Densyl Sandstone Pty Ltd v Watto's Earthmoving & Machinery Hire Pty Ltd [2014] QLC 34

LAND COURT OF QUEENSLAND CITATION: Densyl Sandstone Pty Ltd v Watto’s Earthmoving & Machinery Hire Pty Ltd [2014] QLC 34 PARTIES: Densyl Sandstone Pty Ltd (applicant) v Watto’s Earthmoving & Machinery Hire Pty Ltd (respondent) FILE NO: MRA311-12 MRA107-13 DIVISION: General Division PROCEEDING: Determination of compensation payable for renewal of mining leases DELIVERED ON: 24 October 2014 DELIVERED AT: Brisbane HEARD ON: Submissions closed 19 September 2014 HEARD AT: Heard on the Papers ACTING PRESIDENT: PA Smith ORDER: 1. As regards ML 20032 (MRA311-12): (a) Compensation is determined in the total sum of Three Hundred and Thirty Dollars ($330) (b) Densyl Sandstone Pty Ltd pay the total compensation of $330 to Watto’s Earthmoving & Machinery Pty Ltd within two months of the renewal of ML 20032 2. As regards ML 20132 (MRA107-13): (a) Compensation is determined in the total sum of Three Hundred and Thirty Dollars ($330) (b) Densyl Sandstone Pty Ltd pay the total compensation of $330 to Watto’s Earthmoving & Machinery Hire Pty Ltd within two months of the renewal of ML 20132. CATCHWORDS: MINING LEASES – access – determination of compensation – factors to be considered – lack of material from parties -- 1 of 5 -- 2 Mineral Resources Act 1989 Fitzgerald v Struber [2009] QLC 76 Horn v Sunderland Corporation [1941] 2 KB 26 McGrath v Callaghan & Ors [2011] QLC 29 Mitchell v Oakhill and Mitchell (10 March 1998) unreported Richardson v Barrett [2001] QLRT 89 Shaw v Heritage Holdings Pty Ltd (1992-93) 14 QLCR 139 Smith v Cameron (1986) 11 QLCR 64 Unimin Australia Limited v Maurice and Tricia Freeman (2007) QLC 76 APPEARANCES: Not applicable Background [1] The applicant Densyl Sandstone Pty Ltd (the miner) currently holds Mining Lease (ML) 20032 and ML 20132. The miner applied for a renewal of ML 20032 on 22 March 2012 for a period of 10 years, and for a renewal of ML 20132 on 13 December 2012, also for a period of 10 years. [2] Both MLs are located on Eureka Creek Station, and access for both travels through Featherbed Station, which is owned by Watto’s Earthmoving & Machinery Hire Pty Ltd (the landholder). [3] From mapping material provided by the Mining Registrar, Mareeba, each access through the landholder’s property is about 6 km long. Principles of compensation [4] Section 279 of the Mineral Resources Act 1989 (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 these matters, no agreements have been lodged with the Mining Registrar and the matters have been referred to the Court for determination. [5] The issues which must be considered by the Court are set forth in s 281(3) and (4) of the MRA. -- 2 of 5 -- 3 [6] Although s 281 sets out the matters to be considered, it does not define any method of assessment. In Smith v Cameron,1 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.” [7] In Shaw v Heritage Holdings Pty Ltd,2 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.” [8] In considering Mitchell v Oakhill and Mitchell,3 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.” [9] In determining compensation under s 281 of the MRA, I have adopted the same approach I took in Richardson v Barrett.4 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. [10] 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.5 Of course, great care must also be taken to ensure that there is no “doubling up” of compensation. The Evidence [11] Following the procedures set out in Practice Direction 1 of 2011, the Court wrote to the parties setting out a timetable for the delivery of material and submissions. [12] Only limited material has been supplied to the Court in response to the Court’s request. No valuation evidence has been provided by either party. [13] All that the miner has provided to the Court has been a copy of a previous compensation agreement from 1992, as well as proposed, unexecuted agreements with respect to each renewal. These are of course of little assistance to the Court as they do not show how the provisions of the MLA were applied. The miner proposes that the compensation for access to each ML should be $100. 1 (1986) 11 QLCR 64 at p 74 and 75. 2 (1992-93) 14 QLCR 139 at p 146. 3 (10 March 1998) unreported. 4 [2001] QLRT 89 at paragraphs 9, 10 and 14. 5 Horn v Sunderland Corporation [1941] 2 KB 26 at 43 per Jacobs J. -- 3 of 5 -- 4 [14] The landholder has only recently acquired Featherbed Station. By letter to the Land Court dated 10 September 2014 the landholder advised as follows: “As we are the present owners of Featherbed Station we require no compensation in regards to any previous agreements carried out between the previous owners and Densyl Sandstone Pty Ltd.” [15] This letter is not of assistance. Firstly, it does not appear to apply with respect to future payments of compensation, which of course both these matters relate to. Further, if it really was the intention of the landholders that there be nil compensation for access, it could have easily entered into compensation agreements to that effect. It did not. [16] The previous landholder advised the Court that they sought “no less than $1000 per year” for access.6 This however is no longer relevant, given the stance of the current landholder, and the fact that the previous landholders disposed of the property. Further, the sum of ‘no less than $1000 per year’ was not explained as to its composition in any way at all. [17] As I said in McGrath v Callaghan & Ors,7 it is always difficult for the Court when the parties to mining compensation matters either choose to place no submissions before the Court, or only very limited submissions. Fortunately, with respect to the North Queensland area, the Court is able to obtain assistance from a number of determinations of compensation under the MRA. In particular, I rely on the Fitzgerald decision of the Land Court which followed a formal hearing in Cooktown, with both the miner in that matter and landholder providing sworn evidence to the Court.8 [18] As I observed in Fitzgerald, one problem that immediately springs to mind is that most of the case authorities deal with compensation for mining leases. The authorities regarding the amount of compensation to be determined for access are limited indeed. It is not surprising in circumstances where the authorities are limited and the terminology of the MRA is complex that I have not had any valuation evidence placed before me. [19] As Member Jones said in the case of Unimin Australia Limited v Maurice and Tricia Freeman:9 “I realise that my determination of compensation in this case is a result of little more than calculated guesswork or speculation. However, in circumstances where the parties have elected to provide little or no material to the Court concerning their position about compensation there is not much more than the Court can do.” 6 Letter to the Land Court 28 March 2013. 7 [2011] QLC 29. 8 See Fitzgerald v Struber [2009] QLC 0076. 9 (2007) QLC 76. -- 4 of 5 -- 5 Determination [20] Having considered the limited evidence in this matter, and taking into account my decision in Fitzgerald where I allowed the sum of $5 per hectare per year for access, it is appropriate that I make a like award for access for each of the mining leases in this matter. [21] Assuming that the access is 6 km long and 10 metres wide, that amounts to a total area of 60,000 m² which equates to 6 ha. This amounts to $30 (6 x $5) per lease per year, which is clearly only a nominal amount for 6 km of access. [22] Taking into account the 10 year renewal term of each lease, this amounts to compensation of $300 for each lease, to which I award the additional sum of $30 under s 281(4)(e) of the MRA to reflect the compulsory nature of the grant of each of the mining leases. This results in total compensation under all heads in the sum of $330 for each lease. [23] Due to the small amount of compensation involved, I order that the miner pay the total compensation of $330 to the landowner for each lease within a period of two months of the renewal of each mining lease. Orders 1. As regards ML 20032 (MRA311-12): (a) Compensation is determined in the total sum of Three Hundred and Thirty Dollars ($330) (b) Densyl Sandstone Pty Ltd pay the total compensation of $330 to Watto’s Earthmoving & Machinery Pty Ltd within two months of the renewal of ML 20032 2. As regards ML 20132 (MRA107-13): (a) Compensation is determined in the total sum of Three Hundred and Thirty Dollars ($330) (b) Densyl Sandstone Pty Ltd pay the total compensation of $330 to Watto’s Earthmoving & Machinery Hire Pty Ltd within two months of the renewal of ML 20132. PA SMITH ACTING PRESIDENT OF THE LAND COURT -- 5 of 5 --