Collins v Coates [2012] QLC 10 (2013) 33 QLCR 45

LAND COURT OF QUEENSLAND CITATION: Collins v Coates [2012] QLC 10 PARTIES: Michael Dowse Collins (Applicant) v. Neil Leslie and Meridith Joyce Coates (Respondents) FILE NO: MRA144-11 ML 20642 MRA145-11 ML 20643 MRA146-11 ML 20644 MRA147-11 ML 20645 MRA148-11 ML 20646 MRA149-11 ML 20647 MRA 689-10 ML 20648 MRA 691-10 ML 20649 DIVISION: Land Court of Queensland PROCEEDINGS: Determination of Compensation. DELIVERED ON: 9 March 2012 DELIVERED AT: Brisbane HEARD AT: Cairns MEMBER: His Honour, Mr WL Cochrane, Member ORDERS: 1. In respect of File number MRA 144-11 relating to Lease ML 20642 compensation is assessed at $845.00 per annum to be paid in advance each year. 2. In respect of File number MRA 145-11 relating to Lease ML 20643 compensation is assessed at $785.00 per annum to be paid in advance each year. 3. In respect of File number MRA 146-11 relating to Lease ML 20644 compensation is assessed at $994.00 per annum to be paid in advance each year. 4. In respect of File number MRA 147-11 relating to Lease ML 20645 compensation is assessed at $940.00 per annum to be paid in advance each year. 5. In respect of File number MRA 148-11 relating to Lease ML 20646 compensation is assessed at $814.00 per annum to be paid in advance each year. 6. In respect of File number MRA 149-11 relating to Lease ML 20647 compensation is assessed at -- 1 of 34 -- 2 $921.00 per annum to be paid in advance each year. 7. In respect of File number MRA 689-10 relating to Lease ML 20648 compensation is assessed at $853.00 per annum to be paid in advance each year. 8. In respect of File number MRA 691-10 relating to Lease ML 20649 compensation is assessed at $1,052.00 per annum to be paid in advance each year. 9. In respect of each award of compensation the sum determined in respect of each lease is to be paid annually, the first such instalment to be paid within 30 days of the grant of the mining lease and thereafter in advance on the anniversary of the grant of the mining lease. CATCHWORDS: MINING LEASES – DETERMINATION OF COMPENSATION – principles – piecemeal approach – grazing land – access roads – avoidance of doubling-up – multiple leases held by one miner. APPEARANCES: Mr Collins in person. Mr Lyne (solicitor) for the Respondents. Background [1] This is a decision in eight matters involving applications by the Applicant Michael Dowse Collins for mining leases. [2] At the outset it is appropriate to identify the subject matter of each of the individual files all of which are to be heard and determined together, the Respondents. [3] All of the files relate to the same land which is identified as Hurricane station via Mt Carbine and otherwise described as Lot 1 on DA 802415 of which land the tenure holders are Neil Leslie Coates and Meridith Joyce Coates. [4] Hurricane Station has an area of approximately 78,000 ha. [5] File number MRA 144-11 is in respect of a referral by the mining registrar for the determination of landholder compensation for mining and mining access over Hurricane Station which referral was received by this Court on 13 April 2011 and is in respect of mining lease 20642 for an area of 36.85 ha. [6] File number MRA 145-11 is similarly a referral by the mining registrar for determination of landholder compensation in respect of mining lease ML 20643 for an area of 33.974 ha. [7] File MRA 146-11 is similarly a determination of compensation in respect of referral by the mining registration in relation to ML 20644 for an area of 43.835 ha. -- 2 of 34 -- 3 [8] File MRA 147-11 is similarly a determination of compensation in respect of referral by the mining registration in relation to ML 20645 for an area of 40.885 ha. [9] File MRA 148-11 is similarly a determination of compensation in respect of referral by the mining registration in relation to ML 20646 for an area of 34.493 ha. [10] File MRA 149-11 is similarly a determination of compensation in respect of referral by the mining registration in relation to ML 20647 for an area of 38.1 ha. [11] File MRA 689-10 is similarly a determination of compensation in respect of referral by the mining registration in relation to ML 20648. for an area of 34.214 ha. [12] File MRA 691-10 is similarly a determination of compensation in respect of referral by the mining registration in relation to ML 20649 for an area of 44.264 ha. [13] In other documents tendered before the Court the areas differ slightly from those identified in the mining lease applications from which the figures above are extracted. No reason for those variations was provided and accordingly, for the purposes of this decision, I propose to rely upon the areas identified in the applications for mining leases which total 306.615 ha. The alternative figures which have been provided suggest a figure, in total, of 303.163 ha so that the difference is not of great significance. [14] The applications for mining leases lodged by Mr Collins where accompanied by, as he was required to do, an application for amendment of an environmental authority (mining activities). [15] That application identified Mr Collins’s proposed activities as being “Level 2 Mining Project”. [16] The standard environmental conditions at s.3 of the Code of Environmental Compliance For Mining Lease Projects issued pursuant to the Environmental Protection Act is in respect of mining activities which will not cause more than 5 ha of land to be significantly disturbed at any one time in a riverine area and because of mine workings. [17] Accordingly Mr Collins is restricted to working a maximum of 5 ha at any one time in each of the proposed mining lease areas. [18] Criteria 1 which is identified in the Code speaks in terms of “The mining activities do not or will not cause more than 10 ha of land to be Significantly Disturbed at any one time.” [19] The restriction to 5 ha relates to mining activity in a riverine area. The Code defines a riverine area in these terms: “Riverine area - Refers to the land adjoining and associated with watercourses, including the bed, banks, adjoining terraced land and riparian vegetation.” [20] Given the manner in which this appeal has been conducted there is, in my mind, little doubt that the activity proposed by Mr Collins is in a riverine area as defined in the Code and accordingly he is restricted to not causing more than 5 ha of land to be significantly disturbed at any one time. -- 3 of 34 -- 4 [21] Indeed, as is referred to later in this decision Mr Collins relied upon the existence of a river/watercourse as part of his argument that the area in which he proposed to conduct his mining operations was unallocated State land. [22] Mr Collins appears to be under the belief that he is restricted to 10 ha of land but I think that is incorrect. [23] His misconception is demonstrated in the following passage of cross-examination1 “APPLICANT: Yes, your Honour, the - you know you're talking about mining the whole lease. In the EPA Act we're only allowed to do 10 hectares per lease per year, so how does that go with your severance?-- Ten hectares per year of? Of - of-----?-- What's the total lease area? Forty-five hectares?-- So you----- And each lease is - they - they vary in distance in - in leases, but an average would be about - probably about 42 hectares?-- Okay. I haven't done an average on it?-- So you could mine 10 hectares in one corner and then move to the other 10 in the next year and so forth until you get to the total area. That's how I would see that's a possibility there.” [24] The matter was heard before me in Cairns on 8 August 2011. [25] The application for a mining lease in respect of ML 20642 makes it clear that other land is also affected by the proposal for a mining lease namely leasehold land held by the Kuku Djungan Aboriginal Corporation described as Lot 5112 on Plan No. HG 843453. [26] This decision is not concerned with the Kuku Djungan land although Mr Collins for reasons which will be set out below has referred to that land and a compensation determination made in respect of it by the then mining registrar Mr Windridge in March 2006. [27] In the course of evidence it became clear why Mr Collins was interested in the decision in respect of the Kuku Djungan People.2 [28] In that decision a mining registrar found as follows: “[10] I have some concerns over the surface area of the lease. Section 21(1) of the Water Act provides: “(1) The bed and banks of all watercourses and lakes forming all or part of the boundary of land are, and always have been, the property of the State.” The land owner of the “adjoining” land does not own the stream bed. There is nothing in the definition of “owner” under the Mineral Resources Act 1989 which displaces or overrides this provision dealing with “beds and banks” (s.21 Water Act). [11] There are reservations under subsection (3) of section 21 of the Water Act for landowners, as follows: • The right to take water for stock purposes or domestic purposes (s. 20(3)). • A right of access over the part of the bed or bank that adjoins the owner’s land (s. 21(3)(a). • A right of grazing for the person’s stock over the part of the bed or bank that adjoins the owner’s land (s. 21(3)(b)). 1 T. 1-128 L 29-48. 2 Re: Collins v Kuku Djungan Aboriginal Corporation [2006] QLRT 20. -- 4 of 34 -- 5 • A right to bring an action for trespass on the part of the bed or bank that adjoins the owner’s land as if the person owned the bed or bank (s. 21(3)(c)). Ownership of the stream bed remains with the State. The stream bed is, or must be treated as, unallocated State land. The reservations referred to above are strictly limited rights, and do not confer any locus standi on the adjoining landowner. [12] It appears therefore that the entire lease, or the majority of it, is confined between the banks and therefore is on unallocated state land. Compensation under section 281 for unallocated state land in the stream bed is assessed as nil, because there is no quantifiable effect on the State. [13] That leaves for consideration any land covered by the lease that is outside the stream bed, principally that part of the access which transverses Lot 5112. There is no evidence of the dimensions of this access.” [29] The decision in the Kuku Djungan case does not make clear whether the mining leases which were the subject of that decision were found in water courses which formed “all or part of the boundary of land”. [30] If the water course did not form “all or part of the boundary of the land” then, in my view and with the greatest respect to the learned Mining Registrar, he has misdirected himself with respect to the effect of the then s.21 of the Water Act which he set out in paragraph 10 of his decision. [31] On my reading of that section it is only where a water course forms a boundary of land that the issue with respect to unallocated State land arises. [32] Section 21 of the Water Act 2000 was, by s.240 of the Natural Resources & Other Legislation Amendment Act 2010 omitted from the Water Act and relocated into s.13A of the Land Act 1994. [33] In the present case the water course over which the mining leases are sought traverses across Hurricane Station but, on my review of the maps and plans, at no point forms part of the boundary. Accordingly the effect of s.13A of the Land Act 1994 (and its predecessor s.21 of the Water Act 2000) has no relevance to the determination which I have to make. There is no unallocated State land to consider. [34] I was assisted in coming to the view by the evidence given by Jemma Alexandra Picco a principal surveyor for the north region in the Department of Environment and Resource Management in Cairns. [35] Ms Picco is a registered surveyor with more than a decades experience in that field. [36] Ms Picco’s evidence3 is that the Mitchell and Hodgkinson Rivers are both internal rivers within Hurricane Station property. Accordingly, her evidence followed that there was no unallocated State land over the areas of the Mitchell and Hodgkinson Rivers where they pass across Hurricane Station. 3 T.1-95 L8-10. -- 5 of 34 -- 6 [37] Ms Picco also pointed to the absence of vinculums on the plans which, had they been present, may well have indicated that the land on either side of the rivers was part of Hurricane Station but the rivers themselves were not. [38] Ms Picco also pointed to the presence of dotted lines indicating Parish or County boundaries as sometimes leading to confusion in the minds of readers of maps that, possibly, those dotted or dotted and dashed lines constitute boundaries of properties when in fact, as indicated above, those lines merely indicate the boundaries of Parishes or Counties. [39] While Ms Picco is entitled to tell me how the Department and surveyors generally might read the maps the interpretation of the statute is entirely a matter for me. I am comforted however that the interpretation I place upon the legislation accords with the practice apparently adopted by surveyors and departmental officers. [40] Unfortunately Mr Collins’s mind appears, not unreasonably, to have been influenced by an email which he received from an officer of the Department of Environment and Resource Management dated 16 March 2011 which asserted “all water courses are unallocated State land. As water is a natural resource, the State does not allocate it.” The qualifications and expertise of the officer responsible for sending that email were never established before me. I am, however, satisfied that her/his contention is simply incorrect. Ms Picco was of the same opinion4 although of course interpretation of legal matters is entirely a matter for me. [41] Mr Collins was also influenced in his views by information received about water allocations and an entitlement to draw water from water courses. Those matters are, of course, outside the scope of this determination with respect to compensation. The Evidence of Mr Collins [42] Mr Collins sought, before the Court in his oral evidence, to emphasise two matters that he thought were of particular importance. [43] First of those is that once he has finished mining an area he told the Court that it is his practice to surrender leases so that the lease comes to an end.5 [44] The effect, of course, of the surrender of the lease is that that releases Mr Collins from any obligation to continue paying compensation to the landholders. [45] The second matter that Mr Collins sought to emphasise both in his written statements and in his evidence before the Court was that he does not propose to exploit all of the lease areas at once. [46] I understood the thrust of that particular point to be that Mr Collins felt that he should not, perhaps, have to pay compensation on all of the leases until such time as he began to exploit it. He stopped somewhat short of attempting to convince the Court that compensation ought 4 T. 1-100 L30 and L58. 5 See for example T.1-63 1-67. -- 6 of 34 -- 7 be assessed on the basis of one lease to be paid over the life of all the leases as and when, he got around to exploiting them. [47] Mr Lyne for the landholders made the following, in my opinion compelling, submission in the course of his cross-examination of Mr Collins and in response to some questions from me: “MR LYNE: We have an application for a 15 year term and that maybe become renewable after another 15 years. HIS HONOUR: As all of them do. MR LYNE: My client - my clients are having the imposition of mining leases for a 15 year term, irrespective of how much time Mr Collins spends mining. The reason I've tendered this document is simply to show the Court that Mr Collins doesn't always mine and surrender, he's got some for sale. And when it comes around to compensation under the deprivation of the possession of the land, my client will lose his land for 15 years, not for the period of the mining by Mr Collins. That's the sole purpose of this exercise.” [48] That passage of submission arose out of an attempt by Mr Lyne to tender documents demonstrating that Mr Collins had some mining leases held by him up for sale. [49] In my view there is nothing unusual about that save that it really demonstrates why it is appropriate that compensation should be assessed and paid in respect of each lease regardless of whether it is proposed to exploit that lease in the short term, medium term, long term or not at all. The fact that a lease does, to an extent and in accordance with the provisions of the Mineral Resources Act potentially operate to prevent a landholder from carrying on that landholder’s normal activities on the land the subject of a mining lease. [50] Accordingly, in my opinion, it is appropriate to assess a compensation figure on a per hectare basis having regard to the proposed access in respect of each of the areas for which a mining lease is sought and having regard also to the reality that compliance with the standard environmental code restricts Mr Collins to 10 ha of mining activity at any time. [51] Mr Collins adduced some evidence from people experienced in the grazing industry including a Mr Pringle who was leasing and agistment property on the adjoining landholding name “Kondapringa”. Mr Pringle’s evidence, largely unchallenged, was to the effect that Mr Collins was something of a model occupant of the land and at no time denied access to livestock or Mr Pringle, or employees for water or for grazing on mining leases. [52] Mr Pringle was able to point to some advantages from having Mr Collins and his activity on the “Kondapringa” land including some works with culverts in roads and creation of fire- breaks on the property. Mr Pringle’s evidence was that in the course that Mr Collins’s activities on the “Kondapringa” land with which he was involved he did not actually suffer any loss. [53] He also pointed to the fact that the installation of access roads by Mr Collins was of some benefit in the regular mustering processes that regularly have to be carried out on grazing properties. -- 7 of 34 -- 8 [54] In cross-examination by Mr Lyne for the landholders Mr Pringle denied that the damming of the river for Mr Collins’s purposes said had any detrimental impact upon his grazing activities. [55] He also pointed out that while cattle are inquisitive and somewhat sensitive, especially wild cattle, they quickly got used to the presence of the mining activities and were not at all deterred in going to areas where they had previously been used to grazing or getting water. [56] The evidence given by Mr Pringle was supported by another cattleman Mr Jim Rollinson whose evidence is referred to below. [57] In Mr Collins’s material6 is a short email from a person identified as Jane Tincknell stating that the access roads are of a benefit to them as graziers and that at no time were they denied access to water courses or grass contained within one of Mr Collin’s mining leases conducted on “Kondapringa” station. [58] Mr Collins was happy to endeavour to call Ms Tincknell to give evidence but Mr Lyne conceded that that was not necessary. Accordingly, Ms Ticknell’s email was unchallenged. [59] Mr Collins also called a Mr Rollinson a 79 year old gentleman who is a fourth generation grazier. [60] As with the other witnesses called by Mr Collins, Mr Rollinson confirmed the importance of access roads and the advantage that might be achieved by having a miner repair the roads to a higher standard. [61] Mr Rollinson in his evidence expressed the view that in his experience mining in a river bed lease does not upset a cattle grazing enterprise. [62] Under cross-examination by the solicitor for the respondents Mr Rollinson also acknowledged that access to water is an important aspect of his grazing operation but also expressed the view that the mining would not inhibit the cattle’s access to water. [63] Mr Collins has been mining upstream on a neighbouring station since about 2006. He retains some existing mining leases over that adjoining station, Kondapringa. Mr Collins tendered a video tape of his operation which showed which, together with his oral evidence, demonstrated that he conducts his gold recovery operation in the water courses by scraping up ore bearing rock and passing it through an alluvial screen to extract the gold. The screening plant itself is on skids and can be moved from place to place. [64] Mr Collins was keen to point out, and I accept his evidence in this respect, that the rehabilitation undertaken by him is both simple and effective and consists, largely, of using earth moving equipment to move rocks from which ore has been extracted back into the riverbed and to spread them out in a manner similar to their state prior to the alluvial mining operation occurring. 6 Exhibit 3 p.22. -- 8 of 34 -- 9 [65] The Court had the benefit of a site inspection and was able to see the actual equipment and screening plant used by Mr Collins. [66] Mr Collins7 describes his operation in the following way: “Method of Mining 1. We have been mining upstream from these applications since 2006. We use a mobile plant where we process the ore on site we don’t tuck it anywhere. We pick the ground up put it through the plant then pick it up again and put it back where it came from. We work an area that is within reach of the excavator, when we are out of reach of the excavator we drag the plant forward about 60 meters and repeat the process again. We move the plant on average once a day. A DVD showing the plant in operation is included, photo 2 is the area today that was mined in the DVD in 2007, photo 3 is the areas that were granted in early 2010 we mined them out and surrender them in September 2010. 2. The ground is rehabilitated as we go. 3. As soon as a lease has been rehabilitated and we have no further use for it we surrender it. It takes on average 6 months to mine out and surrender a mining lease. In 2010 we had 2 leases granted in February and we had both these leases mined out, rehabilitated and surrendered by September 2010.” [67] The DVD referred to in the previous extract seems to confirm what Mr Collins was asserting and similarly the photographs which were attached to his statement seem to reflect what is said in the statement. [68] At page 5 of his submission received on 7 April 2011 Mr Collins contends with respect to compensation as follows: “We are seeking/offering compensation on per lease, per year basis payable 30 days after grant of each individual mining lease and each year there after on the anniversary date of the first payment until full surrender of mining lease has been lodged with mines dept. Deprivation of possession 10% of current income on flat land out of river $1.83 = $0.18 x 47 ha (largest lease size) $ 8.46 Access per lease $ 8.78 Additional 10% (s.281(4)(e)) $18.96 Total per lease per year $36.20”8 [69] In Exhibit 3 at page 16 (a further submission from Mr Collins filed 11 May 2011) Mr Collins points out that in the period from 14 December 1999 to 11 August 2008 (the date at which the Coates purchased the property) the value of Hurricane Station had increased from $105,393 to $6,000,000 while the unimproved valuation on the 14 December 1999 was $190,000 compared to $2,300,000 on 11 August 2008. Both of which increases are in the range of 1,000% to 1,210%. 7 Exhibit 2, p. 4. 8 Exhibit 2. -- 9 of 34 -- 10 [70] Hurricane Station has an area of 78,000 ha so that having regard to the sale price of the property the price has increased over a period of some 9 years from $1.35 per ha to $76 per ha. [71] Having regard to the unimproved valuation the value has increased from $2.43 per ha to $29.49 per ha. [72] Mr Collins9 contends that those valuation prices demonstrate that alluvial mining had no adverse affect on the value of Hurricane Station whatsoever. I do not understand the logic in that argument and reject it. [73] Mr Collins’s evidence also seemed to be to the effect that the Court ought not have regard to the substantial increase in the value (on a per ha basis) of the land over which Mr Collins proposes to conduct his mining activities. I reject that proposition as well. If land has a particular value and a miner proposes to “alienate” that land by way of taking a mining lease over it then, in my view, it is appropriate to have regard to the value of the land at the time the mining lease is taken or granted. [74] I do, however, accept the contention by Mr Collins that the land proposed to be mined is of a poorer quality and less useful for grazing purposes than the balance of the property which is generally elevated and carries more vegetation. [75] In respect of each of the following leases I have calculated the area occupied by the access roads as being:  ML 20642 x 10 m = 1.04 ha  ML 20643 x 10 m = 0.387 ha  ML 20644 x 10 m = 2.98 ha  ML 20645 x 10 m = 3.78 ha  ML 20646 x 10 m = 3.89 ha  ML 20647 x 10 m = 10.24 ha  ML 20648 x 10 m = 12 ha  ML 20649 x 10 m = 12 ha [76] ML 20647 – 10.24 km Similarly Mr Collins appears to contend that the calculation of any compensation for access to each of the mining leases ought be calculated on some sort of averaging basis. [77] In his written submission10 Mr Collins identifies that the distances from each of the mining leases to the nearest gazetted road using the existing tracks as follows:  ML 20642 – 1.04 km  ML 20643 – 387 m  ML 20644 – 2.98 km 9 Exhibit 3, p. 16. 10 Exhibit 3, p. 27. -- 10 of 34 -- 11  ML 20645 – 3.78 km  ML 20646 – 3.89 km  ML 20647 – 10.24 km. [78] Mr Collins totals that up to constitute a distance of 22.32 km which spread across six mining leases shows an average of 3.71 km per mining lease. [79] In that document Mr Collins does not make any allowance for nor include in his calculations the distances to be travelled in respect of ML 20648 or ML 20649. In that respect I note11 that ML 20648 and ML 20649 are contiguous in a north-westerly direction to ML 20647 which is the lease which utilises the greatest length of access road namely 10.24 km. [80] Accordingly, it seems reasonable to surmise that in respect of each of those two leases ML 20648 and ML 20649 that the access way will be not less than 12 km in each case. I do not recall and have not been able to find in any of the material before me any better estimate of the distance required for access to those mining leases and accordingly I adopt, in each case a figure of 12 km. [81] The access ways are calculated on the basis of being 10 m wide even though that involves some leeway either side of the actual track. Mr Collins told me that they use about 4 m of that width. [82] In each case a track estimated at 12 km in length and 10 m in width calculates out to an access area of 12 ha. I propose to adopt that 12 ha for access in respect of each of the mining leases, ML 20648 and ML 20649. [83] I do not accept that that the averaging approach contended for by Mr Collins is an appropriate way to assess the compensation attributable to use of the Coates land for each of the mining leases. [84] In my view, each of the mining leases is to be assessed separately and allowance made for compensation in respect of the utilisation of the access ways for each of the mining leases. This is bearing in mind, of course, that there is nothing which compels Mr Collins to work the mines individually and recognising that any one of the mining leases might be sold to a third party and worked at the same time as any other of the mining leases. Indeed the option exists that all eight mining leases could be operated at the same time by any number of miners between one and eight. The calculation of the area of access in each case is set out in Table 1 attached to this decision. [85] Mr Collins in his attempt to identify the likely earning capacity of the Hurricane Station calculates a range of figures. [86] Those figures include calculations based upon information obtained from: 11 See Exhibit 25. -- 11 of 34 -- 12 (a) Graham Kelly which information leads him to calculate an earning capacity of $1.83 per ha. (b) Owen Rankin which information leads him to calculate an earning capacity of $3.30 per ha. (Mount Mulligan) (c) ABARE which information leads him to calculate an earning capacity of $1.68 per ha. (d) Meat and Livestock Australia which information leads him to calculate an earning capacity of $1.34 per ha. (e) Mining and Livestock Australia Northern Beef Situation Analysis and Department of Primary Industries which information leads him to calculate an earning capacity of $1.38 per ha. Each of those figures was calculated based upon the carrying capacity of 1 beast to varying areas ranging between 12 ha and 28.32 ha. The Operations and Evidence of the Respondent Coates [87] A submission was filed in the Court on 8 August 2011 setting out what is said to be the submissions which the Coates’s wish to make to this Court.12 [88] That statement sets out that the Coates have held their Preferential Pastoral Holding 14/1511 since 16 October 2008. [89] The Coates carry out a grazing enterprise on the Hurricane Station and have done since September 2008. A significant (if not entire) part of that grazing operation seems to be entering into agistment arrangements for agisting cattle on certain paddocks including the Hodgkinson paddock which is the relevant paddock to the mining leases. [90] The submission usefully sets out a schedule of the areas and particulars of each application. This is the document which sets out figures which vary slightly and those reflected in the various lease application documents which application documents I have relied upon. [91] Surprisingly the landowners Mr and Mrs Coates through their solicitors elected not to make and file a substantial statement to the Court. [92] Notwithstanding the absence of the statement and contrary to the previous orders of the Court Mr Lyne proposed to call Mr Coates to give evidence. [93] Mr Lyne seemed oblivious to the need to comply with orders requiring the filing of material and informed the Court, that in any event, he only proposed to ask Mr Coates two questions. [94] The first of those was to confirm that the stocking rate was one adult equivalent beast per 17 ha. 12 Exhibit 6. -- 12 of 34 -- 13 [95] The second matter that Mr Lyne indicated that he proposed to ask Mr Coates about was what his attitude would have been if there had been 19.5 km length of mining leases in place at the time he had purchased the property in 2008. [96] It is entirely a matter for the parties and their legal advisors as to the material they choose to file before this Court. Indeed, on a number of occasions, this Court is placed in the difficult position of having to assess a figure for compensation in the absence of any proper information being provided by either party. Nonetheless Mr Glasson in his report reported in terms of what was the “landowner’s position”. His reports says “the landowners claim the following amounts of compensation ….” [97] In reality Mr Glasson (as I refer to later in this decision) appears to have formed a view and opinion as to the appropriate compensation to be paid in the absence of any real information about the activities that the Coates carry on, on the subject land and, in particular, in the absence of any information from the Coates as to how they see the mining activity impacting upon their operation. [98] I am bound to observe that it would have been of great use to me had I heard from Mr or Mrs Coates as to what they saw as to the affect of the mining lease on their property and their grazing operation, albeit one which is characterised by agisting the cattle of other parties. [99] In the light of the above and contemplating that he may give evidence useful to the Court I allowed Mr Lyne for the respondent to call the respondent Mr Coates to give evidence. [100] Mr Coates’s evidence was quite short and to the effect that his stocking rate was one beast per 17 ha, or 42 acres. [101] Mr Collins in his cross-examination of Mr Coates put to Mr Coates that Kelly Grazing was paying a $1 per week for a grown beast and that, on some basis, the Kelly’s contended that the Hodgkinson property was capable of carrying 1 beast per 70 acres. Mr Kelly was not available for cross-examination and the proposition of 1 beast to 70 acres was not accepted by Mr Coates. There is no basis upon which the propositions advanced via an untendered email from Mr Kelly would displace the evidence given by Mr Coates who was cross examined. [102] Accordingly, I accept the evidence and proceed on the basis that the stocking rate is 1 beast per 17 ha or 42 acres. [103] The valuation report prepared by Mr Glasson of Herron Todd White dated 30 March 2011 adopts the figure of 303.163 ha (748.819 acres) (rounded to 748.820) in Mr Coates submission.13 The Evidence of Mr Glasson – Registered Valuer [104] Mr Glasson was called by the respondent’s and through him was tendered a report dated 30 March 2011. 13 See Exhibit 6, page 3. -- 13 of 34 -- 14 [105] In the course of his oral evidence Mr Glasson confirmed that the amended report was misdated and should have been properly dated 14 June 2011. [106] The only difference between an earlier report and Exhibit 7 is that the current report addresses 8 leases rather than 10. There is no change otherwise to the text of the two reports. [107] Mr Glasson in his report identifies the basis for his assessment of compensation as being information provided in: (a) The applications for mining leases. (b) Department of Employment, Economic Development Innovation search and location maps. (c) His physical property inspection 30 March 2011. (d) The provisions of s.281(1-4) of the Mineral Resources Act 1989. (e) Land Court decision – Zimmerebner A-97/76. [108] The Zimmerebner decision was an appeal heard by the then President of the Land Court against a determination of the Mining Warden’s Court in respect of five leases located in the Emerald Mining District, the decision being delivered on 30 March 1999. [109] In relying on the Zimmerebner decision Mr Glasson says that it provides “a sound legal precedent for assessment of compensation as a consequence of the granting of the ten (sic) subject leases.”14 [110] He also observes: “Compensation in respect to the losses under s.281(3)(a)(i-v) is assessed by the piecemeal approach after consideration to the Zimmerebner decision. At page 8 of this decision the Land Court President discusses the relevant precedents for the determination of compensation in matters of this nature by either the ‘Before’ and ‘After’ or the ‘Piecemeal’ Approach.” [111] He refers to Smith v Cameron (1986) 11 QLCR 64, Mitchell v Oakhill (10 March 1988, not reported) and Wills v Minerva Coal Pty Ltd (27 November 1998, not reported). [112] Mr Glasson goes on to say: “In this instance, the piecemeal method is considered appropriate, in view of the small area of land taken with consideration of severance and injurious affection losses, the value of the owners balance land. In this regard, I consider an appropriate diminution in land value for the 15 year term to be in the range of 10% to 100%. I have applied: - 10% loss for the surface area and access road required - 10% loss for surrounding lands, not encumbered by mining leases, however affected by severance and injurious affection.” [113] For the purpose of his valuation exercise Mr Glasson, describes the subject property as having the following characteristics15 14 Exhibit 7, p. 10. 15 Exhibit 7 p. 5. -- 14 of 34 -- 15 “The lands contained within the subject mining leases comprises mainly Hodgkinson Riverbed, which are areas of mainly sandy and gravely alluvial loams timbered with mixed forest and woodland and grassed with marine couch.” [114] Mr Glasson goes on to say that the inspection conducted by him led him to the view that the fencing appeared to be good stock-proof fencing and the property appeared to be adequately serviced by dams and the natural water sources comprising the Mitchell, St George and Hodgkinson River. [115] Referring specifically to the land the subject of the mining lease he says: “The carrying capacity of ‘Hurricane’ is assessed at 4,500 head (AE) or 1 AE: 17 ha.” Generally the land contained in the subject lease areas is considered to be very light in carrying capacity, however, is critical in supporting higher carrying capacity in the surrounding country as it comprises the main water source in this section of ‘Hurricane’. A carrying capacity of 1AE : 17 ha is therefore considered reasonable for the area encumbered by the subject leases. An adult equivalent (AE) is defined as a 450 kg non-lactating beast. This is a long-term year in year out sustainable average level of productivity through fluctuating annual seasonal conditions.” [116] He estimates the carrying capacity of the lease areas as being about 23 head (AE) of cattle. This calculation is of limited use because it ignores the fact that, in my view, the carrying capacity of each lease area has to be assessed on a stand alone basis. [117] The leases, according to the applications lodged by the applicant range in size from 33.493 ha to 44.264 ha. [118] Because there is no real precision in the calculation of carrying capacity I propose, with respect to each lease to assess compensation on the basis that each lease area has a carrying capacity of 2 Adult Equivalent cattle. As I observe above compliance with the environmental code applicable to these leases limits Mr Collins to 5 ha of actual mining activity at any one time. [119] In a recently delivered decision16 His Honour Mr Smith had to consider a proposition advanced by the representative for a landowner that “a hypothetical prudent purchaser would regard the mining leases as effectively depriving the landowners of possession of the surface of all of the … land, even though the stock may graze on that area from time to time.”17 [120] In considering that proposition His Honour considered in detail two decisions of Kingham DP (as Her Honour then was ) in Salmon v Armstrong [2002] QLRT 55 (6 September 2002) and Salmon v Armstrong [2002] QLRT 54. [121] His Honour also had to consider the decision of Zimmerebner v Hawkins & Anor referred to elsewhere in this decision. 16 Slater & Anor v Appleton & Anor [2012] QLC 0007. 17 Slater & Anor v Appleton & Anor [2012] QLC 0007 p. 6 [21]. -- 15 of 34 -- 16 [122] It is unnecessary to set out the analysis carried out by His Honour Mr Smith between [21] and [32] as that analysis is readily available to any interested reader on the internet. [123] It is, however, useful to quote from His Honour’s judgment at [27] where he observes18: “As the authorities show, care must always be taken in any determination of compensation under the MRA to ensure that there is not a ‘doubling up’ of compensation over various heads. A classic case where this may occur is where the landholder receives compensation based on the value of the totality of the land the subject of the mining lease (as was the case in Zimmerebner and Salmon decisions) and a case where compensation is claimed purely on the basis of lost carrying capacity. In the latter case, an evaluation is undertaken as to the actual loss in carrying capacity that has occurred taking account of the actual mining impacts on the land, the cost of agistment etc. In that case, it will always come down to a matter of evidence; that is, does the mining lease and environmental authority authorise the total mining of all of the land at one time, such as a large open cut mine, or is mining restricted to a certain number of hectares of significant disturbance at any one time? Evidence as to whether the mining lease is to be fenced or if the landholders’ cattle are to continue to graze on so much of the mining lease not subject to significant disturbance are also relevant. [124] His Honour went on also to refer the reader to the decision of President MacDonald in Sloan & Anor v Weir & Gregcarbil Pty Ltd.19 [125] In that decision Her Honour, as Mr Smith points out, was considering valuation evidence as a means of determining the compensation to be paid to the landholder and observed20 “[27] The area of the mining lease is 35ha. Although only a small portion (.60575 ha) of the mining lease will be disturbed from time to time by the mining operations, I have accepted that the loss of value of the land is greater than is reflected by the loss of grazing capacity of that small area. The landowner is entitled to be compensated for the loss of control over the mining lease area as evidenced, for example, by the fact that the mining area may move from time to time to various parts of the leased area without the consent of the landowner. The applicants sought to quantify this loss by a depreciation of 33.3% applied per annum.” [126] In the present case even though Mr Collins had clearly intimated that he intends to allow cattle such access as they seek across parts of the mining lease, in each case I have come to the view that if compensation were to be based upon a loss of carrying capacity it would be fair and reasonable to allow to the Coates a sum representing the loss of an opportunity to agist one adult equivalent beast on each mining lease. That is in recognition of the fact that on each mining lease mining activities would be expected to restrict the access of cattle to the actual activity area. [127] However for reasons which are explained below I do not propose to make any allowance for a loss of production capacity because in my view and given my intention to allow a sum for the loss of land subject to the mining activity it would constitute double-counting to also then allow for a loss of production on that land. [128] The 30 March report was an amendment of a report earlier done by Mr Glasson in which he had considered the impact of 10 proposed mining leases, two of which are not presently up for consideration before this Court. 18 [27]. 19 [2009] QLC 0183. 20 At [27]. -- 16 of 34 -- 17 [129] In the amended report, Mr Glasson’s approach, somewhat unfortunately, was to assess the value of the mining lease areas as a whole. His valuation exercise the rationale of which I will outline below, generated an assessment of total compensation of $59,905 which he rounded to $60,000. [130] The compensation assessment set out at section 7.2 of his report21 is as follows: “7.2 Compensation Assessment Compensation is assessed as follows: Value of the Mining Lease Areas: Total Area of the Mining Leases 303.1659 ha Surface Area 303.1659 ha @ $56/ha = $16,977 x diminution @ 100% $16,977 Area of Proposed Access Road 40.755 ha @$56/ha = $2,282 x diminution @ 100% $2,282 Blot on Title Effect of 8 Mining Leases on title, allow $4,000 Diminution In Value of Surrounding Lands Affected by Severance and Injurious Affection Adopt 400 Adult Equivalent Area for ‘Hodgkinson Paddock’ 400 AE area @ $1.00 per week = $20,800 per annum @15 years = $312,000 apply 10% diminution $31,200 SUB TOTAL $54,459 Plus 10% Additional amount recognising the compulsory nature of the acquisition $5,446 TOTAL ASSESSED COMPENSATION $59,905 ADOPT $60,000 ” [131] Mr Glasson reached that figure by adopting what the piecemeal approach to valuation described above. [132] Mr Glasson gave oral evidence and was cross-examined. [133] Mr Glasson’s evidence was to the affect that he had carried out both an aerial inspection of the subject property (by helicopter) and a ground level inspection on foot and by car. [134] The totality of Mr Glasson’s report is best summarised by a lengthy extract from his oral evidence.22 “In relation to the valuation assessment contained on pages 13 and 14 of your report - can you just explain briefly to the Court about item 1, which is headed, "Value of Mining Lease Areas", and how you got to that valuation and a brief overview?— Answer - The total area of the mining leases are around 303 hectares surface area. You know, based on analysis of sales and the subject sale, the analysed figure of $56 per hectare was derived, which equated to 16,977 in dollar amount with a full diminution of a hundred per cent. So that's the loss of the surface area in - in total. The area of the proposed access road was calculated at 40.7 hectares and again at the rate derived from analysis of sales and the subject property was apportioned at $56 a hectare, which come to a figure of $2282 at full value. The blot on title was to recognise the fact that there be eight mining leases encumbering the title and a nominal allowance of $500 per lease was allowed there which equated to $4,000 in total. Then there's a diminution in value 21 Exhibit 7, p. 13. 22 T. p. 106-107 -- 17 of 34 -- 18 of the surrounding lands affected by the mining leases in terms of severance and injurious affection. In particular one paddock, the Hodgkinson paddock, which is separated from the main property by the Hodgkinson River and the leases which will be on the Hodgkinson River, it is - it's my opinion that there would be some severance and access issues there which would result in a diminution, and also for a prospective purchaser to know that there's eight, you know, leases in line for a period of 15 years, it would be reasonable to assume that if the - a property similar was identical next-door without the leases, that they would most likely take that property before they took the subject, given the - given the leases encumbering the property. So we worked out there to come to a figure to work out the diminution in value was that paddock, the Hodgkinson, which is around about 10,000 hectares, can run about 400 adult equivalent cattle, which at a current market agistment rate is a dollar per week, so 400 head at a dollar per week by 52 weeks is 20,800 and assuming a 15 year lease term the figure's $312,000, you know, recognising that there's not a full loss of value given that, you know, cattle can go around some of those lease areas, however, given the fact that a purchaser would look at it and say, you know, 15 years is a relatively long time to have a lease encumbrance of that length, and actual physical length of the river as well, as well as some workability issues getting through the river through those leases, that there would be a nominal loss or diminution in value of that amount, and we calculated that at 10 per cent, and then there's plus a 10 per cent additional amount recognising the compulsory nature of the acquisition, to total 59,905 in compensation rounded to $60,000.” [135] Curiously, Mr Glasson contended that the figure contained in his Section 3.6 – productivity of one adult equivalent to every 17 ha was independently determined by him notwithstanding that that was precisely the figure for which Mr Coates also contended.23 [136] Mr Glasson also conceded that one of the premises upon which his valuation was based was the aspect of denying Mr Coates animals access to the water. He said that was one of the grounds. [137] When pressed however, it emerged that Mr Glasson’s views about the potential impact on access for cattle to the water was very poorly founded. He said, in response to a question asking him what was the nature of the mining operation that “I could only assume that, you know, if there's mining going on and there's pits and - and other sort of activity going on, then there would be some disturbance and prevention of access to the - for the animals to the water.” [138] When asked by me: “Do you have any particular knowledge of the mining operation that's proposed on the site?” [139] Mr Glasson’s response was: “No.”24 [140] Mr Glasson explained his approach to the valuation exercise in the following terms: “Well isn't that important in working out the appropriate disturbance and then the compensation? -- Well it is, but if you go to the basis of valuation on - on mine, I haven't seen what's - what's being proposed. But how we analyse our sales is - is this; we take a fully - fully stocked property which might be $6,000,000, take off the value of the plant and equipment, the stock, the houses, the sheds, what-have-you, and we're left with an overall figure, in this case, at a treated, fenced and watered rate, and then we divide what's left by the total area of the property, and that comes to a rough dollar per hectare value. In this case, in the order of $56. So, therefore, that is what's generally considered to be the compensation for that area. There are parts of the property that 23 T.1-88 (Coates) and T.1-110 l. 28 (Glasson). 24 T.1-11 l. 20. -- 18 of 34 -- 19 would hold probably, you know, double the carrying capacity or 10 times the carrying capacity of the river and some that would hold less. But in our analysis, we are - we try to be consistent with how we do the sales to how we're doing the subject property. We don't take out rivers in the analysis 'cause it would just be too difficult to determine areas, what's taken out, so this is an overall - I've put five sales in here which I've taken out all of the improvements, come back to a treated, fenced and watered rate on an overall value for the whole property.”25 [141] That explanation followed upon Mr Glasson’s concession that he had no particular knowledge of the nature of the mining operation that was proposed on the site. [142] Mr Glasson also told the Court that the contiguous nature of the leases along virtually the whole of the Hodgkinson Creek was another factor which caused him to take into account denial of access to the water. Although he qualified that by saying: “I haven't said there'll be total denial of - of - but there will be a hindrance to access to the water, yes.”26 [143] Elsewhere in Mr Glasson’s evidence had emerged that is was his understanding that all of the access roads which had been marked on the various maps and plans were to be developed by Mr Collins. [144] Mr Glasson said: “As far as I know, the roads will be bulldozed through grazing country which will render those areas, you know, not usable for grazing.”27 [145] When asked whether, if those tracks were already existing access tracks developed by either Mr Coates or his predecessor in title whether there would be a difference, Mr Glasson responded that: “Yes, well there would - there will be no difference in - in value if that's the case.”28 [146] Ultimately Mr Glasson conceded that: “If the tracks were pre-existing they would have no impact upon the usable area for grazing and therefore would not have much impact upon value.” [147] In the course of the evidence of Mr Glasson, I formed the impression, which I have maintained, that Mr Glasson had not been fully informed of all of the relevant background material which would have assisted him in providing a valuation useful to the Court. That said, I also formed the impression that Mr Glasson was an honest and professional witness who had done the best he could with the material provided to him. When discrepancies between reality and information provided to him became apparent he immediately made appropriate professional concessions about the conclusions which he had reached. [148] My views in the course of the hearing were expressed as follows: “Well, Mr Lyne, I don't think the question is entirely unfair when your client was very well aware that Mr Collins was in fact carrying out mining activities on the adjoining 25 T.1-111 l.20-42. 26 T.1-112 l.. 30. 27 T.1-113 l.-5. 28 T.1-113 10. -- 19 of 34 -- 20 property and 60 seconds extra flight in a helicopter would have allowed him an opportunity to look at the operation in action and to look at areas that had been mined and had been rehabilitated. I don't think that was an unreasonable - Mr Glasson ought to be put as an expert witness in full possession of all of the relevant facts, and it seems fairly clear to me from the questions I've asked from him, which I form the view have been very honestly answered, that Mr Glasson was not provided with all of the relevant information, so he's come along here this afternoon and he now finds himself, it seems to me, in the very unenviable position of having produced a report that's based upon material that's contrary to the true situation, which is an appalling position for an expert witness to be in. MR LYNE: Your Honour, Mr Glasson was requested to produce a valuation for Hurricane station. He wasn't instructed to do anything else; that's given. Thank you. HIS HONOUR: Well, he was instructed to produce a valuation for the purpose of assessing compensation in this Court. MR LYNE: Mmm. Correct. HIS HONOUR: And that involves an assessment of the nature of the activity that's proposed on Mr Coates's land. Now, I'm going to take a lot of convincing that Mr Coates was not aware that Mr Collins was carrying on activities on the adjoining property; indeed the evidence is all to the contrary, and yet nobody saw fit to provide Mr Glasson with details of those activities, and he turns up here now and he frankly concedes, as a result of the questions I asked him, that the true situation causes him to change his opinion dramatically. Isn't that the position we're now in?”29 [149] In his cross-examination of Mr Glasson the applicant Mr Collins sought to emphasise that, to date, his practice had not been to operate all of any mining leases he may have had at the same time. [150] He contended that that would lead to a reduction in the impact on the subject property. [151] However, as I have already observed above, each of the mining leases is an individual lease capable of, amongst other things, being operated quite independently of the other leases and also capable of being sold or transferred to another operator. [152] The possibility, at least, exists that all eight leases could, theoretically, be operated at the same time. [153] That prospect brings with it the possibility of a greater impact upon Hurricane Station. [154] Under further cross-examination Mr Glasson conceded that the grazing rates in the river where Mr Collins intends to mine are considerably different to the area out on the flats. [155] Notwithstanding that, Mr Glasson contended that he had taken an overall approach to the valuation exercise on the basis that taking the whole of the countryside on the property into account it was appropriate to use the agistment rate of $1 per ha per year in valuing the loss to the grazier with respect to the larger Hodgkinson paddock of 10,000 ha. [156] I am satisfied from the evidence given by the witnesses called by Mr Collins and, indeed, by the sheer size of the Hodgkinson paddock and the possibility of access to water that Mr Glasson’s approach overstates the diminution in value of the surrounding land. [157] I accept his evidence as expressed in his oral testimony where he said that: 29 T.1-114 -115 l..29-5. -- 20 of 34 -- 21 “The existence of the mining leases may well influence the mind of a potential customer for agistment” but I do not accept that the impact would be to reduce the agistment value of the whole of the land by 10%. In my view the only real impact would be on the lease areas. [158] There was no evidence that the access of cattle to any other parts of the Hodgkinson paddock was restricted. [159] The evidence of Mr Collins and others satisfies me that the cattle would find access to water. [160] There was no other evidence to the contrary and accordingly it is appropriate to accept that aspect of Mr Glasson’s valuation namely that the presence of the mining leases may have some impact upon the willingness of a potential customer to agist cattle on the Hurricane paddock but, in my view, and I so find, such impact would be relatively minor given the size of the paddock and the inevitable ability of the cattle to find their way to water. [161] On all of the evidence I am not satisfied that it has been demonstrated that the presence of the mining leases will have any impact at all on the balance of the Hodgkinson paddock but I do accept that it may have some very minor impact on the willingness of a potential customer to agist cattle on the property. However the Court has to be cautious against the prospect of double counting and in my view the allowances I propose to make for loss of grazing area with respect to the mining leases themselves is sufficiently generous to satisfy me that no other sum should be allowed for the loss of stock grazing capacity on the larger Hodgkinson paddock of 10,000 ha. [162] In that regard I should make clear that I reject the calculation carried out by Mr Glasson in respect of the “diminution in value of surrounding lands affected by severance and injurious affection in the sum of $31,200.” [163] However, I do accept, as I explain in paragraphs below, that the contiguity of the leases does constitute some severance of the property. [164] In the paragraphs below I consider in more detail the propositions advanced by Mr Glasson. [165] Mr Glasson made the important point that while the area proposed to be mined may be inferior in terms of its potential to grazing it is crucial in terms of its role of providing access to the river and hence access to water for the stock. [166] Mr Collins also wanted to emphasise effectiveness of rehabilitation processes. [167] That is of course a matter of compliance with the environmental code imposed upon Mr Collins and does not necessarily take into account the length of time for which the lease might be worked prior to completion of rehabilitation.30 30 T.1-121. -- 21 of 34 -- 22 [168] The real possibility that a miner may utilise the lease for the whole of the 15 year period and, possibly, even apply for a renewal of the lease. In 15 years time the value of the land will undoubtedly change. [169] In my view, this Court is obliged to take into account the period of time for which the mining lease is contended regardless of how long the miner says it will be utilising that lease. If a miner surrenders the lease then that will be at an end and compensation will no longer be payable. [170] I should observe however that I do accept both the oral evidence of Mr Collins and the witnesses who he called, together with the photographic evidence tendered before the Court, as demonstrating that Mr Collins has been successful in the steps he has taken towards rehabilitation of the other sites. That is of course a statutory obligation imposed upon him both by the Mineral Resources Act and the Environmental Protection Act. [171] Mr Collins took Mr Glasson to task with respect to his reliance upon the decision in Zimmerebner.31 [172] Mr Collins’s point was that the Zimmerebner matter involved the mining on river flats on prime grazing country rather than on the beds and banks of a river in poor grounds. [173] Mr Collins took Mr Glasson to task with respect to his contention that the location and contiguous nature of the mining leases on the subject land constituted a severance of part of the Coates’ property. [174] I accept that the presence of the mining leases viewed by a potential purchaser would lead that purchaser to the view that the mining leases severed the property and, in particular, along a valuable waterway. [175] However, all of the evidence including the evidence called from the parties relied upon by Mr Collins to demonstrate that the grazing and mining activity could peacefully and comfortably co-exist also leads me to conclude that while the mining leases may constitute a severance of the subject property the effect of that severance is not as substantial as Mr Glasson believes. [176] Any disruption will be relatively localised to the mining leases and there is no evidence that the leases themselves or the activities associated with them will actually deny stock access to water. [177] In coming to that view I am comforted by the observations of the President in the Zimmerebner decision. The President observed: “I turn now to the effect on surrounding lands when mining activities commences. I accept Mr Compton’s evidence that there will be a certain amount of disruption of the cattle using the three bores, and, from time to time, in mustering. Notwithstanding that there is other mining activity in the area and that the disruption will be relatively localised to the proximity of the leases, the fact that additional mining activity is to take place on the land close to three bores and to a strategic creek crossing 31 Opsit. -- 22 of 34 -- 23 must be of concern to any landowner and would certainly affect the price that a hypothetical prudent purchaser would pay for the property… However, in my view an assessment of loss in perpetuity is not appropriate in this situation where mining activity will occur for a learned period only, even if the subject leases are further renewed. It is more appropriate to determine that element of compensation by assessing the diminution in value which will result from mining activity on the five subject leases each year.”32 [178] Given the period for which the leases are sought, in the present case I incline to the view that in this case it is appropriate to assess the affect of the leases for such a long period of time as effectively a loss in perpetuity. [179] In coming to that view I am mindful of the decision of the Land Court in Smith v Cameron33 where the Court was considering provisions in the then Mining Act 1968 very similar to those contained in s.281(3)(a) of the Mineral Resources Act. [180] As the learned President explained in the Zimmerebner case34 “As explained in Mitchell,35 the Land Court in Smith v Cameron recognised that compensation can be assessed by either the ‘before’ and ‘after’ valuation method or the piecemeal or summation method. In this case, I have found that the ‘before’ and the ‘after’ method is not appropriate and must resort to a piecemeal assessment, as did the valuers. However, the fundamental test of the attitude of a hypothetical prudent purchaser remains.” [181] In the present case Mr Collins did not have an expert valuer and so there was no real live debate between two valuers as to whether the Court ought proceed by way of seeking a ‘before’ and ‘after’ valuation methodology or by a piecemeal or summation method. [182] In my view both methodologies would have had supporters in the valuation profession at large. [183] However the utilisation of the piecemeal approach is not without its dangers including, in particular, the issue of a doubling-up, as, for example, where compensation is allowed for the loss of land and at the same time a landowner seeks compensation for the loss of production which would have occurred on that land. [184] It is axiomatic that the value of land reflects, amongst other things, the productivity of that land. [185] The issue was addressed by the then President of the Land Court in the decision in Mitchell v Oakhill and Mitchell36 where he said “In my opinion, that piecemeal assessment of compensation by separately addressing each of the matters for which Section 281(3) provides that an owner of land is entitled, is not validly based. The assessment of the individual matters is inconsistent and, in part, represents a doubling-up of some claims. For example, paragraphs (i) and (ii) are calculated on the basis of productivity on one hand and percentage loss on the other. Such a piecemeal assessment demonstrates to me the difficulty of attempting to address 32 Decision p.28. In the Zimmerebner decision the application was for renewal of five mining leases for a period of five years. In the present case, of course, the period sought is fifteen years. 33 (1986) 11 QLCR 64. 34 p. 26. 35 10 March 1988 (unreported). 36 (1998) QLCR 66 (at p.71). -- 23 of 34 -- 24 each of the matters separately, rather than by an accepted method of valuation, preferably the ‘before’ and ‘after’ method. If circumstances force a valuer to adopt a summation approach, then care must be taken to ensure that there is no over-lapping or doubling-up in the assessment of compensation.” The Law – Mineral Resources Act 1989 [186] Section 279 of the Mineral Resources Act 1989 provides that a mining lease shall not be granted or renewed unless an agreement in relation to compensation has either been filed at the office of the mining registrar or, in the absence of such an agreement being filed, a determination with respect to compensation has been made by the Land Court. [187] In the present case, no agreement has been able to be reached between the parties and accordingly it falls to this Court for determination. [188] Section 281(3) of the Mineral Resources Act sets out the matters which are to be considered by the Court in that determination of compensation. [189] Although s.281 sets out, in a somewhat compendious fashion, the matters to be considered it does not specify any particular method or mode of assessment. [190] The Land Court in Smith v Cameron37 (a case which is often cited by this Court, held, that: “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.”38 [191] In Cameron v Smith the following observation was made39: “In the end result Mr Todd's valuation of the property at $266,750 was accepted by the Warden and depreciated by him by one-sixth after finding that he had cause to consider matters listed in paragraphs (a) to (f) of Section 431A(5) and that there was no evidence to enable him to make any specific finding in relation to paragraphs (g) and (h) of the subsection. In doing so he likened, rightly in my opinion, the use of the land for mining purposes to a compulsory acquisition of land for a limited period which in my view opens the door for the application of the various principles and practices of valuation applied in determining compensation for the taking of limited rights over land for public purposes. In particular 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.” [192] It is appropriate to identify, at this point, the provisions of s.281(3). That section provides: (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; 37 (1986) 11 QLCR 64. 38 P. 74. 39 P. 73. -- 24 of 34 -- 25 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.” [193] I have had regard to the observations in Smith v Cameron and the decision of Member Scott in Wills v Minerva Coal40 and also the observations of the then President of the Land Court in Mitchell v Oakhill and Mitchell41 where His Honour observed, in respect of s.281(3) that: “The latter section does not prescribe a method of valuation. 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.” [194] In the present case it would be impossible to “quantify an amount in respect of each of the matters referred to” because in respect of some of them there was simply no evidence sought to be adduced by either party e.g. s.281(3)(vi). [195] His Honour Member Smith in Fitzgerald & Anor v SR Struber & Anor42 observed, having regard to the judgment of Member Scott in the Wills v Minerva Coal, as follows43: “I tend to agree with the observations of Member Scott of the Land Court in Wills v. Minerva Coal when dealing with a compensation matter under the MRA. He stated that the matters set out in the MRA were compensation concepts to be taken into account in determining compensation, not a figure accumulated by amounts arrived at following a separate and discrete treatment of them as if they were separate heads of compensation. In determining compensation, 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 lease was not granted.” [196] Mr Glasson, in his oral evidence, accepted that the presence of the mining leases constituted a blot on the title, but made the point, I think importantly, that the assessment of the impact of the blot on the title was a nominal assessment and was not a critical factor in his valuation exercise.44 [197] Mr Glasson also pointed out, again I think compellingly, that while one lease on its own may not constitute a significant blot on the title of a property as large as the Hurricane Station the presence of eight contiguous mining leases is an entirely different matter. [198] Notwithstanding that I have observed above the desirability of assessing each mining lease as an individual lease, the presence of eight contiguous mining leases making up effectively a suite of mining intentions along the whole of the Hodgkinson leads me to the view that some allowance must be made in each lease for its contribution to the totality of the blot on the title 40 (unreported Land Court, 9 February 1999). 41 10 March 1998 unreported. 42 (2009) QLC 0076. 43 Re: Fitzgerald & Anor v SR Struber & Anor para 11. 44 T.1-135 l.20. -- 25 of 34 -- 26 constituted by the presence of those eight contiguous leases including severance and injurious affection. [199] Mr Collins in his cross-examination of Mr Glasson wished to contend that a potential well informed buyer inspecting the property and being aware of the presence of a mining activity on the property would see that as an advantage. [200] My recollection of the evidence of the witnesses relied upon by Mr Collins was not that they regarded the mining operations as a positive advantage but they did acknowledged that there were some benefits in the sense of better access if the miner was minded to improve the access roads. [201] Those witnesses also acknowledged that there was little real impact on the access of the cattle to water. [202] The matters referred to in the preceding three paragraphs do not, in my opinion, overcome the presence of the mining lease as constituting a blot on title which would attract the attention of a potential purchaser. [203] Mr Collins was also keen to emphasise that at an earlier time he had two large leases on the whole of the Hodgkinson River but that opportunity has been thwarted, he says, by some aspects of dealing with native title and native title claims. [204] In fairness to Mr Glasson he gives a very good account of the historic background to this case and the particulars of the mining leases which are sought. However, with respect to deriving a value for each of: - (a) the deprivation of possession of the surface of the land; (b) the diminution of the value of the land of the landowner; and improvements thereon by severance and injurious affection; (c) any surface rights of access; (d) blot on title; (e) an additional amount to reflect the compulsory nature of the granting of the mining lease area; or (f) any loss or expense that arises, he completely fails to provide any basis demonstrating how the figures contended for have been calculated. [205] That can be exemplified by considering the figure of $31,200 claimed as a diminution of the value of the land of the landowner and improvements thereon by way of severance and injurious affection. [206] He carries out a calculation that simply suggests that the Hodgkinson paddock having a capacity to agist 400 cattle at a $1 per week for 52 weeks of the year over a period of 15 years would generate an income of $312,000 to which he applies a 10% diminution in value factor -- 26 of 34 -- 27 to derive a figure of $31,200. The basis for that figure was unexplained in his report and remains unexplained to this date. Similarly the other figures are similarly apparently without any calculable basis. [207] I have already indicated above that I reject the alleged impact on the balance of the Hodgkinson paddock. [208] It is not for this Court to construct a parties case before it, that is a matter for the parties or their representatives. Determination of Compensation [209] However, when a party goes to the trouble of engaging an experienced solicitor to represent its interests before this Court there is, I think, a not unreasonable expectation that such evidence as may be adduced on behalf of that party will be founded upon some cogent and compelling evidence. Sadly, in this case, the Court did not receive that assistance. [210] Accordingly, the Court is left in a position where, on the one hand, the prospective miner seeks to diminish almost absolutely the impact his proposed mining operation may have on the grazing operations conducted by the Coates, (so that at one point he suggests, “The real income loss to Coates as a result of our activities is nil, our activities will be an asset to Coates as the road will be maintained free of charge giving them easy access to that part of their property and when mining the water supply will increase)”45, and on the other hand the landowner produces a valuation which really suggests that the presence of the proposed mining operation on the property will have a very substantial impact upon the grazing/agisting operation presently conducted on the property to yield a total entitlement to compensation in excess of $60,000. [211] It should be acknowledged that, in part, the proposition advanced by the valuer on behalf of the landholder was premised upon the mistaken belief that the access roads constituted a loss of area because they were not pre-existing where as the miner based his propositions, in part, on the notion that the lease areas themselves were “unallocated State land” lying along a river. [212] I also, disappointingly, come to the view that Mr Glasson was not properly informed as to the actual nature of the operation conducted by the respondent’s on the Hurricane Station. [213] In his submission filed on 11 May 201146 at page 14 Mr Collins contends the following: “Income per hectare the Coates are earning now in the area we are looking for access is $1.83/ha. This is the real income the Coates are earning on the flats out of bed and banks of the river. As quoted by the three graziers, one of whom is agisting the area now, the monetary grazing value of the mining lease areas is nil. Our offer to pay the following compensation for the mining lease areas: 45 Exhibit 1, p. 2. 46 Exhibit 3. -- 27 of 34 -- 28 10% of the current income on flat land out of river $1.83/ha by 10% = $0.18 x 47 ha (largest lease size) = $8.46 per lease.” [214] Unfortunately for Mr Collins the figures that he relies upon were provided by Mr Kelly who was not available for cross-examination and who it was decided not to call to give evidence in the light of an ongoing dispute between Kelly and Coates. Accordingly, the figures contended for by Kelly remained unproven and speculative. I give them no weight. [215] Clearly the true figure would seem to lie somewhere between the extravagant amount contended for by the landowner and the miniscule amount contended for by the prospected miner. [216] I have previously indicated that I accept, so far as the report of Mr Glasson is concerned, the following general propositions: 1. The presence of the mining leases on the subject site constitutes a blot on title. 2. The presence of the mining leases will result in the loss of some grazing land, to the extent, at maximum, of 5 ha per lease per year. 3. It is appropriate that some compensation be paid for the increased use of the access ways on the subject land although those access ways are pre-existing and do not constitute of grazing area. 4. There should be some allowance for the total area of the mining leases with respect to the surface area of those leases but double counting is to be avoided by not allowing for the loss of surface area as well as a figure for the loss of carrying capacity. 5. With respect to any diminution in value of surrounding lands affected by severance and injurious affection I am disinclined to allow anything for injurious affection save for the small impact by way of blot on title caused by the presence of the mining leases and the potential severance caused by the contiguity of the mining leases and the potential for their utilisation at the same time. I specifically reject the proposition that the diminution is measured by contemplating four hundred adult equivalent beasts for the Hodgkinson paddock of which 10% is rendered, apparently, unproducted by the presence of the mining leases. [217] I accept that pursuant to s.281(4)(e) of the Mineral Resources Act, a figure of not less than 10% of the aggregate amount calculated by me should be added to reflect the compulsory nature of the action taken by way of granting of a mining lease for a period of 15 years. [218] I have already (see [73] and [74]) calculated that, on the figures presently available Hurricane Station has an unimproved value of $29.49 per hectare. [219] In assessing the appropriate compensation having regard to the valuation prepared by Mr Glasson and the evidence of Mr Collins as to the proposed mining operation (exemplified by -- 28 of 34 -- 29 his previous conduct on other mining leases) a piecemeal assessment of the sort carried out by Mr Glasson is accepted by me in the circumstances of the present case as the appropriate method for assessing compensation. [220] Consideration must, of course, still be given to the attitude of the hypothetical prudent purchaser. Regard must also be had to the length of the leases sought by Mr Collins namely 15 years in each case. [221] Having considered all of the evidence including that of Mr Glasson and Mr Collins I have come to the view that a fully informed hypothetical prudent purchaser would be influenced by the presence of the mining leases on the property and that some diminution in carrying capacity would inevitably occur. [222] I do not accept that there will be a total loss of the whole of the area sought for mining leases. [223] As I pointed out earlier in reference to the Code of Environmental Compliance Mr Collins is entitled to disturb not more than 5 ha of land in each lease at any one time. There will also be undergoing rehabilitation. Those are matters which I am obliged to take into account in assessing compensation. [224] The piecemeal approach which was adopted by Mr Glasson is an approach not generally favoured by this Court which prefers, in consequence of a long line of decisions, to rely upon “before” and “after” method. In the present case however that option is not available to the Court. [225] In resorting to the piecemeal method the Court has on a number of occasions highlighted the necessity to avoid overlapping or doubling up in the assessment of compensation. [226] The authorities47 seem to me to suggest as I have already acknowledged the necessity to liken the use of land for mining purposes to compulsory acquisition of land for a limited period and the utility of applying various principles and practices of valuation which have been applied in determining compensation for the taking of limited rights over land for purpose such as mining and for public purposes such as, for example, electricity transmission lines and drainage and the like. [227] Having regard to the valuation of the subject property at $2.3 million dollars in August 2008 I come to the view that an allowance has to be made for “blot” on the title as well as some limited “injurious affection” and severance. That figure would be relatively low and accordingly I allow the total figure of $1,500 per lease over the life of each lease which is effectively $100 per year. 47 P Joyce v The Northern Electric Authority of Queensland (1974) 1 QLCR 171, Mitchell v Oakhill and Mitchell¸ 10 March 1998, (not reported), Smith v Cameron (1986) 11 QLCR 64 and Wills v Minerva Coal Pty Ltd (27 November 1998) (not reported). -- 29 of 34 -- 30 [228] I allow nothing specific for the effect on the surrounding lands (i.e. the Hurricane paddock) for the reasons which I have explained above, the allowance referred to in the preceding paragraph being intended to allow for such impact. [229] With respect to the area of the mining lease and the obligation, in the current circumstances to treat the granting of the leases as a compulsory acquisition for a limited period of time I adopt the figure referred to in [72] of $29.49 per ha for each lease but must also recognise that the landowner is not necessarily deprived of access to the whole of the lease area. [230] I have adopted the unimproved valuation because, apart from utilisation of the access tracks, there was no evidence before me that suggests that the mining leases would have any impact upon such improvements as have been carried out on the Hurricane Station. [231] Doing the best I can with the material provided to me and having regard to the figures accepted by me and identified above I propose to allow, in respect of each lease a figure of $18 per ha which is intended to reflect: (a) the fact that not all of the lease will be utilised at any one time; (b) the fact that the cattle will continue to have access to a substantial area of the mining lease; (c) the fact that there must be some small loss of production on the area outside the (variable) 5 ha available to Mr Collins. [232] In the analysis above I have identified what I accept as the unimproved value of the land namely $29.50 per ha and the figure that would be appropriate to take into account if the issue of loss of agistment was taken into account and treated as a separate head of compensation. (That process has not been adopted by me in this decision) [233] Spreading the figure of $29.50 per ha or any treatment of that figure across the life of each lease has, of course, the consequence that upon surrender of the lease the miner will have paid only for the period during which the lease area was alienated to it. [234] As to access I accept the proposition that Mr Collins may improve the quality of some of the access roads. Such improvement is, of course intended to suit his purposes rather than being directed towards improving the situation of the landholder. [235] I think it appropriate that some allowance be made in respect of each lease for the utilisation of the access lands and propose to adopt a figure of $5 per ha for each access to each lease. [236] Mr Collins will no doubt complain that for some parts of the access the miner may be paying $40 per year but that complaint would fail to recognise that each of the eight leases is capable of operation by a different operator notwithstanding Mr Collins’s contention that he alone is the lessee. [237] Accordingly the allowances in respect of each lease for the loss of land and the loss of production together with the allowances made by me for the blot on title, severance and -- 30 of 34 -- 31 injurious affection as well as compensation for the access ways is set out in the following table A. [238] Accordingly having regard to the figures in table A attached hereto the lease figures and their composition for each lease are as follows: (a) MRA 144-11 - ML 20642 Compensation for lease area $663.30 Blot on Title, Severance and Injurious Affection $100.00 Value of Access (x $5 ha) $5.20 10% Allowance (s.281(4)(e)) $76.85 Total $845.35 ($845.00 Rounded to the nearest whole dollar) (b) MRA 145-11 - ML 20643 Compensation for lease area $611.53 Blot on Title, Severance and Injurious Affection $100.00 Value of Access (x $5 ha) $1.93 10% Allowance (s.281(4)(e)) $71.34 Total $784.80 ($785.00 Rounded to the nearest whole dollar) (c) MRA 146-11 - ML 20644 Compensation for lease area $789.03 Blot on Title, Severance and Injurious Affection $100.00 Value of Access (x $5 ha) $14.90 10% Allowance (s.281(4)(e)) $90.39 Total $994.32 ($994.00 Rounded to the nearest whole dollar) (d) MRA 147-11 - ML 20645 Compensation for lease area $735.93 Blot on Title, Severance and Injurious Affection $100.00 Value of Access (x $5 ha) $18.90 10% Allowance (s.281(4)(e)) $85.48 Total $940.31 ($940.00 Rounded to the nearest whole dollar) -- 31 of 34 -- 32 (e) MRA148-11 - ML 20646 Compensation for lease area $620.87 Blot on Title, Severance and Injurious Affection $100.00 Value of Access (x $5 ha) $19.45 10% Allowance (s.281(4)(e)) $74.03 Total $814.35 ($814.00 Rounded to the nearest whole dollar) (f) MRA 149-11 - ML 20647 Compensation for lease area $685.80 Blot on Title, Severance and Injurious Affection $100.00 Value of Access (x $5 ha) $51.20 10% Allowance (s.281(4)(e)) $83.70 Total $920.70 ($921.00 Rounded to the nearest whole dollar) (g) MRA 689-10 - ML 20648 Compensation for lease area $615.85 Blot on Title, Severance and Injurious Affection $100.00 Value of Access (x $5 ha) $60.00 10% Allowance (s.281(4)(e)) $77.58 Total $853.43 ($853.00 Rounded to nearest whole dollar) (h) MRA 691- 10 - ML 20649 Compensation for lease area $796.75 Blot on Title, Severance and Injurious Affection $100.00 Value of Access (x $5 ha) $60.00 10% Allowance (s.281(4)(e)) $95.67 Total $1052.42 ($1052.00 Rounded to the nearest whole dollar) [239] In the light of the quantum of compensation determined by me in respect of each of the mining leases above it is my view that it is appropriate that the compensation for each mining lease be paid by way of 15 annual instalments, each in the sum determined in respect of the -- 32 of 34 -- 33 relevant lease, the first such instalment in respect of each lease being payable within 30 days of the grant of the mining lease and thereafter, in advance, on the anniversary of the grant of the mining lease. Orders: 1. In respect of File number MRA 144-11 relating to Lease ML 20642 compensation is assessed at $845.00 per annum to be paid in advance each year. 2. In respect of File number MRA 145-11 relating to Lease ML 20643 compensation is assessed at $785.00 per annum to be paid in advance each year. 3. In respect of File number MRA 146-11 relating to Lease ML 20644 compensation is assessed at $994.00 per annum to be paid in advance each year. 4. In respect of File number MRA 147-11 relating to Lease ML 20645 compensation is assessed at $940.00 per annum to be paid in advance each year. 5. In respect of File number MRA 148-11 relating to Lease ML 20646 compensation is assessed at $814.00 per annum to be paid in advance each year. 6. In respect of File number MRA 149-11 relating to Lease ML 20647 compensation is assessed at $921.00 per annum to be paid in advance each year. 7. In respect of File number MRA 689-10 relating to Lease ML 20648 compensation is assessed at $853.00 per annum to be paid in advance each year. 8. In respect of File number MRA 691-10 relating to Lease ML 20649 compensation is assessed at $1,052.00 per annum to be paid in advance each year. 9. In respect of each award of compensation the sum determined in respect of each lease is to be paid annually, the first such instalment to be paid within 30 days of the grant of the mining lease and thereafter in advance on the anniversary of the grant of the mining lease. HIS HONOUR, WL COCHRANE MEMBER OF THE LAND COURT -- 33 of 34 -- A 1 2 3 4 5 6 7 8 9 10 11 Lease Number Area Value per Hectare (ha) Allowed Compensation Land; (at $18 per ha) Blot on Title, Severance and Injurious Affection Length of Access Area of Access Value of Access (x $5 ha) Aggregate (4 + 5 +9) 10% Allowance (s.281(4)(e)) Total ML 20642 36.85 ha $29.50 $663.30 $100 1.04 km 1.04 ha $5.20 $768.50 $76.85 $845.35 ML 20643 33.974 ha $29.50 $611.53 $100 387 m .387 ha $1.93 $713.48 $71.34 $784.80 ML 20644 43.835 ha $29.50 $789.03 $100 2.98 km 2.98 ha $14.90 $903.93 $90.39 $994.32 ML 20645 40.885 ha $29.50 $735.93 $100 3.78 km 3.78 ha $18.90 $854.83 $85.48 $940.31 ML 20646 34.493 ha $29.50 $620.87 $100 3.89 km 3.89 ha $19.45 $740.32 $74.03 $814.35 ML 20647 38.1 ha $29.50 $685.80 $100 10.24 km 10.24 ha $51.20 $837.00 $83.70 $920.70 ML 20648 34.214 ha $29.50 $615.85 $100 12 km 12 ha $60.00 $775.85 $77.58 $853.43 ML 20649 44.264 ha $29.50 $796.75 $100 12 km 12 ha $60.00 $956.75 $95.67 $1052.42 -- 34 of 34 --