Anglo Coal (Moura) Limited & Anor v Broad & Anor [2005] QLRT 34

LAND AND RESOURCES TRIBUNAL QUEENSLAND CITATION: Re Anglo Coal (Moura) Limited & Anor & G.J. Broad & Anor [2005] QLRT 34 PARTIES: Anglo Coal (Moura) Limited and Mitsui Moura Investment Pty Ltd (Applicants) & Gary Lester Broad and Kerrilyn Jane Salmond (Respondents) FILE NO: MLC181/04 PROCEEDING: Application to determine compensation DELIVERED ON: 16 March 2005 Paragraph 2 and 3 of order amended on: 4 April 2005 DELIVERED AT: Brisbane HEARING DATE: Heard on the papers PRESIDING MEMBER: Windridge MR ORDER/S: 1. Compensation determined at $247,550.00. (at [19]) 2. Such compensation to be paid by the miner to the landowner on or before 1 May 2005. (at [20]). Paragraph 20 amended accordingly by deleting the words “such payment to be made within 30 days of notification of the grant by the Mining Registrar”. 3. If not paid on or before 1 May 2005, interest on the sum of $247,550.00 at the rate of 5.75% per annum shall accrue and be payable from 1 October 2004. (at [21]). Paragraph 21 amended by deleting the words “Should such payment be not made within 30 days of that date”. CATCHWORDS: COMPENSATION – ADDITIONAL SURFACE AREA – GRAZING PROPERTY – SERVICE – INTEREST Mineral Resources Act 1989, s. 281 Uniform Civil Procedure Rules 1999 COUNSEL: N/A SOLICITORS: Messrs Swanwick Murray Roche, for the applicants -- 1 of 6 -- AGENT/S: N/A Background [1] This is an application under section 281 of the Mineral Resources Act 1989 (MRA) for the determination of compensation for the effect upon the respondent landowners of the grant of additional surface area in respect of the applicants’ mining lease number 5596 in the Moura area. [2] The mining lease has a total surface area of 609.46 hectares. Only 82.14 hectares are involved in this determination, and for the purposes of this determination and ease of calculation, I round off the area to 83 hectares. The land is described as Lot 127 on Plan FN 470, County of Ferguson, Parish of Banana, situated approximately 10 kilometres east of Moura on the Dawson Highway. The respondents hold the land as tenants in common in equal shares. The total of Lot 127 is to be acquired. There is no residence on the property. The respondents conduct a small grazing operation on the property. Basically, improvements are water with internal and external fencing. [3] The Tribunal has made certain orders at a prior directions hearing in relation to the exchange of valuations and access to the property by the applicants’ valuers. The landowner has not lodged any written submission and affidavit material. The applicant miner has filed a brief written submission through affidavit material. The Tribunal has for its consideration valuations prepared for the applicant miners (Taylor Byrne) and the respondent landowners (John M. Sheehan). I will refer to these valuations in due course. Compensation [4] The purpose of compensation is to place the landowner in as near a position as possible post acquisition as he or she was prior to the acquisition. Relevantly, section 281(3)(a) requires the Tribunal to settle the amount of compensation an owner of land is entitled to as compensation for: “(i) deprivation of possession of the surface of land of the owner; (ii) diminution of the value of the land of the owner or any improvements thereon; (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”. [5] Section 281(4) enables various additional factors to be included in the compensation determination. In the present case, only paragraphs (a) and (e) are relevant. 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 or 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 -- 2 of 6 -- 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 owners livestock or other chattels as at the date of the assessment shall be considered; … (e) an additional amount shall be determined to reflect the compulsory nature of action taken under this part which amount … shall be not less than 10% of the aggregate amount determined under subsection (3).” [6] The heads of claim for compensation are statute based in s. 281 and it is convenient to deal individually with the prescribed heads of compensation without reference to the practices or procedures of other jurisdictions, being mindful that instances of “doubling-up” are avoided. While the heads of claim that must be considered are set forth in the statute, the methodology to be used in arriving at any quantum is not prescribed. The methodology used, to a large extent, will depend on the particular circumstances that may arise in the matter under consideration. [7] Deprivation of possession: The respective valuations do not reflect the usual “before” and “after” value as the acquisition of the surface area of Lot 127 is total. The “before” and “after” concept is relevant only in so far as the “after” value is effectively nil. The landowners are deprived of the total of the surface area and are unable to use that surface area for production purposes of any kind notionally for the balance of the term of the lease although they retain legal ownership and liability for all local authority charges. The valuer for the respondents assumes that the land is totally lost for the balance of the term of mining lease 5596, being about 15 years. The valuer for the applicant suggests, as an alternative consideration, that if rehabilitation takes place after four or five years, the total loss situation is avoided and an adjustment in favour of the applicant could be considered. I consider that this qualification is far too nebulous to attract any weighty consideration by the Tribunal. In my opinion, there are too many circumstances where such an outcome could be seriously delayed or not occur at all. The total loss scenario is preferred as even after a period of four or five years the respondents would be long gone from the property and perhaps established elsewhere. [8] Diminution of value: With total loss of surface area, diminution of value is the full value. The valuations of the respective parties appropriately reflect total loss. I agree with that proposition. [9] Diminution of use: Diminution of use is total as the surface area is subsumed into mining lease 5596 for mining purposes. The documentation tendered indicates that the surface area will be used for storage of spoil heaps, and co-occupation, co-use or partial use by the landowner to continue any form of production on this land is either not possible, or would be very impracticable. Again, both valuations reflect total loss of the surface area as a basis for compensation. [10] Severance: It appears from the respective valuations that the landowners do not conduct any business of a similar nature from adjoining or nearby land. Therefore there is no severance of this land in Lot 127 from any other land under ownership or control of the respondents. [11] Surface rights of access: This head of claim does not exist in this instance, and neither the valuer of the applicants nor the valuer of the respondents has put forward -- 3 of 6 -- any loss under this head of claim. Any perceived loss is included in the “total loss” concept. [12] Loss or expense: There is no evidence of any other loss or expense that will occur because of the inclusion of this surface area into the existing lease number 5596, except certain items of disturbance which are permitted under s. 281(4)(a). These items will be dealt with later. [13] Additional 10%: Valuer for the applicants goes no further than simply accepting the nominal premium of 10% and makes no further submission on that issue. The valuation of the respondents reflects a premium of 25%. There are certain aspects of this particular matter which warrant some further consideration. Determination [14] It is now necessary to turn to the individual valuations. Both valuers list other sales in the area. I do not propose to individually dissect each sale. With Taylor Byrne adopting $2,500.00 per hectare as an upper limit value, and Mr Sheehan adopting $2,700.00 per hectare, the basic per hectare valuations are refreshingly close and realistic. Date of assessment by Taylor Byrne is 14 February, with inspection on 2 February 2005. Date of assessment by Sheehan is 23 February 2005, with inspection conducted on 20 May 2004. Both valuations are recent but I prefer the assessment of Taylor Byrne on this point, accepting that $2,500.00 per hectare is the upper end of the range suggested in that valuation. The landowner has the advantage of a “2005” assessment whereas the actual notional date of notification/acquisition by the mining company is September 2004. I am constrained in considering any sales recent or future that are remote from the date of “acquisition/notification”. [15] I now turn to other items of potential loss which might generally be described as “items of disturbance”. These items are specifically described in section 281(4)(a) as the costs that might be incurred in obtaining replacement land, removal and relocation of stock and chattels. Taylor Byrne assesses these costs at a total of $17,500. Mr Sheehan itemises some of the anticipated loss in more detail. This loss, as assessed by Mr Sheehan relates to the loss of the “igloo” structure and yards ($7,000.00), cost of inspecting and obtaining a replacement property ($10,500.00), trucking and crane costs ($1,800.00), with valuation and agistment fees ($21,300.00). [16] It is difficult to dispute that there will not be some costs of removal. While it is not certain that agistment will be required, it is an option open to the respondents, at their discretion. Total disturbance assessed by Mr Sheehan is $28,300.00. While I consider the disturbance assessed by Taylor Byrne is supportable, the items of disturbance put forward by Mr Sheehan may well and reasonably be incurred. This figure takes into account the value of the igloo and yards. There is no firm evidence of agistment requirements, and I disallow any claim for agistment. From my reading of the material, the respondent landowners have had some 12 months to consider and make alternative arrangements, and since September 2004 to put any arrangements in place. They may well elect to dispose of the stock, rendering agistment claims an unjust enrichment. I disallow the claim of $4,158.00 for assessment fees by Mr Sheehan as this is not an item of disturbance under the MRA (s. 283(4)(a)) or -- 4 of 6 -- expense arising from the grant (s. 281(3)(vi)). Disturbance fees are allowed in the sum of $19,300.00. [17] Now I turn to the issue of solatium. The statutory provisions sanction an amount of “not less than 10% of the aggregate amount determined under subsection (3)”, together with any amount determined pursuant to paragraph (c) of s. 281 subsection 4. Mr Brown of Taylor Byrne puts forward only the minimum of 10% of this total valuation of $222,850.00, calculated out as $22,285.00. Mr Sheehan submits that a premium of 25% of his total assessment, calculated out at $63,000.00 is supportable due to fast rising values of rural properties and lack of availability of similar properties on which to re-establish. He relates this to the time lag between determination and settlement between the parties. I am not satisfied that there is any special or unusual circumstance wherein the premium of 10% can be increased. I would indicate that in my opinion, the 10% premium is referable only to the aggregate amount determined under subsection (3). Items of disturbance referred to are allowable under subsection (4), but do not attract any premium. No intending purchaser would pay, or be obliged to pay, for disturbance. I determine that a premium of 10% is not payable on those items of disturbance allowed under subsection (4)(a). There is, in my opinion, no special value attaching to the status and use of the land that warrants any further premium. Mr Sheehan raises the aspect of “late” payments in respect of compensation. That is a matter I can rectify in the determination. A property of about 80 hectares carrying about 40 head of stock, is not, in reality, a significant producer in Queensland. There is no special status in the land requiring further consideration. From my reading of the material, Lot 127 is not the principal source of income of the respondents and could not attract any special status and use premium under s. 281(4)(c). [18] Interest: It is common practice to allow interest in these matters where circumstances warrant such a course of action. It appears that action to commence the absorption of Lot 127 into the surface area of Mining Lease 5586 began unofficially in about March 2004. It has taken about 12 months to get to this stage. Interest would normally be payable from the date of “acquisition” (in other jurisdictions) or in this instance, the date of lodgement of the relevant documentation with the Mining Registrar. I select the latter as from the date of lodgement with the Registrar, the action of acquiring the surface area by the applicant is put officially in motion, and the incumbrance commences from then. In this particular instance, there are mitigating circumstances. From the affidavit material filed by the applicant, it seems there was some delay caused by the respondents attempting to frustrate service and causing an application to be made to the Tribunal in relation to an inspection by the applicant’s valuer in order to gain access to the subject land. It also appears from affidavit material that negotiations were conducted for some time with no outcome. I do not consider the action of the respondents was beneficial to their cause, and the applicant should not have to suffer any penalty for the delay and frustration caused which was beyond their control. [19] I determine compensation as follows: (a) Deprivation of possession (s.281(3)(a)(i)) $207,500.00 (83 hectares @$2,500.00 per ha) (b) Additional 10% solatium (s. 281(4)(e)) $ 20,750.00 -- 5 of 6 -- (c) Disturbance (s. 281(4)(a)) $ 19,300.00 Total $247,550.00 [20] No submissions were made in respect of times, terms or manner of payment. In view of the quantum of the award, the circumstances of the respondents and the nature of the mining operation, I order that the applicant miner pay to the landowners compensation in the sum of $247,550.00 on or before 1 May 2005. [21] If not paid on or before 1 May 2005, I order that interest at the rate of 5.75 per cent per annum on the sum of $247,550.00 shall accrue and be payable from 1 October 2004. -- 6 of 6 --