20. The northern part of the property comprises a mix of forest of Box and Narrow-leaf Ironbark country interspersed with lancewood and Rosewood ridges with areas of lighter country timbered with Cyprus pine and Bull oak. 21. The southern part of the property south from the high tension power line comprises mainly open frost country of narrow-leaf ironbark, Moreton Bay Ash with some box and wattle in areas. Description of Country within Mining Lease Area 22. The country covered by the mining lease some 588.3 hectares contains a mix of country. This area originally comprised open forest of Box, Sandalwood and Bloodwood on gently undulating duplex soils extending along the eastern and southern areas of the proposed mining lease area. 23. The country rises from this forest area to low ridges of broken country comprising a mix of Box and of Bull Oak, Bloodwood, Wattle, Lancewood, Turkey bush and Rosewood interspersed with areas of Bloodwood forest. -- 18 of 104 -- 19 24. The soils in this area comprise a mix of red, red gravelly to stony areas on jump ups. About 100 hectares (15%) of forest has been developed along the eastern and southern areas. The higher country provides a good mix of country within the subject property and provides shelter and protection for stock during the winter period and rain events. 25. For these reasons, the loss of this area by the proposed mining lease will have a detrimental effect on the overall management of the balance area of the property. 26. photographs of the country types on Kalari are included in Appendices as summarised in the following table: Appendix Number Description 13 Forest country on southern part of Kalari near powerline easement 14 Area within ML 80194 improved forest country including dam in foreground 15 Rosewood country within the mining lease area Pasture 27. About 100ha of forest country mainly along the eastern boundary adjacent to the homestead and extending towards the centre of the northern part has been pulled and developed. 28. The property has a good mix of pasture with buffel, seca stylo, uraclower, couch, black and white spear, browntop and wire grasses. Soils 29. The soils comprise a mix of lighter duplex soils, black soil, and gravelly red soils with some areas subject to severe erosion after the surface has been disturbed, mainly on the lighter duplex soils. Carrying Capacity 30. 1 beast to 6.5 ha (398 head). Fencing 31. The property is fenced into three (3) main paddocks. 32. The fencing comprises a mix of 2 Plan 1Barb on 6 metre spacing wood posts to 4 barb on 8 metre spacing wood posts and 2 Barb 1Plain on 8 metre spacing wood posts.” -- 19 of 104 -- 20 [50] Leaving to one side the sale of Colorado, Mr Cowie relies on seven sales. Unfortunately, he has not provided a short form table summary of his sales. Mr Hammond of Counsel for the respondent has summarised the sales into tabular form, albeit without noting the sale price and the comparisons to the subject. Set out below is an adaption of Mr Hammond’s table of Mr Cowie’s sales to which I have added a summary of Mr Cowie’s comparison notes and sale prices: “ Sale Number Sale Price Name of Property Date of Sale Area (ha) $/ha TFW Comparison to Subject 1 $730,000 402 Charlevue Rd 01.04.14 397.1 1471.00 Inferior 2 $2,000,000 521 Granleigh – Pheasant Creek Road 20.05.13 1092.95 1354.00 Superior 3 $830,000 Lenz Access Road 06.11.13 781.45 1037.00 Inferior 4 $1,800,000 Capricorn Hwy June 2013 1434 1255.00 Similar 5 $915,000 Yard Paddock 11.05.12 1990.195 584.00 Inferior 6 $710,000 Lagoon Paddock 06.03.12 2022 351.00 Inferiorr 7 $5,200,000 Mt. Flora Road 21.03.12 3750 1386.00 Superior ” [51] There are three common sales between Mr McLay and Mr Cowie. These are McLay’s sales 1, 3 and 5, which are Mr Cowie’s sales 6, 5 and 1 respectively. I discuss the commonality of Mr McLay’s sale 5 and Mr Cowie’s sale 1 later in these reasons. [52] Ms Brien for the applicant submits that Mr McLay’s sales are more closely located to the subject than Mr Cowie’s sales. This is true at least with respect to Mr Cowie’s sales 2 and 3, as is evidence from an analysis of Exhibit 46 which is as follows: -- 20 of 104 -- 21 [53] It must be pointed out that there is an error in Exhibit 46. Mr McLay’s sale 1 (Lagoon Paddock) is linked with Mr Cowie’s sale 5, where it should be linked with Mr Cowie’s sale 6. Likewise, Mr McLay’s sale 3 (Yard Paddock) is linked with Mr Cowie’s sale 6 where it should be linked with Mr Cowie’s sale 5. As Yard Paddock and Lagoon Paddock are common sales in extremely close proximity to each other, the discrepancy in Exhibit 46 is not of concern. [54] It is now necessary to consider each of the sale properties. -- 21 of 104 -- 22 Mr McLay Sale 1 / Mr Cowie Sale 6 – Lagoon Paddock [55] Lagoon Paddock has an area of 2,022 ha and sold on 6 March 2012 for $710,000 which has been analysed by both valuers to $351/ha.26 [56] Mr McLay describes Lagoon Paddock as being made up of mixed ironbark and bloodwood forest country broken by inferior harder rosewood, lancewood and wattle ridges. The land comprises mostly standing timber with a small area having been pulled and raked, and now carrying mostly native pastures. He notes that Lagoon Paddock is fenced into two main paddocks plus a forestry lease paddock, and is watered from four stock dams and some natural lagoons. Mr McLay notes that Lagoon Paddock has no structural improvements and no power and is of a smaller size to Kalari. Overall, Mr McLay considers Lagoon Paddock to be comparable in quality to Kalari. [57] For his part, Mr Cowie notes that Lagoon Paddock is made up of mainly hard tableland country with areas of better forest along the northern and eastern boundaries with a narrow area extending from the centre of the southern boundary into the centre of the property. He notes that about 1,020 ha of the buffer forest had been pulled but carried heavy regrowth which has been re-pulled since the date of sale. He states that the balance area is hard tableland country. Mr Cowie also notes that a large steel tower powerline extends through the property. In Mr Cowie’s opinion, the property was poorly watered and had no yard facilities and no services. In his view, Lagoon Paddock has a carrying capacity of 1 beast to 13.6 ha which equates to 148 head. [58] In Mr Cowie’s view, Kalari is superior to Lagoon Paddock because Kalari has better country, better access and situation, and better services. Mr McLay Sale 2 - Karamea [59] Karamea sold on 29 September 2011 for $600,000. It has a land area of 908 ha which results in an analysed value of $661/ha.27 [60] Mr McLay describes Karamea as having a fair quality of mixed softer ironbark and bloodwood forest country of which about 2/3rds has been pulled and raked with the balance being open standing timber. Mr McLay notes that Karamea is now mostly native pastures with seca and some buffel scattered throughout. [61] Mr McLay advises that Karamea is fenced into one main paddock and is watered by two large open walk-in stock dams. The property has no structural improvements and no power. 26 Ex 3 p 9, Ex 9 p 7. 27 Ex 3 p 8. -- 22 of 104 -- 23 [62] Mr McLay notes that Karamea is smaller in size to Kalari but in his opinion is of superior quality. [63] Mr Cowie has not relied upon this sale because, in his opinion, it is a dated sale.28 Mr McLay Sale 3 / Mr Cowie Sale 5 – Yard Paddock [64] Yard Paddock sold on 11 May 2012 for $915,000. It has a total area of 1,980 ha. Excluding structures, Mr McLay has analysed the sale price of Yard Paddock at $412/ha.29 For his part, Mr Cowie has analysed the sale price of Yard Paddock at $584/ha.30 [65] Mr McLay describes Yard Paddock as being made up of mixed ironbark and bloodwood forest country broken by inferior harder rosewood, lancewood and wattle ridges. He notes that it is mostly standing timber with a small area having been pulled and raked and that it now carries mostly native pastures with seca and some buffel scattered throughout. [66] Mr McLay also notes that Yard Paddock includes a parcel of forestry lease country on the southern boundary which consists of mostly harder spotted gum and ironbark forest country. He says that Yard Paddock is watered from four open walk-in stock dams plus some natural lagoons. [67] Mr McLay notes that at the time of sale Yard Paddock had a very good set of new steel cattle rail yards which he says cost $150,000 new. [68] In Mr McLay’s view, Yard Paddock is slightly superior to Kalari due to its better productive capacity through its development, although he notes that it is smaller in size than Kalari.31 [69] In Mr Cowie’s opinion, Yard Paddock suffers because it is severed by Springton Creek and its many tributaries. Mr Cowie notes that Yard Paddock is made up of all forest country with a hard tableland ridge extending from the northern boundary through the centre of the property to the southern boundary, with a similar hard ridge along the western boundary. He says that the balance of the land is comprised of close forest of narrow leaf ironbark, bloodwood, wattle and spotted gum. [70] In Mr Cowie’s view, approximately 680 ha of the forest had been pulled in several areas but that it carried heavy regrowth at the time of the sale. [71] As regards the special lease component of Yard Paddock, he notes that this timber reserve lease expires on 31 December 2020. Mr Cowie has attributed a value of $18,000 to the 445.155 ha of the timber reserve which equates to a value of $45/ha.32 Mr Cowie 28 Ex 9 p 2. 29 Ex 3 p 10. 30 Ex 9 p 7. 31 Ex T 2–45 l 37–l 44. 32 Ex 9 and Ex 19 and T 5-20 l 28-l 30. -- 23 of 104 -- 24 notes that the only structures on Yard Paddock are steel stockyards and in his opinion Yard Paddock is serviced by poor water. [72] In Mr Cowie’s view, Kalari is superior to Yard Paddock because Kalari is made up of better country, better access and situation, and better services. Mr McLay Sale 4 - Timberoo [73] Timberoo sold on 1 November 2012 for $2,100,000. It has a total area of 4,400 ha and is an improved property with a homestead, machinery shed, yards shed and cattle yards. Mr McLay has analysed the sale price of Timberoo excluding the structures in the amount of $441/ha. [74] Mr McLay describes Timberoo as made up of pulled brigalow scrub country with bean tree and forest influences of 1,690 ha, cleared open broadleaf ironbark country of 203 ha, and densely timbered tableland forest of rosewood, lancewood, and narrow-leaf ironbark of 2,510 ha. [75] Mr McLay notes that Timberoo is divided into seven main paddocks plus some smaller holding paddocks with mostly three and four barbed wires on timber posts, mostly in sound condition but poorly maintained in the years prior to the sale. He noted that there is also a central laneway covering approximately 4 kms with a small section remaining unfinished. In addition, the property is watered from nine permanent dams, plus one unequipped spring fed well, as well as numerous semi-permanent waterholes and smaller dams. Mr McLay notes that Timberoo is much larger than Kalari and in his opinion Timberoo is superior in quality to Kalari due to the larger areas of developed brigalow scrub on Timberoo. [76] Mr Cowie has not relied upon the sale of Timberoo. He articulated his reasons for not relying on this sale in his supplementary report as follows:33 “I have not relied on the sale of Timberoo because my investigations reveal that the property had to be sold as the result of a divorce where the parents and children both owned different parts of the property, but the property was worked as a single grazing enterprise. On the information available to me, as part of the matrimonial settlement the whole property had to be sold. For these reasons, I do not consider that the sale provides reliable evidence of value as it does not meet the “willing but not overanxious” vendor criteria set out in the Spencer case.” [77] Mr Cowie’s views regarding the sale of Timberoo not meeting, in his view, the Spencer test were subject to detailed cross-examination by Ms Brien as follows:34 “There were two vendors involved in the same of Timberoo, a Mr – there was a Coates Proprietary Limited, and there’s a Saunders or – two separate parties involved. And on further investigating with the adjoining owner of the property, Mr Peter McKenzie, who was also the vendor and my sale number 7. He informed 33 Ex 9 p 2 para 4. 34 T 4-73 l 7-74 l 18. -- 24 of 104 -- 25 me that there had been considerable problems within that partnership, and that one of the – two of the parties involved were separated and been divorced, and the property had to be sold. And that was after I investigated as much as I could from the other local inhabitants of the Dingo area, I decided, that under – that that particular sale did not meet the Spencer case protocol. And so you did not speak with the vendor yourself?---No. I was unable to contact them. And when you said it was two separate parties - - -?---Yes. - - - but from your investigations, were they related parties? When I used that phrase, I’m making reference to, for example, an individual person and a company that the – has a relationship with that person?---Two individual parties – I’ll give you the full detail relating to it very shortly when I – the – one party, the owner or registered proprietor on lot 4 and lot 5 on LR 10. Russell John and Selina Rose Curren were the parties – vendors on two of those portions. The other portion, lot 6 on LR 10, was owned by Peter Coates and Associates Australia Proprietary Limited. I understand that Selina Curren was the daughter of Peter Coates, and the property had been purchased in two separate parcels. And Russell and Selina were to live on the property and to work it. And, according to the next door neighbour, he didn’t do much work. He couldn’t even keep the boundary fence in order. And - - - Perhaps we’d better not speculate about his farming abilities?---Anyway, those – that particular couple, Russell and Selina, they separated and divorced. And so the property was then in the – in the joint ownership between parties that were no longer – were together. And, did you investigate how long that property was on the market before it was sold?---Well, to my - - - Sorry?--- - - -to my local knowledge of that area, the – Mr Peter McKenzie, the next door neighbour, actually told Doug Olive that it was available for sale. How long it had been on the market for, I don’t know, and how long it had been advertised, or whether it had been advertised, I have no knowledge of. But, Doug Olive was unaware that that property was for sale, and he lives in the area, so I don’t know how well it was advertised to try and sell. But, the length of time it’s on the market would be relevant to whether or not there was any urgency to the sale; do you agree with that?---I believe it had got to the stage where the property had to be sold. So, is that a yes to my - - -?---It depends on – it depends on what it was on the market for as to how long it’s going to be there, whether it conforms to being a realistic level of values. So, my question was that the length of time is relevant when you are looking at whether or not it was a sale with a degree or urgency?---it was, certainly, because they got the price immediately, half a million dollars. As soon as there was contact – Mr Olive made contact with them, they reduced the price immediately from 2.7 to 2.1 million dollars. And, how do you know that information?---From Mr Doug Olive who was the purchaser in the property. So, Mr Olive told you - - -?---Mr Olive me that himself.” -- 25 of 104 -- 26 [78] Mr McLay on the other hand was strongly of the view that the sale of Timberoo had been well tested in the market.35 He also made the following comments in examination-in- chief:36 “Now, could I ask you, particularly with reference to the sentence starting ‘I have not relied on the sale’, do you agree with that statement?---I don’t agree with the inference that is made that the sale was sold under duress due to the divorce circumstances. I’ve spoken with the agent, and the property was in the market for well over 12 months. I asked the agent directly was there anything in your instruction to expedite the sale process, and he said not at all.” Mr McLay Sale 5 / Mr Cowie Sale 1 - Myimbarr [79] Regrettably, there is some confusion in the evidence and the submissions with respect to the sale of Myimbarr. Ms Brien of Counsel for the applicant, in her submissions37 treats the Myimbarr sale as a common sale between Mr McLay and Mr Cowie. However, Mr Hammond of Counsel for the respondent in his submissions deals with Mr McLay’s sale 5 and Mr Cowie’s sale 1 as two separate sales of two distinct properties. An examination of the evidence shows the reason for this confusion. Mr Cowie in his supplementary report38 does not refer to the sale property in any place by the name Myimbarr, identifying the property simply by its address of 402 Charlevue Road, Bluff. Mr Cowie notes the date of his sale 1 as 1 April 2013, whereas Mr McLay refers to the sale of Myimbarr as taking place on 17 May 2013.39 As described by the respective valuers, there is certainly scope for argument that two separate sales of two different properties are being referred to by the valuers, consistent with the manner in which Mr Hammond has done his submissions. However, a close examination of the evidence reveals that Mr McLay’s sale 5 and Mr Cowie’s sale 1 are indeed one and the same, being a sale of the property Myimbarr. [80] There is clear evidence to support my conclusion that the references by the valuers both relate to the sale of Myimbarr. Firstly, exhibit 46, which is set out earlier in these reasons, clearly shows “Sale figure 5 WM Sale figure 1 JC” as relating to the one property location. However, exhibit 46 can hardly be taken as being conclusive because, as I have already pointed out, there are errors in exhibit 46 relating to the other two common sales. To add to the confusion that maps tendered in evidence in this matter create, exhibit 5 page 20 sets out the location of what were then the respective sales of Mr Cowie and Mr McLay. Although from my review of the evidence it would appear that at the time of the preparation of the map in exhibit 5 that Mr Cowie had four sales 35 T 2-46 l 38. 36 T 2-50 l 38-43. 37 Applicant’s submissions para 124 - 127. 38 Ex 9 p 5. 39 Ex 3 p 11. -- 26 of 104 -- 27 and Mr McLay had five sales, Mr McLay’s fifth sale, Myimbarr, is not included on the map, although Mr Cowie’s first sale, described as 402 Charlevue Road, is shown. [81] Mr McLay’s sale 5 refers to Myimbarr as having the address of 402 Charlevue Road, Bluff, which is an identical address to Mr Cowie’s sale 1. Further, both reports also contain an identical real property description of Lot 2, RP 616780, Parish of Walton. Both valuers also have an identical sale price of $730,000, and a land area of 397.1 ha. Clearly, there has been a mistake made by one valuer or the other as to the appropriate date of sale, but as the respective dates are only approximately one month apart, this difference is not relevant to an assessment of the comparability of the sale. [82] In his exhibit 3 report, Mr McLay applies a dollar value per hectare ex structures for Myimbarr of $1,360/ha. However, Mr McLay made it clear during his evidence that he relies primarily on his sales 1 to 4, and has referred to sale 5 not for its rate per ha but for its value as a site. Relevantly, he had this to say:40 “… But the application for me of this sale is not so much on a per hectare basis. It identifies the market in this area for sites, so what would people pay for a site? They can buy a house in Bluff for, you know, three or three hundred and fifty thousand dollars. They can go and buy 1000 acres for $705,000 with a house. So that’s the kind of relativity I’ve applied this sale. And for me, standing back, looking at the subject, it endorses for me that the market says rural lifestyle values, if you like, you know, exist for 1000 hectare, not – reasonable house around the $700,000 mark. For me it underpins – this sale underpins the subject as a site. You know, 1.09 million. Would people pay that sort of money based on this sale for a property that’s larger but arguably has an inferior development standard? So for me this sale is based as a site, not so much as a per hectare rate.” [83] Mr McLay describes Myimbarr as being comprised as 2/3rd sandy loam ridge, ironbark 1/3rd developed scrub and pulled mixture forest and scrub of 750 acres. He also notes the presence of standing lancewood and rosewood. He describes the property as being broken up into four main paddocks and two holding paddocks with the fencing in fair condition. He notes that Myimbarr has two good dams and one semi-permanent dam, one of which supplies water to two 5,000 gallon tanks at the Myimbarr residence, which he describes as having two bedrooms, two sleep-outs, one bath and in structurally fine but dated condition. Mr McLay considers that Myimbarr is smaller but better in quality than Kalari. [84] Mr Cowie values Myimbarr excluding the structures at $1,471/ha. He describes Myimbarr as being made up of mainly undulating forest country of box, bloodwood, wattle, whitewood, narrow-leaf and quinine on light loam duplex soils with a small area of rosewood ridge in the south-western corner and a small area of lancewood tableland in the north-eastern corner. He puts the carrying capacity at 1 beast per 10 ha and notes that 40 T 2-47 l 11-21. -- 27 of 104 -- 28 there is extensive regrowth particularly in the southern part. Mr Cowie considers the internal fencing, the dwelling, the shed and the stockyard as being in poor condition. He considers that three dams are unequipped. He gives an added value of the structural improvements of $131,000. He has also made allowance for a broken down HD 11 dozer included in the sale which he values at $15,000. [85] In Mr Cowie’s views, Myimbarr overall contains inferior property to that of Kalari. Mr Cowie sale 2 [86] Mr Cowie describes sale 2 as 521 Granleigh-Pheasant Creek Road, Wowan. The property has an area of 1,092.95 ha which Mr Cowie has assessed ex structural improvements at $1,354/ha. [87] Mr Cowie notes that the property relies on artificial water supplies with seven equipped bores. The country is about 50% developed brigalow softwood scrub in good condition on undulating brown red soils, while the balance area comprises about 31% of undeveloped green forest country of narrow-leaf ironbark and bloodwood on undulating gravelly ridges rising to steep mountainous country of about 19% extending to the crest of the Gogango Range. In Mr Cowie’s view, his sale 2 has a carrying capacity of 1 beast to 3.9 ha which equates to about 280 head. [88] In Mr Cowie’s view, his sale 2 is superior to Kalari because of the developed scrub on the sale property. [89] Mr McLay notes that Mr Cowie’s sale 2 is well under half of the size of Kalari. Mr McLay further notes that Mr Cowie has adopted a land value rate for Kalari of 35% below that of sale 2, and a beast area rate over 20% higher.41 In Mr McLay’s view, the carrying capacity assessments made by Mr Cowie are not within accepted district standards. Mr Cowie sale 3 [90] Mr Cowie’s sale 3 is located at Lenz Access Road, Duaringa. It has an area of 781.45 ha and sold on 6 November 2013 for $830,000. [91] Mr Cowie describes his sale 3 as having gravel and bush track access which is severed during wet weather. The property is serviced by five unequipped dams. The country comprises steeply undulating to steep range country comprising about 25% old developed scrub in several areas with extensive regrowth with the balance area of 75% comprising undeveloped forest country on steep stony gravelly soils of narrow-leaf, rosewood, wattle, bloodwood, bean bush and lancewood. In Mr Cowie’s view, his sale 3 has a carrying capacity of 1 beast to 9.1 ha. 41 Ex 4 para 38. -- 28 of 104 -- 29 [92] Mr Cowie notes that the sale property is infested with harissia cactus throughout, and that no electricity is connected to the property. Mr Cowie also notes that the sale property has two rough bush sheds and a 4,000 litre poly tank. He assesses the added value of the structural improvements at $20,000. In his view, the property runs about 85 head of cattle. [93] Mr Cowie arrives at a per hectare value for the property ex structural improvements of $1,037/ha. In Mr Cowie’s opinion, his sale 3 is inferior to Kalari because of the country type and also due to the heavy infestation of cactus. [94] Mr McLay considers the beast area value for sale 3 to be far beyond current values for rural land of this nature. He also does not believe that Mr Cowie’s estimates of carrying capacity are within accepted district standards. Mr McLay also notes that Mr Cowie’s sale 3 is far removed from the location of Kalari, being located about 95 km to the east. Mr Cowie sale 4 [95] Mr Cowie’s sale 4 is located on the Capricorn Highway at Goowarra near the town of Dingo. It has an area of 1,434 ha and sold in June 2013 for $1,800,000. At the time of preparation of Mr Cowie’s exhibit 9, this sale had not settled. [96] Mr Cowie notes that his sale 4 contains near level to gently sloping forest country of box, narrow-leaf ironbark, wattle, quinine, paperbark ti tree, sandalwood, whitewood, with some areas of bulloak and lancewood. Although about 20% of the forest has been pulled it carried at the sale period heavy wattle and paperbark ti tree regrowth. Mr Cowie’s sale 4 has no structural improvements. [97] Mr Cowie considers his sale 4 to be of a similar type of country to Kalari. He assesses the value of sale 4 on a per ha basis at $1,255/ha. [98] Mr McLay is of the view that Mr Cowie’s sale 4 was not purchased in accordance with its highest and best use as a grazing property, but rather for workers accommodation and a high impact industry-major hazard facility of chemical manufacturing. [99] Mr Cowie acknowledges that sale 4 was being purchased by the explosives company Orica but in his view Orica were buying the property in the market and negotiations went on for quite some time and, in his view, the purpose of Orica’s purchase was not relevant.42 42 T 5-19 l 16-20. -- 29 of 104 -- 30 Mr Cowie sale 7 [100] Mr Cowie’s sale 7 is located at Mount Flora Road, Dingo. It has an area of 3,750 ha and sold on 23 March 2012 for $5,200,000. Mr Cowie describes his sale 7 as made up of old developed brigalow, yellow wood and wilga with near level to undulating heavy black to brown clay soils. The property has heavy regrowth to about 50% of the property and melon holes extend over about half of the property. [101] Mr Cowie’s sale 7 had four equipped dams and a partly equipped bore. In Mr Cowie’s opinion three of the dams were unreliable and he noted that since the date of sale three new dams had been installed by the purchaser. The property has no yards, power or telephone and no structural improvements. [102] In Mr Cowie’s view, his sale 7 has a carrying capacity of 1 beast to 4 ha which he equates to 940 head. Mr Cowie has arrived at a value for sale 7 of $1,386/ha. In Mr Cowie’s opinion, his sale 7 is superior to Kalari because the sale comprises all developed scrub although carrying heavy regrowth over about half the property. He concedes however that Kalari is better situated and has power and telephone connection and is adjacent to a town. [103] Mr Cowie’s sale 7 is another of Mr Cowie’s sales that Mr McLay criticises as being too far distant location wise from Kalari, as the sale is located about 40 kms south of Dingo. Sale of Colorado [104] Mr Cowie in his oral evidence-in-chief referred to an additional sale that was not in either of his reports. That was the purchase of Colorado by the applicant. It should be remembered that Colorado borders Kalari and on which MLA 80194 is also located. Colorado was owned by the respondent’s brother, and compensation with respect to MLA 81094 over Colorado was originally to be heard in conjunction with this hearing. [105] Mr Cowie’s evidence is that he was not aware of the contract for sale of Colorado at the time of making his reports. This is surprising. Be that as it may, the evidence shows that on 21 July 2014 the applicant and Mr Goodwin entered into a binding Heads of Agreement43 for the sale of Colorado. The Heads of Agreement was not conditioned by uncertainties such as finance clauses, satisfactory inspection reports, or the like. The transaction completed in accordance with the Heads of Agreement in December 2014. [106] The sale price of Colorado was $1,850,000. This of course is the unanalysed price. The terms of the Heads of Agreement are of vital importance when analysing the sale price. Those terms are as follows:44 43 Ex 6. 44 Ex 16 para 4-9. -- 30 of 104 -- 31 “Right of Use of the Land 4. Carabella will: (a) Grant to Colin William Goodwin and Deborah May Goodwin (‘CW & DM Goodwin’) the right to use the Land for grazing purposes for a period of two (2) years from the date of completion of the sale of the Land by Goodwin to Carabella. The payment of local authority rates will be the responsibility of CW & DM Goodwin. (b) It is acknowledged by CW & DM Goodwin that Carabella has the right to undertake activities on the Land pursuant to the terms of mining lease 80194 on the area of mining lease 80194 provided that Goodwin is given seven (7) days notice. (c) Ensure that CW & DM Goodwin have access to the house, the homestead and the shed during the period of two (2) years from the date of completion and ensure that CW & DM Goodwin has access along the existing access road or an alternate access road constructed by Carabella; (d) Ensure that CW & DM Goodwin has power and telephone to the house during the period two (2) years from date of completion; (e) Provided that it is not inconsistent with the safe and efficient conducting of mine development and mining activities on the surface of mining lease 80194, allow CW & DM Goodwin to have access to existing water on the area of mining lease 80194, within the boundaries of the Land. 5. CW & DM Goodwin will: (a) Maintain the homestead and shed prior to removal from the Land; (b) Maintain the house during the period that it is occupied by CW & DM Goodwin; (c) Insure the house whilst it is occupied by CW & DM Goodwin and insure the homestead and the shed prior to removal from the Land (including public risk insurance); (d) Indemnity Carabella against any actions, suits, claims or demands made by any person against Carabella in relation to the house, homestead and shed. Right to Remove Homestead & Shed 6. Goodwin will be entitled to remove the original homestead and shed erected on the Land (‘the homestead and shed’) and to access the property for the purpose of removing the homestead and shed. The homestead and shed are to be removed at the cost of Goodwin within a period of five (5) years from the date of completion of the contract for sale. 7. For avoidance of doubt, Carablla has no obligation to maintain the homestead and shed. 8. For the purpose of enabling the maintenance of the homestead and shed, Carabella will allow Goodwin access to the homestead and shed during the -- 31 of 104 -- 32 period of three (3) years from the date of expiration of the two year right of access and right of use of the Land as set out in clause 4(b) along the existing access road or an alternate access road constructed by Carabella. Right to Receive Payments under the CCA 9. Carabella will: (a) Allow Goodwin to retain the Annual Payment payable pursuant to the Conduct and Compensation Agreement entered into between Goodwin and OME Resources Australia Pty Ltd dated 24th October, 2013 (‘the CCA’) for a period of seven (7) years following the date of completion of the contract of sale. (b) Allow Goodwin to take such legal action as may be necessary to enforce the payment provisions of the CCA on the condition that any costs of such enforcement will be met by Goodwin and there is no obligation on Carabella to take any action to enforce the payment provisions of the CCA. For the purpose of clarity, Goodwin has no right to bind Carabella in relation to any provision in the CCA.” [107] During examination-in-chief, Mr Cowie arrived at an analysed sale price of $2,177,000 which he then took to be the amount of $1,127/ha based on the 1,93145 ha size of Colorado.46 During cross-examination, Mr Cowie conceded that his per ha sum should be reduced by the amount of $90/ha to take into account the added value to the purchaser of rights under the CCA referred to in the Heads of Agreement.47 [108] Ms Brien of Counsel has provided a good summary of Mr Cowie’s calculation in her submissions:48 “Mr Cowie undertook an exercise of valuing some of the conditions in the following manner: agistment for 2 years based on 280 cattle carried at the present time (as advised by Mr Goodwin) at a rate of $3/head/week, less rates of $1,012/half year (as advised by Mr Goodwin), net $85,336 (correct calculation ($83,312); rental of the homestead and shed for 2 years @ $380/week for the homestead and shed, less insurance of $1,169 p.a., net $37,186; OME Resources gas lease payment for 7 years, present value with an adopted interest rate of 4% net $204,000. Mr Cowie initially then added those three items to the sale of $1,850,000 to give a figure of $2,177,000 which when divided by the 1931 ha is $1,127. … Mr Cowie had not in his calculation made an adjustment for the value to the Applicant of the remainder of the gas lease. He calculated that the figure of $1,127/ha should be reduced by $90.” [109] To continue the intrigue with respect to the sale of Colorado, Mr Cowie had earlier prepared, on 25 February 2014, a valuation report for Colorado49 which had the stated purpose “to assess the value of the property for acquisition by the Carbella (stet) 45 Rounded. 46 T 4-8 l 38 – 4-14 l 8. 47 T 6-20 l 1-6. 48 Applicant’s submissions para 144-145. 49 Ex 40. -- 32 of 104 -- 33 Resources Limited”.50 He calculated a value for Colorado of $3,245,000, which he arrived at as follows:51 “V A L U A T I O N Land Value as presently developed, as fenced and watered with yard facilities: Lot 11: 868.885ha @ $1300/ha: $1,129,550. Plus added value of Structural Improvements: $250,500. Lot 12: 1061.693ha @ $800/ha: $849,354. TOTAL VALUE OF REAL PROPERTY: $2,229,404. Plus 30% premium/acquisition for mining: $668,821. TOTAL VALUE: $2,898,225. Added Value of Lease to Queensland Gas Company: $346,893. TOTAL VALUE OF PROPERTY KNOWN AS ‘COLORADO’: $3,245,118. ADOPT: $3,245,000. Costs for the relocation and purchase of a replacement property to be considered after a settlement figure has been reached.” [110] Of further note, Mr Cowie relied on three sales in his valuation report of Colorado,52 and those sales are also sales he has relied on in this matter, being Mr Cowie’s sales 1, 3 and 4. [111] Mr Cowie sets out the features of Colorado in exhibit 40. He notes that Colorado is made up of two lots, Lot 11 and Lot 12. [112] Mr Cowie describes Lot 11 as being intersected by Walton Creek which extends diagonally through the land in a north-easterly direction. Lot 11 comprises near level to gently undulating forest country on light loam duplex soils with some erosion adjacent to watercourses. He considers the country to be generally comprised of open forest country of box, narrow-leaf, ironbark with a current bush influence through the country. He notes that there is a small area of bull oak along the north-eastern boundary. In Mr Cowie’s view, approximately 320 ha of Lot 11 has been pulled along the western boundary and extends across to parts of the northern boundary and eastern boundary, with the cleared area having some regrowth of mainly ti tree and some box. Mr Cowie further notes that a tree clearing permit has been issued for the clearing of most of Lot 11. 50 Ex 40 p 1 (following title page). 51 Ex 40 p 11. 52 Ex 40 p 8-9. -- 33 of 104 -- 34 [113] As regards Lot 12, Mr Cowie notes that the country rises up the lower slopes of red tableland country and is timbered with wattle, lancewood, bloodwood, moreton-bay ash, narrow-leaf ironbark and cyprus. [114] As regards to the soils that make up Colorado, Mr Cowie says that the soils on Lot 11 comprise mainly sandy loam compex soil, with stony and gravelly red-brown soils and lighter sandy loam in places on Lot 12. The property is well grassed with buffel, wyncasia, uraclover, white and black spear, seca stylo, wararno, bishop, mitchell and wire grass. Mr Cowie assesses the carrying capacity of the property overall as 290 head which he assesses at 1 beast to 6.7 ha. [115] Colorado has no natural water supplies on the property of any consequence, in Mr Cowie’s view. Lot 11 is serviced by five unequipped dams, and Lot 12 by three dams, one of which is equipped and pumps through a reticulation scheme to the homestead. [116] Mr Cowie in exhibit 40 refers to the property as being improved by a dwelling which he values at $200,000, and two sheds, one of which he values at $45,500 and the other at $5,000. It should be noted that there is an inconsistency between exhibit 40 and exhibit 16, as exhibit 16 specifically refers to Colorado as having a house, a homestead and a shed. [117] In exhibit 40, Mr Cowie also refers to the lease over Lot 11 of Colorado to Queensland Gas Company relating to the construction of a number of gas bores on the property. Mr Cowie notes that the establishment of the gas bores commenced on 24 October 2014 for a period of 15 years at the annual rate of $31,200. He has applied a present value to these annual payments of $346,893.53 [118] Mr McLay said quite firmly that he would not rely upon the sale of Colorado as directly relevant evidence to assess the market value of Kalari.54 He had a number of reasons for this, including that the purchase was not for Colorado’s highest and best use of cattle grazing but for mining by a miner who has applied for a mining lease over the property. [119] The legal point has also been made by Ms Brien that the Colorado sale was entered into by parties in litigation and that such sale did not meet the Spencer test. Submissions relating to the evidence of Mr McLay [120] Mr Hammond of Counsel very strongly asserts that the valuation evidence of Mr McLay should be rejected. Importantly, though, Mr Hammond does not assert in any way that Mr McLay’s evidence was deliberately in error or deceptive.55 53 Ex 40 p 7. 54 T 3-48 l 33-34. 55 Respondent’s submissions para 68(m). -- 34 of 104 -- 35 [121] Mr Hammond’s submissions in support of his contention that I should have no regard to Mr McLay’s evidence are lengthy. Thankfully, he summarised his key elements of criticism of Mr McLay as follows:56 “a. He did not inspect any of his comparable sales prior to the preparation of his reports and cannot therefore furnish sufficient evidence about these sales to allow any meaningful evaluation of the validity of the conclusions he has reached (Perpetual Trustee Company Limited); b. He swore that he had inspected each property both in his evidence and in his reports even though he agreed under cross-examination that he had not inspected any of his comparable sales at the time of preparing his report (2-59 @ 25); c. His evidence is that he either flew over or ‘drove by’ some of the properties (although he could provide no details) but that he did not physically inspect any of the properties for the purpose of preparing his report; d. Where he did fly over or ‘drive by’ a property, he is unable to provide any dates or other details; e. His failure to inspect any of his comparable sales should result in the Court rejecting his opinion as to value insofar as he relies on those comparable sales (Glencore Coal) f. He has relied on the opinions of other valuers and the input from other valuers but has failed to disclose this in his report or to include a statement as to ‘the degree of reliance (if any) on his professional opinion from outside experts’ as is required by rule 6.4(f) API; g. He has relied on the reports of other professionals without those persons being called to give evidence as to their opinion and accordingly ‘without evidence from the experts who made those valuations and cost assessment reports, they are of no weight’ (ING Management Ltd); h. By failing to inspect the sales evidence and by relying on other experts’ opinions, McLay’s evidence fails to satisfy the requirements of Perpetual Trustee Company Limited that ‘Expert evidence presented to the Court should be, and should be seen to be, the independent product of the expert…’; i. By failing to inspect the sales evidence and by relying on other experts’ opinions, the court is unable to examine the substance of the opinions expressed by McLay as is required in Perpetual Trustee Company Limited and his opinions should accordingly be disregarded; j. He has failed to disclose, as is required by rule 6.4(e) API, that he had not verified all of the facts and information contained within his reports nor the extent to which that failure might affect his valuation; k. He did not make enquiries of any of the owners of any of the sales evidence properties as to the state of those properties at the times of their respective sales for the purpose of preparing his reports, nor was he able to give any reliable evidence as to the state of those properties at the times of their respective sales; and 56 Respondent’s submissions para 63. -- 35 of 104 -- 36 l. He has been unable to rely on any notes or records made or used by him in the preparation of his reports and is accordingly unable to provide the Court with ‘... sufficient information to enable it to evaluate the validity of the experts conclusions…’ (Perpetual Trustee Company Limited). m. Whilst the Court should note that McLay was factually in error in suggesting that he had personally inspected each of his comparable sales and that he had omitted important disclosures from his reports, he openly conceded the errors when they were put to him and there is no suggestion that his conduct was in any way deliberate or deceptive.” [122] Mr Hammond also gave lengthy reasons as to why Mr McLay’s five sales should not be considered as comparable sales. [123] As regards Mr McLay’s sale 1, Mr Hammond has this to say:57 “Lagoon Paddock should not be considered as a comparable sale for the following reasons: a. The sale occurred over 2 years prior to McLay’s assessment with no detailed review of market trends; b. McLay did not inspect the property for the purpose of undertaking his valuation; c. McLay neither wrote the words describing the property nor knows who did; d. The property has no structural improvements and no power and no adjustment has been made to take these matters into account; e. There is no evidence as to the condition of the property at the time of the sale; f. There is no evidence as to the use of the property or its beast carrying capacity; g. There is no reasoned explanation as to why the property is considered ‘comparable in quality’ to Kalari.” [124] Mr Hammond then turned to Mr McLay’s sale 2 and said:58 “Karamea should not be considered as a comparable sale for the following reasons: a. The sale occurred 2.5 years prior to McLay’s assessment with no detailed review of market trends; b. McLay did not inspect the property for the purpose of preparing his valuation and the words used in his description of the property are not his own words; c. The property is considerably smaller than Kalari; d. The property has no structural improvements and no power and no adjustment has been made to take these matters into account; e. There is no evidence as to the condition of the property at the time of the sale; f. There is no evidence as to the use of the property or its beast carrying capacity; g. There is no reasoned explanation as to why the property is considered ‘superior in quality’ in Kalari.” 57 Respondent’s submissions p 27. 58 Respondent’s submissions p 29. -- 36 of 104 -- 37 [125] As for the sale of Yard Paddock, Mr McLay’s sale 3, Mr Hammond reasoned:59 “Yard Paddock should not be considered as a comparable sale for the following reasons: a. The sale occurred about 2 years prior to McLay’s assessment with no detailed review of market trends; b. McLay did not inspect the property for the purpose of preparing his valuation; c. The property has no structural improvements other than for steel cattle rail yards and there is no evidence as to other connected services. No adjustment has been made to take these matters into account; d. There is no evidence as to the condition of the property at the time of the sale; e. There is no evidence as to the use of the property or its beast carrying capacity; f. There is no reasoned explanation as to why the property is considered ‘superior in quality’ to Kalari.” [126] Moving on to Mr McLay’s sale 4, Mr Hammond said that:60 “Timberoo should not be considered as a comparable sale for the following reasons: a. The property is substantially larger than Kalari; b. McLay did not inspect the property for the purpose of preparing his valuation and relied on the opinion of another valuer; c. The words used by McLay to describe the property are not his own words; d. There is no evidence as to the condition of the property at the time of the sale; e. There is no evidence as to the use of the property or its beast carrying capacity; f. From the evidence of Cowie, it is clear that the sale was a distressed sale due to a marriage breakup.” [127] Finally as regards Mr McLay’s sale 5, Myimbarr, Mr Hammond contended:61 “Myimbarr should not be considered as a comparable sale for the following reasons: a. The property has been treated by McLay as a rural home site (3-9 @ 35); b. McLay did not inspect the property for the purpose of preparing his valuation and relied on the opinions of another valuer; c. There are different markets for rural home sites and cattle grazing properties (3-10 @ 15); d. McLay placed lesser weight on this sale (3-9 @ 35);” [128] It appears to me that there is some difficulty in the approach adopted by Mr Hammond in seeking to have this Court find that none of Mr McLay’s sales are ‘comparable’ sales. This is exemplified by the fact that, rather curiously, Mr Cowie relied for his valuation on three of the very same sales as relied upon by Mr McLay (Lagoon Paddock, Yard 59 Respondent’s submissions p 30-31. 60 Respondent’s submissions p 36-37. 61 Respondent’s submissions p 38. -- 37 of 104 -- 38 Paddock and Myimbar) and Mr Hammond calls upon the Court to accept all of Mr Cowie’s sales. [129] The same sale cannot be accepted as comparable on the evidence of one valuer and at the same time be rejected as not comparable on the evidence of another valuer. This shows a misunderstanding of the meaning of ‘comparable sale’. [130] As Wells J put it in the case of Crompton v Commissioner of Highways:62 “It will be convenient to interpose here some comments about what is meant by the phrase ‘comparable sales’, and how comparable sales are to be used. Upon reading some works on comparable sales, one might be pardoned for supposing that, within narrow limits of tolerance, sales of land similar to the subject land must fall into two rigid categories: comparable sales and non-comparable sales. Such a supposition would, in my opinion, be an over-simplification and could lead to error. It seems to me that, ideally, the valuer should, in the first instance, look at the sales of land over a wide geographical and temporal range, and from these select those that appear potentially useful as a basis for comparison. Those selected should then be carefully analysed by reference to an extensive list of characteristics of land sales the compilation and assessment of which fall clearly within the province of the experts. Whether or not one or more of those sales is, and how it or they ought, to be compared with the subject land becomes then a matter of degree, and a final decision is reached, often by those same experts drawing a series of nice distinctions. Obviously, no two sales of land will be found to be the same, or even similar in all respect. Those that bear a close similarity to the assumed sale of the subject land will be more reliable than those whose similarity is less proximate and in respect of which adjustments or allowances must be made before they can be safely introduced into the valuation process. At a particular point it will be found that, in respect of the remaining available sales, the adjustments and allowances that would need to be made are of such a magnitude that it ceases to be safe or sound to treat them as sufficiently similar to the assumed sale of the subject land, and they must thenceforward be rejected.” [131] Referring to Crompton’s case, Jacobs J had this to say in Redeam Pty Ltd v South Australian Land Commission:63 “In that case it proved impossible to find more than a handful of sales whose respective similarities to the assumed sale of the subject land was sufficiently close to render them reliable and useful for the purposes of valuation. In the present case, it would be open to me to conclude that there are none, for the fact is―with one exception, which is not very helpful for other reasons―that each valuer regarded the sales upon which the other primarily relied as irrelevant, which again points to the wide differences. It therefore becomes ‘of the utmost importance to assess the reasoning of the valuers to discover how carefully and thoroughly they had made the necessary adjustments and allowances when applying the sales they have invoked’: Crompton’s case. Moreover, it must be remembered that a figure reached by the adoption of any given valuation method can only be regarded as an aid to fixing compensation; it is not the compensation or even a pretence to be the compensation. In the words of Isaacs J. in Spencer’s case it representes one of ‘the ordinary business considerations’ to be weighed along with all other circumstances with which the hypothetical buyer and seller are deemed cognisant, that might ‘affect its value’ in the hands of the owner.” 62 (1973) 32 LGRA 8 @ 23-24. 63 (1977) 40 LGRA 151 @ p 157. -- 38 of 104 -- 39 [132] It is this Court’s function, after considering the relevant evidence of all valuers, to be assisted by the expert opinion of the valuers insofar as the Court considers it is able to, and then arrive at a relevant determination of the appropriate amount of compensation payable, based on the value of a subject property. Some sales evidence may be cast aside for a myriad of reasons. Other sales may be considered as superior or inferior to the subject but nonetheless a sufficiently comparable sale to consider. [133] Mr Hammond has pointed out many deficiencies in Mr McLay’s evidence, many of which I agree with. However, it does not necessarily follow that all of his sales must be dismissed as not comparable and, in particular, certainly not where those same sales are relied upon by Mr Cowie. [134] As one would expect, Ms Brien for the applicant submits that the Court should accept Mr McLay’s evidence. She submitted, in part, as follows64 (footnotes excluded): “69. Much time has been spent in the proceeding during the cross-examination of Mr McLay and subsequently in the written submissions of the Respondent, directing attention to the method followed or process undertaken by Mr McLay in forming his opinions. 70. Mr McLay has been a registered valuer since 2007. Mr Cowie gained registration in 1973. Clearly different approaches were taken. Each valuer trained and commenced practice at very different times having regard to available technology and the use of technology. 71. Mr McLay says there is a change in tools that are available to a valuer to undertake the tasks that you are called upon to undertake from time to time, computers and IT are more and more common. On computers there is a world of data that is available in terms of mapping and flood mapping, vegetation mapping, landscape mapping, database systems and sale recording. Essentially everything is moving to an electronic type of environment. The fact that Mr McLay had undertaken searches directed to some of those matters is obvious in his report wherein he records encumbrances or administrative advices noted on the title, vegetation mapping and rainfall: ex 3. These matters are not recorded by Mr Cowie. 72. Mr McLay’s practice involves collected data either produced himself or part of his firm’s data-collection process. Mr McLay explained that he obtained the Google earth aerial photographs (same as ex 11B to 11F) for the subject land and sales 1 to 5. In oral evidence and by reference to the aerial photography (Ex 11A to 11F), Mr McLay identified and explained the indicative location of various country types or land classification areas on the subject site and the sales. The assistance gained from the aerial photography was clear. Mr Cowie gave oral evidence that he accesses and uses aerial photography. 73. Mr McLay ordinarily has regard to the vegetation map issued by the government as it identifies the legal entitlement to treat timber. Mr Cowie was sceptical about these maps due to perceived accuracy issues. 64 Applicant’s submissions para 69-85. -- 39 of 104 -- 40 74. An inspection may be undertaken by car, by aeroplane or walking, depending upon the size of the land, the nature of the terrain, crossing of waterways and density of vegetation. An interview with landowners may be carried out either onsite or by telephone. Mr McLay says flying over the land is a fantastic observation tool as you are above the tree line and can fit the land types together with relative ease. He says that on grazing properties there will be parts of the country that are not readily able to be accessed. The country can be more easily spotted by use of images rather than trying to pick things out when you can only see in some cases 100 metres each side of you. 75. As a general rule Mr Cowie does his inspection by motor vehicle and if he has to walk somewhere he walks but generally by motor vehicle, as he doesn’t walk long distances due to two artificial knees. 76. Mr McLay works extensively in the area and drives by the properties from time to time. Mr McLay had carried out an aerial inspection of each of the properties. 77. Mr McLay does not generally do the classification process of different classes of country in the field. He says it is a matter of looking at maps and assessing areas and with imagery now, it’s relatively clear as to what a land type is like. In his opinion, it is quite efficient and appropriate to use a satellite image to work out amounts of country type. 78. There can be no doubt that Mr McLay was familiar with the three Namoi properties as he visited from time to time due to his friendship with the son of the owner and had discussions with that person about the properties (who also happens to be a valuer). Initially, the inspection for Mr McLay’s 4th and 5th sale was based on aerial observation and familiarisation with the area, examination of satellite imaging, vegetation maps, putting together knowledge on that basis. 79. The manner and timing of recording and storing notes will be a matter of personal preference. At Heron Todd White, where Mr McLay is a director, after a valuer does a valuation, the valuer records on the database the sales they have investigated and their valuation report so other valuers may access it. As an example, Mr McLay accessed the description of sales 1 and 2 from the HTW computer database. Mr McLay had previously analysed sale 2 and at that time paper file notes were taken but they have now been transitioned to a computer-based system. Mr Cowie does not ordinarily date his notes. His notes did not have a reference to the actual property on them. 80. At the time of preparing his report, Mr Mclay reviewed all notes and was satisfied with the content of those notes and the information on that database. 81. In forming his opinion, Mr McLay placed weight on the lack of production of business records. He says that the sighting of business records proves the existence of a business and in the shoes of a potential purchaser, there’s not going to be much recognition for something that cannot be proven. … 85. Mr McLay was a frank witness. He took a careful approach. It is common sense to take advantage of material available, including information readily available on computerised data sets. Notwithstanding the submissions made in relation to the process that Mr McLay undertook, the extent of -- 40 of 104 -- 41 investigations and explanations given provide a sound basis for his opinion. Mr McLay’s evidence ought be accepted.” Submissions relating to the evidence of Mr Cowie [135] Ms Brien is critical of the evidence of Mr Cowie, leading to her conclusion that the Court should prefer the evidence of Mr McLay over that of Mr Cowie. [136] As Ms Brien does not provide a summary of her contentions concerning Mr Cowie, I set out in the paragraphs that follow a summary of what Ms Brien says against Mr Cowie:65 [137] After making the point that Mr Cowie and Mr McLay are valuers from very different generations, she goes on to contend that where Mr McLay had clearly taken great advantage of electronic databases such as undertaking searches for issues such as encumbrances or administrative advices noted on titles, vegetation mapping and rainfall, such matters were not recorded by Mr Cowie. In particular, Mr Cowie’s evidence was that he was sceptical about vegetation mapping issued by the Government due to perceived accuracy issues. [138] Ms Brien goes on to refer to the issue of the manner of a valuer undertaking an inspection and points out that Mr Cowie’s evidence is that he generally does his inspection by motor vehicle. Mr Cowie walks on inspections if he has to, but he doesn’t walk long distances due to two artificial knees. [139] Ms Brien went on to criticise Mr Cowie’s evidence for at times bordering on lacking in dispassionate objectivity. She gave as an example an instance where he was reluctant to provide previous valuations which were called for on the basis that there was a without prejudice conference and the valuations should not be available for use. Ms Brien further submitted that at other points, Mr Cowie’s evidence was muddled, and that although Mr Cowie was given a great deal of latitude when presenting his oral evidence, he seemed to have difficulty responding directly to questions asked of him. [140] Ms Brien goes on to point out that, in her view, Mr Cowie had no regard to the vegetation management codes in forming his opinions. In like manner, Mr Cowie does not include in his sales any properties that have vegetation notices indicated on the title. He accepts that that may well be a matter which impacts on the value of the property. [141] Ms Brien points out that Mr Cowie has made no enquiries as to whether approvals are required to clear land on Kalari or for that matter the sale properties. [142] Important points are made by Ms Brien with respect to Mr Cowie’s evidence relating to carrying capacity. She submits that any reliance on carrying capacity in Mr Cowie’s calculations ought to be disregarded as he does not use carrying capacities given to him 65 Applicant’s submissions para 69-158. -- 41 of 104 -- 42 by owners because, in his view, owners have different views as to what they can carry on their property. Instead, Mr Cowie prefers his own assessments. In Ms Brien’s submission, this method is unreliable or at the least both the owner’s opinion and the valuer’s view should be recorded as to carrying capacity. Ms Brien contrasts Mr Cowie’s approach with that of Mr McLay who says that primarily an owner will have input in determining the carrying capacity as they will always have far more experience in the property than a valuer will. [143] The issue as to discrepancies that arise with respect to carrying capacity are highlighted in Ms Brien’s submission by the respective analyses of Mr Cowie’s sale 3. In evidence, Mr Cowie stated his view that the Lenz access road property had a carrying capacity of 1 beast to 10 ha which he rounded to about 85 head in total. Ms Brien contrasts this with the evidence of Mr McLay who stated that he spoke to the owner of the property who advised that the property’s carrying capacity was running at 180 head due to very dry year but that the owner typically works on about 200 head being about 100 breeders and then bringing the progeny through to a fat animal. [144] Ms Brien also criticises certain aspects of the evidence of Mr Cowie relating to his various sales. As regards Mr Cowie’s sale 1, Ms Brien notes that Mr Cowie agrees that the sale is a much smaller parcel of land than the subject; that it is in a slightly different market; and that people pay more per hectare for a smaller area. [145] Turning to Mr Cowie’s sale 2, Ms Brien points out the inconsistences between Mr Cowie’s evidence and exhibit 29 which is an advertising brochure describing the property. In Ms Brien’s view, Mr Cowie unconvincingly stated that the discrepancies in descriptions of the sale 2 arise because he is looking at the country and the general condition of improvements on sale properties when he inspects them and he does not note all the improvements in his reports on his sale properties at all. Ms Brien notes that Mr Cowie agreed that the fencing on his sale 2 is far superior to Kalari and that some of the country types on sale 2 are also superior to Kalari. He also conceded that his sale 2 is 115 kms east of Kalari and closer to Rockhampton. [146] As regards Mr Cowie’s sale 3, I have already referred to Ms Brien’s comments regarding carrying capacity. Ms Brien notes that Mr Cowie also conceded that his sale 3 is only a bit over 30% of the size of Kalari and that it is 95 kms closer to Rockhampton and the Gracemere saleyards then Kalari. [147] Ms Brien is critical of Mr Cowie’s sale 4 on the basis that sale 4 was purchased by Orica for the purpose of manufacturing hazardous chemicals and for workers’ accommodation. Ms Brien is also critical of Mr Cowie for his view that Orica was buying the property in -- 42 of 104 -- 43 the market and that the purpose for which Orica was seeking the property was not relevant. [148] Moving on to Mr Cowie’s sale 5, Ms Brien is critical of the approach Mr Cowie took particularly with respect to the timber reserve for which Mr Cowie attributed a value of only $45/ha. Ms Brien notes that Mr Cowie did not undertake a check of the dollar per hectare underpinning his assessment. Ms Brien is also critical of the manner in which Mr Cowie has used an assessment of an agistment rate for assessing the timber reserve, and in particular that Mr Cowie only used an agistment rate of $2/head/week for agistment whereas in his Colorado calculations, Mr Cowie used the sum of $3/head/week for agistment. [149] No specific criticisms are made of Mr Cowie’s assessment of his sale 6. Turning to Mr Cowie’s sale 7, Ms Brien is critical of the fact that Mr Cowie did not make an allowance for the fact that the sale property is held in two separate titles and there is an ability to sell each of those titles separately, whereas Kalari is held in only one title. Ms Brien submits that Mr Cowie by his own admission puts the carrying capacity of his sale 7 at 1 beast to 4 ha which is a much higher carrying capacity than Kalari due to the fact that it is better country, being far superior to Kalari. Ms Brien also points out that sale 7 is far removed from Kalari. [150] Ms Brien is also critical of Mr Cowie’s approach to the sale of Colorado. Ms Brien is critical of Mr Cowie for asserting as a fact the ability of Mr Goodwin to clear trees in assessing the value of Colorado, even though Mr Cowie had not seen the relevant vegetation clearing code. I have already referenced in these reasons Ms Brien’s summary of Mr Cowie’s assessment of the analysed value of the Colorado sale. After referring to that assessment, Ms Brien goes on to assert that Mr Cowie’s overall assessment of the value of the Colorado sale was artificial. She noted that Mr Cowie only referred to some of the clauses as set out in exhibit 16 in making his assessment, ignoring others. In Ms Brien’s view, the analysis undertaken by Mr Cowie with respect to Colorado is fraught and ought to be disregarded as it introduces too many assumptions, elements to analyse and adjustments to the sale price to arrive at the market value for the land on the Spencer test. She is also critical of Mr Cowie for using a sale between parties who were engaged in litigation relating to the sale property, commenting that that of itself is good reason to set to one side the sale of Colorado as failing the Spencer test. [151] In her submissions, Ms Brien is also critical of Mr Cowie and the other experts called by the respondent due to those experts receiving information by way of hearsay communications from the respondent and various other persons. Ms Brien is particularly -- 43 of 104 -- 44 critical of the respondent for not calling the respondent herself to give direct evidence as to various matters upon which her experts relied. Whilst noting the special rules that apply to the Land Court pursuant to s 7 of the Land Court Act 2000, Ms Brien is still critical of the respondent and calls upon the inference that the uncalled witness would not have assisted the respondent’s case, particularly in circumstances where it is the party that is the uncalled witness. In this regard, Ms Brien relies upon the decision of Kuhl v Zurich Financial Services Australia Ltd66 which was cited with approval and applied in Savimaki v Sunshine Coast Regional Council.67 [152] For completeness, I should point out that Mr Hammond in his written submissions relied upon the rule in Jones v Dunkel68 to challenge the manner in which the applicant ran its case with respect to the assessment of the sale of Colorado. In Mr Hammond’s view, if there was any evidence that might have explained why the sale of Colorado should not be considered as a valid comparable sale, it was open and incumbent on the applicant to adduce it, but it did not. Conclusion as to the evidence of Mr McLay and Mr Cowie [153] In assessing the evidence of Mr McLay and Mr Cowie, I turn first to my observations of both of them in the witness box. There were many similarities and some vast differences. I found both Mr McLay and Mr Cowie to be truthful witnesses. They both however experienced significant difficulties during cross-examination which had a marked impact on the effectiveness of their evidence. Mr Cowie did tend to become confused on a number of occasions. Mr McLay did rather tie himself up in knots with inconsistent answers to questions when compared to his report and supplementary report. Both valuers had very different views as to the proper manner in which a valuer should go about the process of undertaking the preparation of a valuation report. [154] It is almost as if in this matter I am being called upon to adjudicate as to the appropriateness of two different cultures of valuation practice. Mr Cowie is classically old school. He commenced work as a valuer in 1964, well before there was even such a thing as registration of valuers. He was subsequently registered as a valuer in 1973. He clearly adopts an approach where the primary source of information for a valuation report is a physical inspection of a property coupled with a reliance on his own expertise as to classification of country type and carrying capacity. Although he does rely upon aerial photography, he clearly does not have a detailed knowledge, understanding nor application of the significant electronic tools that a valuer such as Mr McLay has regard 66 [2011] HCA 11. 67 [2013] QLC 33 at [52] and [53]. 68 [1959] 101 CLR 298. -- 44 of 104 -- 45 to. This of course does not make Mr Cowie’s valuation wrong; it is simply symbolic of an ‘old school’ approach. [155] On the other hand, Mr McLay was registered as a valuer in 2007, some 43 years after Mr Cowie commenced work as a valuer. Mr McLay is a director of a significant firm of valuers and relies very heavily on the database of information held by his firm; his own research of other relevant databases; and the previous reports and details and notes of other valuers in his firm who have previously written reports and provided information and inspections of various properties being considered by Mr McLay. Clearly, Mr McLay does not spend a significant time undertaking physical inspections on the ground of properties. However, I reject Mr Hammond’s view that Mr McLay does not undertake inspections at all. I accept Mr McLay’s evidence that he undertakes ‘drive by’ inspections as well as some more fulsome physical inspections. Specifically with respect to the properties referred to in this case, I accept that Mr McLay has flown over all of the relevant properties in a light aircraft and I accept his view that such a form of viewing a property is but another way that an inspection of a property can occur, with clear advantages and disadvantages to the more traditional method of assessing a property by vehicle with some inspection undertaken by foot. I also accept Mr McLay’s evidence that he had particular knowledge of a number of his sales due to his personal friendship with the previous owners and the many times he attended at those properties in a social context. He was clearly, in my view, very well acquainted with those properties. [156] Mr McLay must accept criticism for the manner in which he wrote his report and his supplementary report, referring specifically throughout the report to “we”, stating during cross-examination that “we” should instead have said “I”, but then going on to truthfully explain that much of the information contained in his reports was not his own original work but had simply been adopted by him from the work of other valuers in his firm, based on his own knowledge of the properties, his drive by and other inspections, including his aerial inspections, and his analysis of aerial photography and relevant databases. [157] As Alan Hyam put it in his book “The Law Affecting Valuation of Land in Australia 5th edition”:69 “It is inherent in the process of preparing many expert reports that the factual basis for the opinion expressed is derived from third-party information. Courts emphasise the necessity that the factual bases of opinions be clearly laid out so that the opinion can be tested. An expert is rarely the source of all the factual information in his or her report. It may be garnered from a party (the typical illustration being a medical report), from empirical investigations (engineering 69 The Federation Press 2014, at p 561. -- 45 of 104 -- 46 reports for example) or, in the case of valuations, from data relating to the properties about whose value an opinion is to be expressed. Consistent with that reality, it is accepted that an expert need not amass all the factual data on which an opinion is to be expressed. The task can be delegated to another.” [158] Hyam goes on to quote from the decision of Australian Securities & Investment Commission v Rich.70 In that case, Justice Austin had this to say at paragraph 329: “‘… There is nothing in the law to prevent such delegation from occurring. But it is necessary for the expert who is the author of a report to apply his or her mind to the analysis and reasoning processes that his or her subordinates have developed, so that when the report is finalised, the whole of the reasoning and conclusions that it contains have been adopted as the expert’s own reasoning and conclusions. Were that not the case, the expert could not claim to be the author of the report.’” [159] The comments of Justice Sugerman in Marcus Clark & Co Ltd v Commissioner of Railways71 are also relevant. He had this to say at pages 34-35: “The experts have, of course, a large body of knowledge of other transactions to draw upon, accumulated by themselves or by their respective firms and available to them. That knowledge, it should be noted, is not always accurate, no doubt because of limitations on available sources of inquiry, and the conclusions drawn as to the rate of capitalization in other transactions are, therefore, not always correct, as the investigation of some transactions in evidence in this action has shown. On a question of this sort, great experience may enable an expert to give a worthwhile opinion without being able to give precise references to all the transactions which have come under his notice which support that opinion. The value of the opinion may, as in other fields of expert knowledge, depend upon the background of experience and knowledge which is behind it as well as upon those particular reasons for arriving at it which can be explicitly stated.” [160] Clearly, in my view Mr McLay’s report was poorly drafted. He should have made it clear as to his source of information with respect to each property. This should have gone into significantly more detail than he actually did. For instance, he should have clearly articulated when he was relying upon the inspection and report notes of others in his firm with respect to the details of a property. He should have kept notes as to his ‘drive by’ inspections, as well as notes of his flights over the properties, and included those details in his report and supplementary report. Although I agree with Mr Hammond that Mr McLay did not set out to deliberately mislead the Court, nonetheless the manner in which Mr McLay has referred to his carrying out of inspections of the property left one with the impression that Mr McLay had undertaken physical, on site by vehicle and on foot inspections of the properties when this was mostly not the case. However, as I have already pointed out, my view as to what constitutes an inspection is broader than that of Mr Hammond. That however does not lessen my criticism of Mr McLay for not making 70 (2005) 190 FLR 242. 71 (1949) 11 The Valuer 29. -- 46 of 104 -- 47 his mode of inspection clear in each and every case, with a clear articulation when he was relying upon the work of others. [161] I also agree with Mr Hammond that, at least with respect to some of his comments on sale properties, Mr McLay’s evidence was lacking in that he did not properly or fully ascertain the actual state of the property concerned prior to and as at the date of sale, rather than his description of the property at the time of inspection. Again, if he was relying upon the work of others in his firm for descriptions as to the state of properties at the time of sale, this should have been clearly enunciated. His approach tends to make this evidence unreliable. [162] Turning to Mr Cowie, I also agree with many of Ms Brien’s criticisms, just as I have agreed with many of the Mr Hammond’s criticisms of Mr McLay above. [163] I am particularly concerned regarding Mr Cowie’s failure to adequately appreciate and properly comment on the various statutory instruments relating to vegetation management. His lack of reference to restrictions or otherwise on properties with respect to vegetation management is in my view telling. [164] Despite Mr Cowie’s many decades of experience in valuing properties, I am not at all convinced as to his assessment of carrying capacities of various sale properties and the subject Kalari. I agree with Mr McLay’s evidence that the best source of knowledge is often the landholder, as the landholder will know what the actual carrying numbers are that they have been able to achieve on the property, in good seasons, in bad seasons, and in average seasons. Asking such questions of a landholder will of course be of even far greater evidentiary persuasion in circumstances where the landholders have been running cattle on their properties for a lengthy period of time, successfully, and they have records as to the actual carrying capacity of their properties over the years. In my view, it is remiss of Mr Cowie not to at least take some note of that form of information. [165] I also accept the criticisms of Mr Cowie made by Ms Brien with respect to category B remnant vegetation. Details of category B remnant vegetation are set out in exhibit 32 and exhibit 33. I accept that the level of constraint caused by category B remanent vegetation on Kalari is significant. In my view, Mr Cowie’s failure to properly acknowledge this has resulted in an over valuation of Kalari by him. I also consider it relevant that Mr Cowie’s sales 1, 2 and 3 have significantly less category B remnant vegetation than Kalari, and that Mr Cowie’s sale 7 has none. Insofar as Mr McLay apportioned a percentage figure to instances of category B remnant vegetation in his assessment of sales, his evidence is to be preferred over that of Mr Cowie. -- 47 of 104 -- 48 [166] Further, in my opinion, Mr Cowie was remiss in not including in his sales any properties that have vegetation notices indicated on the title. Mr Cowie conceded in cross- examination that this may be a matter which would impact on the value of a property, and I must agree with him. It is a pity that he did not take the same view when compiling his reports. [167] Clearly, I have difficulties with the valuations of both valuers. Given by findings, I consider it impossible to prefer in totality the evidence of one valuer over another, and therefore the value attributed by one valuer over the other. [168] The valuers have given me little assistance with respect to the impact that the varying sizes of the sales properties have on properly assessing comparable values with respect to Kalari, rather than the general notation that a sale property is considerably smaller or considerably larger than Kalari. Further, although Mr McLay has made good reference to vegetation management and other like constraints on Kalari, he has not, in my view, articulated enough the impact that those restrictions have on his figures. [169] To be perfectly clear, except for those instances where I specifically state to the contrary in these findings, I accept the criticisms of Mr Cowie made by Ms Brien, and the criticisms of Mr McLay made by Mr Hammond. This results in the loss of most of their respective opinion evidence under this item. [170] Having rejected the bulk of the approaches of both valuers with respect to their various valuations, it leaves me in a difficult position in ascribing a dollar value per hectare to Kalari in a structurally unimproved state so as to be relevant for comparison purposes when arriving at a value for the area of Kalari subject to MLA 80194. Looked at objectively, I consider that much of the ground truthing undertaken by Mr Cowie is superior to that of Mr McLay, or rather that I am unable to properly rely upon much of Mr McLay’s ground truthing as it was based to an over reliance on the work of others which was not properly disclosed in his report. Accordingly, I find Mr McLay’s assessment of $400/ha too low for application to the area of Kalari subject to the MLA. In similar vein, however, I find Mr Cowie’s assessments of carrying capacity unreliable and that his values are significantly impacted by his failure to properly take account of vegetation management issues and rights to clear various properties. Accordingly, Mr Cowie’s value of $1,000/ha should be reduced. [171] Taking the totality of the valuation and related evidence into account, I consider that Mr McLay dollar figure per ha should be significantly increased, but I also consider that Mr Cowie’s dollar figure per ha should be even more significantly decreased. I agree -- 48 of 104 -- 49 with Mr McLay that vegetation management can have a negative valuation impact on properties, and there is certainly evidence in the comparable sales to support what Mr McLay says. [172] Valuation evidence has been referred to as far from an exact science but rather a matter of opinion which can vary, and this case is certainly clear evidence of that. Doing the best I can on the evidence in its inadequate state, I assess the value of that land on Kalari which is subject to MLA 80194 to have a value of $650/ha. As there are 588.3 ha of land on Kalari located within MLA 80194, the equation becomes 588.3 x $650 which equates to $382,395.00. Check Approach [173] It is always a matter of great concern to the Court when two opposing parties each rely upon their own experts, particularly in this case the valuation experts, and it is the Court’s finding that little reliance can be placed on the conclusions of either expert. As I have indicated, in this case, I consider that the state of the evidence with respect to each valuer is such that I could justifiably refuse to rely upon any of the evidence of either valuer. Certainly, that approach is justified when the submissions of Ms Brien and Mr Hammond are taken into account, for they both give compelling reasons why the expert evidence of their opponent should be totally disregarded. [174] Of course, to totally disregard the evidence of both valuers would leave the Court in a very difficult position in determining the appropriate amount of compensation payable to the respondent with respect to that much of Kalari which is located on the MLA land. Bearing that in mind, and looking at the totality of the evidence of the valuers, I have come to the conclusions set out in the previous part of this decision that the per hectare figure for Kalari adopted by Mr McLay appears to be too low, while that of Mr Cowie is too high. I acknowledge however that my arriving at a figure of $650 per ha can hardly be said to be as a result of a scientific analysis. [175] Given the difficult situation that I have found myself in assessing the compensation for the loss of the MLA area of land on Kalari, I have thought it appropriate in this matter to undertake a check approach of my assessment of $650 per ha, based on the evidence that I have before me. [176] For the check approach, I consider it appropriate to investigate in some detail the sale of Colorado to the applicant. Colorado is, after all, a property which borders Kalari and shares many of the same attributes of country type etc as Kalari. Indeed, had the sale of Kalari been a normal Spencer test compliant sale of willing but not over anxious vendors and purchasers, then I have no doubt, based on their evidence, that both valuers would -- 49 of 104 -- 50 have included the sale of Colorado in the sales on which they directly relied. Of course, Mr Cowie does rely upon the sale of Colorado as I have already set out in some detail. His methodology, however, in analysing that sale, leaving to one side Spencer concerns, is flawed. Whilst with respect to his other sales Mr Cowie has analysed such sales on an excluding structures basis to arrive at a dollar value per hectare, he has not in his assessment analysed the Colorado sale the same way. It is clearly necessary to compare apples with apples in order to arrive at any result which can be used in a proper analysis for the MLA land on Kalari. As such, I consider that Mr Cowie’s analysis of the Colorado sale should have also been on an excluding structural improvements basis. [177] Lest there should be any doubt, I wish to make it abundantly clear that, as a primary finding, I consider the sale of Colorado does not meet the Spencer test as it occurred as a result of litigation between the parties and there are certainly doubts as to whether either party could properly classified as willing and not overly anxious. That said, however, there is some very good direct evidence relating to certain aspects of the Colorado sale which I find reliable. Given the unsatisfactory nature of the analysis of the other sales relied upon by the valuers, then despite my principal concerns regarding the Colorado sale, I consider it a worthwhile check approach to take the clear evidence provided in this case regarding the Colorado sale as a check to my conclusion of a value of $650 per ha for the MLA land on Kalari. [178] Exhibit 16 is clear evidence as to the sale of Colorado from Mr Goodwin to the applicant. It shows that Colorado was sold for a sale price of $1,850,000. I also accept the evidence that that sale completed in December 2014. [179] As the evidence has shown, the sale of Colorado was subject to a number of special conditions. In short, exhibit 16 shows that what was not purchased by the applicant was the next two years of grazing on Colorado; the homestead and a shed; and seven years of payments under the pre-existing CCA between Mr Goodwin and OME Resources Australia Pty Ltd. On the other hand, what the applicant did purchase was the property itself including the house and the remaining years of the CCA agreement. [180] In simple terms, therefore, to analyse the sale of Colorado to an excluding structures basis, in my view the value of the house and of the remainder of the CCA agreement should be taken away from the sale price of $1,850,000. [181] Unfortunately, the state of the evidence with respect to the value of the house is unclear. When I turn to exhibit 40, which was Mr Cowie’s valuation report prepared for Mr Goodwin relating to the compensation payable in light of MLA 80194, I note at page 5 thereof that Mr Cowie has applied values to the “dwelling”, “shed no. 1” and -- 50 of 104 -- 51 “shed no. 2”. These descriptions of course do not align with the descriptions of what was sold and what was to remain in the sale of Colorado as detailed in exhibit 16. Giving the benefit of the doubt to the landholder, I am prepared to accept that the dwelling referred to by Mr Cowie in exhibit 40 is one and the same as the homestead referred to in exhibit 16. That then means that the house referred to in exhibit 16, which remains on Colorado after the sale, is either shed no. 1 or shed no. 2. I do note however that the description of shed no. 1 does appear to be more in keeping with that of a house than shed no. 2, but at the end of the day, as the difference in value of the two sheds is put by Mr Cowie at only $40,500, it will make little difference to the overall assessment of a dollar per hectare value for Colorado. [182] Thankfully, I do have what I consider to be reliable evidence as to the remaining value of the CCA agreement to the applicant. This is in the form of Mr Cowie’s evidence that that remaining value should be assessed in the sum of $90 per ha which, given the size of the property of 1,931 ha, amounts to a sum of $173,790. The first step in arriving at a per hectare value for Colorado based on the applicant’s purchase is to remove from the sale price the sum of $173,790 for the CCA agreement together with the sum of $5,000 for ‘the house’. This leaves the sum of $1,671,210. The matter however does not end there, as Mr Cowie in exhibit 40 made it clear, at page 11, that he considered a premium should apply for a mining acquisition/purchase of 30%. Mr Cowie’s evidence in this regard is consistent with the evidence of Mr McLay where Mr McLay said that the applicant’s purchase of Colorado was not for Colorado’s highest and best use of a grazing property but rather for mining purposes. Unfortunately, Mr McLay did not attributed a percentage value to any increase in price because of a mining purchase, but I take his reference to that factor into account in accepting Mr Cowie’s figure of a 30% premium. [183] As I have accepted that the applicant did not purchase Colorado for its highest and best use of grazing but rather purchased Colorado because of the use of mining to which the applicant intends to put Colorado, and as I accept that the applicant paid a premium of 30% for such alternate purpose in its purchase of Colorado, it follows that the purchase price of Colorado needs to be reduced by an amount of 30% in order to bring it back to an appropriate value for a highest and best use as grazing land. [184] A 30% reduction from the sum of $1,671,210 equates to $501,363. When $501,363 is subtracted from $1,671,210, the result is the sum of $1,169,847. This figure of course must be divided by the overall hectare size of Colorado in order to arrive at a per hectare value. It is necessary therefore to divide $1,169,847 x 1,931. When this is done, the per hectare figure is $605.82. -- 51 of 104 -- 52 [185] In my view, the figure of $605.82 per ha fits more comfortably with my assessed value of $650 per ha than either Mr Cowie’s assessed figure of $1,000 per ha or Mr McLay’s assessed figure of $400 per ha. I am not troubled by the fact that the check approach figure is $45 per ha lower than my assessed value of $650 per ha, given that I consider that any doubt should fall on the side of the landholder who is essentially being deprived of the area of MLA 80194 on her land in circumstances quite out of her control which are more akin to those circumstances which apply in compulsory acquisition cases. Further, I should stress, I have considered the sale of Colorado as a check approach only in circumstances where my primary conclusion regarding the Colorado sale is that it is an unreliable sale in Spencer test terms. [186] A final observation should be made with respect to the check approach I have undertaken above. It may be considered unfair to have reduced the Colorado sale by the 30% premium for a mining purchase in circumstances where this very case concerns compensation for mining on Kalari. That however, is not the point. The valuers both agreed that in arriving at an appropriate value for Kalari, relevant sales should be analysed on an excluding structures basis of properties with a highest and best use of grazing. The assessment is then made as to the appropriate dollar value for the loss of that grazing land to the landholder in light of MLA 80194. However, in accordance with the provisions of the MRA, there are other items of compensation, which is clear from this case, which also need to be taken into account and added into the total compensation payable to the landholder. Such sum includes in s 281(4)(e) of the MRA a minimum amount of at least 10% to be added to the compensation to reflect the impact of the MRA process on the landholder. I deal with the additional amount under s 281(4)(e) in my discussions of Item 15. Item 2 - Rosewood [187] The respondent’s claim under this item was originally detailed in Mr Cowie’s first valuation report as follows:72 “Loss of value of 6000 Rosewood fence posts per annum @ $8.00 per post for 20 years capitalised @ 4% 652,335” 72 Ex 9 p 25. -- 52 of 104 -- 53 [188] Mr Cowie subsequently revised his assessment for the loss of rosewood down by over 50%. In his supplementary report, he had this to say:73 “Added Value: Rosewood Timber 9. None of my 7 sales properties have areas of Rosewood in sufficient quantities to establish a continuing business supplying Rosewood fencing material to the market. 10. For this reason when comparing the sale properties to Kalari, the Rosewood on the subject property that will be lost if the mining lease is granted has an added value over and above the analysed land values of the sale properties. Revised Valuation Rosewood Timber 11. My original assessment of the value of the timber resource ($652,335) was based on an existing operating business supplying Rosewood post. At the time of the Mining Lease application in February 2013, there was no business operating. However, there had been such a business operating in the past as shown by the large number of stumps throughout the Rosewood country where Rosewood timber has been cut in the past. An example is shown in the photo in Appendix 15 of my first report. 12. I have revised my assessment of the added value of the Rosewood to allow for the fact that: (i) the business would need to be established; (ii) because there is a present market demand to meet a level of annual production of 3000 posts, a prudent purchaser would assess the risk and level of return for that part of the business differently to that part for the remaining 3000 posts where the level of demand is more uncertain; (iii) the risk that there may not be a demand for the additional 3000 posts would be a relevant matter considered and allowed for by a potential buyer because Rosewood timber cannot be cut and stored for longer than 12 months because the timber matures and becomes very difficult to work; (iv) there should be some allowance for loss of some of the Rosewood timber from risk of fire; 13. I consider there would be no difficulty and limited risk in establishing the business for the supply of 3000 posts to meet the existing annual demand that I have been able to confirm exists. 14. In order to assess the present value of that potential income taking into account the different levels of risk and a reasonable return, I have used the Table in Appendix… to this report to obtain the Present Value Interest Factor for a One-Dollar Annuity Discounted at k percent for n periods. 15. For the supply of 3000 posts where there is an existing demand, I have adopted a 20 year time period and used a discounted rate of 10%. The factor from the Table is 8.5136. 73 Ex 9 p 3-4. -- 53 of 104 -- 54 16. For the supply of 3000 posts where there is no established demand and greater risk, I have adopted a 20 year time period and used a discount rate of 20%. The factor from the Table is 4.8686. 17. My assessment of the added value of the Rosewood based on the matters referred to above is: (i) 3000 posts x $8 per post: - $24,000 pa x 8.5136 = $204,326 (ii) 3000 posts x $8 per post: - $24,000 pa x 4.8696 = $116,870 Added Value of Rosewood $321,196 Adopt $321,000” [189] Interestingly, Mr Cowie had, on 25 May 2014, prepared a valuation report for the respondent74 on the same basis as his valuation report for Colorado.75 In the 25 May 2014 report for Kalari, Mr Cowie also assessed a value for the loss of rosewood. He wrote:76 “Loss of Value of Fencing Material within the mining lease area, rosewood posts. Loss of sale of 500 Rosewood Posts per month @ $8.00 per post for 30 years @ 4%: $830,017.” [190] Accordingly, within a short period of time, Mr Cowie arrived at three very different valuations for the loss of rosewood on Kalari ($830,007; $652,335; and $321,000) with a difference of over $509,000 between his highest and lowest valuations. This of itself demonstrates how difficult it is to value this aspect of the claim and underscores the caution I must exercise in reviewing Mr Cowie’s evidence due to the large fluctuations of his assessment of value for this item. [191] The primary position of the applicant is that no claim should be allowed under this item. Ms Brien submits that the claim fails because the facts required to support Mr Cowie’s valuation opinion have not been proven.77 She also relies on Mr McLay’s evidence which in short is that he considers the rosewood timber to exist in situ with the land and to be reflected in the sale price of land. Further, he stated that a purchaser would not pay for a business which was not in existence, noting that the respondent was unable to supply him with any documentary records of a past operating rosewood post business. In addition, Mr McLay stated that sales which included areas of rosewood did not reflect any premium for the existence of the rosewood.78 [192] Ms Brien also submitted that if any claim under this head was allowable, the claim should be for the opportunity lost, not for the loss of profit. For completeness, Ms Brien 74 Ex 39. 75 Ex 40. 76 Ex 39 p 8. 77 Applicant’s submissions para 160. 78 See T 3-20 l 10 - 3-22 l 15. -- 54 of 104 -- 55 then examined in some detail what she said demonstrated a lack of factual foundation for the rosewood claim. [193] Mr Hammond relied strongly on the evidence of Mr Cowie, not only with respect to his valuation expertise, but also with respect to his many decades of experience as a primary producer with long experience with the use of rosewood fencing. [194] While Mr Cowie conceded that standing timber is ordinarily included in the value of land, his opinion is that when timber has a commercial value attributed to it, it does add value to the land.79 Mr Cowie explained his concept of commercial harvesting of rosewood this way:80 “93. It is important to understand when assessing the commercial value of Rosewood timber the significance of properly managing an area of Rosewood forest in order to ensure that the timber can be harvested in perpetuity. 94. To successfully manage a Rosewood timber resource so that the resource becomes a perpetual resource, it is necessary to cut the suitable fencing material when ready to allow the younger timber to grown into a productive tree. By managing the timber resource in this way there will be an ongoing supply of Rosewood posts to come from the particular area. It is significant for the purposes of my assessment of compensation in this case to note that there is no other Rosewood timber available on Kalari apart from that located within the mining lease area.” [195] Mr Cowie’s clear evidence is that there are 6,000 post able to be harvested each year in perpetuity, given the size of the area of rosewood. The applicant is sceptical about Mr Cowie’s assessment, noting that the system adopted by Mr Cowie was somewhat unorthodox and that his assessment “happened to coincide with an earlier estimate”.81 [196] The applicant’s criticisms of Mr Cowie ignore the evidence of Mr Byrom who produced an expert survey report.82 Mr Byrom gave excellent expert evidence in this matter. His evidence and report were both clear and precise. Further, he was very careful to ensure that it was understood when he was acting on the advice and knowledge of others, in particular Mr Cowie and Dr Shorten (an expert geologist). [197] Mr Byrom did not simply rely on what others told him and, by using their GPS information, prepare a report. He did do that, but he also supplemented his knowledge by his own inspection of Kalari on 31 July 2014. I accept Mr Byrom’s evidence that there is 64.40 ha of rosewood timber on the MLA area. I also accept Mr Cowie’s evidence that this area of rosewood can be perpetually harvested at a rate of 6,000 posts per annum, with two riders. The first rider is that Mr Cowie’s estimate of 6,000 post took no account 79 T 5-53 l 30-33. 80 Ex 8 paras 93 and 94. 81 Applicant’s submissions para 175. 82 Ex 6. -- 55 of 104 -- 56 of the Vegetation Management Act 1999 (the VMA). It should have, no matter what Mr Cowie’s reservations may be as regards the accuracy of VMA mapping. [198] Helpfully, Regulated Vegetation Category B (Remnant Vegetation) under the VMA on Kalari which overlaps the rosewood area on the MLA has been mapped.83 Further, exhibit 43 sets out the Property Map of Assessable Vegetation (the PMAV) for Kalari. [199] Where cutting of rosewood is contemplated for the areas of Kalari mapped as Category B areas, reference must be had to the self-assessable vegetation clearing code “Managing a native forest practice”.84 The code sets out steps to be followed and imposes obligations and constraints in some circumstances. For example, the harvesting of hardwood in RE 11.5.2, which is located on Kalari in the area indicated as carrying the rosewood, requires the retention of an average of 125 to 150 trees per ha with the trees being more than 2 metres in height (depending on rainfall) with no less than 50 trees on any hectare.85 No account was taken of this matter by Mr Cowie. [200] The second rider is that no account has been taken by either Mr Cowie or Mr Byrom of the overlap that exists between the rosewood area and those areas containing quarrying material claimed under Item 3. Should both claims be allowed, clearly there would be a doubling up to some extent. [201] At this point, it is appropriate to indicate other difficulties I have with Mr Cowie’s evidence regarding the rosewood claim. To begin with, Mr Cowie’s assessment of this item and Item 3 is based on his assumption that the respondents will not have access to the MLA area following the grant of the ML. This assumption is not soundly based in law. [202] As then Deputy President Kingham (now her Honour, Judge Kingham) said in Salmon v Armstrong:86 “[25] The landowners submitted that, regardless of the conditions of the environmental authority, the miner is able to exclude the landowners from the lease area. The holder of the mining lease is entitled to enter and be within the land and upon the surface area covered by the lease ‘for any purpose for which the mining lease is granted or for any purpose permitted or required under the lease or by this Act’. It could also be inferred from s. 403(1) that the holder has the right to exclude the landowner from the lease area. Relevantly, that section provides that it is an offence to enter, use or occupy the surface area of a mining lease. It is a defence if the person is the owner or is authorised by the owner and the person has the consent of the holder of the mining lease. [26] Whilst it is unnecessary for me to determine this issue in order to determine compensation, it is my view that this section does not confer exclusive rights to possession upon the holder of the mining lease. Section 403(1) has to be 83 Ex 49. 84 Ex 36. 85 Ex 37 p 9-10. 86 (2002) QLRT 54 @ [25] and [26]. -- 56 of 104 -- 57 interpreted in the light of the purpose of the Act and of other relevant provisions, including s 235. I do not accept that s. 403 confers on the holder of the mining lease unfettered power to without consent. [footnotes excluded]” [203] I respectfully agree, although of course there will necessarily be some area of ML 80194 where the respondent could not access due to safety and other restrictions. [204] Insofar as the current operational plans of the mine are known, I accept that the bulk of the western part of the rosewood resource will not be impacted by the mining operations and that the respondent, should she ever have a rosewood post business, or other need for rosewood posts, would be able to assess the bulk of the rosewood in the western area. To be clear, my decision is based on this assumption. If it transpires that the applicant’s mining program changes with the effect that the respondent loses access to the western rosewood area, then I note that the respondent could revert back to the Court pursuant to s 283B of the MRA for a review of compensation due to a material change in circumstances for the ML changing the impact of mining operations on the respondent’s land. [205] My other difficulty with respect to Mr Cowie’s evidence regarding the rosewood claim relates to an issue that I have already touched on, being the lack of an existing business relating to the sale of rosewood posts, or any evidence by the respondent of any intention to commence such a business in the future. Further, there was no evidence of any business records relating to previous cutting of rosewood, or any evidence at all from the respondent as to prior cutting and use of rosewood. [206] For all I know, the areas of cut rosewood could all have been used privately by the respondent and not been part of a commercial business. I can only speculate, and in my view Mr Cowie has done little more than speculate. The reason for the respondent’s lack of evidence to the court in this regard has not been explained. That leaves the only finding open to me that the evidence of the respondent would not have assisted the respondent’s claim under either this item, or indeed under any of the other items claimed. [207] Notwithstanding the foregoing, the fact remains that I have found that commercial rosewood exists on the MLA area, and that part of that rosewood will be impacted by the proposed mining operations. The question to be asked, then, does this represent a claimable item under the compensation provisions of the MRA? -- 57 of 104 -- 58 [208] In support of the claim for this item, Mr Hammond relies on the Land Court decision of GWE Armstrong & Ors v Council of the City of Caloundra.87 Member Divett’s decision in Armstrong is particularly relevant as follows:88 “ (v) The Highest and Best Use In order to adequately compensate the claimant for the full monetary equivalent of the value to them, it is important to determine the highest and best use of the land. (Turner v. Minister of Public Construction (1956) 95 CLR 245). In that matter Dixon CJ said at page 264: ‘Afterall the purpose is to ascertain the full return which may reasonably be expected from the sale of the land, not the most conservative value. The ultimate purpose of the inquiry is to find a figure which represents adequate compensation to the landowner for the loss of his land. Compensation should be the full monetary equivalent of the value to him of the land. All else is subsidiary to this end.’ The Acquisition of Land Act 1967 directs that the compensation shall be assessed according to the value of the estate or interest of the claimant in the land (section 20(2)). The highest and best use of the land is a factor in determining its market value for a likely legal purpose to a prudent purchaser (Cieslinski v. Minister of Works (1978) 20 SASR 55). … (vi) The Commercial Value of Timber: As noted previously I believe the 15 trees upon the family transfer lot have a commercial value for removal at something less than the added value they bring to the land in situ as a rural homesite. If I then consider the remaining 41 trees, I note that 26 are located on the 41.4 hectare parcel and 15 are on the 20 hectare parcel. Only four of those trees (5, 11, 19 and 20) on the 40 hectare parcel possibly fall within the 30-50 metre buffer area along the frontage of Obi Obi Creek, and should perhaps be maintained for environmental purposes. If I consider first the possible use of the remaining trees upon the land as a dairy farm, I note that over many years the trees were seen as providing camps and shelter for the dairy herd, and there was no attempt to harvest the timber. As both valuers have made no allowance for the removal of timber, I see no case for now providing an additional amount for their harvesting for a use as a continuing dairy. It would be fair to conclude that the added value in situ for that purpose would exceed the value for commercial harvesting. If I now consider Mr Venz’s trees for the purposes of the 20 hectare and the 41.4 hectare parcels, I see that four trees (38 to 41) are close by the dwelling and are likely to retain some aesthetic value associated with the residence. That leaves a likely 33 trees for which there is likely to be some residual additional value for harvesting purposes, particularly as those trees may well need to be removed as part of the planting of the avocado trees on the 20 hectares, and possibly macadamia trees on the 41.4 hectares. For the purpose of this exercise I will constrain my estimate of value to those 33 trees. 87 Unreported, 13 October 1998. 88 At p 25-28. -- 58 of 104 -- 59 An analysis of the total commercial timber reserve is as follows: Mr Venz Mr Pearce … (11) Value of balance of trees $20,151.64 $ 512.43 In considering the difference between the estimates of Mr Venz and Mr Pearce, I find Mr Venz’s estimate is over-optimistic and based more upon hearsay than documented actual sales. However, it is also fair to say that Mr Pearce acknowledges the existence of the alternative market for special timbers, although his experience with that market is also limited to a few sales by his Department. Mr Pearce’s estimate of an increase of 50% beyond the standard log measurement volume would also appear to be very conservative. In considering the price per cubic metre, I note there is a wide disparity between the figures adopted by the two Foresters. Clearly the actual value per cubic metre achieved will tend to be more market-driven than merely the Forestry listed figures. However, for quantities of significant size the optimism of the industry journals should not be assumed. As Mr Heyworth-Smith noted in his address: ‘The result is somewhere between the two, and I can only commend the Member that we take a broad look at the matter and strike a fair balance between the two. Obviously the proper result is somewhere between the two.’ (T.120). Mr Jones saw the quantum at something significantly less than $7,500. In view of the vagaries of the two estimating processes, I will allow a figure of $10,000 for any commercial timber recovered. That figure follows the principle of resolving obscurities in favour of the claimant (Robinson & Co Ltd v. Collector of Land Revenue, Singapore [1980] 1 WLR 1614, at 1621); and also to provide a liberal estimate in accordance with Commissioner of Succession Duties (SA) v. Executor Trustee and Agency Co of SA Ltd (1947) 74 CLR 358 at 374.” [209] The first observation to make is that Armstrong related to a claim for compensation under the Acquisition of Land Act 1967 (the ALA) and not the MRA. However, in my view the principles of compensation under the ALA and the MRA are such that it is appropriate to take into account and consider ALA cases. [210] The next observation is that although Member Divett did make an award which included an amount for the loss of some commercial timber, he did not make his finding on precisely the same footing as that put forward by Mr Cowie, which is essentially based on loss of profits of a business. I note in particular his observations regarding the claimant’s expert evidence as being overly optimistic and based more upon hearsay than documented actual sales. The same criticisms certainly apply with respect to Mr Cowie in this matter. [211] Assistance in resolving this item of claim is to be found by an analysis of other acquisition and related cases. -- 59 of 104 -- 60 [212] In Beard v The Director of Housing,89 Justice Crisp had this to say at page 148: “If the land to be valued enjoys in whole or in part a special potentiality which is not reflected in its present use, then it is clear that in the notional price which the court must find it should include full allowance for that potentiality, but such allowance will not exceed that added value which a purchaser of the land as a whole would presently pay for the land in contemplation of its advantages. (Turner v. Minister for Public Instruction (19) ). This added value which a notional purchaser would pay may not be the same and may well be less than the amount that could be produced by ultimate realisation of the same potentialities by the dis- possessed owner, in other words it is value to the owner, not value in his hands that is the criterion (Maori Trustee v. Ministry of Works (20) ). [213] Crisp J then continued at pages 153-4: “To ascertain its agricultural value is not difficult. The real task is to value the potential. This involves in the circumstances of this case both a qualitative and a quantitative analysis―the one to assess the highest statement of the potential whether it could justify close subdivision into housing blocks or, on a lower scale, rural blocks or farmlets as one witness called them, and the other its value. … Thirdly it will be necessary to determine the nature of the potential. This will involve some consideration of the development in the area both accomplished and projected as at the relevant date. This having been determined the land with its potential is to be valued with regard to the considerations mentioned at the commencement of this judgment.” [214] I consider it appropriate to look in greater detail at the High Court case of Turner v Minister of Public Instruction90 referred to by Justice Crisp. In Turner, Chief Justice Dixon made the following observations at page 264: “This is perhaps a convenient point to make an observation about the basis of the deduction of a percentage for ‘risk of realisation’. To no small extent the ‘risk’ is of the estimate of the net proceeds of sub-divisional sale proving too low. The reason may be found in the estimate of the prices for blocks being too high, the sale of the blocks being too slow, the estimated costs attending sub-division and sale proving too low or in any or all of such cases. It is therefore evident that the degree of faith felt in the estimates, whether by the court or the hypothetical purchaser, must bear upon the fixing or allowance of the percentage. In coming to a reliable determination there is no reason why it should not be done by fixing provisional figures and then reducing them, but it would seem that there is equally no reason why it should not be done by making definitive estimates in the first place. It must be borne in mind, of course, that while the estimate of the expenditure may prove too high and the estimate of the return may prove too low, the contrary is equally possible. At some point fixed reliance must be placed on the figures produced by the use of the hypotheses which the use of the formula requires. After all the purpose is to ascertain the full return which may reasonably be expected from the sale of the land, not the most conservative value. The ultimate purpose of the inquiry is to find a figure which represents adequate compensation to the 89 [1961] TAS SR 141. 90 [1955-56] 95 CLR 245. -- 60 of 104 -- 61 landowner for the loss of his land. Compensation should be the full monetary equivalent of the value to him of the land. All else is subsidiary to this end.” [215] Further in Turner, Justice Kitto had this to say at pages 287 to 291: “… But two questions then arose. The first was whether a further deduction should be made for what was called the risk of realisation, i.e., the possibility which necessarily existed at the date of the resumption that the gross proceeds of realisation might prove to be less than £10,300, and that the amounts included in the £3,218 might prove to be under-estimates. The second was whether a deduction should be made of an amount equal to the profit which a purchaser buying the land at the date of the resumption would expect to make by reselling it in subdivided allotments. … … It is potentiality for subdivisional sale must, as I have said, be allowed for. No sensible buyer or seller would omit to give it weight. But neither would such a buyer or seller suppose for a moment that because that potentiality existed the present value (i.e., at the date of resumption) would be equal to the net amount likely to be produced by sales of allotments effected at a then future date after time, trouble and money had been expended in creating the conditions necessary to make sales in subdivision possible. To hold that compensation for the resumption of a parcel of land, as to which all that can be said is that it is suitable for immediate subdivision, should be the net amount which the land would be estimated to produce to the owner if he were to subdivide it and sell the allotments himself is, in my opinion, to fall into the precise error which the Privy Council condemned in Vyricherla’s Case (2), by approving the saying that it is the possibilities of the land and not its realised possibilities that must be taken into consideration. … This, I am bound to say, strikes me as self-evident, and its application in this case is, I think, quite clear once the precise problem in respect of each of the questioned deductions is apprehended. In respect of the first deduction it is essential to bear in mind that the figure of £7,082 is only the net amount which, at the date of resumption, the land ‘might well have been expected’ (these are the words of the case stated) to produce if and when the process of subdivision and also of allotments should be carried through. Having regard to the way in which the gross figure was arrived at, it could not have any greater title to certainty than those words of description convey. It was, as the learned judge says in the case stated, only an estimate formed with such guidance as he had available to him as to values and tendencies and as to the opinions which prudent persons, competent to form an opinion and informed as to relevant circumstances, might be expected to have formed at the relevant date. It could not be more. A person considering the matter on the relevant date, whether as a potential vendor or as a potential purchaser or as an owner wishing to decide whether he would sell the land as it stood or subdivide it, would have been acutely aware that the figure of £7,082, or whatever figure he arrived at form himself, would be subject to all the doubts inevitably flowing from its being founded in ‘estimate, judgment and conjecture’. As the Full Court observed, ‘many factors in the calculation are speculative, the time taken to realize the land may be longer than was estimated, unforeseeable difficulties may arise in respect of the sales of particular lots or all lots in the subdivision, the prices are estimates only, conditions may change in some or all respects before the time for sale arises, and the costs involved in effecting the subdivision may prove to be greater than is estimated’. The net return which the land ‘might well have been expected’ at the relevant date to produce at a period possibly nine or ten months later, and after the expenditure of sums uncertain in amount, is therefore not a figure upon which a person concerned not to overlook ordinary business considerations could prudently accept as a basis for a decision to buy or sell the land as a whole or to keep it for sale by a more advantageous method. He would not need to be reminded that what may well be expected, on the basis of such -- 61 of 104 -- 62 intelligent prophecy as the known facts permit, and what can fairly be counted upon, are two very different things. Any or all of the assumptions that are reflected in his final figure might easily be falsified by events. Inevitably he would base his thinking upon a figure somewhat lower than the net sale price which he had reached on paper. … … Even apart from evidence, it seems obvious that no one is going to buy an area of land to sell it in subdivision is he has to pay as much for it as he think he can prudently count on getting back. Why should he bother, if he is not going to make a profit? But although this is conceded by everyone, it is said that there is no need to consider such a purchaser; the owner may subdivide the land himself, thereby getting the whole of the net proceeds of sale; and if he does so he will not lose the amount which a purchaser would want by way of a profit. To look at the matter in this way is to desert the established test; but let it be deserted. In a case where land has no special value to any particular person, how is it possible to say in one breath that the land is not worth more than £x to a purchaser who is likely to get £x + y if he resells in subdivision, and to say in the next breath that it is worth the full £x + y to the existing owner on that date? If a purchaser would not pay the £y because that is the profit which he would need to see in the venture before he would put his money into it and go to all the trouble and expense it requires, why should not the existing owner, who is envisaged as considering what the land is worth to him, reflect that he needs a like inducement to leave his money in the land and go to the same trouble and expense? It all comes back to the one point: at the date of resumption the land was simply incapable of immediate sale in subdivision, and it would necessarily remain incapable of sale in subdivision until time, trouble and expense had been laid out upon it; and no one, present owner or incoming owner, is likely to be so completely unbusiness-like as to make these outlays unless he believes that he can reasonably count on getting from the subdivision sales an amount which will exceed the present value of the land by such a sum as will make it all worth his while. The deduction is therefore not condemned by calling it the profit which a purchaser would require. It would have to be allowed for even by an existing owner, in working out what was the money equivalent of the land to him at the date of resumption, as distinguished from the money which it could be made to produce in nine or ten months’ time provided that he set about dealing with it in the right way. There simply cannot be a difference between the price would be agreed upon between a businesslike purchaser and a businesslike vendor and the amount which a businesslike owner would treat himself as leaving invested in the land in the event of his deciding to retain it. It is said that for compensation purposes it is not the value of the land simply, but its value to the expropriated owner that must be given, and that the value to the expropriated owner in this case must include what he would have got by selling in subdivision.” [216] In The Privy Council case of Raja Vyricherla Narayana Gajapatiraju v The Revenue Divisional Officer, Vizagapatam, 91 Lord Romer on behalf of their Lordships commented as follows at pages 312 to 313: “… In the case of land, its value in general can also be measured by a consideration of the prices that have been obtained in the past for land of similar quality and in similar positions, and this is what must be meant in general by ‘the market value’ in s. 23. But sometimes it happens that the land to be valued possesses some unusual, and it may be, unique features, as regards its position or its potentialities. In such cases the arbitrator in determining its value will have no market value to guide him, and he will have to ascertain as best he may from the materials before 91 [1939] AC 302. -- 62 of 104 -- 63 him, what a willing vendor might reasonably expect to obtain from a willing purchaser, for the land in that particular position and with those particular potentialities. For it has been established by numerous authorities that the land is not to be valued merely by reference to the use to which it is being put at the time at which its value has to be determined (that time under the Indian Act being the date of the notification under s. 4, sub-s. I), but also by reference to the uses to which it is reasonably capable of being put in the future. No authority indeed is required for this proposition. It is a self-evident one. No one can suppose in the case of land which is certain, or even likely, to be used in the mediate or reasonably near future for building purposes, but which at the valuation date is wast land or is being used for agricultural purposes, that the owner, however willing a vendor, will be content to sell the land for its value as waste or agricultural land as the case may be. It is plain that, in ascertaining its value, the possibility of of its being used for building purposes would have to be taken into account. It is equally plain, however, that the land must not be valued as though it had already been built upon, a proposition that is embodied in s. 24, sub-s. 5, of the Act and is sometimes expressed by saying that it is the possibilities of the land and not its realized possibilities that must be taken into consideration.” [217] The case of Emerald Quarry Industries Pty Ltd v Commissioner of Highways [No 2]92 is also relevant. Wells J made the following observations at pages 280 to 281: “… As the above broad survey of facts discloses, I have to guide me three expert witnesses who base their valuations upon a capitalization of estimated nett profits averaged over what is deemed to be an appropriate number of years; one whose valuation is based upon a discounted estimation of loss of future profits; and one who valuation was reached by using a method of comparable sales. It is, I think, only fair to state at the outset that the strong impression left on me by Mr Christianos, the claimant’s managing director, is that, throughout these protracted proceedings, he seems to have looked upon his claim to compensation as an El Dorado whose gleaming prospect has been presented to him by the acquisition, and by the principles upon which compensation (in his eyes) ought to be based. I am convinced that he saw himself as having engineered something of a business coup when he bought the quarry; that from it he hoped, in due course, to win himself a fortune; and that a fortune is, therefore, what he was, and is, entitled to receive. It is, however, a melancholy truth, which Mr Christianos must perforce accept, that his company is to be compensated for the bird that was in his hand, not for the two that perhaps were in the bush nearby. What he has lost is, no doubt, an opportunity to make a profit, but he has not lost the profit itself; he is to be fairly compensated, not by paying him an amount equivalent to estimated profits, but rather, if I may risk the charge of oversimplification, what the ordinary commercial man would pay for the same opportunity.” [218] Further, in Realty Corporation Ltd v Commissioner of Main Roads,93 Roper J had this to say at page 205 regarding a claim that was made for a possibility to make profits which the claimant had lost: “The third matter as to which evidence was given was the loss of the profits which the plaintiff company claimed that it could have made from the original lots, and that it could not now make from the residues. … It is to my mind clearly established that the profits which could have been made from the use of land are not to be added to the value of the land to arrive at the compensation payable for the resumption of the land: Pastoral Finance Association v. The Minister ([1914] 92 (1979-81) 43 LGERA 273. 93 (1940) 14 NSW LGR 204. -- 63 of 104 -- 64 A.C. 1083; 15 S.R. 535). The profit in question here flows from the undertaking of building a cottage, an undertaking which had not started when the resumption took place. There is nothing before me to show that the plaintiff company has not available to it at market value as much land in the vicinity as it could profitably use for the erection of cottages, and the continued possibility of erecting the cottages on this land does not appear to me to be necessary to enable the plaintiff to each such profits. In other words, this land appears to me to have had no peculiar or special suitability for the purpose of building cottages which is not possessed by almost all of the large area of vacant land in the immediate neighbourhood. In my opinion, therefore, this claim cannot add to the measure of compensation arrived at by taking the difference in values between the original lots and the residues.” [219] In my view, similar considerations apply in this matter as regards the claim for Item 2 as those discussed by Justice Roper in Realty Corporation Ltd, as well as the other cases referred to in this part of my decision. I have already found that the respondent will not lose access to the commercial rosewood timber contained in the western part of the rosewood area. Doing the best that I can based on the evidence in this matter, and noting in particular the areas of rosewood identified in exhibit 5 page 13, as a rough estimate it would appear that the western portion of rosewood comprises approximately one-third of the area of 64.40 ha of commercial rosewood located on the MLA area. Assuming an equal distribution of the rosewood over all of the 64.40 ha, this would appear to mean, based on Mr Cowie’s calculations, that some 2,000 posts will be able to be harvested per annum from the area of rosewood to which the respondent will be able to maintain access during the mining operations. Accepting, with considerable hesitation, that there is currently a market for 3,000 posts annually, the actual potential loss to the respondent based on Mr Cowie’s figures would be the loss of an existing market of 1,000 posts annually and a possible loss of a further potential market of 3,000 posts annually. Using Mr Cowie’s calculations, this equates as follows: (i) 1000 posts x $8 per post: - $8,000 pa x 8.5136 = $ 68,109 (ii) 3000 posts x $8 per post: - $24,000 pa x 4.8696 = $116,870 Added Value of Rosewood $184,979 Adopt $185,000” [220] I do not however consider it appropriate to award the sum of $185,000 for Item 2. As I have indicated, I have considerable difficulty with aspects of Mr Cowie’s evidence with respect to this claim, including in particular his failure to take into any account issues arising under the VMA. I am also concerned that the respondent did not provide any evidence to the Court with respect to this claimed item. [221] Further, as the authorities I have referred to clearly show, it is not the loss of profit which is to be compensated (particularly for a business not in existence nor shown to have any intention on the part of the respondent of coming into existence) but what extra amount a prudent purchaser would have been prepared to pay for Kalari given the existence of a -- 64 of 104 -- 65 commercial quantity of sustainable harvested rosewood. It is indeed a matter of regret that Mr Cowie did not approach the assessment of compensation under this head this way. In reality, I am left in the position of making little more than an educated guess as to the proper amount of compensation payable under Item 2. [222] Taking all factors into account, and doing the best that I can on the evidence before me, I consider it appropriate to make a significant deduction from the amount of $185,000 calculated in paragraph [219] for this item of one-half. In doing so, I am being as liberal as I consider I can be to the respondent in this matter, who after all is suffering the disruption of having a ML over her land pursuant to the MRA in circumstances essentially out of her control. However, that does not alter the fact that her loss is calculated by an assessment of the additional amount that a purchaser would pay for Kalari because of the existence of the rosewood. Clearly, a vendor would want a sale price to reflect as high a value as possible for the potential found in the rosewood by making reference to the potential profits, while a purchaser would seek to pay as low of an extra amount as they could. Using the potential profits (already discounted) as a base, I can do little more than ensure that the vendor and purchaser would meet half-way. I accordingly reduce the sum of $185,000 by one-half which results in the sum of $92,500, which I round to $93,000. [223] I accordingly assess compensation under Item 2 in the amount of $93,000. Item 3 – Non-mineral Resource [224] The respondent’s claim under this item is in the sum of $815,000. Mr Allan of Counsel helpfully summarised the claim under this item during the hearing as follows:94 “… your Honour, I’m just framing the case so that in the context of any further objections – that it could be made clear to our opponents that our case is squarely based on the assessment of the compensation of this particular resource either on two alternate basis: on – it’s going to be used by the mine. You find it’s not, then the compensation which is presently claimed in the 815 – in the amount of 815,000, your Honour can obviously not find that. If you find that applying the applicable law, that it will be used and applying the appropriate test to evaluate this evidence that you’re satisfied that this represents reliable expert evidence from Mr Grey and Mr Shorten, then we’d get up on the 815,000. In the alternative – and it’s merely an alternative – if in fact this resource, which was not part of an ongoing business – there was no – present at the date of application of the mining lease or currently, which is the date you’re concerned with – ongoing business, that is not our case. We say that there was no extraction of the resource by the present owner that’s been identified. But if your Honour finds when assessing compensation that there was a resource in existence that is going to be lost forever that could be sold by a person in a position of my client, that will have an alternate value. That alternative value is put forward in Dougal Grey’s supplementary report at 73,000.” 94 T 2-12 l 20-38. -- 65 of 104 -- 66 [225] The respondent relies on the evidence of three experts in support of her claim under this item. Those experts are Mr Cowie, Dr Shorten (a geologist) and Mr Gray (who holds a Bachelor of Engineering (Mining), a Master of Business Administration, and who has particular expertise in quarrying). [226] With respect to this item, Mr Cowie had this to say:95 “Loss of Non-Mineral Resources: Sand, Gravel and Clay 95. I have identified that there are sand, gravel and clay within the proposed lease area that will be lost when the mining operation commences. 96. For the purposes of the preparation of this report, I have had regard to and adopted the expert opinions of Dr Graham Shorten (geologist) and Mr Dugald Gray (mining engineer). Dr Shorten has identified the extent, quantity and quality of the non-mineral resources. Mr Gray has assessed the value of the non-mineral resources. The location of these non-mineral resources is shown in Appendix 36. The quantities are shown in a table prepared by Dr Shorten and are shown in Appendix 37. 97. Under s 236 of the Act (Appendix 2), the payment of a prescribed royalty is required to be made by the mining company Carabella to the property owner, Ms Goodwin, for the use of any non-mineral resource such as sand, gravel, clay or rock that is within the mining lease area. 98. Whilst Carabella has not provided any information as to its requirements in terms of volumes for the non-mineral resources in the development and ongoing operation of the proposed mine, it clearly would make commercial sense for Carabella to utilize the resources which are located within the proposed mining lease area rather than pay to import the material from elsewhere. The costs of purchasing this type of material from off site would include payment for the material and transportation costs. 99. Even in the unlikely event that Carabella did not use the existing sand, gravel and clay resources within the mining lease area during the term of the mining lease these non-mineral resources have a commercial value to Ms Goodwin and they will be lost as a result of the mining operations. 100. I have adopted the values assessed by Mr Dugald Gray which are set out in his report.” [227] Before even turning to the evidence of Dr Shorten and Mr Gray, a clear issue arises from Mr Cowie’s evidence. That issue is Mr Cowie’s understanding of the operations of s 236 of the MRA. [228] Ms Brien has considered the operation of s 236 in her submissions. Effectively, I take Mr Hammond’s reply submissions in the first sentence of his paragraph 24, to essentially agree with Ms Brien. [229] As Ms Brien puts it at paragraphs 35-38 and 187 of her submissions, s 236 of the MRA is a right to use gravel subject to compliance with conditions in the mining lease and the 95 Ex 8 para 95-100. -- 66 of 104 -- 67 payment of royalty, whereas s 281 is an assessment of compensation to the owner of land as a consequence of the grant of the mining lease. [230] Ms Brien points out that the right to mine is not an entitlement to take sand or gravel. If the holder of the mining lease exercises the s 236 statutory rights to use sand and gravel, then s 236 applies and royalties are payable to the landowner. The grant of a mining lease does not affect the landowners’ right to exploit gravel reserves on land. The landowner can dig up and sell gravel whenever or if ever the landowner wishes. [231] Further, Ms Brien notes that the landowner is in the same situation as any other landowner in that if an approval is needed to exploit gravel resources then that must be obtained. The grant of the mining lease leaves the gravel resource unimpaired and the landowner at liberty to utilise the resource in the same was as before the grant of the mining lease. Any inclusion of an amount for the non-mineral resource ‘used’ by the applicant would result in double recovery for the same resource and a double obligation on the applicant. [232] Ms Brien further submits that, on the evidence, the applicant does not have a present intention to excavate quarry material on the subject land outside the mine footprint and notes the obligation to pay royalty.96 In short, Ms Brien submits that the miner does not intend to use the resource, but will have to meet the s 236 obligation if it does. [233] For his part, Mr Hammond points out in paragraph 24 of his reply submissions that if the resources are stripped and stockpiled as general overburden to allow the mining operation to proceed, or if they are alienated by being covered by up to 40 metres of overburden at the conclusion of the mining lease, they will not have been ‘utilised’ by the applicant but will nonetheless be lost to the respondent. [234] I agree with Ms Brien’s submissions regarding the operation of s 236 of the MRA. Therefore, consistent with the comments made by Mr Allan with respect to this claim as detailed earlier, the respondent’s claim for $815,000 under Item 3 must fail. That then leaves the respondent’s alternate claim of $73,000. [235] The applicant’s alternate claim of $73,000 is detailed in exhibit 52 which is Mr Gray’s supplementary report. That sum is calculated as follows:97 “4.0. Valuation Method 1 – Capitalised Royalties Method using DCFROR analysis based on anticipated future cashflows adjusted for risk 4.1 Future annual production sold of 5,000 tonnes at a royalty rate of $3.00/t would yield a profit (EBITDA basis) of $15,000 for the landowner. Assuming a valuation period of 20 years, and according to the assumptions described above, a total of approximately 100,000 tonnes of 96 Ex 2 para 7 and 8. 97 Ex 52 p 4. -- 67 of 104 -- 68 extractive materials would be extracted from the eastern portion of Area 2 (in the absence of the mine). 4.2 The rate at which the future annual cashflows of $15,000 (foregone by the landowner) are discounted should reflect not only the time value of money but also the risk associated with future operations. 4.3 From my experience in the valuation of quarries in Queensland, the Weighted Average Cost of Capital (WACC) used to discount future cashflows is typically in the range of 11% to 14% for established quarries with low to moderate business risk profiles. 4.4 For the subject land, I am of the opinion that a higher discount rate is justified to account for uncertainties or risks pertinent to the site. Having regard to the factors in the risk management framework in Appendix 1 to this supplementary report, the resource, statutory/legal, economic, extraction, processing, transport, environmental, social/cultural and governmental factors present low commercial risks. 4.5 The principal uncertainty and risk for future royalty cashflows from the subject land is the lack of an established, existing customer base for quarry products. 4.6 The subject land has been intermittently quarried in the past, but no systematic geological assessment is known to have been conducted for the extractive resources on Lot 80 prior to the recent resource assessment by Dr. Shorten. This new information provides additional certainty as to the distribution and quantity of extractive resources on the subject land and makes the extractive resources more attractive to the marketplace. 4.7 Potential customer segments include local government, local rural landowners, civil contractors (project specific) and re-sellers of quarry materials including cartage contractors and landscaping yards. 4.8 Having regard to the above risk factors, in my opinion a discount rate of 20% is applicable for the valuation of future capitalised royalties (foregone by the landowner because of the mine). 4.9 A cashflow of $15,000 pa for 20 years, at a discount rate of 20% has a present value of $73,044. 4.10 This method of valuation is widely used within the extractive industries for valuation of royalties on a going concern basis but it is also used for capital budgeting and financial analysis purposes for proposed quarries (ie for new quarries or extensions to existing quarries), provided the uncertainties, business risks and costs are sufficiently known. For the subject site I am of the opinion that there is sufficient knowledge and uncertainty that the adoption of the method of valuation is valid.” [236] I note that Mr Gray also conducted a different valuation method (Capitalised Earnings (EBITDA MULTIPLIES)) as a cross check, and that the cross check value he arrived at was $75,000.98 [237] Mr Gray then summarised his findings as follows:99 98 Ex 52 para 5.4. -- 68 of 104 -- 69 “5.5 I therefore estimate the value foregone of extractive materials within the subject land sterilised or alienated by the mine disturbance footprint to be $73,000 (assuming the materials are not used by the mine for construction or development purposes).” [238] Before turning to the submissions of the parties, it is appropriate that I make some general observations regarding the evidence of Dr Shorten and Mr Gray. [239] Dr Shorten clearly has high qualifications. In my view, he certainly understood his obligations as an expert witness and sought through his answers to questions to assist the Court. He is obviously highly knowledgeable in his field. [240] If any criticism can be made of Dr Shorten, it would be his tendency to answer questions very quickly. This appeared to cause him to lose his train of thought on a number of occasions. [241] Overall, I was impressed with Dr Shorten’s evidence, which I find reliable. [242] Turning to Mr Gray, it is clear that he is highly qualified in quarrying specifically and mining generally. [243] Mr Gray took his time in answering questions, being careful, in my view, to ensure that his answers were both correct and given in a way which could be clearly understood. [244] I was impressed by Mr Gray’s evidence about the overuse of borrow pits in coal seam gas areas of Queensland and related unlawful activity that he considered was going on. [245] Overall, I was highly impressed by Mr Gray’s expert quarrying evidence which can certainly be relied on by the Court. [246] The applicant is critical of the respondent’s claim.100 Ms Brien submits that the respondent’s case is not premised on an ongoing business, or a quarry in existence, at either date of inspection, the date of application of the mining lease in February 2013, or indeed now. She points out that there are no approvals to carry out a quarry activity on the land and no evidence that a quarry at any extraction rate can operate without approvals. [247] Ms Brien goes on to say that Mr Cowie asserts that the non-mineral product has a commercial value to Ms Goodwin that will be lost forever as a result of the mining operation, not on the basis it has an immediate value to her, but rather, any value that it has will be lost if it is covered over by mining spoil. In her view, Mr Cowie did not have a proper appreciation of the mine footprint, as in her submission it is clear from exhibit 5 page 12 that not all of the non-mineral resource identified is going to be sterilised permanently as a consequence of the mining operation and also because the area to be 99 Ex 52 para 5.5. 100 Applicant’s submissions paras 190-206. -- 69 of 104 -- 70 affected by the mine footprint has also not been calculated. In short, Ms Brien asserts that Mr Cowie’s assertion lacks a factual foundation. [248] On the other hand, Ms Brien calls on the Court to accept what Mr McLay had to say, as in her view Mr McLay says the value of quarry material and any quarry business is inherent with the value of the approvals, because approvals are hard to get, high risk, cost a lot of money to obtain and therefore the value is in the approval itself. She says that Mr McLay’s advice to a potential purchaser would be that without approval there is no support for a value of this product and that, on that basis, he formed the view that the gravel resource had no added value to the value of the land. Ms Brien notes that Mr McLay saw the gravel pit of pea gravel and white clay but because there was no historic data available, there was nothing to consider. Mr McLay in her view is not of the belief that a prudent purchaser would recognise any amount for the quarry resource on the property, as he notes that the Spencer test involves a not-overly anxious, properly informed, willing vendor, but also a willing a purchaser. [249] In concluding her submissions regarding Item 3, Ms Brien of Counsel had this to say:101 “207. In determining the dollar figure, Mr Gray used a period of 20 years. 208. In selecting the discount rate to be applied, Mr Gray has not had regard to the fact that there is a potential that 5,000 tonnes will not be won from the site every year rather assuming the maximum of 5,000 tonnes p.a. Vegetation constraints may place some constraints or obligations on the landowner as to how to undertake their up to 5,000 tonnes per year activity. 209. There was significant uncertainty in the evidence in relation to the extent of the resource and the quality of the resource for either scenario. There has been no attempt to quantify the resource on a proper basis. There has been no attempt to test the material to determine the specifications of the resource. 210. There is a lack of cogent evidence as to the existence of a market underpinning the $73,000. 211. The court cannot without any confidence pick a figure. There is not enough evidence to form a view that the non-mineral resource has any added value, let alone the values claimed.” [250] Mr Hammond sees things quite differently.102 In his view, it is clear from the evidence that there exists quarry materials within the mining lease area on the subject land which would be available to be delivered to the market generally (subject to appropriate authorities and approvals being obtained if the level of extraction were to exceed 5,000 tonnes pa) and which will be available for use by the applicant without the need for 101 Applicant’s submissions para 207-211. 102 Respondent’s submissions para 111-129. -- 70 of 104 -- 71 authorities or permits regardless of the quantum of extraction, and which imparts on that land some special potentiality. [251] Mr Hammond notes that in his supplementary report, exhibit 47 at appendix 2, Mr Shorten sets out the enquiries he has made as to the quarrying operations that have previously been undertaken on Kalari and the uses to which the materials have previously been put and can be put into the future. As Mr Hammond puts it, the evidence shows a large commercial resource and extensive previous quarrying with a high potential future use independent of the applicant as it is not a resource that owes its potentiality to the proposed mining operation. [252] Mr Hammond concluded his submissions with respect to Item 3 this way:103 “138. It is clear from the evidence of Shorten that the non-mineral resources have been extensively quarried in the past both within and outside the mining lease area. This fact was also obvious from the site inspection undertaken by the Court. 139. As a result of the construction and operation of the mine, the non-mineral resources within the mining lease area will be sterilised and lost to the respondent forever. 140. Knowing that these resources exist on her land and the value of them as deposed to by Gray, to deny compensation to the respondent for this potentiality would be to treat her as a vendor parting with her land under compulsion.” [253] In considering this item, many of the same considerations as those taken into account in Item 2 are relevant. The authorities equally apply to the recoverability of this item as they did to the rosewood. My discussion of the question of the respondent having continued access to the MLA area post grant is also equally relevant. I note that some of the quarry resource lies outside of any area to be disturbed under the current mining plan.104 Although Mr Hammond in his submissions has calculated the total amount of spoil to be removed from the pit, his calculations ignore standard mining procedure as evident from the plan of operations that the initial cut will be stockpiled followed by progressive back- filling of the void during mining. [254] Vegetation management issues have again been ignored by the respondent. Mr Hammond in his submissions on this item made reference to a number of additional authorities which should be considered. [255] In Wills v Minerva Coal Pty Ltd105 Member Scott had this to say at pages 323 to 325 in a case which also considered compensation payable under s 281 of the MRA: 103 Respondent’s submissions para 138-140. 104 Ex 2 p 12. 105 (1998) 19 QLCR 297. -- 71 of 104 -- 72 “The difficult question to answer with respect to s.281(4)(c) is concerned with what the status of the land adds to the current use in considering the effect on value as it is clear that, putting the statute aside, it is possible to find cases where the current use would give rise to an added value in the land. One thing is clear and that is that the question of status must apply to the same land involved in the current use. This is indicated by the use of the conjunctive ‘and’ and in the use of the phrase ‘certain land’. That is, the same land is being referred to. Given this, it is sensible that the status would be associated with the current use. Such a connection is indicated also by reference to the singular ‘a premium’. The status of the land will be a positive characteristic, however, it may be demonstrated by reference to a negative example. Assume that a current use is carried out but that it is not lawful, given the absence of consent or approval of a statutory authority and that there is evidence that such approval would be quite improbable. In such circumstances, the requisite status will not be present and a premium would not be added to the market value. I do not intend by this to indicate that the term status will be confined in its meaning to situations involving the presence or absence of appropriate approvals, but the example is useful in two respects. It provides an indication of a sensible meaning which can be given to the term status in the context of the legislation; and it tends to show that it will not always be the case that the landholder needs to positively show the presence of a particular status in the land for if it is the case that based on general principle it can be demonstrated that the current use should warrant a premium, then the status of the land may be assumed to be appropriate unless there is evidence to the contrary. One outcome of the construction that I have placed on s.281(4)(c) is that it does not and cannot be construed to extend to the added value that the land might have for some intended use. It is confined to a current use. I do not, of course, have in mind an intention in the form of a recent brainwave or a dream unsupported by objective evidence. If, however, it can be demonstrated by the owner of the land that his land or part of it has a value in excess of market value because of an intended use, then for the owner to be justly compensated he ought to, on principle, receive compensation for such value. There are some utterances in decided cases which indicate that on those occasions the Court was of the view that special value should be confined to an existing use (eg Yates Property Corporation Pty Ltd v. Darling Harbour Authority (1991) 73 LGRA 47 per Kirby P at 52-53; Chong v. Fairfield MC (1968) 88 WN (NSW) 346 per Else-Mitchell J at 356), however, the Pastoral Finance quotation which I have included above authorises that intended uses be taken into account, as do a number of other authorities (eg Arkaba Holdings Ltd v. Commissioner of Highways (1970) SASR 94 per Bray CJ at 100). The test of value proposed by Moulton LJ in the last sentence of the Pastoral Finance quote is certainly broad enough to incorporate intended uses and I would venture the opinion that any narrowing of the test to exclude intended uses could lead to an unjust result in some cases. Lord Moulton's test was explained further in Commissioner of Highways v. Tynan (1982) 53 LGRA 1 at 9: ‘It seems to me that the principles to be applied where special value is in issue are virtually the same as those laid down in Spencer's case, though extended and qualified slightly, to accord with the changed inquiry. What the court is being asked to determine is the price at which a person in exactly the same position as the claimant would 'come together' with a hypothetical person on the point of dispossessing him, in circumstances in which the claimant would, in order to retain the land under threat, pay a sum representing the market value of the land, together with the value of all its special advantages to him, but would not, in addition to market value, pay more than the provable commercial value to him of those special advantages.’ -- 72 of 104 -- 73 Just as the hypothetical prudent purchaser in Spencer will be assumed to pay for the potential in the land, so would the hypothetical prudent purchaser in Tynan. The central question is concerned not with whether the use is present or intended, but whether it is of value to the owner. It must sound in commercial value (Polegato v. Griffith CC (1988) 64 LGRA 265 at 269 and 272) and be supported by objective evidence showing that there is a potentiality in the land in the hands of the owner. The question is: does s.281 cater for compensation for such a potentiality in a provision other than subsection (4)(c) given that provision's confinement to current use? I have discussed earlier under the heading "Value of Land Severance and Injurious Affection" the notion of "value to the owner" and my view that in the absence of s.281(4)(c) the concept of special value in all of its respects would be found to be implied in the phrase in s.281(3)(a)(ii) "value of the land of the owner". Given, however, that s.281(4)(c) allows the award of a premium for something akin to any special value arising out of a current use only, it would do violence to the concept of "value to the owner" to attempt to unravel out of subsection (3)(a)(ii) that part of special value which might apply to a potential use. I am forced to look elsewhere in the statutory provision. Section 281(3)(a)(vi) refers to ‘all loss or expense that arises; as a consequence of the grant or renewal of the mining lease;’. I consider this provision in some detail when I deal with the issues relating to ‘Capital Gains Tax’ and ‘Disturbance’, but for present purposes I wish to focus on the word ‘loss’ referred to in that provision. The Macquarie Dictionary (1982 edn.) includes these meanings: ‘1. detriment or disadvantage from failure to keep, have, or get: to bear the loss of a robbery.... 4. a being deprived of or coming to be without something that one has had: loss of friends.’ The Concise Oxford (5th edn.) refers to ‘person, thing or amount lost’. The word "loss" is used in a number of the land acquisition statutes. For example, s.25A Land Acquisition Act 1969 (SA) speaks of the dispossessed owner having suffered a loss which is to be compensated. That is, it is the term which is used in a generic sense to cover all of the loss to be considered in the assessment of compensation. The Victorian statute, the Land Acquisition and Compensation Act 1986 provides an example of loss being used in a narrower sense, that is loss attributable to severance (s.441(1)(c)). The term ‘loss’ in s.281(3)(a)(vi) MRA is not confined to a particular cause of loss such as in the Victorian example; it arises from the action of the grant or renewal of the mining lease which generates the general right to compensation, thus it is used in a generic sense, but appears to be included in the section more as a safety net provision than the primary source of compensation. Nevertheless it seems clear to me that the term ‘loss’ in s.281(3)(a)(vi) suitably covers, amongst other things, compensation for the loss in value occasioned by the owner having to yield up the opportunity to put his land or part of it to a particular use which would not sound in the market value of the land but which has a present economic value to him. I will for convenience refer to the combined compensation which I have described here as arising under s.281(3)(a)(vi) and that arising under s.281(4)(c) as ‘statutory special value’. Let me mention for completeness that the prospective nature of the word ‘arises’ in s.281(3)(a)(vi) is of no significance to my findings on the matter of compensation flowing from an intention to use. This aspect of what I have called statutory special value is concerned with a present value and its loss involves a present loss. I should point out that my conclusion that an above market or statutory special value is compensable, but that the source of the right to compensation is found in separate provisions in the Act, may present practical but not insurmountable difficulties depending on the facts of the case. Such difficulties could, for example, arise where the nature of the statutory special value is not easily divided between current and intended use. Consider an example where the owner of the land has devoted land to -- 73 of 104 -- 74 the use in question and has commenced usage of part of it only. Nevertheless, the statute does envisage that the premium assessed under 281(4)(c) be separately identified as part of the process required in the consideration of any "additional amount" to be awarded under s.281(4)(e). I will turn to consider that provision shortly, however, will foreshadow now that I envisage that the need to separately identify a premium under s.281(4)(c) will infrequently arise. There are two final points. First, there is nothing in s.281(4)(c) which requires that any premium assessed under that provision be expressed as a percentage of any figure in s.281(3)(a). It need only be expressed as a percentage for the purpose of considering any interrelationship with s.281(4)(e) that arises. Second, a premium will not be assessable as part of the process employed in the ‘before and after’ valuation method in reliance on market transactions alone. Such a process will reveal diminution in market value only. Equally, it would be wrong in principle to express the premium as being additional to the figure resulting by any process designed to reveal a diminution in market value. Any statutory special value will be found in the value of the owner's land before the grant of the mining lease and the measure of compensation will be found by considering what value the owner's land has after the grant of the mining lease, including any surviving statutory special value, or to what extent its previous overall value has diminished.” [256] Mr Hammond also considered the case of Pastoral Association Ltd v The Minister106 where the Privy Council had this to say at page 1087: “The [Association was] clearly entitled to receive compensation based on the value of the land to them. This proposition could not be contested. The land was their property and, on being dispossessed of it, the [Association was] entitled to receive as compensation the value of the land to them whatever that might be. The question whether that value had as yet been developed by the actual erection of the buildings necessary to enable the [Association] to realise the special value they thus possessed was no doubt one of the circumstances which was material for guiding the jury to assess its value in the [Association’s] hands, but it by no means prevented the land from having this special value, nor did it interfere with the [Association’s] right to have that special value duly assessed by the jury, as the amount of the compensation due.” [257] I next turn to the case of Edinburgh Pty Ltd v The Minister107 where Justice Else-Mitchell had this to say at page 50: “The assessment so required to be made by this provision has been held to require assessment of the value of the land to the owner (Pastoral Finance Association v. The Minister. But however the test is defined, and putting aside for the moment the special position created by compulsory acquisition of an easement, it is beyond controversy that the ascertainment of value involves the assumption of a willing purchaser of the land or interest acquired as at the date when the notification of resumption or acquisition was published in the Gazette, even if the circumstances are such that the only purchaser would be the acquiring authority acting, in accordance with the accepted hypothesis, without the assistance of a compulsory power of acquisition (Vyricherla’s Case). Such a purchaser must not be taken to possess any special prescience but it must be assumed that both he and the vendor would be concerned with the nature of the development which would be permissible at the date of the acquisition and in the future after that date. In this way at least the County of Cumberland Planning Scheme Ordinance would necessarily enter into the contemplation of the parties and, if there were nothing 106 (1914) AL 1083. 107 -- 74 of 104 -- 75 more than the restrictions imposed by that scheme, the valuation would proceed on the assumption that the land over which the easement now exists would be capable of subdivision with the consent of the responsible authority …” [258] In Reference Under The Electricity Commission (Balmain Electric Light Co. Purchase) Act 1950108 Justice Sugerman had this to say at page 89: “The Raja’s Case :―The decision in the Raja’s Case requires that in valuing for compensation upon a compulsory acquisition there be taken into account any unusual or special features or potentialities of the property acquired, even though they are useful only to the authority compulsorily acquiring and that authority is their only possible purchaser. First, then, it must be found that there is such a feature or potentiality. But when that is found, the decision prescribes no extraordinary principle for determining what is to be paid for the feature or potentiality. It requires no imputation to the acquiring authority of such special notices as Sir Garfield has mentioned or of willingness to purchase at a figure determined by those motives. Neither in principle nor in the application of principle did the Raja’s Case require or suggest any departure from the ordinary rule in land acquisition cases (to which class the Raja’s Case belonged) of willing vendor-willing purchaser, to be applied to the special feature or potentiality, or any disregard of ordinary commercial considerations in applying that rule. ‘….. even where the only possible purchaser of the land’s potentiality is the authority that has obtained the compulsory powers, the arbitrator in awarding compensation must ascertain to the best of his ability the price that would be paid by a willing purchaser to a willing vendor of the land with its potentialities in the same way that he would ascertain it in a case where there are several possible purchasers and ….. he is no more confined to awarding the land’s “ poramboke ” value in the former case than he is in the latter’. And :― ‘the only enhancement in the value to the appellant of his land by reason of its special adaptability as a water supply was the sum that the Harbour Authority, as a willing purchaser, would have been willing to give in excess of the land’s “ poramboke ” value.’ Finally, I should refer to :― ‘It is plan, therefore, that in view of the fact that the water could not be exploited by the appellant himself and that it would necessarily be some years before the water would become a profit-earning asset in their hands’, [the emphasis is supplied] ‘the Harbour Authority, however willing purchasers they might be, would not have agreed to pay anything like that sum.’ The Raja’s Case in any event appears to have no application here. There was no unusual or special feature or potentiality of the undertaking.” [259] The final case referred to by Mr Hammond under this item was Waters & Ors v Welsh Development Agency.109 Lord Nicholls had this to say at paragraph 36: “Potentiality is part of the market value of land and must be taken into account when assessing compensation. Potentiality should be valued even if the only likely purchaser is the acquiring authority itself. That was decided in the Indian case. But market value does not include enhanced value attributable solely to the particular use proposed to be made of the land under a scheme of which compulsory acquisition of the subject land is an integral part. This element of value is not part of market value because it is not an element the owner could have realised in the open market. That is the traditional view, which has long been acted upon in this country. It is much too late now for judicial interpretation to set the law on an altogether different course, even if that were otherwise appropriate. Potentiality is 108 (1956) 1 LGRA 49. 109 [2004] 2 All ER 915. -- 75 of 104 -- 76 to be assessed and valued as matters stood before the particular scheme, of which the subject land’s acquisition is part, came into being.” [260] Of course, Lord Nicholls’ comments above relate specifically to a scheme in a compulsory acquisition matter, but I consider his general comments about potentiality relevant to this case. [261] Lord Nicholls went on to make further comments linked to the concept of a compulsory acquisition scheme at paragraphs 64 and 65 which are also of general relevance: “The value of the land is not the price a “driven” buyer would be prepared to pay. But a strip of land may have special value if it is the key to the development of other land. In that event this feature of the land represents part of its value as much for purposes of compensation as on an actual sale in the open market. [65] The intersection of these two principles was identified neatly by Mann LJ in Batchelor v Kent CC (1989) 59 P & CR 357 at 361: “If a premium value is ‘entirely due to the scheme underlying the acquisition’ then it must be disregarded. If it was pre-existent to the [scheme] it must in my judgment be regarded. To ignore the pre-existent value would be to expropriate it without compensation and would be to contravene the fundamental principle of equivalence”.” [262] Just as I was satisfied under Item 2 (the rosewood claim) that an amount of compensation should be awarded to the respondent in accordance with the various authorities due to the special circumstances that arise on Kalari as regards the existence of commercial rosewood, so to am I convinced by the evidence relating to the quarry material claimed under Item 3 in the alternate amount of $73,000 that some amount should be payable by the applicant to the respondent under this head as there is a commercial quantity of quarry material within the MLA area and particularly within the area of the mine footprint to which the respondent will not have access during the mining operations and, depending upon the nature of those mining operations, some or all of that area within the mine footprint may indeed be permanently sterilised. [263] Concerns that I addressed however regarding the quantification of Item 2 also arise with respect to this item. I note again the lack of any account taken by the respondent as regards vegetation management issues. These certainly should have been taken into account with respect to the quarry claim just as they should have been taken into account with respect to the rosewood claim. I am also as equally concerned under this item of compensation as I was under Item 2 with the fact that the respondent did not provide any evidence to the Court as to this claimed item or indeed as to the previous extraction of quarry material that has been undertaken on the property, although she did provide, it would seem, detailed information to her experts. -- 76 of 104 -- 77 [264] I have two other areas of concern, they being the fact that Mr Gray used a period of 20 years for his calculation of this item of claim, and also the question of approvals required of the respondent to undertake commercial activities with respect to quarry material. [265] In regard to the question of the 20 year time period and the quarrying of only 5,000 tonnes per annum, I note the evidence of Mr Gray during cross-examination as follows:110 “And moving, then, to the – page 4 of your report, this is when you’re actually attempting to put a figure on this exercise, you have assumed 5000 tonnes per annum every year for $3 per tonne royalty for 20 years. Firstly, why have you included a 20-year period?---It’s typically a period that applies to – if you’re looking at capitalised royalties, typically 20 or 25 years is a life that’s applied. I mean, the resources – mining – or, quarrying may continue beyond that period, but certainly when we’re doing feasibility studies and evaluating discounted cash flow rate of return analysis or net present value analysis, typically we use a 20 or 25- year period, notwithstanding that there aren’t materials that remain and won’t be used in the future, but their value in 20 or 25 years, if you discount them back to the present day, becomes quite low. So it’s – I’ve adopted from my experience a period of 20 years. All right. And you have assumed 5000 tonnes per year will be won every year and there will be royalties paid on that figure every year. Have you – in selecting your discount rate, have you had regard to the fact that the potential that 5000 tonnes will not be won from the site every year?---No. I’ve assumed the maximum of 5000 tonnes per annum. I didn’t randomly rely on it. As I said, Dr Shorten, well, helpfully produced an estimate of what he believed materials had been extracted over time, that’s both within the mining lease and outside the mining lease within the lot 80 land, and in his exhibit, if you add up those quantities that have already gone somewhere, if you like, the quantity’s about 200,000 cubic metres. So if you were to adopt, for argument’s sake, a density of two tonne to the cubic metre, the evidence from Dr Shorten’s report is that about 400,000 tonnes of material has gone somewhere from this site. Now, again, I’m relying on Dr Shorten and the discussions he’s had with the Goodwin family, but there seems to be evidence that there’s extraction back in the 70s. It may even have gone back a bit earlier in time. So when I look at it over the course of perhaps 40 years or more, I suspect more than 5000 tonne per annum has been sold. I accept that anything more than 5000 tonnes per annum is not legal in a planning sense, at least, so I’ve – in my view, there’s evidence that the historical extraction is such that projecting into the future, given supply – you know, the supply and demand situation, that, yeah, I’ve adopted the 5000 tonne per annum. I think it’s a reasonable assumption, just based on that work that Dr Shorten did in terms of how much has been removed historically.” [266] I am prepared to generally accept the comments made by Mr Gray as set out above. As already indicated, I was impressed with him as a witness. Notwithstanding that, there remain imponderables with respect to this claim. If the respondent is compensated in the manner suggested by Mr Gray and Mr Cowie, due to the fact that there is clearly, on the evidence, large amounts of quarry material located both outside the mine footprint but on the MLA area to which the respondent may continue to have access and, indeed, large 110 T 8-34 l 25 – 8-35 l 10. -- 77 of 104 -- 78 quantities of quarry material on the respondent’s property outside of the totality of the MLA area, that means that, should the respondent so choose, the respondent could undertake as of right commercial extraction of up to 5,000 tonnes per annum from areas outside of the mine footprint by way of a commercial business operating without the stringent planning requirements of a larger operation while at the same time receiving compensation on that same basis for the same nature of small scale quarrying operation on the land within the mining footprint. Clearly, under planning laws, the respondent could not mine more than 5,000 tonnes per annum without significant planning approval and as such any payment to her of a sum for a small scale quarrying operation has the potential to double-up given the fact that she could only undertake one small scale operation of mining of up to 5,000 tonnes per annum on her property per year. That said, however, it is also true to say that in a real sense I am prepared to find on the limited evidence available to me, relying primarily on the current plan of operations, that the mine footprint will effectively sterilise quarry material which will therefore be lost to the respondent for all time and for which she has a right to be compensated. [267] Overall, despite the absence again of any reference to vegetation management procedures and the lack of direct evidence from the respondent, I am of the view that the evidence with respect to this claim is somewhat better than the evidence with respect to the rosewood claim. However, for the reasons and concerns I have outlined, I again do not consider that the totality of the alternate claim made by the respondent should be allowed, as once again it is not quantified by an analysis of what a prudent purchaser would have paid by way of extra amount for the potentiality of this area of land to be quarried. This is particularly relevant when a hypothetical purchaser of Kalari would have other areas on Kalari on which to establish a quarrying operation. I also take into account concerns as to ‘doubling-up’ should the quarrying be limited to 5,000 tonnes per annum on both the MLA part of Kalari and the balance land of Kalari. [268] Doing the best that I can with the evidence before me, consistent with the authorities, and taking into account the approach that I took with respect to the rosewood item, and in particular repeating my words at paragraph [222] about a vendor and purchaser meeting half-way, I consider it appropriate with respect to Item 3 to reduce the amount that the respondent has claimed in the alternative by 50%. A 50% deduction results in an amount of $36,500 which I am prepared to round up to the sum of $37,000. Item 5 – Depreciation/Diminution to Balance land -- 78 of 104 -- 79 [269] Item 5 relates to a claim for depreciation/diminution to the respondent’s balance land. To begin with, it should be noted that Mr McLay and Mr Cowie use different terminology to describe this item. [270] Mr McLay in exhibit 3 referred specifically to s 281(3) and (4) of the MRA and applied various values to each subsection thereof. For s 281(3)(a)(ii) of the MRA, which relates to “diminution of the value of the land or any improvements thereon”, he allowed what he referred to as “a nominal 5% diminution in value of the balance land to allow for noise and dust impacts”.111 In that same area of his report, he referred to MRA s 281(3)(a)(iv) which relates to “severance of any part of the land from other parts thereof or from other lands of the owner” and stated “No Amount Allowed”.112 [271] Mr Hammond of Counsel effectively summarised Mr Cowie’s assessment of Item 5113 this way:114 “D. Diminution in the Value of the Balance of the Land Pursuant to MRA s.281(3)(a)(ii), (iii) and (iv). 141. By reason of the construction and operation of the mine, the balance of land not included within the mining lease area will be diminished in value: a. By the impacts of noise and dust from the mine construction and operation; b. By the severance of the portion of the land within the mining lease area; and c. By the ‘blot’ occasioned by the existence of the mine.” [272] The respondent’s claim is however more complex than that. The claim in Item 6 is also expressed as a claim for diminution pursuant to s 281(3)(a)(iii) of the MRA.115 Likewise, Item 12 is also a claim made pursuant to s 281(3)(a)(iii) of the MRA.116 Further, Item 13 is a claim made pursuant to MRA s 281(3)(a)(iii), (iv) and 4 (e).117 [273] The manner in which the respondent has made her claims for Items 5, 6, 12 and 13 causes me great concern as regards to falling into error via a doubling up of claims. Mr Brien of Counsel for the applicant does in fact seek that a number of those claims not be allowed because of doubling up. 111 Ex 3 p 12 @ 7.3. 112 Ex 3 p 13. 113 Which Mr Hammond referred to as “D”. 114 Respondent’s submissions para 141. 115 Respondent’s submissions para 165. 116 Respondent’s submissions para 179. 117 Respondent’s submissions para 184. -- 79 of 104 -- 80 [274] I can set out the position of the applicant with respect to Item 5 quite quickly. Firstly, Mr McLay quantifies the claim in this way:118 “We have allowed a nominal 5% diminution in value of the balance land to allow for noise and dust impacts 1,969.7ha x $335/ha @ 5% $32,992” [275] The first point to note is that Mr McLay has valued the balance land of Kalari at $335 per ha. As is obvious from my previous finding regarding the value of Kalari, the state of the evidence does not make assessing a value for the balance land an easy task. Given the evidence, I am not prepared to revisit the value of $650 which I have assessed for Kalari. Implicitly, therefore, I reject Mr McLay’s assessment at $335 per ha. That leaves Mr McLay’s assessment of diminution at the nominal rate of 5%. [276] Ms Brien describes Mr McLay’s assessment of 5% diminution this way:119 “Mr McLay’s assessment of 5% diminution for the balance is also reasonable. He assesses that there will be an impact for about 100m around the edge of the lease area, however he has applied a figure over the whole parcel. The Respondent is being compensated 100% for the value of the land to be affected by the 15 year mining lease. The activity must comply with all approval conditions that constrain impacts off-site including dust. The Applicant has agreed to pay compensation for the price of a new house together with the connection of utilities and an access track at a figure much higher than the assessed value of the current house at $120,000. The asserted severance claim is not established. There is no basis to allow 20% for diminution.” [277] Mr Hammond dealt with the claim in Item 5 under separate headings namely noise and dust, severance and blot. Noise and Dust [278] Mr Hammond summarised Mr Cowie’s evidence as to noise and dust this way:120 “a. As on site coal processing will form part of the mining operation, the dust problem will be very severe; b. The prevailing wind will exacerbate the dust problem which will extend over the majority of the northern part of Kalari; c. The dust problem will have an effect on approximately 580ha of land outside the mining lease area; d. The dust settling on pasture significantly reduces the capacity of pasture to support grazing of cattle; …” [279] As Mr Hammond put it at para 150 and 151 of his submissions, the applicant would have it that the conditions of the EA121 are sufficient evidence to obviate any concern that 118 Ex 3 p 12. 119 Applicant’s submission para 159. 120 Respondent’s submissions para 148. 121 Ex 8 Appendix 22. -- 80 of 104 -- 81 Kalari will be affected by noise and dust from the construction and operation of the mine. However, condition B1 of the EA simply requires that the applicant ‘…shall ensure that all reasonable and feasible avoidance and mitigation measures are employed so that the dust…’. This condition does not prohibit the creation of dust. It only requires ‘reasonable and feasible measures’ to be employed and provides a system for dealing with complaints. [280] I agree. [281] Further, Mr Hammond has referred to the applicant’s own document, exhibit 48A, which has this to say at page 62 regarding dust impacts: “5.2.2.3 Dust Impacts Dust impacts will be generated from the following activities at the Project:  Loading and unloading trucks with overburden and coal;  Bulldozing and loader operations on overburden and coal;  Drilling and Blasting;  Mobile equipment operation on haul roads;  Stockpile feed to conveyors;  Conveyor transfer points; The model results for dust impacts consider each of the above dust general sources with an emission inventory developed for each specific source for each modelled quarter of the modelled year. Further detail on the emissions inventory can be found in Appendix A. Modelling includes the dust control measures intended to be incorporated into operational activities which are further addressed below. In this case, the uncertainty in the modelling results is high due to assumption regarding the details of emission sources and operating information. Hence the results should be interpreted as providing an indication of impacts. Initially the preliminary mine plan was modelled, which resulted in some of the 6th highest 24 hour average PM10 results exceeding the PM10 criteria of 50ug/m³/24 hour, at multiple receptors when background levels were considered. As a result of modelled PM10 impacts and other potential impacts relative to noise, surface water, and rehabilitation values, mine planning underwent significant revision in an effort to mitigate undesirable impacts to these values. The model was re-run considering the revised mine plan and subsequently there were no exceedences of the 50ug/m³/24 hour criteria by 6th highest 24 hour average PM10 when considering background levels.” [282] The applicant’s same document went on to say the following regarding noise in exhibit 48B at page 117: -- 81 of 104 -- 82 “Assessment of Primary Noise Impacts Exceedances The predicted exceedances of the nominated 37dBA Leq night-time criterion (under adverse conditions) are listed as follows:  5dBA exceedance at Receiver A (located to the south of the MLA).  3dBA exceedance at Receiver B (located to the south of the MLA). As shown in Table 33 above, no exceedances are predicted under neutral conditions with the daytime and evening fleet, but there are exceedances predicted at four receivers under adverse conditions with the night-time equipment fleet. The sensitive receivers which are predicted to exceed the nominated noise criterion are all single residential receptors (A to D) located outside the Bluff township. These exceedances could be addressed in a number of ways, including:  Mitigation measures of the affected residences in the form of construction upgrades (e.g. windows, insulation) and ventilation upgrades (e.g. air- conditioning).  Financial compensation to landowners.  Re-location of dwellings.  Further mitigation measures at the mine site. Predicted noise levels comply with the proposed noise limits for all other receptors for all meteorological conditions.” [283] I note that receiver B is located on Kalari.122 Severance [284] Mr Hammond summarised Mr Cowie’s evidence as to severance in exhibit 8 para 113- 120 this way:123 “a. In assessing the diminution in the value of the balance of the land, he has relied on the information available to him and his experience as a rural valuers as to the nature of the proposed mining operation and the impacts on cattle grazing country of coal mining operations; b. The mining lease area is to be fenced which will physically sever it from the balance of the Kalari; c. The result is a reduction in the area of the property of about 588ha and the associated reduction in the area of different classes of country on Kalari that previously allowed the respondent flexibility in her management practices for the rotation of stock; d. A large area of the country used by stock during the winter and rain periods will be lost if the mining lease is issued which will result in a loss to the overall grazing capabilities of the property; 122 Ex 48B p 84. 123 Respondent’s submissions para 162. -- 82 of 104 -- 83 e. The applicant will employ about 100 personnel during the mining operations and any prospective purchaser would be concerned about who and what might come onto Kalari by means of the access road and the mining lease area. It is conceded that the applicant now suggests that about 40 – 50 personnel will be required to operate the mine. f. The diminution in value of 20% that Cowie attributes to the balance of the land at Kalari includes an allowance for severance as well as noise and dust.” [285] Mr Hammond referred to statements made by Mr McLay during cross-examination relating to Mr Cowie’s assertions relating to severance in exhibit 8. Mr McLay relevantly had this to say:124 “Do you accept that?---My understanding of severance was that it would sever one parcel from another. I would - - - Well, did you read his report, Mr Cowie’s report? Because at page 116, it’s made very clear. He refers to a decision of F.W. Hughes. I won’t read the whole lot. And it’s been law - can - well, long settled law that severance can also mean reduction in area, just not a division into two parts. You weren’t aware of that?---Not in that context. And the context it’s used - can I suggest to you, Mr McLay - for an expert valuer attempting to ascertain in a compensation matter severance damage, is the reduction in area affects a diminution in value for the current or any potential use?- --I don’t agree. You don’t agree? That’s - it’s no difficulty. You’re entitled to disagree. So you don’t agree then with paragraph 114?---Well, it’s all factual statements. Well, I’m just asking you. You can read it and either agree or disagree?---Well, I agree. And do you agree with paragraph 115?---Yes. I agree.” [286] For completeness, and to put Mr McLay’s evidence into context, Mr Cowie had this to say in exhibit 8 at paragraphs 114, 115 and 116: “114. As the area of the mining lease is to be fenced, the balance land is physically severed from the mining lease area. The result is a reduction in the area of the property for cattle grazing of some 588.3 hectares and the associated reduction in the area of different classes of country on Kalari that previously allowed Ms Goodwin flexibility in her management practices for the rotation of stock. 115. In effect, the issuing of the mining lease will sever the country types presently available for the best management of the property. A large area of the country used by stock during the winter and rain periods will be lost if the mining lease is issued. This action will, in effect, sever the property’s management practices which will result in a loss to the overall grazing capabilities of the property. 124 T 3-60 l 1-21. -- 83 of 104 -- 84 116. The nature of this severance damage, by reduction in area, was explained in F.W. Hughes Pty Ltd v Minister for Conservation (1950) 17 LGR (NSW) 274 where at page 281 Sugarman J. stated: ‘It is no doubt true as a general proposition that the taking of portion of an entire holding carried on as one property is not necessarily compensated by a mere award of the value of the portion taken considered simply as if it were a separate and independent parcel of land. The taking of part may result in a diminution in the value to the owner of what remains and, in particular, that may happen because of a disturbance in the previous proportions of different classes of land or of lands used for different purposes or in different ways.’” [287] At this point, it is appropriate to make one thing clear. Despite the evidence of Mr McLay and Mr Cowie, I do not depart from my earlier finding that the boundary of MLA 80194 will not be fenced. However, I certainly do accept that certain areas of MLA 80194 will be fenced for safety reasons. Blot on Title [288] As regards blot on title, Mr Cowie had this to say:125 “120. The existence of the mining lease would also deter purchasers as the proposed mining operations would significantly affect the management practices for grazing cattle and would also become a ‘blot’ on the title of Kalari. These matters were recognised as factors adversely impacting on the value of the land affected by a proposed mining lease by the past President of the Land Court, Mr Trickett in Mitchell v Oakhill & Mitchell (1998)19 QLCR 66.” [289] Mr Hammond points out126 that the area of MLA 80194 takes up approximately 23% of the total area of Kalari. Mr Hammond also pointed out the contents of the applicant’s exhibit 48C at pages 189-190: “As discussed in above, the pre-mining land suitability is considered to be Classes 3 and 4 (marginally to moderately suitable) for beef cattle grazing activities. Although strategies will be implemented to minimise the Project footprint, land disturbance and landform modification will occur and the post-mining landform will differ to the gently undulating pre-mining landform dominated by grazing use. Consequently there will be a net shift between the pre-mining and post-mining agricultural capability and suitability of the land within the Project area. The Land Suitability classification for the rehabilitated disturbance footprint will range from Beef Cattle Grazing Land Suitability Class 3 to Class 5, see Figure 5.5.11. This will provide a post-mining landform capable of both grazing enterprises (Class 3) along with some land that is best re-vegetated with trees and shrubs for erosion control (Class 4). The post-mining landform will also contain areas not suitable for any agricultural enterprise, which is primarily related to the final void area (Class 5).” Analysis of Item 5 claim 125 Ex 8 para 120. 126 Respondent’s submissions para 156. -- 84 of 104 -- 85 [290] Having considered the position of the parties regarding Item 5, there are a number of points to be made. The first is to refer to a number of relevant authorities on point. [291] The Land Appeal Court had this to say regarding the concept of severance in Suntown Pty Ltd v Gold Coast City Council127 at page 207: “Severance damage arises from the separation or division of the claimant’s land as a result of the resumption. The severance may be by way of a division of the retained land into two parts, for example, by way of a resumption for an intersecting road. It may also occur where a part only of the claimant’s land is taken leaving a compact parcel. Severance damage is depreciation in the value of the retained land resulting from its division into two or more parts, or its reduction in area and consequent loss of value for some current or higher (potential) use.” [292] Further, in Gold Coast City Council v Halcyon Waters Community Pty Ltd,128 the Land Appeal Court at paragraph 18 referred to Couper Essex v Local Board of Action129 and noted the words of Lord Watson: “I think the expression ‘the severing’ as it occurs [in the relevant statutory provisions], read in the light of the context, merely signifies that what [those acquiring the land] have acquired is separated from, in the sense that it can no longer be treated by the landowner as part of, the subject which, until its purchase, he held along with it.” [293] Then President Trickett of the Land Court considered many of the issues relevant to the current Item 5 in the case of Mitchell v Oakhill & Mitchell.130 He had this to say at pages 73 and 74: “It is well established that compensation for the loss of land (even temporarily) cannot be resolved by simply saying that the appellant has been deprived of approximately 50 hectares of land at $42.50 per hectare and compensation assessed at $2,125. That does not compensate the landowner for having mining activity on his land. I return to the decision of the Land Appeal Court in Joyce's case, particularly the extracts from the decision quoted at pages 177 and 178. Applying those tests to the present case, the question arises as to the attitude of a hypothetical prudent purchaser and whether such a person would consider that the property would suffer diminution in value because of the granting of the mining lease. Unfortunately, I have no expert evidence in that regard. All I have is the evidence of the appellant, seemingly based on the advice from Mr Todd, that the diminution in value is considerable. However, for the reasons expressed earlier, I have rejected that opinion. Understandably in the circumstances, the Warden came to the conclusion that he had no evidence in relation to the various items set out in section 281(3)(a) and based his determination upon the amount offered by the respondents. However, I have formed the opinion that compensation of $10 per hectare per annum will not adequately compensate the landowner. In arriving at that conclusion I have tried to place myself in the position of a hypothetical prudent purchaser. In my opinion such a person would not simply 127 (1979) 6 QLCR 196. 128 (2011) 32 QLCR 146. 129 (1889) 14 App CAS 153. 130 (1998) 19 QLCR 66. -- 85 of 104 -- 86 reason that with the granting of the mining lease the property has been reduced in area by approximately 50 hectares for a term of ten years. A potential purchaser would also take into account the fact that the mining lease will be situated in the best lambing paddock and that the dust, noise and nuisance will necessitate a change in the management of at least that part of the property from breeding ewes to wethers. This could result in a change to the whole management strategy. Perhaps most importantly, a potential purchaser would realise that with the granting of the mining lease, the owner would lose control not only of the use of the lease area, but also would lose control of who and what comes on to the property by means of the access road and the mining lease. This would raise understandable concerns about strangers being on and passing through the property. A potential purchaser would also be concerned about the possibility of the mining lease being extended beyond the ten year period. … There is also the fact that the mining lease will become a "blot" or encumbrance on the title of the property. Any prospective purchaser will be able to ascertain that there is mining activity on the property. That alone may well deter some potential purchasers. On the other hand, those negative aspects must be balanced against the fact that the mining lease will be situated on the southern boundary of the property and will occupy only approximately 50 hectares out of a total area of over 16,000 hectares. The lease is for only ten years, it will not be fenced and the owner will have the right to graze sheep over it, apart, of course, from the area being mined. In addition, the respondents have undertaken to restore the area to its natural condition and to compensate the owner for loss of stock or damage. It is impossible on the state of the evidence to arrive at a definitive conclusion as to just how the granting of a mining lease would affect the mind of a prudent purchaser of "Warnambool Downs". However, I have no doubt that it would affect the price that such a person would pay. Any prudent purchaser would prefer to purchase a property without a mining lease on it, no matter how innocuous it seemed to be. In the present state of the property market in western Queensland, where there are many good properties for sale, the presence of a mining lease may deter a potential purchaser from buying the property unless that purchaser felt that the price was such that he or she was getting a bargain. A vendor may well have to drop the asking price. However, I have no valuation evidence to indicate just how much that may be.” [294] Finally, again referring to the meaning of severance, is the case of Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of NSW131 where Tobias JA noted at paragraphs 107 to 108: “In other words, the definition in s 58 of the Act of the expression ‘loss attributable to severance’ in s 55(c), is concerned with the reduction in the market value of other land retained by the dispossessed owner where the effect of the compulsory acquisition is that that land is severed, in the sense of separated form, other land also retained by that owner. The usual example of severance in this sense is where land is compulsorily acquired for a road through the middle of a larger parcel in the one ownership thus effecting a reduction in the market value of that part of the parcel retained on either side of the acquired land due to their separation of severance form each other as a consequence of the acquisition. 131 [2006] NSW CA 314. -- 86 of 104 -- 87 The other sense in which the term severance is used in the Act is in s 55(f). Here, the term is used in the sense of the effect of the carrying out, or the proposal to carry out, the public purpose for which the land is acquired caused by the process of compulsory acquiring of the acquired land which is thus ‘severed’ from the other land of the dispossessed owner (the residue land). The provision contemplates that the effect of that severance for the public purpose may be to decrease or increase the value of the residue land.” [295] It is also appropriate at this point for me to refer to significant evidence which Mr McLay gave in re-examination generally with respect to his 5% diminution:132 “When you were asked about the five per cent diminution in value question, I wrote down that you started out your answer, “I admit an arbitrary application”, and then you went on to talk about noise and dust, and you then referred to a calculation by reference to 100 metres from the boundary. What did you mean by the words “admit arbitrary application”?---Well, I mean they’re - it’s - my expertise isn’t in the field of measuring dust and its impacts to grazing and so on. So in that respect, I guess it is an arbitrary application. But I, as I pointed out, referred to a calculation accepted by the court in the past for a road. And in that decision, a distance of 10 metres was allowed. I allowed 100 metres. So I thought it was appropriately covered.” [296] It is a pity that Mr McLay appears to be unaware of the comments made by then President Trickett in Mitchell’s case referred to above. If he had been, he may have arrived at a different conclusion than that set out at T 3-69. To be fair to Mr McLay, he does concede that his expertise is not in the field of measuring dust and its impact on grazing and so on. That is clear from his evidence. [297] Mr Cowie in my view with respect to this item of claim has demonstrated his understanding of the impact claimable by a landholder pursuant to s 281(3) of the MRA with respect to diminution. No doubt, in addition to his many decades of experience in valuing properties, his general knowledge in this regard has been enhanced by his own experience in living next to a mining operation. That, of course, does not make him an expert on the precise impacts of dust in light of the EA. [298] I agree with the comments of then President Trickett in Mitchell, but I would take them even further given the facts of this case. The applicant does not propose a small mining operation such as small scale gem or gold mining. Although not huge, the applicant’s proposal is for a significant open-cut coal mining operation. Previous Court and Tribunal decisions relating to open-cut coal mining clearly indicate the significant impacts that open-cut coal mines may have on neighbouring properties.133 132 T 3-69 l 5-13. 133 See for instance the Land and Resources Tribunal decisions of New Oakleigh v Hardy & Ors & EPA [2003] QLRT 24, Xstrata Coal Queensland Pty Ltd & Ors v Friends of the Earth-Brisbane Co-op Ltd & Ors, and the Department of Environment and Resource Management [2012] QLC 013, Hancock Coal Pty Ltd v Kelly & Ors and Department of Environment and Heritage Protection (No. 4) [2014] QLC 12 and Adani Mining Pty Ltd v Land Services of Coast and Country Inc & Ors [2015] QLC 48. -- 87 of 104 -- 88 [299] I prefer the evidence of Mr Cowie with respect to Item 5 over that of Mr McLay. However, in saying that, I must stress that I do not agree that there can be an allowance made for the impact of dust on the property and a separate allowance made for the loss of carrying capacity for that property. This clearly amounts in my view to a doubling-up. The dust impacts the property by affecting the carrying capacity of the property due to dust settling on pasture, etc, thus causing a diminution as claimed under this item. [300] Although I accept a 20% deduction to the balance land for diminution as claimed under Item 5, including the claim for severance, I only allow such claim on the per hectare rate for the balance land of Kalari of $650. [301] Further, I must stress that I include in my allowance of a 20% deduction the loss occasioned by dust as claimed in Item 6, as in my view to do otherwise would be to double-up the claim. Were I not including the impact on carrying capacity but assessing it separately under Item 6, my assessment under this head would have been greater than, but much closer to, Mr McLay’s assessment of 5%. [302] The result is the determination of compensation with respect to Item 5 being calculated as follows: 1,969 ha @ $650 per ha @ 20% = $255,970 Item 6 – Reduction in cattle on 580 ha - dust [303] In exhibit 8, Mr Cowie describes the claim under this item as follows:134 “Loss of sale of 44 weaners per year at $250 per head due to reduced carrying capacity on 580ha: PV of $1 per annum for 15yrs is 11.11839. Loss assessed as [44 x $250 x 11.11839] 122,302” [304] Mr Hammond has the following to say in his submissions about the claim under this item:135 “162. In his report (Exhibit 8 at para 30) Cowie assesses the beast carrying capacity of Kalari at 1 beast per 6.5 ha which equates to about 398 head of cattle currently sustainable on the property. 163. A reduction in the land area of Kalari by the area of the mining lease will reduce the sustainable herd to about 303 head of cattle. 164. Cowie assesses that the reduction in the sustainable herd will result in a loss of the sale of 44 weaners per annum (Exhibit 8 at page 25). 165. The loss in carrying capacity is a direct result of the reduction in land area of Kalari which will result from the granting of the mining lease and accordingly a diminution in the use made of the land of the respondent pursuant to s.181(3)(a)(iii). 134 Ex 8 p 25. 135 Respondent’s submissions paras 162-167. -- 88 of 104 -- 89 166. The assessment of diminution in the value of the balance of the land claimed separately to this head of compensation is a claim for the impacts of dust, noise, severance and the ‘blot’ caused by the existence of the mine. This claim for the loss of the sale of cattle due to the reduction in the carrying capacity of Kalari is a separate claim that can be determined mathematically and is excluded from the claim in respect of noise, dust et cetera. There is accordingly no overlapping or doubling up of these two claims. 167. Cowie assesses the net present value of this loss based on the sale of 44 weaners per annum at a price of $250.00 per head for 15 years at $122,302.00.” [305] Ms Brien is very critical of Mr Cowie’s evidence under this claim item.136 As she points out, Mr Cowie’s evidence was that he arrived at the total impact number of hectares affected by dust through his own calculations and experience.137 Further, Ms Brien was critical of Mr Cowie for using his own experience in assessing a 50% reduction in carrying capacity on the area of 580 ha because of dust.138 Ms Brien also points out a lack of precision in Mr Cowie’s figures. [306] Ms Brien makes telling submissions regarding the conditions in the EA for MLA 80194:139 “218. The environmental authority applies to the mining operation. The authority imposes conditions about dust and particulate levels and places an obligation to comply with the general environmental duty as set out in the Environmental Protection Act. The Respondent admits that the mining company is presumed to act lawfully when they are undertaking the future mining operations [T 4-34 l. 47 to T 4-35 l. 2]. 219. Statement made by Mr Cowie in ex 8 in relation dust matters are expressed without reference to any conditions in the EA [T 4-37 l. 26-30]. When writing his report Mr Cowie’s was unaware of what condition B1 required and what the identified particulate levels actually represent [T4-36 l. 8-15]. Despite not understanding the conditions he did not seek out any advice to interpret the document. Whilst Mr Cowie was aware of the EA including its conditions, he does not agree with everything that has been said there (in the EA) because he does not agree with the report [T 4-32 l. 15-16, T 4- 35 l. 32-33 and l. 45 and T 4-36 l. 3-4]. Mr Cowie’s concerns were based upon misapprehensions not grounds in fact and when those matters were bought to his attention he maintained his personal opinions.” [307] Ms Brien concluded her submission on Item 6 this way:140 “224. The assessment rests on the following assumptions, none of which has any basis in factual evidence: (a) that at the time of the grant of the mining lease, the level of stock/carrying capacity will be as stated by Mr Cowie; 136 See applicant’s submissions para 213-223. 137 T 5-44 l 36-47. 138 T 4-37 l 32-40. 139 Applicant’s submissions paras 218-219. 140 Applicant’s submissions paras 224, 226 and 227. -- 89 of 104 -- 90 (b) that at the time of the grant of the mining lease, it will be necessary to reduce the stock levels by 44 stock; (c) the grant of the mining lease will occur when stock are grazing and not ready for market; (d) the dust deposition will make the grass inedible for cattle; (e) the deposition of dust will be for so long and make the grass so inedible that the cattle will not continue to fatten to full size and value so that there is a need to sell immediately on the grant of the mining lease; (f) that in the current condition, the respondent will only get $224 and not $750; and (g) that the cattle will improve in condition if the mining lease is not granted. … 226. To the extent there is any impact on the balance land Mr McLay factored in a distance of 100 metres around the mining lease in his 5% diminution to the balance land for any dust impacts. 227. For those reasons the item ought not be allowed and it represents a doubling up.” [308] In my reasoning with respect to Item 5, I only accepted Mr Cowie’s evidence in a general way, and certainly not as an expert able to speak with precision about dust impacts in light of the EA. [309] I find Mr Cowie’s evidence as regards his understanding of the conditions relating to dust as set out in the EA woefully inadequate. Ms Brien has correctly pointed out that this Court has to act on the assumption that the applicant will undertake its mining operations lawfully and in accordance with the draft EA. In addition, there is no factual evidence to suggest that the applicant will not comply with the requirements of the draft EA. Although I accept that Mr Cowie has some experience as a landholder residing next to a coal mine and has observed the incidence of dust resulting from that coal mine, there is absolutely nothing to show that the EA conditions of that coal mine are the same as the draft EA in this case. [310] Put simply, Mr Cowie is not an expert as to the amount of particulate matter existing in the air as a consequence of the applicant’s mining operation, nor is he an expert as to the reduction measures that the applicant will be required to put into place to ensure that dust emissions from the mine are not in exceedance of the draft EA requirements. For clarity, I should point out that the EA is only in draft form as it must remain so until such time as MLA 80194 is actually granted. -- 90 of 104 -- 91 [311] I explained in my analysis of Item 5 my finding that the percentage of diminution I allowed under that item included losses of grazing ability on the balance land in light of the mining operations. I remain of the view that to allow Item 5 in the quantum which I did and also to allow Item 6 would result in a classic case of doubling-up. [312] The dangers of doubling-up in awards of compensation is an issue that I give close scrutiny to in all my determinations of compensation under the MRA. Indeed, the comments that I make as to doubling-up at paragraph [27] of this decision are repeated in numerous other decisions that I have given relating to MRA compensation. [313] As Justice Talbot said in the case of Richardson v Roads and Traffic Authority of New South Wales141 at page 303: “It would be a classic case of ‘double dipping’ to allow compensation for existing improvements on the acquired property and then to allow further compensation as the cost of reinstating the equivalent fixtures and improvements on another property.” [314] Consistent with the reasoning set out by Talbot J in Richardson above, I consider it a classic case of doubling-up to award compensation for the diminution on the balance lands in accordance with various factors including dust, and to go on to allow a further claim with respect to a reduction in carrying capacity on the balance land caused by dust. [315] I agree with the submissions of Ms Brien. The claim in Item 6 is not allowed. Item 12 – Rental Income [316] In considering this item, two factors arise. The first is the legal question as to whether the claim can be sustained in light of the different tenure of the rental house land and the different use to which that land is put (rental house) when compared to Kalari (grazing property). The second point to consider is the quantum claimed by the respondent. I will deal with each separately. Legal Basis for Item 12 [317] With respect to the legal basis on which this claim is made, Ms Brien had this to say:142 “229. The Respondent is the registered lessee of a term lease of Lot 2 on HT185 with an area of 0.8094 ha, granted for residential purposes, commencing on 9 February 2000 and expiring on 8 February 2020, under the Land Act 1994. The lease is subject to conditions including that the lessee shall use the leased land for residential purposes (A46(1)), in the event of ceasing this use the lease may be forfeited (A46(2)), and the lessee will maintain all improvements. The Respondent purchased her interest in Lot 2, including the house, on 24 June 2002, for $10,000. 230. The rental property is on a separate title to Kalari, is held under a different tenure and is used for a different purpose to Kalari. The rental property is not an aggregation with the Kalari grazing holding. This is apparent from 141 (1996) 90 LGERA 294. 142 Applicant’s submissions paras 228-231. -- 91 of 104 -- 92 the use identified in the lease. As discussed under the ‘Legal principles’ heading in these submissions, the rental property is not land that is included in the application for the mining lease and on that basis s.281 has no application to this item. 231. Mr McLay has properly not considered it as part of his assessment.” [318] Earlier in her submissions at paragraph 42, Ms Brien observed as follows: “Item 12 seeks compensation relating to the rental house on adjoining land. The rental property is not situated on land the subject of the mining lease application. The application describes the relevant parcels of land (s.245) and compensation must be settled with the person who is the owner of the land the subject of the application (s. 279). The reference to ‘the land’ in s. 281 applies to the parcels of land (or parts thereof) that are included in the application for the mining lease. Section 281 refers back to s. 279. Section 279 refers to the person ‘who is the owner of land the surface of which is the subject of the application’. The reference in s. 281 to ‘the land’ is a reference to the land (or part thereof) the subject of the application and not unrelated land irrespective of whether or not it is under the ownership or control of the owner.” [319] Ms Brien relied on observations I made when Deputy President of the Land and Resources Tribunal regarding the meaning of owner of land pursuant to the compensation provisions of the MRA. The case referred to was that of Re Q Coal Pty Ltd v Watts143 where I had this to say at paragraphs 33-38:144 “[33] In my view, the scheme of the MRA, when taken as a whole, means that reference in section 281(3) to ‘compensation an owner of land is entitled to’ relates to compensation for the land actually taken by the mining lease. Of course, compensation is also payable for severance of any part of that land from other parts of the land of the owner, as well as under the provisions of section 281(4). [34] Where the meaning of a revision of an act is, amongst other things, ambiguous or obscure, reference may be had to extrinsic material, including an explanatory note or memorandum relating to the bill and the second reading speech for the bill. As regards the extrinsic material for the MRA, I turn first to the second reading speech of the Minister for Mines and Energy of 7 September 1989 where the Minister said that:- ‘It must be remembered that the current Mining Act, introduced in 1968, has required considerable amendment. Even so, it has been subject to judicial challenge as well as criticism in relation to ambiguity in its interpretation. Further, the current legislation is more a rationalisation of the 1898 Mining Act, which in itself was a consolidation of Queensland’s early mining statutes, rather than the creation of a new and progressive system of mining administration. The legislation now before the House introduces a totally new concept which relies on adopting a new approach to the definition of land and the authorities available for accessing such land for the purposes of prospecting, exploration and mining. The major issues which result 143 [2006] QLRT 115. 144 Although one aspect of this decision was taken on appeal, that being injurious affection, the appeal does not impact on the following extracts. -- 92 of 104 -- 93 from this approach and which form important components of the legislation relate to – the definition and ownership of minerals; availability of land and access thereto; prospecting and exploration; mining and development; and compensation for affected land-owners.’ [35] The Minister incorporated into his second reading speech explanatory notes. Importantly, the explanatory notes have this to say with respect to compensation:- ‘The basic principle of compensation to owners whose lands are included in mining claims and mining leases has been retained. However, the provisions have been worded to ensure that the compensation agreed upon or determined prior to grant is for the lands of an owner of which an area of surface has been taken up or to which a surface access applies.’ [36] For completeness, I should add that the second reading speech and explanatory notes referred to above related to a Mineral Resources Bill in 1989 which was subsequently withdrawn. However, on 5 October 1989 a new Mineral Resources Bill was introduced to Parliament, founded on the withdrawn bill. The provisions relating to compensation in the withdrawn bill were retained and extended as set out by the Minister for Mines and Energy and Minister for Northern and Regional Development … [38] My view (which accords with that of the Mining Referee in Xstrata) that the relevant compensation heads relate to the land the subject of the mining lease, is consistent with the approach that the Court of Appeal took in Sullivan v Oil Company of Australia Ltd (No. 2). Sullivan concerned the issue of the quantum of compensation payable under the Petroleum Act 1923.” [320] Mr Hammond submitted that under s 281 of the MRA all of the land of the owner should attract the benefit of compensation.145 Mr Hammond went on in his reply submissions to say as follows:146 “31. It is clear that s.279(1)(a) does nothing more than identify the qualification of the person with whom compensation must be settled. That person must be the ‘owner of the land the surface of which is the subject of the application and of any surface access to the mining lease land.’ S.279 does not limit the nature or extent of the assessable compensation. 32. The criterial for the assessment of compensation is contained within s.281 which includes, in sub-s.281(3)(a)(ii), (iii) and (iv), a requirement to assess compensation in respect of ‘the land of the owner’ or ‘other land of the owner.’” [321] Mr Hammond in his reply went on to refer to the decision of President MacDonald in the Land Court decision of Van Byron Pty Ltd v Chief Executive, Department of Main 145 Respondent’s submissions para 177. 146 Respondent’s reply submissions paras 31 and 32. -- 93 of 104 -- 94 Roads.147 That was a case involving determining of compensation under the ALA. President MacDonald had this to say at paragraphs 42 to 46: “[42] In the Court of Appeal in Springfield, Keane JA said that the text of s.20(3) did not reveal any concern as to the means whereby a claimant for compensation evidenced its ownership of the land. It is the value of the land adjoining the land taken which is significant, not the evidence by which ownership of that land is proved. Further a purposive approach to s.20(3) indicated that it was impossible to attribute to the legislature an intention that the amount of compensation payable to a landowner might vary depending on whether the balance of the land retained by the landowner was contained in one or a hundred titles. [43] The Courts in Springfield were construing the phrase "any land adjoining the land taken" in s.20(3) of the Act. The question is whether that reasoning should be applied in construing the word "land" in the phrase "other land" in s.20(1) of the Act. I consider that it should, for a number of reasons. In s.20(3), there is to be set off any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works on purpose for which the land is taken to be set off. Springfield held that "any land" adjoining the land taken was the landowner's whole parcel of land adjoining the land taken. It necessarily follows, in my opinion, that in considering whether there has been enhancement of the value of "any land … severed therefrom", within the meaning of s.20(3), the whole of the landowner's balance parcel severed from the land taken is what is referred to. [44] Moving then to s.20(1)(a), and remembering that in Halcyon the Land Appeal Court said that it was difficult to think that the legislature intended to adopt different concepts of severance in s.20(3) and s.20(1), it would follow that, in referring to the "severing of the land taken from other land of the claimant", the words "other land" in s.20(1)(a) are to be construed with the same meaning as "any land" in s.20(3), that is they refer to the whole of the landowner's balance parcel. [45] This is consistent with the rule of statutory construction that, so far as possible, words are to be given the same meaning throughout an Act. There is no reason to give the word "land" in the phrase "other land" in ss.20(1)(a) and 20(1)(b) a different meaning from the word "land" in the phrase "any land" in s.20(3). Further, as with s.20(3), I can see no reason to attribute to the legislature an intention that the amount of compensation payable to the landowner under s.20(1)(b) might vary depending on whether the balance of the land retained by the landowner is contained in one or a hundred titles. [46] The effect of the respondent's submission is that the severance test is to be applied to each lot in the landowner's remaining parcel of land. Section 20(1) does not say that severance must be established between various parts of the remaining land. Once it is accepted, as it has been here, that the balance of Lot 14 is "other land" within the meaning of s.20(1)(b), there is nothing in the section or the authorities to indicate that it is necessary to establish that any lots that adjoin the "other land" are to be treated separately from that "other land". Rather the decision in Springfield is to the contrary.” [322] I have already referred to the Land Appeal Court’s decision in Halcyon Waters where that Court quoted from Lord Watson in Couper Essex. It is appropriate to consider further comments of Lord Watson as follows:148 147 (2011) 32 QLCR 325. -- 94 of 104 -- 95 “The fact that lands are held under the same title is not enough to establish that they are held ‘with’ each other, in the sense of the Act; and the fact that a line of railway runs through them is, in my opinion, as little conclusive that they are not. I shall not attempt to lay down any general rule upon this matter. But I am prepared to hold that, where several pieces of land, owned by the same person, are so near each other, and so situated that the possession and control of each gives an enhanced value to all of them, they are land held together within the meaning of the Act; so that if one piece is compulsorily taken, and converted to uses which depreciate the value of the rest, the owner has a right to compensation’.” [323] The Land Appeal Court went on to point out the following in paragraph 19 of Halcyon Waters: “A somewhat similar approach was taken in Crisp & Gunn Co-operative Ltd v Hobart Corporation (1963) 110 CLR 538. A landowner owned three separate parcels of land, which were not contiguous, but were separated by two streets. They were, however, used by the landowner in its general business as a timber merchant. One of them, that which was located at the south-western end of the holding, was the subject of a resumption. The landowner made a claim for compensation, including for damages sustained by reason of severance of the resumed land from the land comprising the other two parcels. Of that claim, the High Court said [at 548] ‘[w]e have no doubt that this case was a case of severance although the three parcels were not contiguous’.” [324] In my view, the authorities set out above are relatively clear (at least to some extent) in determining this aspect of the claim. When considering what makes up the land of the owner, it is irrelevant whether the owner’s land is contained within one or indeed 1,000 separate lots. That however is not the end of the matter, as in my view the authorities tend to indicate that there is to be some form of common use by the owner of the lands of those separate lots in order for the separate lots to all be considered as the land of the owner. [325] It is not at all difficult to envisage circumstances where a grazing property owned by a landholder may indeed be made up of various lots, some of which may indeed have different forms of tenure holding. So much is made abundantly clear by a close assessment of various sales relied upon by the valuers in this matter where such sales simply referred to the property name of the sale but the details of the sale noted that the sale was over various lots. However, as the High Court pointed out in Crisp & Gunn Co- operative Ltd, another factor is the use to which the landowner puts the various lots; in that case, the landholder used the various lots in the landholder’s general business as a timber merchant. [326] Accordingly, I am in no doubt that it is irrelevant when considering the land of the owner of a grazing property that the property may be made up of various lots and titles. The key factor is that the landholder is the owner of the various lots and all are used for a like 148 Taken from Halcyon Waters para 18. -- 95 of 104 -- 96 purpose. Thus, in this case, had Kalari been broken up into various lots, all lots would have encompassed Kalari and therefore been other land of the landholder for the purposes of determining compensation under s 281 of the MRA. [327] It is particularly noteworthy that not even Mr Cowie attempted to incorporate the rental house lot into the property Kalari. This was because, clearly in my view of the evidence, it is a stand-alone business of Mrs Goodwin that operates quite independently to Kalari. [328] Although the matter is certainly not without some doubt, on balance I am inclined to the view as put by Ms Brien that the lot on which the rental house is located is not part of Kalari on which the MLA is located and is used for a distinct, separate business and as such is not the other land of the landholder for the purposes of s 281 of the MRA. Accordingly, it is my view that, on a proper construction of the statute, the respondent’s claim in Item 12 is not legally sustainable. [329] For completeness, and in case I am found to be wrong as to my legal interpretation of the claim in Item 12, I now turn to consider the quantum of the claim made by the respondent in Item 12. Quantum of claim in Item 12 [330] The respondent seeks the sum of $133,879 for Item 12. Mr Cowie had assessed the amount which he believes is payable under this item at $148,754 which he calculated as follows:149 “Present Value $1 pa for 15 years: 11.11839 x $13,379.12 (net income) 148,754” [331] Mr Cowie conceded in cross-examination that he had not included any amount in his calculations for maintenance costs.150 In light of that concession, the respondent accepted that the amount claimed should be reduced, and the respondent chose 10% of the rental income as an appropriate deduction.151 [332] Mr Hammond gave the following submissions in support of the Item 12 claim:152 “172. The rental home has been rented to Lawrence and Ruth Selky since October 2009 at a weekly rental of $320 (Affidavit of L. G. Selke sworn 26 August 2014, Exhibit 14). In his affidavit, Selke deposes (at paragraph 6) that: ‘… in the event of the mining venture going ahead… It is both my intention and my wife’s intention to, upon finding a suitable replacement property to rent, move as both my wife and I are concerned about the dust and noise pollution that we envisage will occur as a result of the proposed mining operations next door.’ 149 Ex 8 p 25. 150 T 4-68 l 19 – l 22. 151 Respondent’s submissions para 179. 152 Respondent’s submissions paras 172-174, 176. -- 96 of 104 -- 97 173. The rental home is situated about 160 m from the North Western boundary of the mining lease area. (para 7, Exhibit 14 and page 12, Exhibit 5). 174. Under cross-examination it was suggested that if Selke were to vacate the rental home there is a market place onto which one would put their property if they were looking for a tenant (4.71 @ 35). Cowie gave evidence (4-72 @ 10): ‘… We are living in a town of Bluff. You have been to the town of Bluff. The availability of tenants within that area could be somewhat restricted.’ … 176. There is no specific evidence as to the ‘market rent’ that may be achieved for the rental home. However: a. The evidence is that the current tenants have occupied the home at a rental of $320.00 per week for over 5 years; b. There is no suggestion, either through the applicant’s own expert (McLay) or through cross examination of Cowie by the applicant, that this rental is other than the market rental; c. Cowie has assessed weekly rental that would represent the market rental of the homestead and shed on Colorado at $380.00 per week (4-9 @ 40) which was unchallenged by the applicant; d. The Court had the benefit of seeing both the rental home and the homestead at Colorado and would be in no doubt that the homestead at Colorado would attract a higher rental than the rental home.” [333] Ms Brien’s submissions as to the quantum of the claim in Item 12 are summed up in the following two paragraphs from her submissions:153 “233. Mr Cowie has assessed the loss on the basis that due to dust and noise impacts, the present tenant will move out on the grant of the mining lease, no other tenant would occupy the premises for the next 15 years, that $320 weekly rental will be maintained into the future, but that for the grant of the mining lease, the house would have 100% occupancy for the next 15 years, and that the lease will be extended beyond its term and the mine will impact on a decision as to whether to renew the lease. Those assumptions are not proven. 234. The present tenant does not state that he will move out on the grant of the mining lease. Mr Selke deposes that should the mining venture go ahead, it is his intention to move ‘upon finding a suitable replacement property to rent’. He also states that the current house is ideal for his purposes as he has a fair number of chattels and runs two horses within the property. There is no evidence before the court as to the rental market in the area that would suit Mr Selke’s needs based upon price, and the property and animals he has, to draw a conclusion as to when or if the present tenant will move out. Some of the workers and employees of the proposal would be potential tenants for the property.” [footnotes omitted] [334] Ms Brien then continued in some detail to further attack the basis of the quantum of this claim. 153 Applicant’s submissions paras 233-234. -- 97 of 104 -- 98 [335] In Ms Brien’s opinion, Mr Cowie’s pessimistic view of the impacts on the rental house caused by dust and noise are based upon an incorrect understanding that the processing plant at the mine would be working 24 hours a day154 and a lack of knowledge of the effect of the EA and the constraints it imposes on the operation, despite appending it to his report. As Ms Brien puts it, when Mr Cowie wrote paragraphs 85 and 86 of exhibit 8, he did not particularly consider the matters in condition B1 because he was unaware of what the levels meant and that conditions B1 and D1 are outside his area of expertise.155 In relation to the noise conditions, as Ms Brien has pointed out, Mr Cowie stated “I am unaware of what the noise limits as they’re described actually mean”.156 [336] Ms Brien notes that conditions B1 and D1 of the EA conditions impose limits on both noise and dust emissions at residential dwellings in addition to requiring compliance with the general environmental duty. [337] Ms Brien was critical of Mr Cowie for not taking into account the location of the rental property when considering the impacts, noting that a five-track railway line passes the rental property and one of its purposes is for the cartage of coal as the main central line running between Rockhampton and Longreach.157 Ms Brien pointed out that the adjacent railway line typically has 100 coal trains and nine livestock trains (and others) weekly, and the coal trucks on trains are not generally covered.158 [338] Very perceptively, Ms Brien notes an inconsistency in what Mr Cowie has to say in this item compared to his alternate assessment for a quarry operation of up to 5,000 tonnes per annum in Item 3. As Ms Brien puts it:159 “Mr Gray considered that the haulage to take the quarry material off site would use the access track past the house and over the five-track railway line. The track around the rental house is the easiest way to get onto the road system. On the basis of an average of around 30 tonnes per truck to remove the material off site (being a truck with a dog trailer attached) at 5,000 tonnes per annum, there would be 156 truck movements per year. Typically, the way these pits are worked is as a campaign operation with two or three trucks that will operate for a day or two and then you will not see them again for another month and then they will come back and have another bite. Usually if you have two or three trucks carting to a job say 10 or 15 km away, you might have one truck every 20 minutes to half an hour. If you have two or three trucks operating, you could have a truck every 10 or 15 minutes for short durations. The operator will physically push material up into a stock pile and if there is any beneficial screening, that would be done by a quarry operator. Theoretically, you could screen and process 5,000 tonnes in a few days.” [footnotes omitted] 154 See Ex 2 para 17(e), T 5-43 l 39-41. 155 T 4-39 l 40-46. 156 T4-36 l 31-33. 157 T4-66 l 30-34. 158 T4-66 l 39-40. 159 Applicant’s submissions para 239. -- 98 of 104 -- 99 [339] As regards the point of the respondent in her submission allowing an arbitrary figure of 10% for maintenance costs, Ms Brien notes that this was not the subject of any evidence from the respondent or anyone else on her behalf. [340] Ms Brien was critical of Mr Cowie for assuming that the property will be unoccupied for 100% of the time for 15 years160 even though he agreed there is a market place for rental properties.161 When queried on this, Ms Brien points out that Mr Cowie states he is not assuming there will be no other tenant in the market place but rather, if the area will be affected by dust, if one tenant moves out, and another tenants moves in, they would also suffer the same impacts and probably would not continue to reside in that residence.162 [341] Further, Ms Brien notes that Mr Cowie expressed a concern that if the tenants moved out and the property is unoccupied, that the term lease may be cancelled or forfeited (as a consequence of condition A46(2).163 Ms Brien submits that condition A46(2) is directed towards the use for a residential purpose, not continuous occupation. She argues that Mr Cowie’s concern lacks any foundation as there is no basis to expect that the grant of the mining lease will have any impact on the grant of a renewal of the term lease having regard to the matters in s 158 and 159 of the Land Act 1994. [342] I agree with all of Ms Brien’s criticisms of the evidence with respect to the quantification of Item 12. [343] I find the lack of any coherent evidence as to the rental market in Bluff and the surrounding area of extreme concern. Further, such evidence as there is, is in my view woefully inadequate to substantiate the quantum of this claim. One would have thought that it would have been a relatively simple matter to have obtained detailed expert evaluation as to the rental market in the surrounding area; the number of houses available for rent; the occupation rate; the average rental rate; general market conditions; and so on. All of this evidence was missing, either from Mr Cowie or indeed another expert witness who no doubt could have been called to give expert opinion in this regard. [344] Indeed, assuming that the current tenants do actually vacate the rental property because of mining operations on the ML, that would of itself mean that substantial new employment opportunities would have arisen on or in relation to ML 80194 and those workers would themselves have to find places to live in either the short or long term. [345] It is virtually beyond belief that the respondent is seriously having this Court believe that a rental property directly beside five rail tracks with a heavy carriage of uncovered 160 T 4-69 l 17-23. 161 T4-71 l 34-41. 162 T4-71 l 43-46. 163 T 4-72 l 1-18, T 4-69 l 43 to T 4-70 l 15. -- 99 of 104 -- 100 lengthy coal trains and other general goods at the rear of the property, and multiple movements of trucks carrying gravel material from the quarry via the front of the rental property, have no impact on the ability to rent the rental property in the slightest, whilst the existence of the mine will lead of itself to the rental house being totally unavailable for rent for the entirety of the 15 year period of the lease. Put simply, I am not convinced. [346] In my view, the respondent has failed to establish by any reasonable evidence that she will suffer any loss at all as a result of the grant of MLA 80194 over and above those aspects of normal risk of occupancy which any owner of a rental property needs to take into account from time to time. [347] In my view, even if a claim under Item 12 was properly made out at law, the quantum of such claim should be NIL. Item 13 – Loss of value of cattle forced sale [348] Mr Hammond has this to say as regards this item of claim:164 “180. With the granting of the mining lease and the resultant reduction of 588ha in the grazing area available at Kalari, the sustainable herd will be reduced by about 90 head of cattle from 393 head to 303 head based on Cowie’s assessment of 6.5 head per hectare carrying capacity. 181. Upon the granting of the mining lease, the respondent will no longer be able to graze her cattle on the mining lease area which will be fenced off. This will necessitate her taking prompt action to reduce the number of cattle grazed on the property. The property is currently severely drought affected and the cattle market is depressed. 182. The respondent will not have the opportunity to raise the condition of the cattle for market, nor will she be in a position to wait for the market to improve. 183. Cowie has estimated that the current value of the cattle is about $244 per head given their current condition, the depressed market and the fact that the sale will be a forced sale. Cowie further assesses that the market price of cattle in normal seasons would be about $750 per head. This equates to a loss of $526 per head or a total loss of $47,340.00 (Exhibit 8 at page 25). 184. The respondent claims compensation in the sum of $47,340 pursuant to s.281(3)(a)(iii), (vi) and s.281(4)(e) MRA.” [349] Ms Brien submits that this item is a doubling-up, as any losses of this nature are captured in the award for loss of the area of the mining lease. [350] Ms Brien points out that Mr Cowie states that as a consequence of the area of the mining lease being fenced, the balance land is physically severed with the result that there is a reduction in the area for cattle grazing impacting on the flexibility the respondent has in 164 Respondent’s submissions paras 180-184. -- 100 of 104 -- 101 her management practice for the rotation of stock165 and result in a loss in overall grazing capabilities. [351] It is submitted by Ms Brien that the Court has no evidence from the respondent in relation to management practices about stock rotation and any impacts on flexibility. Further, as to whether a loss is likely to occur, this will depend upon the timing of the alleged impact as the grant of a mining lease does not affect an overnight loss of land. [352] Ms Brien notes that, similar to the assessment of loss for the forced sale of cattle due to dust effects, the assessment of Item 13 rests on the following two assumptions, neither of which have any basis in factual evidence: (a) that at the time of the grant of the mining lease, the level of stock was as stated by Mr Cowie; and (b) that at the time of the grant of the mining lease, it is necessary to reduce the stock levels by 90 head. [353] Ms Brien strongly submits that a stock book for the property is not in evidence; there is no evidence of the age of the cattle on Kalari; the Court has no evidence as to how frequently cattle are sold from Kalari or the price achieved for the cattle; there is no evidence of the condition of the stock on the land at a particular time; and no business records of any description were produced. [354] The submissions of Ms Brien in relation to this item conclude this way:166 “253. This is a theoretical claim based upon assumptions not proved. The Respondent attended court every day and therefore was available to give evidence. Her failure to give evidence in support of this claim is telling. It should be inferred that she could not have given evidence supporting the opinions expressed by Mr Cowie. 254. Mr McLay does not understand how the mining lease will change flexibility in management or rotation of stock as it is simply a reduction in the area. That is understandable given the lack of evidence on the subject from the Respondent. Mr McLay says it is simply a reduction in the area of the property. 255. No allowance ought be made for this item.” [footnotes omitted] [355] I agree with Ms Brien’s submissions in their totality with respect to this item of claim. [356] To begin with, this is a classic case of doubling-up. All of my comments relating to doubling-up made in my finding relating to Item 6 are equally applicable here. The doubling-up relates both to Item 1 and Item 5. 165 Ex 8 p 21 paras 114-116. 166 Applicant’s submissions paras 253-255. -- 101 of 104 -- 102 [357] Again, just as was the case for Item 6, any loss which the applicant may suffer over and above the value of the land in Item 1 is in my view fully compensated by the amount of depreciation of the balance lands which I have allowed in Item 5. [358] In addition, even if Item 13 was not a doubling-up, the evidence is so vague, and is made up of such conjecture, that I agree with Ms Brien that it simply cannot be relied on. [359] I award NIL with respect to Item 13. Unnumbered Items [360] Curiously, there are three unnumbered items which the applicant considers are properly payable to the respondent which the respondent does not specifically claim. Those unnumbered items are set out in paragraph [11] of these reasons and are as follows: “ Stamp duty $14,189 Cost to transport livestock $1,875 Settling costs $5,000 ” [361] As the applicant has essentially conceded these costs, I will allow them. [362] This results in a total for the unnumbered items of $21,064 which I allow. Item 15 – 10% of value of land [363] In his submissions, Mr Hammond claims Item 15 in accordance with s 281(4)(e) of the MRA in the amount of 10%. He claims this amount of 10% with respect to the value of the land contained within the mining lease area (Item 1) and the diminution in the value of the balance land (Item 5).167 [364] Ms Brien accepts that an amount of compensation is payable to the respondent pursuant to s 281(4)(e) of the MRA. That provision is already set out in paragraph [22] of these reasons. [365] The wording of s 281(4)(e) of the MRA is clear. An additional amount to reflect the compulsory nature of the grant of MLA 80194 over the respondent’s land shall be determined at a rate of not less than 10% of the aggregate amount determined under s 281(3). [366] Of course, a difficulty arises in this matter in that a number of the items of claim have been agreed as between the applicant and the respondent, and further that some items are claimed as an amalgam of s 281(3) and s 281(4) of the MRA. [367] Neither party has contended that this Court should allow an amount greater than 10% for Item 15. Accordingly, the additional amount pursuant to Item 15 will be allowed at the 167 Respondent’s submissions para 185. -- 102 of 104 -- 103 rate of 10%. Consistent with the submissions of the respondent, I will allow the amount of 10% on the quantum that I have found for Items 1 and 5, being the amounts of $382,395 and $255,970. When both these sums are added together, they make a total of $638,365. Ten percent of that amount equate to $63,837. [368] I determine the additional amount payable with respect to Item 15 in the sum of $63,837. Summary of conclusions with respect to each item claimed [369] Consistent with my findings above, the amount of each item in dispute is determined as follows: Item Claim Finding 1 Area affected by ML $382,395 2 Rosewood $93,000 3 Non-mineral resource $37,000 5 Depreciation/diminution to balance land $255,970 6 Reduction in cattle on 580 ha – dust NIL 12 Rental income NIL 13 Loss of value of cattle forced sale NIL Stamp duty $14,189 Cost to transport livestock $1,875 Settling costs $5,000 15 10% of value of land $63,837 Total $853,266 [370] Of course, to the sum of $853,266 needs to be added the sum of $541,553 as agreed between the parties. When added together, this results in a determination of the total compensation payable by the applicant to the respondent of the sum of $1,394,819. Timing of payment of compensation to the respondent [371] The issue of the timing of the payment of the compensation by the applicant to the respondent is essentially a matter of agreement. That is, the compensation should be payable within 14 days of the grant of MLA 80194 save for the determined compensation for the relocated house related items which is payable within 14 days of the applicant being provided with a copy of a binding contract for the construction of a house on the land and not before 14 days after the grant of MLA 80194. ORDERS 1. Compensation payable by the applicant to the respondent for the grant of MLA 80194 is determined in the total sum of $1,394,819 which sum includes the items agreed between the parties and the additional amount pursuant to s 281(4)(e) of the Mineral Resources Act 1989. -- 103 of 104 -- 104 2. The compensation of $1,394,819 in order 1 is payable within 14 days of the grant of MLA 80194 save for the determined compensation for the relocated house related items which is payable within 14 days of the applicant being provided with a copy of a binding contract for the construction of a house on the land and not before 14 days after the grant of MLA 80194. PA SMITH MEMBER OF THE LAND COURT -- 104 of 104 --