Armstrong v Salmon [2002] QLRT 104

LAND AND RESOURCES TRIBUNAL QUEENSLAND CITATION: Armstrong v Salmon [2002] QLRT 104 PARTIES: Dean Linsay Armstrong & Lisa Maree Armstrong (Appellants) v Geoffrey Laurence Salmon (Respondent) FILE NO/S: APTP00061/2002 PROCEEDING: Appeal against determination of compensation DELIVERED ON: 18 December 2002 DELIVERED AT: Brisbane HEARING DATE/S: 12 November 2002, Emerald PRESIDING MEMBER: Koppenol P ORDER/S: Appeal dismissed (at [53]) CATCHWORDS: APPEAL – DETERMINATION OF COMPENSATION – DEPRECIATION – BLOT ON TITLE – INJURIOUS AFFECTION – ACCESS – COMPONENTS OF COMPENSATION – COSTS Mineral Resources Act 1989, ss. 281, 282(1), (8) Land and Resources Tribunal Act 1999, ss. 15(1)(b), 39(2), 40(1)(b), 41(2), (4), 50, 65(1), (5), Sch 1 Supreme Court Act 1995, 209(2) Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336, applied Marshall v Director General, Department of Transport (2001) 205 CLR 603, applied R v The Land Court, ex parte Kennecott Explorations (Australia) Ltd [1989] 1 QdR 335 (FC), applied The Minister v Ryan (1963) 9 LGRA 112, followed Minister for Lands v Ferguson (1969) 48 LVR 9, followed Zimmerebner v Hawkins & Anor (1999) 20 QLCR 71, referred to Smith v Cameron (1986) 11 QLCR 64, referred to Messer v Rossi [2001] QLRT 6, referred to Re Supersorb Minerals NL & Ors [2001] QLRT 88, referred to Richardson v Barrett [2001] QLRT 89, referred to Barry v Barrett [2002] QLRT 2, referred to Wills v Minerva Coal Pty Ltd [No 2] (1998) 19 QLCR 297, referred to -- 1 of 10 -- COUNSEL: N/A SOLICITOR/S: N/A AGENT/S: Mr G.T. Houen, for the Appellants Respondent appeared on his own behalf Background [1] This is an appeal under s. 282 of the Mineral Resources Act 1989 (MRA) against a determination of compensation for the proposed grant of a mining lease over land in the Emerald district. The mining lease was recommended for grant for the purpose of mining sapphire, zircon and corundum. The determination was made by a Deputy President of the Tribunal in the sum of $29,542.50 plus $1,100 for the landowners’ valuer’s further fees.1 That sum was ordered to be paid by 1 up-front payment ($16,294.70) within 1 month of the grant of the mining lease and 4 annual instalments (each of $3,311.95). [2] The landowners appealed on 8 grounds which I will address in turn. The appeal (together with 2 related appeals)2 was heard in Emerald by a Tribunal panel comprising Mr R. Wright, Mr D. Webster and myself; however the decision is ultimately mine alone.3 A view of the subject land was also conducted shortly after the hearing concluded. Loss of value – Ground 1 [3] The complaint here was that the amount allowed for loss of value of the mining land was a realised loss and should have been part of the up-front payment rather than as part of the annual instalments. [4] The Deputy President concluded her analysis of the various components of compensation as follows: “[55] As the compensation includes amounts reflecting the impact of disturbance on the lease over the term of the lease, I do not consider it is reasonable to require the miner to pay the entire sum up front. I consider it reasonable the miner pay a sum reflecting compensation for the blot on title and the valuer’s fees up front with the balance paid annually upon grant and at the commencement of each subsequent year of the lease. Accordingly I direct the miner to pay to the landowners:  within 1 month of the grant of the mining lease, the sum of $16,294.70; and  on each anniversary of the grant of the lease, for the term of the lease, the sum of $3,311.95.” [5] The total compensation determined under s. 281(3) was $26,856.82 and an additional 10% ($2,685.68) was awarded under s. 281(4)(e). Of the total sum of $29,542.50, $16,294.70 was directed to be paid within 1 month of the grant of the mining lease. 1 [2002] QLRT 54. 2 Armstrong v Salmon [2002] QLRT 105; Armstrong & Salmon [2002] QLRT 106. 3 Land and Resources Tribunal Act 1999, ss. 40(1)(b), 41(2) & (4), Sch1; MRA, s. 282(1) & (8). Messrs Wright and Webster are members of the Land Tribunal established under the Aboriginal Land Act 1991 and are thus eligible panel members under ss 15(1)(b) & 39(2) of the LRT Act. -- 2 of 10 -- The Deputy President said that it was reasonable that the compensation for blot on title and the valuer’s fees ($3,850) be paid up front. The Appellants argued that the up-front payment represented only blot on title and valuer’s fees. [6] With respect to blot on title, the sum of $15,905 was claimed. The Deputy President adopted that amount as the starting point but halved Mr Compton’s [the landowners’ valuer] 5% reduction in value rate to 2½%.4 That resulted in a notional assessment for blot on title of $7,952.50. After taking proper account of any overlap between blot on title and loss of value and after adding in the valuer’s fees ($3,850), a figure in the order of $10,000 to $11,000 would be attributable to blot on title and valuer’s fees. That is more than $5,000 less than the up-front payment which was directed. [7] The Deputy President concluded that the compensation included amounts reflecting the impact of disturbance on the lease over the term of the lease. When considering aspects of the loss in value of the land affected by the mining lease, the Deputy President did so under the heading: “The area disturbed by mining activities”.5 Although the Deputy President did not ultimately apportion a precise amount for loss of value of the land, it is clear from her conclusions and by her reference to “the impact of disturbance on the lease over the term of the lease” that that component was included in the total determination. Given that the up-front payment was for $16,294.70 and that about $10,000 to $11,000 was attributable to blot on title and valuer’s fees, it follows that about $5,000 or $6,000 was included in the up-front payment for loss of value of the land. The Appellants had claimed $10,300 for this component.6 [8] In Zimmerebner v Hawkins & Anor,7 the Land Court (Trickett P) said that under s. 281 of the MRA, the Court’s task is to assess total compensation and then, as a matter of discretion, impose terms, conditions and times when payments are to be made. I respectfully agree with that approach. [9] In the present case, it is clear that the Deputy President exercised her discretion and directed that the sum of $16,294.70 be paid up front. Some of that amount was for blot of title and valuer’s fees and some of it was for loss of value of the land. The balance of the loss of value component was included in the subsequent annual payments. The mining of the subject land will occur progressively over the 5-year term of the lease. [10] As the Deputy President’s payment and time directions were a matter of discretion, and as I have not been satisfied by the Appellants that that discretion was erroneously exercised, it follows that Ground 1 fails. Environmental conditions – Ground 2 [11] The complaint here was that the Deputy President erroneously concluded that the environmental conditions applicable to the mining lease would enable only 8ha to be disturbed by the mining activities, whereas a total of 24ha was said to be the correct figure. 4 [2002] QLRT 54, at [30], [39]. 5 Ibid at [22] (emphasis added). 6 Ibid at [5]. 7 (1999) 20 QLCR 71, 92. -- 3 of 10 -- [12] The landowners urged the Deputy President to assess the loss in value of the land affected by the mining lease on the assumption that they would be deprived of possession of the entire area for the term of the lease, whereas the miner submitted that compensation should be calculated on the maximum area that could be disturbed. [13] In her reasons, the Deputy President considered the effect of the relevant environmental authority; but as I read the relevant discussion, she made no findings as submitted by the Appellants. Moreover her conclusion on the disturbance issue actually favoured the landowners:8 [emphasis added] “Nevertheless, I consider a hypothetical prudent purchase would regard the lease as effectively depriving the landowners of possession of the surface of the land, even through their stock may from time to time graze on that area.” [14] Ultimately then, the environmental conditions were irrelevant to the Deputy President’s conclusion on the disturbance point. Ground 2 is misconceived. Depreciation – Ground 3 [15] In their written submissions, the Appellants said of this ground: “3.1 The matter complained of is that the learned Deputy President likened the depreciation of this mining lease land to that in Zimmerebner v Hawkins & Anor, as though they were directly comparable, and as though the percentage depreciation in Zimmerebner was directly relevant here.” [16] However, at the conclusion of her discussion on the disturbance point, the Deputy President said, relevantly, as follows:9 “The issue is the effect this would have on the value of the land, given the short term of the lease. In Zimmerebner, President Trickett adopted a discount on the purchase price of 25%. In recent Tribunal decisions on the gemfields, the Tribunal has adopted a figure of 33%, based on valuation evidence. That is the discount rate used by Mr Compton [the landowners’ valuer] and, as the miner has not persuaded me that this rate is inappropriate, I have adopted it in making my determination.” [17] Once that passage is perused, it is clear that contrary to the Appellants’ submissions, the Deputy President did not adopt the Zimmerebner discount rate, but rather accepted the rate (33%) which had been advanced by the landowners. Ground 3 is therefore misconceived. Blot on title – Ground 4 [18] The complaint here was that “without the benefit of either alternative evidence or valuation expertise of her own”, the Deputy President “rejected the expert assessment of blot on title and adopted her own assessment which was for half the amount.”10 8 Ibid at [27]. 9 Ibid at [28]. 10 Appellants’ written submissions para 4.1. -- 4 of 10 -- [19] The landowners claimed $15,905 for blot on title to compensate for the impact of the grant of the mining lease on the value of the property as a whole. That reflected a 5% reduction in value discounted by 33%, in accordance with the opinion of their valuer Mr Compton. The Deputy President accepted the discount rate but halved the reduction in value figure to 2.5%. [20] It is important to note that valuation is a matter of estimation and discretionary judgment.11 In cases such as this, the Tribunal is not obliged to accept the opinion of the only valuer who gives evidence, and is entitled in appropriate circumstances to decide that lower figures are justified.12 [21] The Appellants submitted that the Deputy President had erred in not accepting Mr Compton’s analysis of the comparative sales data or his evidence about the effect of rehabilitation upon the subject land’s productivity. [22] The Deputy President did not accept Mr Compton’s evidence that the sale price of a nearby property (“Minnie Plains”) was not adversely affected (by way of blot on title) by the existence of a mineral development licence (MDL) over it. An MDL is granted for advanced exploration activities where significant mineral occurrence of possible economic potential exists. It authorises drilling, trenching, bulk sampling and testing.13 We were told at the hearing that an MDL can be used to extract a bulk sample of up to 200,000t of coal, which would first require an excavation of over 1 million m3 of overburden. Mr Compton thought that a blot on title would only arise at the mining lease stage. The Deputy President did not accept that view, concluding that an MDL did constitute a blot on title – but that given the high sale price of that other property, its impact was only minimal. I can see no error in that commonsense approach. [23] Mr Compton also gave evidence about the depreciated value of an adjoining property (“Subera”), having regard to the proportion of that property which was subject to mining encumbrances. The Deputy President mathematically extrapolated those figures to its likely impact upon the subject property. Although some point was made by the Appellants about the accuracy of the calculations, it is clear that if (as Mr Compton said) 58.6% of “Subera” was subject to mining encumbrances which led to a 25% negative impact on value, the 1.6% of this property which will comprise the mining lease would lead (other factors aside) to a negative impact on value of less than 1%.14 That, as the Deputy President correctly said, was “not the 5% applied by Mr Compton.” In other words, the Deputy President regarded Mr Compton’s assessment as too high. [24] Mr Compton also said that one of the factors in his assessment was that “rehabilitation without guarantee of restoration of land capability assessed on the basis of productivity” [sic]. In evidence, he later qualified that to refer to restoration “within the 5-year term”.15 However although Mr Compton was not confident that the land would be returned to the same productivity at the end of the 5-year term of the mining lease, the Respondent’s expert (Mr Fletcher) gave evidence that the 11 Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336, 381. 12 The Minister v Ryan (1963) 9 LGRA 112, 114; Minister for Lands v Ferguson (1969) 48 LVR 9, 11. 13 MRA, s. 181. 14 1.6 ÷ 58.6 x 25 = 0.68%. Although the judgment (at [35]) referred to 68%, I assume that was a typographical error which omitted the decimal point. 15 AB 192. -- 5 of 10 -- rehabilitation proposed would return the land to its pre-disturbance productivity.16 The evidence on the point was therefore in conflict and the Deputy President was entitled to not accept Mr Compton’s opinion. The Deputy President was also correct in stating that she was required to act on the assumption that the relevant environmental conditions would be complied with17 – and therefore that the land would be restored by the end of the lease to the same productivity. [25] A point was also made by the Appellants that contrary to the Deputy President’s views, there was evidence that the purchase price of “Subera” did not include any assessment for the impact of disturbance on the lease area and on the balance of the property. Reference was made to a tendered compensation agreement and to certain of the evidence given by Mr Compton. However although evidence was given about various aspects of the sale price of “Subera”, I am unable to see that there was evidence of the no-disturbance element as asserted by the Appellants. Indeed no precise passages in the evidence were referred to in that regard by the Appellants. [26] Finally, I also note that when Mr Compton gave evidence, he accepted that his 5% reduction in value figure was a subjective opinion and that another valuer had adopted a figure of only 2.5% for this property.18 Although that was not a stated feature in the Deputy President’s analysis, it nonetheless is consistent with the Deputy President’s conclusion. [27] The Deputy President gave proper and detailed consideration to all relevant factors and I am not satisfied that the Appellants have demonstrated any errors in her approach. Before leaving Ground 4, I note that the Appellants also raised some issues concerning access, but as access is specifically the subject of Ground 7, it will be addressed under that ground. Injurious affection – Ground 5 [28] The Appellants said that the Deputy President cut the expert assessment for injurious affection to the balance lands by two-thirds, without the benefit of justifying evidence and contrary to comprehensive supporting expert evidence. [29] The landowners claimed $5,800 for injurious affection relating to the balance of the property. Mr Compton assessed compensation using a 33.3% reduction in carrying capacity of the land outside the lease area, based on a notional buffer of 500m around the mining lease. The miner submitted that compensation should be nil because there would be no or minimal impact. [30] In a resumption case, “injurious affection” is regarded as a neat, expressive way of describing the adverse effect of the activities of a resuming authority upon a dispossessed owner’s land.19 Similarly in a mining compensation case, the focus will be upon the adverse effect of the mining activities upon the landowner’s land – and for present purposes, upon that part of the land which will not be mined. 16 AB 255. 17 See R v The Land Court, ex parte Kennecott Explorations (Australia) Ltd [1989] 1 QdR 335, 337 (FC). 18 AB 186. 19 Marshall v Director General, Department of Transport (2001) 205 CLR 603, 622. -- 6 of 10 -- [31] The Deputy President accepted that there would be some impact on the land not under lease – namely the effect of dust and noise on cattle, interference with plans to subdivide the large bullock paddocks, and a new access point being created into the property. With respect to dust and noise, she said that a significant buffer was already provided because the miner could disturb up to 10ha only; with respect to interference with plans to subdivide, she said that no evidence was led as to the impact of that interference on the property’s profitability; and with respect to access, she acknowledged that there was a risk of unlawful access through the western part of the property. [32] The Appellants submitted that the maximum area of allowable disturbance was 24.5ha, but as was conceded by the Appellants at the hearing, that area was for this mining lease application and 2 others. [33] The Appellants submitted that the evidence of Messrs Compton and Armstrong “substantiated in general terms the impact on profitability”. It is difficult to accept that submission once it is appreciated that Mr Compton conceded that he was “not an expert in cattle husbandry”20 and that (as the Deputy President said) Mr Armstrong acknowledged that he had no experience of running cattle on properties affected by the type and scale of mining proposed by the miner in this matter.21 The Appellants did not address the effect of those statements upon their witnesses’ evidence. I have carefully read those parts of the evidence which the Appellants said supported their arguments about profitability but am unable to accept that either witness had demonstrated the requisite expertise to express an opinion as to the specific effect of the proposed mining operations upon this property’s profitability. The Deputy President did not doubt that there would be some effect, but no evidence was adduced which would have enabled a precise assessment to be made. [34] The Appellants’ submissions about access are addressed under Ground 7. [35] Once the above analysis is made, this part of the appeal turns upon whether the Appellants have otherwise demonstrated that the Deputy President erred in reducing Mr Compton’s 500m buffer zone approach by two-thirds. Although the Appellants attempted to support Mr Compton’s assessment for injurious affection by reference to other issues, the only apparent justification advanced for the 500m buffer zone was the following:22 “Whether that buffer zone is an appropriate area cannot be judged by comparison with the area of the mining lease adjacent to it, as the Deputy President has done (paragraph 41/42: Appeal Book page 62). The only relevant consideration is the cattle management issue of the distance from mining activity within which disturbance to cattle would occur. That can only be a matter for expert opinion and such opinion and the basis for it was given by Mr Compton (transcript, page 82, line 11: Appeal Book page 188).” [36] The apparent justification for the first sentence of the preceding passage is the contents of the second and third sentences. I have previously rejected the Appellants’ submissions about the cattle management (or profitability) point. It should be noted that it was Mr Compton who advanced the buffer zone approach to assess injurious affection. For the Appellants to now say that the appropriateness of 20 AB 188. 21 [2002] QLRT 54, at [18]. 22 Appellants’ written submissions para 5.9. -- 7 of 10 -- a buffer zone cannot be judged by comparison with the adjacent mining lease area is really to dispute the very basis or effect of the buffer zone – which was the method advanced by their expert valuer. A buffer is relevantly an area or zone which separates 2 other areas – here, the mining lease area and the land which is not being mined. The relevant question is whether a buffer of a certain distance will be adequate in all the circumstances. [37] The learned Deputy President analysed the suggested buffer zone of 500m and regarded it as excessive because (a) it was, in total, more than 157% of the area of the lease itself, and (b) it constituted a buffer of 19.67ha for every hectare disturbed by mining. This, the Appellants said (without elaboration), was “an inappropriate statistical interpretation of Mr Compton’s evidence”. However Mr Compton himself conceded that the basis for his 500m buffer zone was his involvement in various compulsory acquisitions or negotiated settlements which “differ[ed] in scale and use” from this case, and that “[w]hether it’s 500 metres or 400 or 250 is subjective.”23 Those concessions substantially reduce the force of Mr Compton’s evidence on this point. Moreover it also suggests that a substantial reduction of at least one-half in the suggested 500m buffer could still constitute an appropriate buffer for present purposes. The Deputy President adopted one-third of that 500m – namely 166m. That distance seems to me to be reasonable in the circumstances and having considered the Appellants’ submissions, I am unable to see that it has been demonstrated that the Deputy President’s approach was erroneous. Judgment – Ground 6 [38] The matter complained of here is that the judgment does not show how the assessments adopted for the 3 heads of compensation are employed in calculations, nor what the amounts ordered for payment at particular times represent. [39] In dealing with the various components of compensation in s. 281 of the MRA and in determining the total compensation payable (without providing a breakup of the individual components) and at which particular times, the Deputy President adopted the approach which had generally been adopted by the Land Court since 198624 and by this Tribunal since 2001.25 [40] I did not understand Mr Houen to have submitted that the approach in those earlier cases was wrong. Rather his submission seemed to be that it should not have been adopted in this particular case. However no reasons for that submission were advanced and absent any basis for questioning the previously adopted determination approach, I am not satisfied that any error in the Deputy President’s approach has been demonstrated. Access – Ground 7 [41] The Appellants complained that the Deputy President refused any compensation for blot on title “arising from the access and resulting loss of paddock security”, whilst accepting that the miners’ access would expose the western half of the property to 23 AB 188. 24 Eg, Smith v Cameron (1986) 11 QLCR 64, 74, 83; Zimmerebner v Hawkins & Anor (1999) 20 QLCR 71, 77, 92-3. 25 Eg, Messer v Rossi [2001] QLRT 6; Re Supersorb Minerals NL & Ors [2001] QLRT 88; Richardson v Barrett [2001] QLRT 89; Barry v Barrett [2002] QLRT 2. -- 8 of 10 -- the risk of unlawful entry (a factor relevant to a purchaser’s assessment of the property’s value). [42] The Deputy President considered that the amount determined for blot on title adequately compensated the landowners for the effect of the grant of the lease, including access. She took into account that the access was located along a boundary and an existing track and that traffic along that track would be increased. [43] The Appellants submitted (without elaboration) that this aspect of the decision “is completely at odds with the uncontested expert evidence, and with the Deputy President’s own findings acknowledging adverse impacts of the access on market value.”26 They went on to say that Mr Compton’s assessment of blot on title “recognised the loss of paddock security from the opening of a new public access to the southwestern sector of the property.”27 In other words, the landowners’ expert’s assessment of blot on title took access into account. [44] As discussed earlier, the Deputy President’s determination included a component for blot on title. That component was expressly stated to compensate the landowners for the effect of the grant of the lease, “including access”. It is clear therefore that the Deputy President considered the question of access when making her determination as to the total compensation payable. [45] The Appellants did not argue that specific aspects of the expert evidence necessitated a higher award, nor did they identify the respects in which the award was thought to be “completely at odds” with that evidence. In the circumstances, I cannot be satisfied that the Deputy President’s treatment of access was erroneous in any respect. Costs – Ground 8 [46] The matters complained of here were that the Deputy President erroneously disallowed the Appellants’ claim for the costs of their agent Mr G. Houen of Landholder Services Pty Ltd (a) in formulation of the compensation claim and (b) thrown away because of the miner’s abandonment of their valuer’s evidence. Mr Houen is not a lawyer. [47] The Deputy President disallowed claim (a) because of insufficient information to determine whether Mr Houen’s engagement by the landowners was reasonable or necessary, and claim (b) because the Tribunal was unable to award the costs of a lay agent representing a party. [48] As to (a), the Appellants submitted that the compensation claim was a complex one requiring detailed knowledge and experience, and that the proper test was whether the costs incurred by the landowners were reasonable and necessary. As to (b), they argued that s. 281(7) of the MRA, which provides that when determining compensation, the Tribunal “may make such order as to costs between the parties to the determination as it thinks fit”, should have been applied to award the landowners Mr Houen’s costs thrown away by the miner’s actions. 26 Appellants’ written submissions para 4.13. 27 Ibid, para 4.14. -- 9 of 10 -- [49] Section 281 (Determination of compensation by tribunal) provides in subs. (3)(a) that the Tribunal shall settle the amount of compensation an owner of land is entitled to as compensation for a variety of components “as a consequence of the grant … of the mining lease”. In Wills v Minerva Coal Pty Ltd [No 2],28 the Land Court (Scott M) held that any decision by such a landowner to employ 1 or more of a range of para professionals (such as Mr Houen) does not arise “as a consequence of the grant of the mining lease”, but by virtue of the independent decision of the landowner to conduct his affairs in a particular way. Accordingly he held that Mr Houen’s fees for his involvement in negotiations or in the preparation of the claim for compensation could not be awarded. I respectfully agree with that approach. [50] However there is an even more fundamental obstacle in the present case to any award of Mr Houen’s fees. I refer here to s. 209(2) of the Supreme Court Act 1995, which provides as follows: “Appearance to be in person or by barrister or solicitor or person allowed by the judge 209(1) … (2) A person who is not a barrister or solicitor of the Supreme Court shall not be entitled to claim or recover or receive directly or indirectly a sum of money or other remuneration for appearing or acting on behalf of another person in the Supreme Court. (3) …” [51] In my opinion, this section also applies to the Tribunal by virtue of s. 65 (Powers of tribunal) of the Land and Resources Tribunal Act 1999. Section 65(1) provides that the Tribunal has, for exercising its jurisdiction, “all the powers of the Supreme Court”; and s. 65(5) provides that to the extent that the practice and procedure of the Tribunal in exercising its jurisdiction are not provided for in the rules, “they must as far as practicable be the same as the practice and procedure of the Supreme Court in similar matters.” The Land and Resources Tribunal Rules 2000 do not address the award of or the entitlement to costs. Thus whether s. 209(2) is seen as a power provision or one relating to practice and procedure, it follows that Mr Houen’s fees “for appearing or acting on behalf of” the landowner in the Tribunal – and they are the fees which are being claimed – are not claimable or recoverable. Recourse to s. 281(7) of the MRA is not to the point, because that provision relates to the Tribunal’s power to make costs’ orders between parties and not to the antecedent issue of whether a non-lawyers’s costs for appearing or acting for one of the parties are recoverable. [52] Ground 8 therefore fails. Conclusion and Orders [53] For the reasons set out above, each of the grounds advanced by the Appellants fails. The appeal will therefore be dismissed. 28 (1998) 19 QLCR 297, 362, 363. -- 10 of 10 --