Barrett v Weir & Anor [2006] QLRT 51

LAND AND RESOURCES TRIBUNAL QUEENSLAND CITATION: Re Barrett v Weir & Anor [2006] QLRT 51 PARTIES: In the matter of Mining Lease 70211 – Application for determination of compensation payable to Rodney Keith Barrett by Kelven John Weir and Mark William Bayly FILE NO: MLC3/06 PROCEEDING: Application for determination of compensation DELIVERED ON: 2 June 2006 DELIVERED AT: Brisbane HEARING DATE: Heard on the papers MEMBER: Windridge MR ORDER/S: 1. I determine compensation under s. 281 in the sum of $624.00 (at [23]). 2. I award an additional amount of $62.40 in accordance with s. 281(4) (e). (at [24]). 3. I direct that the miner pay the total compensation in the sum of $686.40 to the landowner within 3 months of notification of renewal of the mining lease by the Mining Registrar (at [25]). CATCHWORDS: MINING LEASE RENEWAL – DETERMINATION OF COMPENSATION - EFFECTIVE DATE – AGISTMENT –– SHORT TERM LEASES Mineral Resources Act 1989, ss 279, 281, 286 Smith v Cameron [1986-87] 11 QLCR 64 Shaw v Heritage Holdings Pty Ltd [1992-93] 14 QLCR 139 Mitchell v Oakhill and Mitchell (10.03.93), unreported Hicks & Anor v Graham & Anor [2004] QLRT 47 Sullivan v Oil Company of Australia (No 2) [2004] 2QdR 105 COUNSEL: N/A SOLICITOR/S: N/A -- 1 of 6 -- Background [1] Kelven John Weir and Mark William Bayly (the miners) seek the renewal of mining lease 70211 under s. 286 of the Mineral Resources Act 1989 (the Act). The application for renewal of the mining lease was lodged at the office of the Mining Registrar at Emerald on 11 March 2005. [2] The lease is located over part of Lot 5 and part Lot 63. Lot 5 (Parish of Keilambete and County of Clermont) is land held by Rodney Keith Barrett, and that is the matter now before the Tribunal. Access appears to be along a public road at or near the declared Fossicking Area and then into the lease surface area through Lot 63. The miners state very little disturbance has been carried out to date and most of the disturbance relates to the plant site. A grazing operation is conducted on the property by the current owner. The Renewed Lease [3] The lease, initially granted on 20 June 2002, is for the purpose of mining for silver ore, gold, diamond, lead ore, sapphire and zircon . The miners seek a renewed term of 3 years over total surface area of 71.2743. The term of 3 years will commence from 1 July 2005. As the loss to the landowner is taken to crystallise on 1 July 2005, all values that apply to this determination apply from that date. Therefore the effective date, for the purpose of this determination of compensation, is 1 July 2005. For the purpose of this determination, I round off the area to 71 hectares. However, I note there is no accurate information as to the portion of the lease that is on Lot 5 (owned by Barrett) and that portion that is on Lot 63 (owned by B.W. and E.L. Sloan. From the graphics supplied by the Registrar, it appears that about 50% of the lease area is located on each portion. However, the material filed by the adjoining landowner (Sloan) refers to areas of 15 hectares and 20 hectares, making a total area in Lot 63 of 35 hectares, assuming those figures are reasonably accurate for these purposes. Material filed by Mr Barrett in the formulation of his claim refers to an area of 36 hectares. I therefore assess the area of the mining lease located on Lot 63 at 35 hectares, and the balance of the lease, namely 36 hectares, is on Lot 5 which is held by Rodney Keith Barrett. The Act [4] Section 279 of the Act 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 Registrar, or in the absence of such an agreement, a determination of compensation has been made by the Tribunal. In this instance, no agreement has been lodged with the Registrar and the matter has been referred to the Tribunal for determination. [5] The matters which must be considered by the Tribunal are set forth in s. 281, subsections (3) and (4) of the Act. Although s. 281 sets out the matters to be considered, it does not define any method of assessment. Whilst the Tribunal is only bound by its own legislation, the following past appeal cases offer some guidance as to the methodology that may be used in arriving at a determination of compensation. 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 -- 2 of 6 -- 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 President of the Land Court, referring to s. 281(3) of the 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.” The evidence [8] No party appeared before the Tribunal in person and this matter has been dealt with on the papers. Material that has been considered by the Tribunal in this instance is a submission from each party, in the form of letters, and further material which consists of plans, photographs, reports etc. [9] Some documents from the office of the Registrar are available for assistance on factual issues, i.e. copy of application for renewal and Public Mining Lease Report which give accurate details of area, descriptions, parties, relevant dates etc. These facts do not go to the substantive issue to be considered, and have no influence on the quantum of the award. Where necessary for accuracy purposes, I have referred to those documents to assist in the formulation of this determination. Compensation [10] Relatively, s. 281(3) 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; (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.” [11] Section 281(4) enables various additional factors to be included in the compensation determination. It provides as follows: “(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; -- 3 of 6 -- (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).” [12] It is not practice that this Tribunal follow the practice or procedures of other jurisdictions in determining compensation to be awarded to any landowner. Section 281 is specific in relation to the matters to be considered.1 The issue open to argument in each case is the approach to be adopted when considering the relevant heads of claim as they relate to the particular mining tenure, taking care that there are no instances of “double dipping”. In this instance, a “piecemeal” approach appears to be the only useful method of assessment, based on the nature of the mining operation and the possible or probable effect on the pastoral operations of the land owner. I consider it is appropriate to use stocking rates or agistment rates as an appropriate basis for assessment in this instance. This is not a “greenfield” site, rather a “brownfield” site for a short term of renewal. The respective parties have made submissions on the criteria in s. 281 of the Act. The landowner seeks total compensation in the sum of $35,740.00. The miners make comments on various issues and offer the sum of $858 for compensation as I understand their material. I now turn to the submissions and the provisions of section 281. Deprivation of possession: (s. 281(a)(i)) [13] In law, the renewal of the lease effectively deprives the owner of the use of that surface area for the term of the lease. Production from the surface area of 36ha is notionally lost for 3 years. I note that only a small portion of the lease area can be disturbed under the plan of operations, and the balance of the surface area appears to be unfenced. This balance of the lease, in all probability, has been grazed by stock from time to time. It appears the miner may, or be entitled, to disturb less than 4 hectares of surface area as part of their plan of operations. Current disturbance arrears to be restricted to existing plant which is on the surface area in this Lot. There is no effective means of attributing quantum to this small benefit to the landowner. Likewise, if there have been no mining operations conducted for a period of time, this is a small but unmeasurable benefit to the landowner. There is no formal valuation evidence to consider. Diminution of value: (s. 281(3)(ii)) [14] There are no improvements of the landowner on the surface area of the lease or near the lease that would be affected. The landowner, influenced (as he says) by sales in the area, assesses the value of Lot 5 at $570.00 per ha (for 36 ha). The landowner has tendered a copy of a determination (as the result of an appeal) which values the land in Lot 5 (unimproved) at $660.000 as at 1 October 12004. 1 Practice Direction 2 of 2003. -- 4 of 6 -- [15] Diminution of use: (s. 281(3)(iii)) [16] There is no diminution of use of the balance land or improvements on the balance land. The landowner is able to use the balance of the land for normal pastoral operations. I make no award for this head of claim. Severance: (s. 281(3)(iv)) [17] The landowner makes a claim for severance. I am of the opinion there is no evidence of severance before this Tribunal that renewal of the lease will cause severance of one part of the property from any other part. No award is made for this head of claim. Access: (s. 281(3)(5)) [18] Access appears to be down a public road or track, and then into the property via Lot 63. There is no evidence before the Tribunal to consider in relation to access across other land the property of the landowner, and I therefore make no award under this head of claim. Other loss or expense: (s. 281(3)(vi)) [19] There is no evidence of any other loss or expense incurred in preparation of the landowners claim. Such expenses are not caused “as a consequence of the grant or renewal of the mining lease” (s. 281(3)(b). No award is made under this head of claim.2 Solatium: (s. 281 (4)(e)) [20] There was no evidence called to support any claim under paragraphs (a), (c), (d), or (e) of subsection 4 of s. 281 of the Act. There appears to be no factor that would warrant any increase above the prescribed minimum of 10% of any award under subsection 3 of s. 281 of the Act. Accordingly, I award an additional sum assessed at 10% of the aggregate amount determined under subsection 3 of s. 281. Determination: [21] In making this determination I take into account that the only other viable use of the land is low intensity grazing under favourable pasture and weather conditions. I consider mining operations confined to 4 hectares or less on a lease of this size would have no measurable effect on the operations conducted on the property. The landowner has advanced the argument that a number of sales in the area support his valuation assessments at $570.00 per hectare, discounted in his calculations. In relation to these sales, there is no detailed information as to whether or not there are improvements involved, if they are stocked or unstocked, or sold on a ‘walk in/walk out’ basis etc. However, there is no suggestion that those figures are incorrect or inflated. I propose to base this assessment on agistment rates, and therefore it is not necessary to consider neighbouring sales. 2 See Sullivan v Oil Company of Australia (No 2) [2004] 2 QdR 105. -- 5 of 6 -- [22] Agistment rates in the area are $4 per week. Any variation in agistment rates seems to depend on the actual type of country and the age and type of beast that is depastured. I consider that a rate of $4.00 per week is the appropriate current rate. [23] The miner has indicated that the sum of $10,890.00 was paid to this landowner for a prior renewal. This Tribunal is not bound by the terms, conditions or quantum of any prior agreement, but must have cognizance of that fact as it would be highly inequitable to require the miner to pay the full (or a discounted) freehold value for every renewal of a short term lease. Likewise, it would be inequitable if no further award was made in favour of the landowner, as there is the continuing presence of the miner on the land. The Tribunal can only determine a “financial” resolution and is not empowered to impose conditions as part of a compensation award. I note that about 33% of the current term has already expired or is about to expire, and there has been little or no work on that part of the lease that is within Lot 5. I consider the only equitable method of assessing compensation in this particular instance is on an agistment basis, and I determine that an agistment rate of $4.00 per week is the appropriate rate for land in this area. Stocking trials conducted in the area (Keilambete) arrive at a stocking rate of 1 breeder to 8.9 hectares. I assess the disturbed area, or area that might be disturbed when mining commences, as equivalent to or less than, one beast area. [24] I consider that the following award will satisfy the requirements of s.281 for the renewed term of the lease for the limited purposes authorised by the renewal of the lease. Drawing on the evidence that is available, I determine compensation under Part 7 of the Act in the sum of $624.00 (1 beast @ $4.00 per week for 156 weeks). The sum awarded for access is nil and the aggregate of this award is therefore $624.00 for the full renewed term. [25] I allow the further sum of $62.40 under s. 281(4) (e) to reflect the compulsory nature of the renewal of the lease. [26] In relation to the terms, conditions and times when payments should be made, I take into account the quantum of the order, the area of the lease and the renewed term of the lease. I regard the loss as crystallising as of the date of commencement of the renewal, and payment should not be on a yearly basis. I order that the miner pay total compensation to the current landowners in the sum of $686.40 within a period of 3 months from notification of renewal of the mining lease by the Mining Registrar. -- 6 of 6 --