Ellis & Anor v Struber & Anor [2010] QLC 65

LAND COURT OF QUEENSLAND CITATION: Ellis & Anor v Struber & Anor [2010] QLC 65 PARTIES: In the matter of Mining Lease No 20339 – Application by Raymond Kenneth Ellis and Paul David Ellis for determination of compensation payable to Stephen Struber and Dianne Wilson- Struber FILE NO: MRA490-09 PROCEEDING: Application for determination of compensation DELIVERED ON: 9 April 2010 DELIVERED AT: Brisbane MEMBER: Mr PA Smith ORDERS: 1. Total compensation awarded under all heads in the sum of $3850. 2. The miner pay the compensation of $3850 to the current landowners by way of instalments, the first instalment being in the sum of $1000 within a period of three months from notification of grant of the mining lease by the Mining Registrar, a further payment of $1000 on the third anniversary date of the grant of the lease, a further payment of $1000 on the sixth anniversary date of the grant of the lease, and the balance of $850 on the eighth anniversary date of the grant of the lease. CATCHWORDS: MINING LEASE – DETERMINATION OF COMPENSATION Mineral Resources Act 1989, ss 279, 281 Smith v Cameron [1986-87] 11 QLCR Shaw v Heritage Holdings Pty Ltd [1992-93] 14 QLCR Mitchell v Oakhill and Mitchell (10 March 1998) unreported Re Fitzgerald & Anor and SR Struber & Anor [2009] QLC 0076 APPEARANCES: Not applicable – Heard on the Papers -- 1 of 6 -- 2 Background [1] The applicants Raymond Kenneth Ellis and Paul David Ellis (the miner) seeks the grant of Mining Lease 20339 in the Mareeba District for a term of 10 years. The lease is over an area of 35 ha. [2] The application was recommended for grant by a decision of the Land Court of 4 November 2009.1 [3] The lease is located on Palmerville Holding which is owned by Stephen Struber and Dianne Wilson-Struber . A grazing operation is conducted on the property. MRA [4] Section 279 of the Mineral Resources Act 1989 (“MRA”) provides that a mining lease shall not be granted or renewed unless an agreement in relation to compensation has been filed at the office of the Mining Registrar, or in the absence of such an agreement, a determination of compensation has been made by the Court. In this instance, no agreement has been lodged with the Registrar and the matter has been referred to the Court for determination. [5] The matters which must be considered by the Court are set forth in s.281(3) of MRA. Although s.281 sets out the matters to be considered, it does not define any method of assessment. In Smith v Cameron (1986) 11 QLCR 64, the Land Court held at p.74: “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.” [6] In Shaw v Heritage Holdings Pty Ltd (1992-93) 14 QLCR 139, the Court at p.146 said: “the method of assessment remains a matter which will be governed by the facts and circumstances of each case in which event emphasis may shift from one method to another.” [7] In considering Mitchell v Oakhill and Mitchell (10 March 1998) unreported, the then President of the Land Court, referring to s.281(3) of the Mineral Resources Act, found: “the latter section does not prescribe a method of assessment. In my view, as long as the amount of compensation finally determined sufficiently accounts for each of the matters referred to in the sub-section, it is not necessary to quantify an amount in respect of each of the matters referred to.” 1 See 2009 QLC 0158. -- 2 of 6 -- 3 The evidence [8] On 21 November 2009 the Court visited Palmerville Holding to inspect a number of mining application areas, including the one currently under consideration. The miner and Mr Struber were both in attendance, as was Mr Struber’s solicitor. [9] Each party has provided limited written submissions to the Court, and this matter has been dealt with on the papers. In these reasons I refer to the salient points but not all the evidence that I relied upon in making my determination. [10] As neither party provided the Court with formal valuation evidence to consider, the Court does not have that assistance in arriving at a determination. This situation is understandable as, due to the small area involved, the cost of a valuation would far outweigh any award for compensation. [11] Both parties in their submissions refer to previous determinations on Palmerville Station to support their contention as to compensation. The miner in particular has not appreciated is that in many decisions, little evidence was generally placed before the Court, particularly by the landholders. The miner has also failed to take into account the Fitzgerald decision of the Land Court in May, 2009 which followed a formal hearing in Cooktown, with both the miner in that matter and landholder providing sworn evidence to the Court.2 It is appropriate that I repeat some of my observations in Fitzgerald:3 “Principles of Compensation 11. It has often been stated that the principles of compensation under the MRA are littered with inherent difficulties relating to doubling-up; issues as to whether or not separate heads should be awarded as separate monetary sums under each provision in s.281 of the MRA; or whether an all-up sum should be determined taking into account all of the heads. I tend to agree with the observations of Member Scott of the Land Court in Wills v. Minerva Coal4 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.5 12. I concur with Member Scott's observations in that regard. I also note with approval the lengthy determination of compensation principles set out by then President Trickett of the Land Court in the case of Zimmerebner v. Hawkins & Ors.6 One problem that immediately springs to mind is that most of the case authorities deal with compensation for mining leases. The authorities regarding the amount of compensation to be determined for access are limited indeed. It is not surprising in circumstances where the authorities are limited and the terminology of the MRA is complex and the factual matrix of the matters under 2 See Fitzgerald v Struber[2009] QLC 0076. 3 At paragraphs 11-17. 4 (1998) 19 QLCR 297. 5 Horn v. Sunderland Corporation [1941] 2 K.B. 26 at 43 per Jacobs J. 6 (1999) 20 QLCR 71. -- 3 of 6 -- 4 consideration here are so unique that I have not had any valuation evidence placed before me and I have also had little evidence as to the actual value that should be applied to the particular land in question in this particular matter. 13. As Member Jones said in the case of Unimin Australia Limited v. Maurice and Tricia Freeman7:- "I realise that my determination of compensation in this case is a result of little more than calculated guesswork or speculation. However, in circumstances where the parties have elected to provide little or no material to the Court concerning their position about compensation there is not much more than the Court can do." 14. I accept of course that the parties in this case have certainly not provided no information to the court. However, in a pure valuation sense the actual evidence that would be appropriate in applying all valuation principles in order to arrive at the proper amount of compensation in this matter remains scant. Living in a time of uncertain economic conditions, rising costs and the expense of obtaining professional valuation reports, one can completely understand from both parties a reluctance to spend many thousands of dollars engaging expert valuation opinions which may indeed only tend to create differing opinions lengthening the time of hearing and lengthening costs for all parties in circumstances where the actual quantum that is being dealt with is in relative terms small. 15. It would be remiss of me to not refer to the case of Edwards v. Calmsden & Ors.8 That was a determination of compensation by myself in a mining lease access matter. Where the matter is of particular interest is found in paragraph [3] of the decision as follows. "The miner has submitted that there should be no or minimal compensation as the access is an ungazetted mining road which has been in existence for at least 40 years; the landholders conduct low intensity grazing; no grazing land will be impacted on by the road usage; and that the existing access is poor, with any upgrading work undertaken by the miner improving not diminishing the value of the land." 16. Unfortunately in that case the miner's submissions did not include any details of the length of access over the landholders' property which is indicative of many cases which I have had to determine compensation, particularly in my days in the Land and Resources Tribunal where the emphasis was almost always on compensation for the mining lease disturbed actual area and not for access. Having no idea of the size of the actual access in the case I have just quoted from, in that case I came to the conclusion that I could only award a nominal amount given that I had no idea if the access was 180 metres or 100 kilometres. The amount awarded in that case was $5 per annum for the term of the lease which equated to $100. 17. In other cases there have been similar difficulties in determining the quantum of compensation. For instance, in the matter of White v. Warner & Anor,9 there was also scant evidence as to what the actual access to be dealt with was and in that matter the award that was made for access which was across a property was again a nominal amount of $10 which led to a total compensation of only $310. I hasten to add that did not concern a mining lease application in this area of Queensland, but it does show the difficulties with determining the quantum of compensation for access and in this matter for variation of access. The competing issues that I have to take into account are these. On the one hand there are numerous miners using a road not unlike the circumstances in the matter I referred to where there had been an ungazetted road with mining access for 40 years and therefore leading to a nominal amount of compensation. The important point though is that compensation was awarded in that case, not no compensation as the miner had sought. The difficulty arose that I had no idea as to the length or width of that access.” 7 (2007) QLC 76. 8 [2007] QLRT 118. 9 [2007] QLRT 53. -- 4 of 6 -- 5 [12] Having considered all of the evidence in this matter; my view of the property; and my decision in Fitzgerald; I see no reason to depart from my determination of compensation in Fitzgerald. That is, the sum of $10 per hectare per year for the area of land covered by the mining lease, and the sum of $5 per hectare per year for access. Access [13] The next question to consider is that of compensation for access. I have no doubt that the landholders consider that they should receive compensation for access through Palmerville. This issue though was effectively decided by the Court in the Markett mining lease application for grant. In that decision, following a detailed analysis of historical documents, I determined that the bulk of the access to the mining lease was over a public road.10 That road goes directly past this application area. I also note that, by Government Gazette notice of 12 March 2010, certain land on Palmerville Station was resumed for road purposes. [14] From my view of the mining lease on 21 September 2009, it is clear that no access is required which is not over a public road. I therefore consider it appropriate to make no award for compensation for access. Determination [15] Having regard to all the circumstances, I consider that the following award will satisfy the requirements of s.281. I determine compensation under Part 7 of the MRA, to satisfy all heads of compensation set forth in subsection 3 of section 281 of the MRA, to be $10 per hectare per annum for the lease area of 35 hectares ($10x35x10) which equates to $3500.00, to which I award the additional sum of $350.00 under s.281(4)(e) of the MRA to reflect the compulsory nature of the grant of the mining lease resulting in total compensation under all heads in the sum of $3850.00. Terms of payment [16] In relation to the terms, conditions and times when payments should be made, I take into account the quantum of the order, the size of the mining lease and the period of the mining lease. In these circumstances, I order that the miner pay the compensation of $3850.00 to the current landowners by way of instalments, the first instalment 10 See 2010 QLC 0028, para 19-25. -- 5 of 6 -- 6 being in the sum of $1000 within a period of three months from notification of grant of the mining lease by the Mining Registrar, a further payment of $1000 on the third anniversary date of the grant of the lease, a further payment of $1000 on the sixth anniversary date of the grant of the lease, and the balance of $850 on the eighth anniversary date of the grant of the lease. Costs [17] Neither party has sought an order for costs and in this matter it is not appropriate that costs be awarded. Orders 1. Total compensation awarded under all heads in the sum of $3850. 2. The miner pay the compensation of $3850 to the current landowners by way of instalments, the first instalment being in the sum of $1000 within a period of three months from notification of grant of the mining lease by the Mining Registrar, a further payment of $1000 on the third anniversary date of the grant of the lease, a further payment of $1000 on the sixth anniversary date of the grant of the lease and the balance of $850 on the eighth anniversary date of the grant of the lease. P A SMITH MEMBER OF THE LAND COURT -- 6 of 6 --