Citigold Corporation Limited v Titley & Ors [2011] QLC 49

LAND COURT OF QUEENSLAND CITATION: Citigold Corporation Limited v Titley & Ors [2011] QLC 49 PARTIES: Citigold Corporation Limited (applicant) v. Vivienne Aletta Titley & Ors (respondents) FILE NO: MRA407-10 DIVISION: Land Court of Queensland PROCEEDINGS: Application for mining lease DELIVERED ON: 3 August 2011 DELIVERED AT: Brisbane HEARD ON: On the Papers MEMBER: Mr BR O’Connor, Judicial Registrar ORDERS: 1. Compensation determined at $12,600. 2. The applicant pays the total compensation of $12,600 to the respondents within two (2) months of the renewal of the mining lease. CATCHWORDS: Mining lease, renewal, compensation Background [1] Vivienne Aletta Titley, Arthur Robert Titley, Antony Lee Titley, Rosemarie Catherine Titley, Teena Louise Titley and Benjamin Harris Titley (the respondents) are the owners of the land described as Lots 1 and 15 on SP218328 and Lot 1 on MPH 33483, County of Davenport Parish of Blackjack; the applicant is the holder of Mining Lease No. 1549 ("the mining lease") over part of the land referred to above. [2] Such mining lease is sought to be renewed and the parties are unable to agree upon appropriate compensation. The latter question has been referred to the Land Court for determination. Both parties have provided written submissions to the Court and have agreed that the question be determined on the papers. [3] The applicant's proposal to the respondents is for an amount per hectare based on three times the land valuation at the time of disturbance as determined by the Valuer-General for areas disturbed temporarily by mining and access to the mining area or $1,000 per hectare, -- 1 of 5 -- 2 whichever is greater; and for an amount per hectare based on six times the land valuation at the time of disturbance as determined by the Valuer-General for areas disturbed permanently by mining and access to the mining area or $1,000 per hectare, whichever is greater. This offer has been rejected by the respondents. [4] The respondents have engaged the services of lawyers and obtained a report from a private registered valuer, Mr JA Lyons. [5] That report notes that: • Lot 15 forms part of a 40 hectare rural residential subdivision established by the respondents. On the completion of necessary infrastructure, both lots will be sold by the respondents. On its renewal, the mining lease will: i. restrict the area on Lot 15 on which a buyer can construct improvements (in that the buyers will not be able to construct improvements on the area of the Mining Lease); ii. influence the decision of potential purchasers to buy the lots; iii. comprise a blot on the title of each lot; and iv. therefore diminish the value of each lot. • the amount of the diminution of the value of Lot 15, and therefore the amount of compensation that the respondents are entitled to, is the sum of $10,000. • the renewal of the mining lease will also lead to a diminution of the value of Lot 1 on SP218328 and Lot 1 on MPH 33483 for the same reasons as referred to above, but to a much lesser extent. That loss of value is a nominal amount of $1,000 for each of these lots. [6] In addition, the respondents claim to have incurred legal and valuation fees and therefore claim the following sums as 'expenses' that have arisen under section 281(3)(a)(vi) of the Mineral Resources Act 1989 (MRA): Valuation fees $1,650.00 Legal fees $2,750.00 Total $4,400.00 [7] The respondents submit that the order for compensation that should be made is as follows: Diminution in value of Lot 15 $10,000.00 Diminution in value of Lot 1 $1,000.00 Diminution in value of Lot 1 $1,000.00 Valuation and legal fees $4,400.00 $16,400.00 Plus a further allowance of 10% (under s.281 of MRA) -- 2 of 5 -- 3 The relevant legislation [8] Compensation in the present case is governed by s.281 of the MRA: "281 Determination of compensation by Land Court (3) Upon an application made under subsection (1), the Land Court shall settle the amount of compensation an owner of land is entitled to as compensation for— (a) in the case of compensation referred to in section 279— (i) deprivation of possession of the surface of land of the owner; (ii) diminution of the value of the land of the owner or any improvements thereon; (iii) diminution of the use made or which may be made of the land of the owner or any improvements thereon; (iv) severance of any part of the land from other parts thereof or from other land of the owner; (v) any surface rights of access; (vi) all loss or expense that arises; as a consequence of the grant or renewal of the mining lease; and (b) in the case of compensation referred to in section 280— (i) diminution of the value of the land of the owner or any improvements thereon; (ii) diminution of the use made or which may be made of the land of the owner or any improvements thereon; (iii) all loss or expense that arises; as a consequence of the grant or renewal of the mining lease. (4) In assessing the amount of compensation payable under subsection (3)— (a) where it is necessary for the owner of land to obtain replacement land of a similar productivity, nature and area or resettle himself or herself or relocate his or her livestock and other chattels on other parts of his or her land or on the replacement land, all reasonable costs incurred or likely to be incurred by the owner in obtaining replacement land, the owner’s resettlement and the relocation of the owner’s livestock or other chattels as at the date of the assessment shall be considered; (b) no allowance shall be made for any minerals that are or may be on or under the surface of the land concerned; (c) if the owner of land proves that the status and use currently being made (prior to the application for the grant of the mining lease) of certain land is such that a premium should be applied—an appropriate amount of compensation may be determined; (d) loss that arises may include loss of profits to the owner calculated by comparison of the usage being made of land prior to the lodgement of the relevant application for the grant of a mining lease and the usage that could be made of that land after the grant; (e) an additional amount shall be determined to reflect the compulsory nature of action taken under this part which amount, together with any amount determined pursuant to paragraph (c), shall be not less than 10% of the aggregate amount determined under subsection (3)." Applicant's Response [9] The principal arguments advanced by the applicant (in the response submission) include: -- 3 of 5 -- 4 • There is no loss of utility and use of the land at all until the land is utilised for the purpose intended-namely mining, which is why the compensation is based on when disturbance occurs. • The respondents purchased the land with the mining leases present. There has been mining on the subject land previously and evidence of same is present. • If the mining leases have any negative value on the land then the respondents received their 'compensation' by their reduced price calculation on the purchase of the land. • Over the term that the land has been owned by the respondent they have had full use of the land at all times and no utility has been lost, despite the applicant paying compensation to the previous owner. • Citigold group, including Great Mines Pty Ltd, Charters Towers Mines Pty Ltd and Charters Towers Gold Pty Ltd, also have other Mining Leases in the Charters Towers area and there has been no diminution in the value of the background land value when they come up for sale because a Mining Lease has been present. • The respondents are more than capable of paying their own costs, as is the applicant, so why should the applicant be required to pay expenses incurred by the respondents at the respondents' request for the respondents' benefit, not the applicant's request or benefit. The approach is unreasonable. The respondents are entitled to do this but the cost burden should be theirs totally. Consideration of Arguments [10] It is acknowledged that evidence produced for both the applicant and the respondents is given by persons with very considerable experience in their relevant fields. Mr Lyons is a registered valuer with extensive experience in North Queensland rural valuations, while Mr Lynch is one with vast experience in the mining operations in the Charters Towers area who has successfully negotiated with various landowners over some considerable time. [11] It is also accepted that there are existing leases on the subject lots and that the current owners may have paid a lesser price for such lots because of this. However, this price presumably factored in the term of the existing leases and that further compensation could be payable if such were renewed. It is this further compensation that now is required to be determined. [12] I have considered the submissions of the parties and the following factors are relevant in arriving at my conclusion: -- 4 of 5 -- 5 • The mining lease is intended for use as essentially a buffer for a "tailings dam" located nearby but not on the subject land. Minimal disturbance of the subject land is envisaged. • However, the respondents are entitled to have some compensation for blot on title quite separate from any actual disturbance caused by the very fact of renewal of the mining lease (see Barrett v. Weir [2009] QLC 0182). • The suggested approach by the applicant would not allow for this fact. • The valuation approach by Mr Lyons is based on sales evidence in the area but his allowance for diminution caused by the renewal of the mining lease is (understandably) based on his professional opinion only. Mr Lynch claims sales in the Charters Towers area affected by mining leases do not show a lesser value than would otherwise be the case. I am prepared to accept Mr Lynch's observation by making some allowance for this factor and also making a further allowance for the fact that the lease is a term lease (even though for an extended period of 17 years) and is not in perpetuity. I propose to reduce the land diminution factor to $6,000 for Lot 15 on SP218328. The $1,000 diminution for Lot 1 on SP218328 and Lot 1 on MPH 33483 can remain as claimed. • While it may not be standard practice in the area, a landholder is entitled to seek professional advice in matters of this nature. Costs are in the discretion of the Court. No evidence has been produced by the applicant that the legal and valuation fee amounts claimed by the landowner are unreasonable. However, I consider some reduction should be made as the valuation evidence of the respondents has not been fully accepted by the Court (Barrett v. Weir op.cit) Order I award an amount of Six Thousand Dollars ($6,000) for Lot 15 on SP218328 and One Thousand Dollars ($1,000) each for Lot 1 on SP218328 and Lot 1 on MPH 33483 affected and an overall amount of Three Thousand Five Hundred Dollars ($3,500) for legal and valuation fees applicable to all these lots. A further figure of 10% in accordance with s.281 of the MRA is also included. The total figure (rounded) amounts to Twelve Thousand Six Hundred Dollars ($12,600). It is ordered that this amount shall be paid within two (2) months of the renewal of the mining lease. BR O’CONNOR JUDICIAL REGISTRAR -- 5 of 5 --