Dare & Ors v State of Queensland & Anor [2016] QLC 11

LAND COURT OF QUEENSLAND CITATION: Dare & Ors v State of Queensland & Anor [2016] QLC 11 PARTIES: Eamonn Michael Dare, Elaine Mary Dare and John Redmond Dare (applicants) v The State of Queensland (represented by Chief Executive, Department of National Parks, Sport and Racing). (first respondent) and HQ Plantations Pty Ltd (second respondent) FILE NO: MRA058-15 PROCEEDINGS: Determination of compensation payable for renewal of mining lease. DELIVERED ON: 19 February 2016 DELIVERED AT: Brisbane HEARD ON: Submissions closed 23 November 2015 HEARD AT: Heard on the papers JUDICIAL REGISTRAR: GJ Smith ORDERS: CATCHWORDS: 1. In respect of ML 6616 compensation is determined in favour of the First Respondent in the total sum of $626.00. 2. In respect of ML 6616 compensation is determined in favour of the Second Respondent in the total sum of $3,645.00. 3. The miner pay compensation in the amounts set out in orders 1 and 2 within four months from notification of the issue of the mining lease by the Department of Natural Resources and Mines. MINING LEASE - renewal - mining lease area - owner - plantation licensee - licence area - determination of compensation - limited material - use of earlier compensation agreement - calculation. Mineral Resources Act 1989 ss 279, 281 Sch 2 (ha) -- 1 of 7 -- 2 APPEARANCES: Forestry Act 1959 Part 6D The Moreton Club v The Commonwealth (1948) 77 CLR 253 Wills v Minerva Coal Pty Ltd [No.2] (1998) 19 QLCR 297 Not applicable [1] This proceeding concerns a referral to the Land Court by the Chief Executive, Department of Natural Resources and Mines (DNRM) pursuant to s 279A of the Mineral Resources Act 1989 (MRA) for the determination of compensation in respect of the renewal of Mining Lease 6616. The referral did not list HQ Plantations Pty Ltd as a respondent. Background [2] The applicants, Eamonn Michael Dare, Elaine Mary Dare and John Redmond Dare (the miners), seek the renewal of ML 6616. The Mining Lease Area of 1.619 ha is situated on land described as Lot 673 on Crown Plan FTY1931 and is part of the Elgin Vale State Forest. For the purposes of the MRA, the property is owned by both the State of Queensland (First Respondent) and HQ Plantations Pty Ltd (Second Respondent)1. [3] The property is located in the Gympie Regional Council local government area and is used as a timber plantation. [4] The specific Land Court reference and tenure details are set out as follows: Court Reference Tenure ID Area Term Lease Purpose MRA058-15 6616 1.619 ha 5 years Gold Relevant Legislation [5] Section 279 MRA provides that a mining lease shall not be granted or renewed unless an agreement in relation to compensation has been filed or, in the absence of such an agreement, a determination of compensation has been made by the Land Court. In this matter, no agreement has been lodged with DNRM and the matter has been referred to the Land Court for determination. [6] Section 281 MRA identifies the matters which must be considered by the Court when determining compensation. In particular, s 281(3)(a) provides that an owner of land is entitled to compensation for: 1 See MRA Sch 2 (ha) – owner includes a plantation licensee for a licence area under the Forestry Act 1959. -- 2 of 7 -- 3 “ (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.” [7] Section 281(4) MRA enables various additional factors to be included in the compensation determination. In the present case, only paragraph (e) is relevant. It provides as follows: “(4) In assessing the amount of compensation payable under subsection (3) - (e) an additional amount shall be determined to reflect the compulsory nature of action taken under this part which amount … shall be not less than 10% of the aggregate amount determined under subsection (3).” [8] The assessment to be undertaken in accordance with s 281 MRA was discussed in Wills v Minerva Coal Pty Ltd 2 as follows - “It is beyond question as I have written above that the primary source of law is the statute under consideration and it seems to me that the learned Member acknowledged this when he said: ‘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.’ Section 281 MRA neither prescribes nor suggests a method of assessment or valuation either. The selection of an appropriate method is a matter for the relevant expert, however, there is one warning that I should post. If the expert was to approach the assessment of compensation by simply accumulating figures assessed independently under each of the items listed in s.281(3)(a)(i) to (vi) and without regard to the prospect of a matter being dealt with under more than one item, the chance that there will be a duplication of items assessed will be high.” The Conduct of the Proceedings and Evidence [9] On 12 March 2015, the Land Court registry wrote to the miners and the representative of the State of Queensland setting out a timetable for the delivery of materials and submissions in accordance with Land Court Practice Direction No. 5 of 2013. [10] On 24 April 2015 the Land Court Registrar received correspondence dated 23 April 2015 from HQ Plantations Pty Ltd advising of its interest in the proceedings as an “owner” entitled to compensation pursuant to s 279 MRA. [11] On 24 April 2015 correspondence was also received by the Court from In-house legal DNRM advising of relevant background matters, confirming that HQ Plantations Pty Ltd, (although 2 Wills v Minerva Coal Pty Ltd [No.2] (1998) 19 QLCR 297 at 315. -- 3 of 7 -- 4 not a party to proceedings) was an “owner” pursuant to the MRA3 and requesting an extension of the existing timeframes to allow for liaison and settlement negotiations to take place between the parties. [12] On 4 June 2015 the Court ordered that HQ Plantations Pty Ltd be joined as a second respondent and also granted the parties an additional 3 months extension in order to carry out negotiations in order to attempt to resolve the issue of compensation. [13] On 17 September 2015 further correspondence was received by the Court from In-house legal DNRM advising that the proceedings remained unresolved and enclosing an agreed amended timetable for the filing of material by the parties. The Court made orders in accordance with the agreed timetable [14] Relevant material and related submissions were received form the first and second respondents on 10 and 13 November 2015 respectively. No material was received by the Court from the miners in support of any contended compensation amount. First Respondent’s Material [15] The first respondent provided a detailed “compensation statement” which includes background information together with contentions concerning the determination of compensation pursuant to s 281 MRA. The submission confirms the renewal application date of 13 October 2011, the area of ML 6616 as 1.619 ha and that the purpose of the lease is to “extract minerals, principally gold”. [16] The compensation statement confirms that the State of Queensland is the registered owner of the Elgin Vale State Forest, but notes that as a consequence of Administrative Arrangements Order (No.2) 2015 the Chief Executive, Department of National Parks, Sport and Racing (representing the State of Queensland) would be considered the “owner” for the purposes of determining compensation. This judgement will reflect those new arrangements regarding the State’s representative. [17] The compensation statement explains the standing of the second respondent as “owner” within the definition set out in Sch 2 (ha) of the MRA i.e. as a “plantation licensee” for the licence area under that Act4. [18] The first respondent’s submission also details the relevant considerations within s 281 MRA and contends for a determination based upon an adjustment to a formulation that was set out 3 See MRA Sch 2 (ha) – owner includes a plantation licensee for a licence area under the Forestry Act 1959. 4 Forestry Act 1959. -- 4 of 7 -- 5 in a 2001 compensation agreement between the First Respondent and a prior lessee of ML 6616. [19] The relevant formula calculates compensation as follows: Compensation = Rateable Value x Rental Rate (6%)5 + administration/monitoring costs The adjustment contended for by the first respondent involves the deletion of administration/monitoring costs from the formula in recognition of the operational and managerial responsibilities being undertaken by the second respondent, HQ Plantations Pty Ltd. A table of the notional compensation amounts ensuing from the second respondents suggested formula is set out below: Year of Lease RV-Land Value Rental Rate Compensation 1 $ 2000 6% $ 120 2 $ 2000 6% $ 120 3 $ 2100 6% $ 126 4 $ 2172 6% $ 130 5 No yet known 6% $ Not yet known [20] The First Respondent also contends that “The existence of ML6616 over State Forest 673 constitutes a blot on the First Respondent’s title. The First Respondent seeks compensation for the deprivation of possession of the surface of land of the owner.” Second Respondent’s Material [21] The Second Respondent “seeks compensation for the losses and expenses that arise from the renewal of ML 6616”. In short these losses are attributed to the following activities: (a) Time spent conducting an annual inspection to review the impact of the mining operations on the surrounding licence area. The inspection costs are calculated on the basis of one employee @ $50 per hour for 7 hours with an additional travel expense of $154.00. (200 km round trip from regional office @ ATO rate of $0.77km). The total sought within this category is $504.00 per annum. (b) Specific fire risk management, intervention and oversight carried out by the second respondent to ensure a controlled burning program does not impact upon ML 6616. This task can be undertaken by a local employee of the Second Respondent at a cost of $225.00 per annum. (c) Administration and invoice costs ($95.00 per invoice). 5 Land Regulation 1995. -- 5 of 7 -- 6 Determination [22] As is often the case the parties to this determination have not sought to rely on valuation or other expert evidence to support their contentions. The miners have not filed any material, submission or response to the material filed by the respondents. The referral is somewhat unique given the involvement of two owners, one being the State of Queensland and the other being a plantation licensee, HQ Plantations Pty Ltd. The information provided by the respondents concerning the nature of the plantation licence arrangements were very helpful in the circumstances. First Respondent [23] The basis of the determination contended on behalf of the First Respondent involved an adjustment to an existing compensation agreement to reflect the operational and management activities now assumed by the Second Respondent pursuant to the Plantation Licence issued in 2010. Although this calculation includes an unknown factor i.e. the final year land value, I have notionally substituted the year 4 “RV Land Value” of $2172.00 for that unknown factor in order to ascertain a tentative “working total”. This substitution results in a final year compensation amount of $130.00 and a total compensation of $626.00 overall for the full 5 year renewal period. [24] I have considered the facts, circumstances and submissions on behalf of the First Respondent in an attempt to reach a determination without a “mere mechanical adherence to calculation”6. In the absence of any contrary submission, the relatively modest amount contended and the familiarity of the First Respondent with ML 6616, I consider that the application of the suggested formula results in an appropriate amount of compensation in light of the s 281 MRA factors. Given the adoption of this approach and the first respondent’s submission that compensation is sought “in the amounts calculated herein”7, I do not consider that an additional amount pursuant to s 281(4)(e) MRA need be added in the circumstances. Second Respondent [25] The amounts sought by the Second Respondent have been detailed at [22] and are described as “losses and expenses that arise from the renewal of ML6616”8. I agree that the amounts sought in respect of an annual inspection of the forest area surrounding ML 6616 and the associated fire management measures are items envisaged by s 281(3)(a)(vi). However, on the material before me it is not clear how the “Administration and invoice costs ($ 95.00 per invoice)” arise as a consequence of the renewal. I am therefore not able to include this 6 The Moreton Club v Commonwealth (1958) 77 CLR 253 at 259. 7 First respondent submissions filed 10 November 2015 at para 26. 8 Second respondent submissions filed 13 November 2015 at para 9. -- 6 of 7 -- 7 amount as compensation in this determination. In the circumstances I consider an amount of $729.00 per annum i.e. $ 3645.00 in total, to be appropriate compensation for the renewal period. [26] Given the nature of the amounts claimed by Second Respondent and the absence of a submission to the contrary I do not consider that an additional amount pursuant to s 281(4) (e) MRA ought to be added in the circumstances. [27] In view of the amounts involved and the time elapsed since the application for renewal I intend to order that the total amount of compensation be paid in full rather than by annual or periodic amounts. ORDERS 1. In respect of ML 6616 compensation is determined in favour of the First Respondent in the total sum of $626.00. 2. In respect of ML 6616 compensation is determined in favour of the Second Respondent in the total sum of $3,645.00. 3. The miner pay compensation in the amounts set out in orders 1 and 2 within four months from notification of the issue of the mining lease by the Department of Natural Resources and Mines. GJ SMITH JUDICIAL REGISTRAR -- 7 of 7 --