Angela Mining Pty Ltd v Philipson [2006] QLRT 148

LAND AND RESOURCES TRIBUNAL QUEENSLAND CITATION: Re Angela Mining Pty Ltd & R. and L. Philipson [2006] QLRT 148 PARTIES: Angela Mining Pty Ltd (Applicant) & Ron and Leanne Phillipson (Respondent) FILE NO/S: AML191/03 PROCEEDING: Application to determination compensation for ML 10291 DELIVERED ON: 9 November 2006 DELIVERED AT: Brisbane HEARING DATES: 21 May 2004 (Charters Towers ) and on the papers PRESIDING MEMBER: Smith DP ORDER/S: 1. Compensation determined in the total amount of $1,500.00 [at 16] 2. Applicant to pay compensation in the sum of $1500.00 to the respondents within a period of 2 months from notification by the Mining Registrar of the grant of ML10291 [at 17] CATCHWORDS: MINING – MINING LEASE - DETERMINATION OF COMPENSATION Mineral Resources Act 1989, ss 281 (3) & (4), 283A, 283B Angela Mining Pty Ltd v Philipson [2004] QLRT 136; [2004] QLRT 150; [2006] QLRT 108 and [2006] QLRT 109 each applied COUNSEL: A.M. West for the Applicant SOLICITORS: Dale and Fallu Solicitors for the Applicant Mrs L. Philipson (personally) for the Respondents Background -- 1 of 8 -- [1] This matter is an application under the Mineral Resources Act 1989 (“the MRA”) brought by the applicant miner Angela Mining Pty Ltd (“the applicant”) for a determination of compensation payable to Ron Philipson and Leane Philipson (“the respondents”) who are the landholders of land on which a recommendation has been made for the grant of ML 10291 to the applicant. [2] The application for the grant of ML 10291, together with compensation for the adjacent ML 10019 also held by the applicant, as well as an application for a variation of access for ML 10019, has been before the tribunal for a number of years in unique, indeed strange, circumstances. Matters relating to the applicant’s mining operations on the respondents’ land have been the subject of four decisions by this tribunal1, as well as two ministerial directions. The facts and circumstances relating to the applicant’s mining activity on the respondents land, and the respondents’ view of the impact of those mining operations on their land, is previously set out in those four previous decisions. In particular, a chronology of the facts and circumstances relating to ML 10291 is set out in detail in paragraph 1 of my decision of 25 September 2006.2 [3] As indicated, this matter relates to the determination of compensation for ML 10291. The mining lease has been recommended for grant for a term of ten years. It has an area of 80.3 hectares and is of what can be called an ‘awkward’ shape. Compensation is determined pursuant to s. 281 (3) & (4) of the MRA. Details of the principles to be applied with respects to a determination of compensation have already been fully canvassed in previous decisions of the tribunal between these parties and it is unnecessary for me to repeat them again here. In particular, I note the decision of President Koppenol with respect to compensation for ML 100193 and also my decision relating to variation of access for that same mining lease.4 I note in particular that the area of ML 10019 is only 2 hectares. [4] In its written submissions the applicant contends that no award of compensation should be made, or that any compensation should be minimal. The applicant’s reasoning is as follows:-5 “S.281 – Compensation 33. The question of compensation has already been decided in relation to ML 10019 (see Re Angela Mining Pty Ltd & Philipson [2004] QLRT 150). The respondents were awarded $220 payable at $22 per annum for 10 years. The Applicant’s proposed use of ML 10291 is no more intensive than its use of ML 10019. It merely extends the area over which the activities of mining can be carried on during the 10 years. What is proposed will effect no greater impact on the respondents than the use of ML 10019. Accordingly, the issues having been determined, the respondents are bound by the decision above and are not entitled to any further compensation. 34. ALTERNATIVELY, if they are entitled to further compensation, it should be in the same amount as the compensation for ML10019.” 1 [2004] QLRT 136: [2004] QLRT 150 : [2006] QLRT 108 and [2006] QLRT 109. 2 [2006] QLRT 108. 3 [2004] QLRT 150. 4 [2006] QLRT 109. 5 Applicants submissions 14 August 2006 paragraph 33 and 34. -- 2 of 8 -- [5] The respondents have provided a copy of the Department of Natural Resources Mines (as it then was) Unimproved Valuation Notice issued 29 March 2005, valuation date 1 October 2004, in the sum of $1,700,000.00 for their 31,200 hectare property. I note that the previous valuation of the property on 1 October 2001 was in the sum of $420,000.00 showing a marked increase in valuation for the property in the period of October 2001 to October 2004. Using the unimproved valuation, and assuming the land subject to the mining lease is of an average standard for the property,6 the unimproved value of the mining lease land equates to$54.49 per hectare. Although the purpose of the unimproved valuation is not for determining compensation under the MRA, given the absence of any other valuation evidence, I am prepared to accept the value of the land as at 1 October 2004 to be, rounded up, $55.00 per hectare. Further, absent any evidence that I can rely on as to any change in value subsequent to that date, I adopt $55.00 per hectare for the purposes of this determination. [6] The respondents have summarised their claim for compensation as follows :-7 “CALCULATION OF COMPENSATION: Part (1): Basis of calculation: $54.49 per hectare (unimproved) #REFER ATTACHMENT (1) Compensation for access area Diminution of use made 5 kilometres x 30 metre (1.5 hectare ) total area within property (ie. After leaving gazetted Cornelia access road) Lease term 10 years Amount payable $81.74 per annum $817.40 total Part (2): Basis of calculation: $3000 per kilometer (materials and construction of new fenceline) Compensation for compulsory acquisition of key fenceline and loss of surface rights of access Diminution of use made and improvements there on loss of premium use land and expense that arises as a consequence 3.7 kilometres x $3000 Amount payable $11,100.00 Part (3): Basis of calculation: 16 hours @ $25-00 per hour Costs for respondent to prepare extra submissions etc. Resultant from rehearing matters Amount payable $400.00 Part (4): Basis of calculation: 2006 amount only available 6 This assumption is confirmed by the inspection carried out on the property in 2004. 7 the respondents submissions, October 2006. -- 3 of 8 -- $0.11 per hectare # REFER ATTACHMENTS (3) AND (4) New Mining lease area 80 hectares Current Grazing lease rental 2006 rebated $8.80 (note: 0.8% basis used) Amount payable (incremental per annum) Year 1 only $8.80 Part (5) Basis of calculation: loss of grazing land @ $54.49 per hectare per annum #REFER ATTACHMENT (1) Based on details provided in application and evidence, Area of mining activity: 1 hectare Disturbance of stock surrounding / areas of rehabilitation: 1 hectare Total disturbance/loss of area: 2 hectares Lease term: 10 years Amount payable: $ 108.98 per annum $1089.80 total” [7] In response to the respondents submissions, the applicant had this to say:-8 “2. The following observations can be made in relation to the Respondent’s submissions filed on 30/10/2006, and in particular under the heading “CALCULATION OF COMPENSATION”. Part (1) ACCESS AREA 3. An award of compensation has been made in relation to access: VOA 17/06 on 25/09/2006. There is no jurisdiction to further consider this point. Part (2) FENCELINE 4. This claim is based on a mistaken interpretation by the Respondents. The loss is not of the type described. The grant of the Variation of Access is not an acquisition of the fence line, and in any event, the Variation has already been compensated for as submitted in paragraph 3 above. Part (3) COSTS ASSOCIATED WITH THE HEARING 5. This is a cost that does not attract compensation. Part (4) RESPONDENT’S LAND HOLDING COST 6. The respondent has claimed its lease cost over the entire 80 hectare mining lease area. Points 10 and 12 of the August Submissions deal with the rolling nature of the operations, including progressive rehabilitation requiring only approximately 2 hectares at any time. On the Respondent’s material, the loss is $0.011c per hectare per year. Part (5) RESPONDENT’S LOSS OF USE 7. The respondent’s submission is flawed for 2 reasons. Firstly it considers a total loss of land, and secondly, they value the loss at 2 hectares per year, which equates to a total loss of 20 hectares over the 10 year lease. The loss claimed does not resemble the loss likely to 8 Submissions 1 November 2006 -- 4 of 8 -- be suffered, namely the loss of use. Adopting what appears to be the Respondent’s. For example if a notional rental of say 8% x 2Ha x $54.49 =$8.72 per year. CONCLUISION 8. The Respondents do not deal with the argument raised in points 33 and 34 of the August Submissions. Further, the arguments raised by the Respondent’s place their case within the realms of the previous award for compensation. 9. It is respectively submitted that no further Orders should be made.” Determination [8] As can be seen from the details of the submissions set out above, and despite President Koppenol’s decision on compensation for ML 10019 of 10 December 2004 were he clearly set out each of the prescribed heads of compensation in the MRA, neither party has chosen to address specific heads of compensation under that act. However, there are a number of relevant points made by each party which I will deal with in turn. [9] Clearly, the respondents remain concerned regarding interference with their mustering activities on their property and in this regard they have made a substantial claim for fencing off the access to the mining lease. In his December 2004 decision, President Koppenol had this to say regarding access :-9 “[11] Surface rights of access: Two points were advances by the landowners. They related to the presence and control of noxious weeds and the disruption said to be caused to cattle mustering. As to the former, the miner has clear legal obligations under the Mineral Resources Regulation 2003(section 18 (b)) and the Environmental Protection Agency’s code of environmental compliance for mining lease projects (condition 13) to prevent the spread of noxious weeds. Penalties apply for non- compliance. As to the latter, whilst heavy machinery will initially be delivered to the mine site via the access track along the relevant fence line (where cattle are mustered), subsequent traffic will only be light. It is also relevant to note that the miner was given permission by the station manager to use that track. On the material advanced by the parties, I am not satisfied that the impact on the property or on cattle mustering in the area concerned will be other than minimal. In the circumstances, no more than a nominal sum of $100 is justified for this item, in my view.” [10] Additionally, at paragraph 24 of my recommendation of 25 September 2006 for the grant of ML 10291 I repeated with approval submissions by Mr West of Counsel for the applicant in the following term:-10 “Clearly the respondents are not happy about the situation. They see the proposed fence line access as interfering with their cattle mustering. They also urge potential erosion problems. The whole issue appears to be a multi-layered misunderstanding. As such it is not an adverse reflection on the Applicant. It does not seem likely that the fence line route will be so heavily trafficked with miners and musterers that the two would be a danger to each other and could not co-exist. A recommendation should be made in favour of the fence line access route.” [11] Unfortunately, due to the less than friendly relations which would appear to have existed between the parties over the last number of years, I am concerned that the parties will have difficulty co-existing, and indeed it may prove necessary at some 9 2004 QLRT 150 at (11). 10 at para [24]. -- 5 of 8 -- time in the future for the fence proposed by the respondents to be erected. However, looked at objectively, the erection of such fencing should not be necessary as the mining operations on the property are such that any movement of mining equipment or vehicles should be able to be organised so as to easily avoid any interference with the respondents mustering and other landholder related operations. Accordingly, my determination is based on the presumption that the applicant miner will allow the respondents to carry out mustering and other landholder related activities on unmined areas of the mining lease land and the access thereto in such a way as to not overly disturb the operations of the respondents. However, should the applicant choose to conduct his mining activities in such a way as to unduly disrupt and inconvenience the respondents in their mustering and other normal day to day activities on their property (and in particular so much of their property as will be impacted by access to ML 10291), then it would certainly be open to the respondents to seek an amendment of compensation by agreement (s 283A MRA) or by review by the tribunal (s 283B MRA). [12] I reject the submissions by the applicant regarding the determination of compensation. Although they correctly state that an award of compensation has been made with respect to variation of access on 25 September 2006, that compensation relates to access to ML 10019 and is relevantly nominal in nature, particularly taking into account the fact that the mining operations on ML 10019 are small and that the overall mining lease application area is only 2 hectares. The same cannot be said for ML 10291 which, as mentioned previously, has a total area of 80.3 hectares. Certainly, however, the fact that the applicant will be using the same access for each mining lease must be taken into account and the compensation for access payable by the applicant discounted accordingly. [13] I also do not agree with the applicant’s contentions regarding the loss of land to be suffered by the respondents. As pointed out by the applicant, such loss amounts to 20 hectares over the 10 year life of the lease. I note that this represents only one quarter of the total application area. It is trite to say, as the applicant appears to be saying, that the compensation to be paid by the applicant should be limited to only 2 hectares for the entire 10 years of the mining lease. That is neither reasonable nor sensible. Although the applicant will conduct rolling mining operations, with rolling rehabilitation, the fact remains that on the figures which appear to be agreed between the parties, some 20 hectares of the respondents’ property will be adversely impacted over the 10 year period. Clearly, such agreed impact equates to a total loss to the respondents of 2 hectares of land per year over the 10 year period of the mining lease. However, in my view the likely impact on the respondents’ land will be much greater than that – perhaps three times as great per year. That level of impact (60 hectares) would be more in keeping with the total area of the mining lease and the term of the lease. On the other hand, and most surprisingly, the applicant has not argued for any reduction of the compensation based on the term of the lease. In normal circumstances, a long term lease is to be taken as a total loss for the landholder. A term of 10 years, given the nature of the mining, is not sufficient, in my view, to be considered a total loss. An appropriate deduction would be, say, to 30%. On balance, given my views of the likely total impact of the mining lease on the subject land of 60 -- 6 of 8 -- hectares, and taking into account a deduction due to the term of the lease, the end result equates to a total loss of 2 hectares per year.11 [14] The respondents claim the sum of $400.00 for the additional costs and time incurred on the hearing of the applicant’s application following the ministerial directions. In so far as this claim relates to costs, it has not been appropriately made and in that regard is rejected. However, given the extremely unusual circumstances of this matter, and the fact that the respondents have been put to unexpected and unusual inconvenience given the two ministerial directions that can be properly said to have directly arisen as a result of the applicant’s shoddy presentation of its material at the original hearing of both the mining lease application and the compensation determination, I believe that this is one of those most rare cases where an additional amount under s. 281(4)(e) with respect to the compulsory nature of the action taken should be made in a sum which is greater than the usual 10 per cent. [15] As regards the respondents submissions at part (4) regarding lease payments, in my view if such a concept were to be accepted, then it would apply to that land effectively lost to the respondents only (that is, up to say 6 hectares per year). As the amount claimed in those circumstances amounts only to a very small sum per year, any such amount is taken to have been included in my rounding up of the per hectare value from $54.49 to $55.00. [16] Taking into account all of the evidence before me, all of the submissions, and the previous decisions with respects to ML 10291 and ML 10019, I determine compensation with respect to ML 10291 and access thereto as follows:- Loss of Grazing Land 2 ha per annum @ $55 per ha for 10 years $1,100.00 Access $20 per year for 10 years $ 200.00 _______ $1,300.00 Additional Amount s. 281 (4) (e) $ 200.00 Total $1,500.00 I accordingly determined compensation in the total amount of $1,500.00 Terms of payment [17] In relation to the terms, conditions and times when payments should be made, I take into account the quantum of the order and the period of the lease. In these circumstances, I order that the applicant pay compensation in the sum of 11 Likely loss of 6ha per year reduced to 1/3 (2ha per year total loss equivalent) given the 10 year term -- 7 of 8 -- $1,500.00 to the respondents within a period of 2 months from notification by the Mining Registrar of the grant of ML10291. -- 8 of 8 --