Delminco Pty Ltd v Harbron Pty Ltd [2005] QLRT 151

LAND AND RESOURCES TRIBUNAL QUEENSLAND CITATION: Delminco Pty Ltd v Harbron Pty Ltd [2005] QLRT 151 PARTIES: In the matter of Mining Leases 7219, 7220 and 40006 – Applications by Delminco Pty Ltd for determination of compensation payable to Harbron Pty Ltd. FILE NO/S: MLC105/2005 MLC106/2005 MLC175/2005 PROCEEDING: Applications for determination of compensation DELIVERED ON: 15 November 2005 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 $830.00. (at [21]) 2. I award an additional amount of $83.00 in accordance with s. 281(4)(e). (at [21]) 3. I direct that the miner pay the total compensation in the sum of $913.00 to the landowner within 3 months of notification of renewal of the mining leases by the Mining Registrar. (at [22]) 4. No order for costs. (at [23]) CATCHWORDS: MINING LEASE – DETERMINATION OF COMPENSATION – RENEWAL Mineral Resources Act 1989, s. 85(1) & (7) The Land and Resources Tribunal Act 1999 (s.50) Smith v Cameron [1986-87] 11 QLCR Shaw v Heritage Holdings Pty Ltd [1992-93] 14 QLCR Oakhill v Mitchell (Land Court – unreported) SOLICITOR/S: Bottoms English, Lawyers, for Respondent Landowner -- 1 of 5 -- Background [1] The applicant Delminco Pty Ltd (the miner) seeks the renewal of Mining Leases 7219, 7220 and 40006 in the Mareeba District. The three leases were initially granted for 10 year terms in 1993. The application for renewal of each lease for a term of 10 years was lodged at the office of the Mining Registrar, Mareeba . In respect of each lease, I note that the parties are the same, the submissions from the parties incorporate the three leases into the submissions, and the leases are located on the same property. I am satisfied that no party will suffer any disadvantage if the matters are dealt with together. [2] The leases are located on Strathleven Holding. There is no tenure report which would assist with an accurate description of the background tenure. Whilst desirable in most cases, it is not an issue here. Access is through the same property. A grazing operation is conducted on the property by the current owners Harbron Pty Ltd. Mining lease 7219 is approximately 17.25 ha, mining lease 7220 is approximately 48 ha, and mining lease 40006 is approximately 17.12 ha in area(p.7 of respondents submission). The leases are granted for the purpose of mining for alluvial gold. The Act [3] Section 279 of the Mineral Resources Act 1989 (“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 it is now necessary that the matter of compensation be determined by the Tribunal. [4] The matters which must be considered by the Tribunal 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. 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.” [5] 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.” [6] 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.” -- 2 of 5 -- The evidence [7] Neither party sought to appear before the Tribunal and this matter has been dealt with on the papers. The respondent landowner has lodged a lengthy submission with a supporting statement. The applicant miner made a brief response wherein the issues were dealt with. [8] There was no formal valuation evidence to consider, therefore the Court does not have that assistance in arriving at a determination. Due to the small area involved, the cost of a valuation would far outweigh any award for compensation. [9] Mr DeLacey, on behalf of Delminco, details his attempts to reach some form of settlement, but at paragraph 8 of his letter of 5th November, withdraws his previous offer of $1000.00. for compensation. The respondent landowner, through their legal representatives, seeks compensation in the sum of $155,025.00, plus 10% solatium under section 281(4)(e). [10] I take note that of the total area of the three leases is approximately 82.37 hectares. For the purposes of this determination, I round off the area to 83 hectares. The miner is entitled under his Environmental Licence to disturb up to a certain area at any one time of the surface area during his mining operations. This effectively bars the landowner from access to that part of the lease for grazing purposes by stock. It is not the usual event that the mining lease is fenced to keep stock out, and it is common practice for the balance of the lease not disturbed by mining to be left available for grazing by stock and native fauna. However, these particular leases are alluvial leases in the stream bed. It has been suggested that the three leases could be worked at the same time, creating more “disturbance” for the landowner (as I understand part of the submissions). This is highly unlikely unless the miner has three plants and three crews operating at the same time. I have never observed such an operation, even by larger scale mining companies. I therefore intend to give no weight to that suggestion. This determination will reflect the level of usage of the surface of the lease by the miner against the right of the landowner to receive compensation and place the landowner is as near a position that a monetary award can as if the lease did not exist. The telling factor is the nature and location of the surface area. [11] Each case is determined on its own merits, and the approach to determine compensation may vary even for leases or claims on the same property, subject to such evidence that is tendered. Any award can be impacted by such things as the term of the lease, i.e. short or long, the area of the claim or lease, the mineral to be extracted and the method of mining. [12] The heads of claim for compensation are statute based in s. 281 and it is now convenient to deal individually with the prescribed heads of compensation without reference to the procedures of other jurisdictions, being mindful that instances of doubling up are avoided. -- 3 of 5 -- Deprivation of possession [13] For all intents and purposes, the landowner is deprived of the total of the surface area of the leases and is unable to use that surface area for production purposes of any kind for the term of the renewal. I note that the applicant miner has, a number of times, re-iterated that the area to be worked is the stream bed, notwithstanding some apparent confusion by the landowner of the location of the boundaries of the leases. Deprivation of possession would have a negligible effect on the production from 83 hectares of river alluvium. I am of the opinion that only a nominal award is justified under this head of claim. Diminution of value [14] Diminution of value I am not satisfied that there is any evidence that warrants an award under this head of claim. Delminco asserts that the leases were in existence at the time the property was purchased by Harbron. The leases are located in the bed of the stream. It is difficult to accept that there is any quantifiable loss. I make no award for this head of claim. Diminution of use [15] Diminution of use would relate to the area under active mining. That is not likely to be large, and at any given time, the other two leases are not being worked. Again, the only area being worked is part of the surface area which is the stream bed. I make no award for this head of claim. Severance of any part from other parts of the land [16] Renewal of the leases does not cause severance of any part of the land from any balance land of the landowner, purely on the basis of size and location. No award is justified under this head of claim. Surface rights of access [17] It appears there has been, since the initial grant of the lease, and after application for renewal but prior to this determination, a variation of access application lodged Delminco. The issue of variation of access and assessment of compensation thereon have been dealt with by the Tribunal (VOA178/04, VOA179/04, VOA180/04). I do not accept that it is open to Harbron to revisit the issue where there is no evidence that there has been a substantial change in circumstances. No additional award is made in respect of access. All loss or expense that arises [18] Harbron has submitted a number of items that will result in loss or expense, allegedly, on the renewal of the term of the leases. I see no grounds that would justify consideration or acceptance of any of these heads of claim. None appear to have been necessary or evident in the initial term of ten years, so it is difficult to see how any of these claims arise now. -- 4 of 5 -- Status and use [19] Section 281(4)(c) permits a claim for any special status and use . This use must be in existence prior to the grant of the lease. Organic status might be claimed under this head, but the organic status did not exist at the time of grant or renewal. There is no evidence of any special features which would indicate any higher status and use attaches to the land. Solatium [20] There is no evidence that a premium higher than the 10% allowed under section 281(4)(e) is warranted. [21] Having regard to all the circumstances, I consider that the following award will satisfy the requirements of s. 281 for the term of the renewed leases for the limited purposes authorised by the renewal of the leases. I determine compensation under Part 7 of the Mineral Resources Act 1989, to satisfy all heads of compensation set forth in subsection 3 of section 281 of the Mineral Resources Act 1989 shall be the sum of $1.00 per annum per hectare for 83 hectares. The aggregate total of this award for the three leases is $830.00. I further award the sum of $83.00 under section 281(4)(e) to reflect the compulsory nature of the action taken under this part. Terms of payment [22] 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 leases and the period of renewal. In these circumstances, I order that the miner pay total compensation to the landowners in the sum of $913.00 within a period of (3) months from notification of renewal of the mining leases by the Mining Registrar. Costs [23] The respondent landowner seeks costs estimated at $10.000.00 for “advice and legal representation”. Legal fees and other costs i.e. valuation fees are not recoverable as they are incurred in preparation of a claim against the miner and not as the consequence of the grant or renewal of the lease.1 I found the submissions of the respondent landowner of no real assistance. Cases stated were distinguishable from the current matter which is basically a sand operation in a stream bed which removes the gold and returns the material back to the bed. There is little or no grazing value in a dry stream bed and compensation awards for alluvial mining must reflect this fact. The approach of the miner appears to have been realistic and focused. Any award for costs would be pursuant to section 50 of the Land and Resources Tribunal Act 1999 and, had costs been incurred by the miner, would have been awarded to the miner in this instance. Costs are refused. 1 Minister of State for the Army v Pacific Hotel Pty Ltd [1944] StRQd 112, 119, 120, 122, 129; Sullivan v Oil Company of Australia (No 2 [2004] 2 QdR 105, 116 [37]. -- 5 of 5 --