Affinis Pty Ltd v Harth & Ors [2007] QLRT 90

LAND AND RESOURCES TRIBUNAL QUEENSLAND CITATION: Affinis Pty Ltd v Harth & Ors [2007] QLRT 90 PARTIES: In the Matter of Mining Lease 5771. Determination of compensation payable by Affinis Pty Ltd to Norman Francis Harth, Gary Colin Vincent & Kim Ellen Vincent, and Diane Garratt-Johnson FILE NO: MLC153/06 PROCEEDING: Application for determination of compensation DELIVERED ON: 17 July 2007 (Ex tempore) DELIVERED AT: Rockhampton HEARING DATE: 16, 17 July 2007, Rockhampton MEMBER: Smith DP ORDER/S: 1. Compensation payable to each of the landholders determined as follows: “ASSESSMENT – Mr N Harth Section 281(3) Total Loss 1 hectare @$7,000.00 per hectare $ 7,000.00 Injurious Affection 6.5 hectares @ $7,000.00 per hectare x 25% $ 9,625.00 $16,625.00 Section 281(4)(e) 10% of $16,625.00 $ 1,662.50 Total $18,287.50 ASSESSMENT – Mrs D Garratt-Johnson Section 281(3) Total Loss 1 hectare @ $7,000.00 per hectare $ 7,000.00 Injurious Affection 9 hectares @ $7,000.00 per hectare x 25% $15,750.00 $22,750.00 Section 281(4)(a) 10% of $22,750.00 $ 2,275.00 Total $25,025.00 ASSESSMENT – Mr G Vincent and Mrs K Vincent Section 281(3) Total Loss 1 hectare @ $7,000.00 per hectare $ 7,000.00 Injurious Affection 8.32 hectares @ $7,000.00 per hectare x 25% $14,560.00 $21,560.00 Section 281(4)(a) 10% of $21,560.00 $ 2,156.00 Total $23,716.00”[at38] -- 1 of 14 -- 2. Orders made that, should any party wish to make application for declarations as to the scope of the compensation determinations, or seek orders for costs, including indemnity costs, any party seeking such declarations and/or orders for costs shall file and serve comprehensive written submissions by 4pm 10 August 2007. Any party wishing to respond to any such submissions is to file and serve comprehensive written submissions in response by 4pm 17 August 2007. Any written submissions in reply are to be filed and served by 4pm 22 August 2007. Further, should any party desire that additional submissions be made orally, they must file and serve a notice seeking same, together with reasons as to why the Tribunal should hear oral submissions, by 4pm 17 August 2007. (at [41]) CATCHWORDS: COMPENSATION – MINING LEASE RENEWAL – ASSESSMENT OF COMPENSATION – TOTAL LOSS – EXPLORATION – DETAILS OF MINING PROGRAM – EXPERT EVIDENCE – CONSENT FOR IMPROVEMENTS – SUBDIVISION – IMPLIED CONSENT – UNDERGROUND MINING – DETERMINATION BASED ON EVIDENCE OF PROPOSED MINING PROGRAM Mineral Resources Act 1989 ss 10,279(5), 281, 283A QCoal & Others v Watts [2006] QLRT 115 referred to Bakhash & Monize [2003] QLRT 133 referred to Salmon v Armstrong [2001] QLRT 72 referred to COUNSEL: A.C. Barlow instructed by Grant & Simpson solicitors, for Gary Colin Vincent & Kim Ellen Vincent, and Diane Garratt-Johnson, respondents SOLICITOR/S: D. White of McCullough Robertson, for Affinis Pty Ltd, the applicant A. Palmer of Rees R & Sydney Jones, for Norman Francis Harth, respondent [1] I have before me three matters relating to the determination of compensation with respect to three separate landholders regarding the determination of compensation for Mining Lease 5771. The matter comes about because of a referral to the Tribunal by the Mining Registrar pursuant to s.279(5) of the Mineral Resources Act 1989. [2] The position with respect to this application for a renewal of the Mining Lease can be summarised as follows. The current applicant for the Mining Lease, Affinis Pty Ltd, seeks the renewal of Mining Lease 5771. This Mining Lease expired on 31 May -- 2 of 14 -- 2006 after a term of 21 years which had also been renewed from an original grant for a term of 11 years from 1 June 1974. The original holder was Mount Isa Mines Limited, which transferred its interests to Peko-Wallsend Operations Ltd on 30 August 1979, which in turn transferred its interests back to Mount Isa Mines Limited on 1 July 1985, which then transferred its interests to Affinis Pty Ltd on 20 October 1987. [3] What does not necessarily become apparent is that although Mining Lease 5771 has been in the name of Affinis Pty Ltd since 1987, a major corporate re-structure regarding the applicant occurred in the last few years as a result of receivers and managers being appointed to the company and a new financial structure arising thereafter. This has particular relevance to the evidence by Mr Kohler on behalf the applicant as his position has arisen with the applicant since about 2005 as part of the new structure. It is as if we are dealing with two distinct entities, a new Affinis and an old Affinis with respect to the activities. This will become particularly relevant when I refer to activities that occurred in the mid 1980s at the last renewal of the mining lease. [4] There are three landholders with respect to the land before me. Other landholders also fall within the bounds of Mining Lease 5771 but compensation with respect to each of those landholders has already been agreed between those parties. The landholders currently before me are Mrs Garratt-Johnson, Mr and Mrs Vincent and Mr Harth. For the bulk of this decision I will simply refer to the landholders as a generic term as many of the principles in the decision in this matter apply equally to all of them but in an examination of the relevant cases of each landholder I will make specific references to differences where relevant. [5] By way of background it is necessary to understand what has occurred physically on the land of Mining Lease 5771. Prior to 1985 the bulk of the land was contained within one single parcel of land. At about the same time as the Mining Lease was renewed in the mid 1980s the then owner of the land applied to the Livingstone Shire Council for subdivision of the land into what were to become rural residential home sites. The three landholders before me each hold as at today's date one of those home sites. In the case of Mr Harth he is an original purchaser of the subdivision from the 1980s. Mr and Mrs Vincent are relatively recent purchasers having purchased the property by contract of sale dated December 2003. [6] The position with respect to Mrs Garratt-Johnson is again somewhat different in that her husband was an original purchaser of the subdivided land in the 1980s. Due to reasons explained in her affidavit material the property was transferred to her father and then in the last couple of years transferred to herself. However, as has been made clear from her evidence, she has resided in a home built on that property since not long after the subdivision of the property occurred when it was in her husband's and then her father's name, so she is a recent property owner but a long term resident of the land subject to her matter. [7] One point has immediately arisen as a point of contention between the parties, and that is whether or not there has been any consent given by the miner to the construction of the dwelling houses on the land. I will deal principally with this point later. For reasons that I hope become obvious, the issue of consent may not turn out to be as fundamental as the parties otherwise may think. -- 3 of 14 -- [8] When considering matters of compensation the authorities make it clear that what the Tribunal has to determine is, in effect, a determination of equivalence, that is putting the landholders into a position by financial return by way of a determination of compensation to return them to the position they would have been in had the mining lease not been granted1. That of course is a simple statement to make but the facts of this case unfortunately make the determination somewhat more unusual. It is also clear that in determining compensation the tribunal has to follow as a matter of law s.281 of the Mineral Resources Act 1989 and in particular s.281(3)(a). In making this determination and doing so ex tempore before the parties today I have specifically taken into account and considered each of the heads set out under that provision in arriving at my determination of compensation in each matter. Section 281(3)(a) of the Mineral Resources Act 1989 provides as follows: “s.281 (3) Upon an application made under subsection (1), the tribunal 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” [9] Some issues of credit arose in this matter with respect to each of the witnesses so I think it appropriate that I take a moment to consider my views on the reliability of the evidence of the parties in this matter. I will turn first to the evidence of Mr Kohler for the applicant. I was impressed by Mr Kohler as a witness before this Tribunal. He attempted to answer questions in my view in a direct manner, although of course not always in a manner which was sought by the representatives for the landholders but that is to be expected. He did suffer though from a lack of any or any detailed knowledge of the activities of the applicant prior to his taking up a position with the applicant and I also note that he had not made overly great attempts to obtain information as to what had occurred in the company in decades past. However, what is clear to me from his evidence is that he is seeking without any ambiguity to recommence extractive mining operations on mining leases which have in his view fallen within a more economic climate due to the common ownership of Mining Lease 5771 and other surrounding mining leases. This has only occurred in the last few years. It is also clear in my view from the evidence of Mr Kohler, and I accept his evidence, that the mining company in seeking to undertake extractive mining on the mining lease has endeavoured to date to the greatest extent possible to conduct those activities whilst allowing the landholders to remain in occupation of their homes on their respective freehold titles. I rely particularly with respect to Mr Kohler on his evidence which is to be found at paragraph 37 of his statutory declaration of 19th April 20072 that to the best of his knowledge any ore extraction 1 See Bakhash v. Monize 2003 QLRT 133 @ paragraph 3 where I said “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 renewed. Of course, great care must also be taken to ensure that there is no “doubling up” of compensation.” 2 Exhibit V9. -- 4 of 14 -- undertaken on ML5771 would be carried out by conventional underground ore extraction methods at depths of 150 metres or more below the surface. Given the manner in which I intend to determine compensation in this matter this is one of the more crucial findings of fact that I make. [10] I now turn to the evidence of the landholders. With respect to Mr Harth who gave his evidence first I found him to be a down-to-earth, honest witness who simply told his account in the manner in which he best understood it. Mr Harth, Mr Vincent and Mrs Garratt-Johnson, and, of course, to an extent Mr Kohler, suffer under the complexities of the Mineral Resources Act which at times appears to be written in a way to serve as a distraction to highly skilled lawyers, let alone lay people who have to deal with matters such as this before the Tribunal. To the extent that any of the evidence of the landholders or Mr Kohler appears vague with respect to their understanding of compensation principles under the Mineral Resources Act, I accept that that vagueness does not come from any intention on any of those witnesses to deceive or mislead the Tribunal in any way, but simply from a lack of detailed legal understanding and doing the best they can to try to come to grips with compensation statements made in their respective names in a highly complex technical case. [11] I find the landholders Mr Vincent and Mrs Garratt-Johnson to be equally reliant as I do Mr Harth. There is an issue as between Mr Vincent and Mr Kohler regarding issues that may or may not have been said as between the parties, however, in my view what was or was not said at that time at the end of the day has no bearing on any determinations that I make of compensation in this matter and it's not necessary for me to make any finding as to who is the more believable with respect to that very, very limited aspect of the evidence. [12] Of course the principles of compensation have been the subject of many decisions before the Tribunal. I have had referred to decisions made by myself and also Deputy President Kingham and President Koppenol of the Tribunal. A vexed element of those decisions has related to when it should be considered that the grant of a mining lease for an extended period of time should be considered as a total loss of the land by the landholders. I was referred by Mr Barlow to my decision in QCoal & Others v Watts3 where I said: “Certainly, in instances such as the one at hand where the mining lease is proposed to be granted for a period of 30 years, the impact of the mining lease is significant and the land comprising the mining lease should be treated, as the valuers for the respective parties properly have, as if it were a full loss of such land for the full term of the respective leases. However, that is not always the case with respect to mining leases. Some mining leases are granted for very short period of time. In other circumstances, the mining activities to be undertaken on the land, unlike the significant open cut mining operations as proposed for the Sonoma coal project, may have little impact on the land. Instances such as alluvial gold mining immediately spring to mind. Further, it is common for mining leases, although over a relatively large area of land by terms of their grant, to be conditioned by their environmental authority so that disturbance can only take place to a relatively small amount of the mining lease area at any one time, such as 10 hectares. In such circumstances, it is quite usual for landholders to continue with their normal operations on the area of mining lease land not being disturbed by the miners, and numerous awards of compensation by this Tribunal have frequently taken such limitations on disturbance in environmental authorities into account.” 3 [2006] QLRT 115 @ paragraph 53. As Mr Barlow pointed out, although this decision was altered in part on appeal, this aspect is undisturbed. -- 5 of 14 -- [13] This aspect was also considered by myself in the matter of Bakhash & Monize4 where I said, at paragraph 18: “As the mining lease renewal is for a term of 21 years, applying standard valuation methodology, it is not appropriate to discount the per hectare amount as the Respondent effectively will suffer a total loss of the land the subject of the mining lease.” [14] When considering whether or not a lengthy period of a mining lease term should amount to a 100% loss on the part of the landholder, it is fundamental that reference has to be had to the nature of mining to be undertaken on the land. In the matter of QCoal the mining that was to be undertaken was an extensive open-cut mining operation. Likewise, in Bakhash the mining was on a relatively small area of land that could only feasibly be undertaken by substantial use of the surface, which was then deemed to be, in the absence of any other particulars by the applicant, full use of the surface of that land. So too in other mining situations referred to in various cases the nature of the sapphire or opal mining, or whatever it may be, is in the majority of those cases a surface disturbance either immediately of the whole of the land or a progressive disturbance of the whole of the land over a lengthy period of time. [15] It is argued on the part of the landholders that the absence of any particularity of what is to occur by the miner in this case means that the Tribunal should act on a presumption that the mining operation will be a complete take of the land and the landholder should be compensated as if they will be excluded from the land. I am not persuaded that a 100% allowance is appropriate in this case for reasons which I trust will become clear. [16] The miner comes before the Tribunal seeking unusual compensation and an unusual renewal of the mining lease. It is said by the landowners that the miner does not know what is going to occur on the mining lease and requires additional exploration work to be undertaken. This, to some degree, is also said on the part of the applicant miner. It is also contended by the landholders but not overly relevant to these proceedings that not much mining activity has occurred on the subject land over the past 30 or so years. This is relatively true. However, I note the following table of activities included in the evidence of the applicant:5 “Work conducted on the Deposit from 1986 to present includes, but is not limited to: (a) Geological assessment (1988) (b) Ore treatment assessment (1988) (c) Ore reserve and resource estimation (1988-1989) (d) Evaluation of the mount Chalmers Mine (1988)) (e) Re-logging of drill core (1988) (f) Evaluation and valuation of the Mount Chalmers Mine (1989) (g) Metallurgical testwork (1989) (h) Preparation of computer database and resources estimation (199201993) (i) Resource estimation (1994) (j) Exploration and resource delineation reverse circulation and diamond core drilling, including holes to provide fresh samples for metallurgical test work (1995) (k) Preparation of an environmental management overview strategy (1995) (l) Earthworks (1995-1996) (m) Recovery of historical geological data and mine production records, data validation, preparation of electronic databases, three dimensional modelling of mineralised zones and underground and open-cut mine workings, mineral resource and ore 4 [2003] QLRT 133. 5 Exhibit V9 paragraph 20. -- 6 of 14 -- reserve estimation, validation of resource estimates against historical production records (1995-1996) (n) Mining pre-feasibility studies, including open-pit optimisation, preliminary pit and mine design, mine scheduling, rock strength determinations and mill work and abrasion index estimates, ore specific gravity determinations, mineragraphic determinations, metallurgical test work and investigations into ore processing options, infrastructure requirement assessments, economic evaluation (1995-1996) (o) PhD thesis work on the Mount Chalmers deposit, including drill core logging and detailed geological assessment (1996-2001) (p) Geological field checking, data recovery and validation, preparation of electronic databases (2005-2007) (q) Erection of safety signage and fencing (2005) (r) Resource estimation (2005) (s) Geological reviews of the Mount Chalmers Project (2005-2006) (t) Interim plan of operations (2006) (u) Examination and checking of drill cores (2006) (v) Computer modelling of the Deposit, geological assessment and target generation (2005-2007) (w) Acquisition of satellite imagery, historical aerial photographs and regional digital elevation modes (2005-2007) (x) Preparation and validation of detailed digital elevation models over the mine area (2006) (y) Acquisition, reprocessing and interpretation of aeromagnetic, radiometric, induced polarisation and gravity geophysical datasets (2005-2007) (z) Operation of a water pump-back system for the Mount Chalmers pit, including the installation of a new pump and piping in 2005” [17] I also note that in seeking the renewal of a mining lease for what may be seen as being for exploration purposes, that exploration can be viewed as mining under the Mineral Resources Act and I note in particular the case of Salmon v Armstrong6 referred to by the applicant where Deputy President Kingham said:7 “It is also worth noting the objectors’ submission that it was inappropriate for a mining tenure to be granted to enable exploration work to be undertaken. The definition of “mine” in the MRA is sufficiently broad to encompass exploration activities. There is nothing in the plain meaning of the works or in the scheme of the MRA that persuades me that the differently described classes of activities should be exclusive of one another or that the definition of “explore” should be used to cut down the definition of “mine”. Indeed, if that approach were adopted, the prohibition on exploration tenures would prevent the holder of a mining lease from first determining which areas within the lease should be mined. This would be an absurd result.” [18] I agree with the landholders' representatives' submissions that the miner cannot simply sit back and say words to the effect of ‘pay compensation on a minimal basis for exploration only, and if mining is to occur, then later on we will go back and review the compensation.’ It is conceivable, as pressed by the representatives of the landholders, that in such circumstances the matter may not be a material change for the purposes of the legislation8 and therefore the actual elements of compensation as determined by the Tribunal may not necessarily be subjected to amendment. The Tribunal cannot proceed on the basis of a hypothetical situation but must determine compensation on the basis of the mining application before it and that mining application must be determined by reference to the evidence. 6 [2001] QLRT 72. 7 at paragraph 19. 8 See MRA s 283A(1)(b). -- 7 of 14 -- [19] I can only make sense of a determination of compensation in this matter by therefore making very formal determinations as to the elements of mining that are to occur on the subject land for the next 21 years and to determine compensation with respect to those determinations of fact. Taking into account fully the evidence of Mr Kohler I find that the compensation to be paid in each of these matters relates to mining activity which will involve firstly the drilling of boreholes for testing purposes on the surface of each block of land and that that activity will occur in the 12 to 18 months following renewal of the mining lease by the Minister. I then proceed with my determination on the basis that the applicant will undertake underground mining operations with respect to the mining lease area contained under each of the landholder's area of land by gaining access to such areas of land from an area near or substantially near the existing large pit contained off the current properties of the landholders. As such I have no evidence before me and specifically make no determination of compensation that there will be any access to underground mining shafts from any of the landholders’ properties from the surface. I trust I have made that clear but to remove any doubt my finding is that the applicant by its evidence will conduct after it has concluded its pre feasibility and other preliminary activities underground mining accessing each of the areas of mineralisation under the three properties by way of underground shafts which have their point of origin at a place within a mining lease holding of the applicant off the surface area of the land of the landholders. [20] I also specifically note the evidence of Mr Kohler that he has no intention of disturbing the residences and lifestyle of the landholders, at least to the greatest extent possible. Of course drilling of boreholes on the surface must have some impact on the life of the landholders and that was essentially acknowledged by Mr Kohler. For the purposes of determining compensation therefore I have considered that a total area probably not more than .5 of a hectare as a cumulative amount for each property holder will be disturbed by the applicant on the surface of each landholder's property. However, out of an abundance caution and due to the lack of precision by the applicant I have rounded that amount up to one hectare, so my finding of fact is that over the period of 21 years for the term of renewal of this mining lease the renewal applicant will disturb an area of no more than one hectare of the surface of each of the properties, leaving aside the slag heap moonscape area of the Vincent property and to a lesser degree the back of Mr Harth's property. I am talking purely about currently undisturbed areas of the landholders' land to make that also clear. In making a determination that no more than one hectare will be disturbed on each of the landholder's land I find that the loss of one hectare aggregated for each landholder will be a total loss for the period of the mining lease and that the losses occasioned by that one hectare of surface activity takes account of bore drilling activities, access to and from various parts of the mining operations of the applicant by conventional, including four-wheel drive vehicles but not mine haulage vehicles, and the resultant noise that may flow from those areas. [21] Whilst I have for the purposes of this determination of compensation taken into account one hectare of total loss of the surface of each landholder's land for a period of 21 years, it is also clear to me that there will be other impacts on the surface of the landholders' land and that impact comes in two ways. Firstly, there will be instances of dust, noise and other nuisance to the balance of the properties. For the bulk of the time, as has been the case I believe from the evidence of the landholders themselves for the last 21 years, this impact is relatively minimal. However, were mining -- 8 of 14 -- activities to be fully undertaken in an underground capacity with access as I've mentioned off site I still anticipate there would be some degree of movement of vehicles on the surface of the land for various activities as would normally be required by a mining company undertaking underground mining in the particular aspects of this case, and that such activity, being the bringing-on and positioning of bores and drills onto various parts of the land; no doubt monitoring of earth movement and perhaps the effects of mining operations underground etc.; and moving of vehicles around the land; will have an adverse impact on the balance areas of the land to some extent and will also, with respect to those areas of the land which are not covered by the mining lease but still held by the landowners, in particular that land of Mr Harth, create a degree of injurious affection to the balance land even though that is only relatively slight. [22] I also accept that in undertaking underground mining under the land of the landholders that there will be a further loss occasioned by each of the landholders for blot on title (sometimes referred to under the head of diminution of the value of the land of the landholders). The general perception in the marketplace as confirmed by the experts is that there is a reduction in the perception of the value of land when underground mining activities occur under that land, although I believe that the perception is not necessarily equal to reality particularly when that underground mining occurs in a relatively hard rock situation. A pillar form of mining is to be undertaken in this case and not the long wall form of mining which causes major subsidence of the surface areas of the land and I should make it clear, if I didn't earlier, that the form of underground mining which the applicant has indicated, and I so find, will be carried out on the respective land is not long wall mining which would cause major impacts to the surface of the land but mining by way of pillar and post which I find for the purposes of this determination is done on the assumption that there will not be any subsidence to the surface of the land and if any subsidence did occur in the future that would be a matter which I believe could be referred back to the Tribunal under the provisions of the MRA. [23] There is sales evidence of a property immediately adjacent to the property of Mrs Garratt-Johnson. Those sales on their face would give the indication that the existence of the mining lease (which also impacts the sale property) has had very little impact on the market. I accept the evidence of Mr Compton that the purchasers of each of those sales were not, as he referred to them, well informed purchasers and that they proceeded with those purchases on the assumption that they were dealing with mining leases that had very little impact on the land. It makes it very difficult to quantify just what the market is saying about the impact that this form of mining has on the value of the properties which is certainly a shame because following normal valuation methodology one could normally go to no better an authority than the sale of a property on the same mining lease being very close to the same time as the determination of compensation had to be made, but on the specific facts of the history of mining in this area and these particular mining leases and the lack of extractive mining operations for a lengthy period of time I do find and agree with Mr Compton that those sales have not necessarily reflected the reduction that one would have anticipated would be made had there been an active mining operation on the land. [24] The question of how one accepts or does not accept valuation evidence, as I've not yet dealt with Mr Compton apart from the limited sense above, or Mr Craig, is -- 9 of 14 -- always a moot one for either this Tribunal or the Land Court or any other Court that is seized with determining issues of compensation for impacts of actions on land. When the complexities of the Mineral Resources Act are added to the very unusual facts situation that I have before me the task of Mr Compton and Mr Craig falls from the difficult and imprecise science that valuation expert evidence can be to almost the near impossible. This was particularly so with respect to Mr Craig who, although being put under fair but somewhat sustained criticism by the landholders' representatives, did proceed I believe on the basis of an expert doing the best he could on the instructions he received to consider varying scenarios. Unfortunately of course, the scenario that I am finding in this case doesn't necessarily accord well with the varying scenarios that he was given to consider. [25] In like manner Mr Compton's evidence also carefully considered from a valuation perspective the impact that he believed this mining lease could have, but he also suffered from the lack of particularity of impacts that may or may not occur by mining operations on land. Both valuers quite properly indicated in answers under cross-examination, as I would expect them to, that the level of impact and therefore compensation payable would clearly be subject to the disturbance that occurred on the actual land and their instructions, and I make no criticism at all of the instructing solicitors in this regard to the valuers, by necessity were limited in the manner in which the valuation evidence could be obtained. I think they each did the best they could do with the hand they were dealt on the facts of this case. [26] After that rather lengthy analysis of the principles and evidence in this matter it is time to put figures to the conclusions of facts I have made but to do this I run into another problem, and that is the impact of the mining activities on whether or not consent has been given to the building of the homes on the surface of the land. This is, as I have mentioned previously, one of the vexed points of this decision. In many respects what I am being called upon to do is to make assumptions on what must have occurred or been implied to have occurred by each party in this matter, but to make those assumptions really in the absence of a detailed knowledge and evidence of what has happened in the past. In making that reference I refer specifically to what occurred in 1985 which I do see as relatively crucial were surface mining to be undertaken and the houses to be demolished, but as I have not found that to be the case then in many ways it becomes only a moot point but one which I still must address. It strikes one as peculiar that negotiations could proceed between a landholder and a mining company for the renewal of a mining lease over a large area of land at the same time as the landholder was making application to the local authority for subdivision of that land. In many respects the mining lease applicant as currently structured is the unfortunate beneficiary of the circumstances that arose back from 1985 because whatever was said between the parties at that stage will, I doubt, ever be known by any of the parties before this Tribunal. [27] The consequences of the activities by both the miner and the then landholder have had a crucial impact on this case coming before the Tribunal today. The actions of the landholder in seeking a subdivision of the land into rural residential lots resulted in the current landholders or their predecessors in title, purchasing blocks of land on which they believed they could build a residence. All evidence that I have before me shows that they obtained the services of a solicitor in undertaking that conveyance. I do not understand how the shire council proceeded to make the subdivision at a time that the land was subject to a mining lease which was itself at that stage subject to a -- 10 of 14 -- renewal application, nevertheless the council did. This has led to a chain of events which then resulted in land being put up for sale and purchased by landholders. Their position then in purchasing the land and proceeding to build their homes on that land is eminently understandable. However, at law what is understandable and what are the provisions of legislation do not necessarily follow. The manner in which the landholders in the 1980s conducted their conveyance of the land must raise questions for the legal profession in the manner in which solicitors acting in property conveyances undertake their searches of encumbrances to land or other blots on title on that land which are easily identifiable by search. [28] The land in question is contained within a district that has been the subject of mining for the best part of a century. A qualified solicitor conducting a proper transfer should have undertaken searches of the Department of Mines, in whichever form it happened to be named at that stage, as to the existence of mining leases or exploration permits or the like on that area of land and provided advice to the landholders accordingly. Of course a mining lease does not create an estate or interest in land as is clear from both the terms of the mining lease itself and the provisions of the Act9 and therefore the undertaking of a simple freehold title search will not reveal the existence of a mining lease, but that does not alter the fact that a mining lease is in existence. [29] The landholders then proceeded to have title given to them on a subdivided area of land with permission by a local authority to construct a residence and they then proceeded to obtain the consent of the local authorities as any other landholder would normally do to build their residences; again a completely understandable situation but a situation which was founded upon a wrong legal presumption that they could go and build a building on a mining lease without having to obtain the consent of the mining lease holder. The complexities of this matter though do not end there and that is because by the actions of the miner over the very lengthy period of this mining lease at no stage has anything that I can see on the evidence ever occurred to give the landholders any cause for concern as to the building of their buildings upon their land up until the recent time of the applicant determining that it wanted to proceed to extraction of mineral from Mining Lease 5771. [30] I find it virtually impossible because of a lack of evidence to determine if there was a formal consent given by the original mining lease holder in 1985 to the then landholder for the rural residential subdivision to occur. I find that each of the homes were built out of ignorance of the existence of a mining lease at the time, and therefore that construction occurred on their part without the consent of the mining lease holder. I also find that the mining lease holder has in the past 20-something years conducted itself as if it acquiesced to the existence of the buildings on the subject land. [31] Out of this myriad of findings must come a determination of compensation. The matter would be in my view particularly vexed if the mining operations to be undertaken were that of open-cut mining with the necessity to destroy the dwellings. In that circumstance a finding of compensation for the loss of the homes would then have to be determined and it would be necessary for me to determine as a matter of law if compensation was payable for the loss of the homes. However, in the confines of the facts as I've specifically found them to be, I find that none of the mining 9 See MRA s 10. -- 11 of 14 -- activities on the renewed lease (given the mining program to be undertaken by the miner on the land) will cause the landholders to be removed from the land or from their homes. I also specifically find that the residences of the landholders and the land immediately surrounding those residences will not be the subject of the one hectare of specific surface disturbance that I have referred to earlier that will occur on the surface by drilling. In lay terms, the compensation is determined on the basis that a drilling rig will not drill a borehole through the floor of a residence down to a depth of some hundreds of metres under the residence nor will it drill through the playground equipment of a child close to the residence but will proceed at a distance somewhat removed from the residences so as to minimise the disturbance and the impact of such activity on the living areas of the landholders. Given the nature of that finding and the convoluted state of affairs regarding consent or otherwise to the creation of rural residential home site land which by its very creation forms, accepting the valuation evidence of each of the valuers, a material change in the value of the land even without the existence of a residence and the difficult question of consent that then flows but given the lack of open-cut mining and impact on the residences, I have determined to accept the evidence of Mr Compton that the value of the land of each of the landholders should be valued at $7,000 per hectare with respect to the land that will be subject to a total loss for the period of 21 years and that that land specifically with respect to complete loss will not include the area of the residences for the surface but specifically does include the area of land with respect to underground mining activities on the land. [32] In simple terms, compensation is determined on the basis that the miner will conduct underground mining activities even under the homes at a depth of 150 metres but will not drill through those homes in order to access any of the mineral or testing to reach that mineralisation. [33] In considering the impact of the mining lease on the balance areas of the land, there are a number of competing considerations in this matter which remove it somewhat from all of the previous considerations that I am aware of that have been made by the Tribunal in like compensation matters, that is that the area of land to be disturbed as I've mentioned I expect to be more like half a hectare or less on each but I've allowed up to one hectare, that disturbance will be relatively minor in that it is by way of drilling and access of vehicles across the land for pegging and other like matters or for accessing other areas of the tenement held of the landholders' area. The impact will also include impact by way of underground mining for the whole area of the mining lease for each of the landholders and the existence of underground mining does have an impact or a diminution or blot value for the land. [34] I have attempted but failed to find various different percentages to take into account each of the components of percentage of loss that may be occurred in each of those factors but have instead decided to determine it from an all-up figure and in so doing I also do not take into account or accept a value of the properties as rural residential but as rural land at a value of $7,000 per hectare. [35] Taking into account all impacts on the balance area of land with respect to the area of each mining lease and in particular with respect to the Garratt-Johnson property, including the small balance area of land which is to be severed which I also take as being a loss by way of injurious affection and I apply the same rates for that. By way of simplification it's only a small area of land. I consider that an appropriate -- 12 of 14 -- percentage to apply will be 25%. This has the following result and I will deal with figures that I have prepared for Mr Harth's land but again the decision will more or less stop at this point and this is where I'll ask each of the parties to make orders consistent with the determination I'd make at this point but I'll assist you. Don't worry, I'm not letting you try to delve into my mind as to what I'm getting at. [36] The manner of compensation is as I see it for the Harth's property but I may have made some errors on some of the areas. There is a 100% loss of one hectare at a rate of $7,000, $7,000 loss. The balance area of land is therefore 6.5 hectares at $7,000 at 25% which equals $9,625 making a total of $17,625 to which I also allow an additional amount of 10% which is an amount of $1,663 rounding it up, so with respect to the Harth's property the assessment of compensation I believe would be the total sum including the extra amount of 10% of $18,288. Very similar figures would flow with respect to the Garratt-Johnson land and the Vincent land. For the Garratt-Johnson land the balance area taking off one hectare as being the total area of their land with injurious affection applying at the same ratio for the very small parcel of severed land. With respect to the Vincent land the figures are to apply to the balance area of land not including the area of land that is subject to the current spoil. I haven't specifically previously found but I will say now that the Vincents in purchasing the land purchased the land with the existence of that spoil there and that would clearly have been a matter that should have been taken into account in the purchase price of that land that had been subject to compensation to a previous landholder. I think in the general perceptions I can do no better than the valuers themselves who valued that area of land at nil in their valuations so I don't intend to disturb those values. [37] [Deputy President Smith, due to the late hour, and with the concurrence of the parties, then made orders requiring the parties to provide to the tribunal compensation tables for each landholder prepared in accordance with the above decision and following the methodology as set out for the Harth property, with relevant adjustments. Each party subsequently provided tables the following week.] [38] [Subsequently, the following orders were made]. The orders of the Tribunal with respect to compensation payable to each of the landholders, taking into account the tables provided by each party, and, in circumstances where there are differences in the tables, preferring the tables of the applicant miner, are as follows: “ASSESSMENT – Mr N Harth Section 281(3) Total Loss 1 hectare @$7,000.00 per hectare $ 7,000.00 Injurious Affection 6.5 hectares @ $7,000.00 per hectare x 25% $ 9,625.00 $16,625.00 Section 281(4)(e) 10% of $16,625.00 $ 1,662.50 Total $18,287.50 ASSESSMENT – Mrs D Garratt-Johnson Section 281(3) Total Loss 1 hectare @ $7,000.00 per hectare $ 7,000.00 Injurious Affection 9 hectares @ $7,000.00 per hectare x 25% $15,750.00 $22,750.00 Section 281(4)(a) -- 13 of 14 -- 10% of $22,750.00 $ 2,275.00 Total $25,025.00 ASSESSMENT – Mr G Vincent and Mrs K Vincent Section 281(3) Total Loss 1 hectare @ $7,000.00 per hectare $ 7,000.00 Injurious Affection 8.32 hectares @ $7,000.00 per hectare x 25% $14,560.00 $21,560.00 Section 281(4)(a) 10% of $21,560.00 $ 2,156.00 Total $23,716.00” [39] Mr Barlow had sought that declarations be made as to the activities to be undertaken under the Mining Lease for the purposes of the determination of compensation. I indicated that, “if there can be any words reached between the parties which give each of you comfort I will certainly consider those”10. It is apparent that no agreement has been reached. Accordingly, as I indicated to Mr Barlow, I will take submissions from the parties. [40] There have also been limited submissions made by some of the parties as to orders for costs, including on an indemnity basis. [41] In the circumstances, should any party wish to make application for declarations as to the scope of the compensation determinations, or seek orders for costs, including indemnity costs, any party seeking such declarations and/or orders for costs shall file and serve comprehensive written submissions by 4pm 10 August 2007. Any party wishing to respond to any such submissions is to file and serve comprehensive written submissions in response by 4pm 17 August 2007. Any written submissions in reply are to be filed and served by 4pm 22 August 2007. Further, should any party desire that additional submissions be made orally, they must file and serve a notice seeking same, together with reasons as to why the Tribunal should hear oral submissions, by 4pm 17 August 2007. 10 Transcript of decision, 17 July 2007, p13. -- 14 of 14 --