Donovan v Struber & Anor [2007] QLC 118

LAND COURT OF QUEENSLAND CITATION: Donovan v Struber & Anor [2007] QLC 118 PARTIES: Gary Awarua Donovan (applicant) v Stephen Roy Struber and Dianne Wilson-Struber (respondents) FILE NO: MLC00154/2007 PROCEEDING: Application to determine compensation DELIVERED ON: 30 November 2007 DELIVERED AT: Brisbane MEMBER: Mr FW Windridge, Judicial Registrar ORDERS: 1. Compensation determined at $210. 2. Such compensation to be paid by the miner to the landowner in the sum of $105 within 90 days of notification of the grant of the mining lease, with the balance of $105 to be paid on or before 1 January 2013 unless the lease is sooner cancelled or surrendered. CATCHWORDS: Compensation – mining lease – stream bed – grazing property Mineral Resources Act 1989, s 281 Smith v Cameron [1986-1987] 11 QLCR 64 Shaw v Heritage Holdings Pty Ltd (1992-93) 14 QLCR 139 Mitchell v Oakhill and Mitchell (10 March 1998) unreported APPEARANCES: Not applicable - Heard on the Papers [1] This is an application under section 281 of the Mineral Resources Act 1989 (MRA) for the determination of compensation for the effect upon the respondent landowners -- 1 of 6 -- (Struber and Wilson-Struber) of the proposed grant of the applicant’s mining lease number 20439 in the Mareeba District. [2] The lease is located on Lot 2 on CP910619 for mining and access, and partly on a Road Reserve (for mining) and Lot 4567 on PH1696 (for access). Compensation to be determined is that part of the mining lease that is on land held by the respondent landowners Struber and Wilson-Struber. The actual area of the lease is 3.2922 hectares. For convenience and ease of calculation, I round off the area to 3 hectares. [3] The parties have been unable to resolve the issue of compensation, and the matter has been referred to the Tribunal (as it then was) for determination. Whilst it is within the power of the parties to come to agreement on any issues, the power of the Court (as it now is), is limited to Section 281 of the MRA. [4] The Land and Resources Tribunal has given directions in relation to submissions, and this matter has been dealt with on the papers. The landowner has not lodged a submission. It is not the function of the court to seek or provide evidence for any party. The applicant miner has lodged a short written submission in which he refers to a number of matters. It is not the function of the Court to go on a hunt for evidence to justify any determination when that evidence is not supplied for consideration. However, a mining Lease Report has been supplied as part of the material forwarded by the Registrar, and I also have access to a QVAS report relating to the valuation of the property effective from 30 June 2005. For the purpose of accuracy, I have referred to those documents when necessary. No site visit has been conducted although a general inspection of the area will be conducted in 2008 when climatic conditions are favourable. The miner seeks an initial term of 25 years. Given the area involved and the method of operations, this appears to be a long term, but the term may be justified if the lease is used for future reserves. Compensation [5] Relevantly, section 281(3)(a) requires the Tribunal to settle the amount of compensation an owner of land is entitled to as compensation for: “(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; -- 2 of 6 -- (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”. [6] Section 281(4) enables various additional factors to be included in the compensation determination. In the present case, only paragraph (e) is relevant. It provides as follows: “(4) In assessing the amount of compensation payable under subsection (3)— … (e) an additional amount shall be determined to reflect the compulsory nature of action taken under this part which amount … shall be not less than 10% of the aggregate amount determined under subsection (3).” [7] The matters which must be considered by the Court are set forth in section 281(3) of the Act. Although section 281 sets out the matters to be considered, it does not define any method of assessment. Whilst the Court is only bound by the relevant legislation (i.e. section 281), the following past appeal cases offer some guidance as to methodology to be used in arriving at a determination. In Smith v Cameron [1986- 1987] 11 QLCR 64, the Land Court held at p. 74… “The section in my option 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.” [8] 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.” [9] In considering Mitchell v Oakhill and Mitchell (10 March 1998) unreported, The President of the Land Court, referring to section 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.: [10] In this instance, I have no evidence of the area of land contained in the lease that is within the banks of any stream, or that part of the lease area that is contained in the -- 3 of 6 -- holding as against that part of the lease area that is part of the road reserve. It is the responsibility of the miner to submit such information for consideration. Normally the bed of a stream would be valued less than adjoining banks. [11] There is no evidence of the dimensions of access. [12] Deprivation of possession: Technically, grant of the lease does in law deprive the owner of the use of that surface area that is within the lease boundary. Apart from taking water or exercising the right to depasture stock (if pasture does exist), the surface of the stream bed is of little use by the landowner of the adjoining land. [13] Diminution of value: There is no valuation evidence to consider. It is difficult to find any significant reduction of value if a periodical alluvial operation is conducted in the stream bed. [14] Diminution of use: There is no evidence of diminution of use. Again, if alluvial ground in the stream bed is being worked, there is little diminution of use by the landowner. [15] Severance: There is no evidence that the grant of this lease will cause severance of one part of the property from any other part of the property. I make the assumption that the plan of operations restricts the mining operation to the alluvium confined by the stream banks. [16] Surface rights of access: There is no evidence of any loss of land in the surface right of way. [17] Loss or expense: There is no evidence of any other loss or expense that will occur because of the grant of the lease. [18] Additional 10%: In respect of s. 238(4) (e), no submissions were made. There does not appear to be any reason or special circumstance why the premium should be increased, and therefore no more than the statutory 10% should be added to the general award. -- 4 of 6 -- Determination [19] With the material supplied by the Registrar is a Property Details Report from QVAS. This report indicates the total area of the property is 125640 hectares and for rating purposes is valued at $650.000 unimproved, effective as at 1/10/2005. This equates to a per hectare value of $5.1735. The open market price may well be higher than this valuation. In my opinion, there will be a negligible effect, if any at all, on the management of the pastoral holding. Principally, only the alluvial material in the stream bed will be disturbed. This disturbance will be minimised and returned to natural contours as soon as the stream suffers flooding. I am not satisfied that any award other than a nominal award is justified, given the lack of valuation evidence. However, I am of the opinion that the information gained from the QVAS Report gives some support to a valuation of about $5 per hectare. The applicant miner seeks a lease of about 3 hectares. At $5 per hectare, this equates to $15.00 per year. For a term of 25 years, this calculates to a total of $375. While the rate per hectare may appear to be low, I take into account that only the stream alluvium is to be mined and processed, and some discounting is warranted for this fact. I factor in a discount rate of 50% due to the nature of the country and the method of mining. Should the lease be terminated before expiration of the full term, the landowner has the financial benefit of some overpayment. This compensates for other factors and any increase in market value. Having regard to the foregoing, I determine compensation at the rate of $5 per hectare for a term of 25 years on 3 hectares, with discount as referred to above. (a) Deprivation of possession (s. 281(3)(a)(i)) 3 ha @ $5.00 per ha per year for 25 years, Discounted by 50% $187.50 (b) Access (s.281 (3) (a) (v) nil (c) Additional 10% (s.281 (4) (e)) $ 18.75 TOTAL: $206.25 [20] I round off this determination to $210. There was no submission in relation to the times, terms and manner of payment from the landowner. The miner submits that payments should not be in advance in full as the lease might be mined out within 10 years. Due to the quantum involved, I consider that payment of compensation should be in two payments as follows: -- 5 of 6 -- [21] The sum of $105 within 90 days of notification of grant of the lease by the Registrar, and the sum of $105 on or before 1 January 2013 unless the lease is surrendered or cancelled prior to that date. FW WINDRIDGE JUDICIAL REGISTRAR -- 6 of 6 --