Deeley v Hicks [2001] QLRT 94

LAND AND RESOURCES TRIBUNAL QUEENSLAND CITATION: Ronald Leslie Deeley v. Russell Brendon Hicks and Cameron Jeffrey Hicks [2001] QLRT 94 PARTIES: In the Matter of Application for Mining Lease No. 70188 Ronald Leslie Deeley Applicant -and- Russell Brendon Hicks and Cameron Jeffrey Hicks Landholders FILE NO/S: MLC00013/01 PROCEEDING: Determination of compensation DELIVERED ON: 7 December 2001 DELIVERED AT: Brisbane HEARING DATES: 21 February 2001; 2, 3 April 2001; 5 June 2001; 5 July 2001; 1, 9 August 2001; 19 September 2001; 10 October 2001; 1 November 2001 PRESIDING MEMBER: Smith DP ORDER/S: 1. I assess the total compensation in this matter at $8,800. (at [28]) 2. I direct that the Applicant pay the total compensation of $8,800 to the Landholders in instalments, the first payment of $4,800 within 1 month of the grant of the mining lease, and the balance of $4,000 within 13 months of the grant of the mining lease. (at [30]) CATCHWORDS: MINING LEASE – DETERMINATION OF COMPENSATION – PRINCIPLES TO BE APPLIED – CROSS-POLLINATION – ACCESS – VALUATION AND LEGAL FEES Mineral Resources Act 1989, ss. 279, 281, 307 Land and Resources Tribunal Act 1999, s. 83 Elliot v. Hicks [2001] QLRT 38, referred to Re Weir, Rasmussen and Others [2001] QLRT 77, referred to Richardson v. Barrett [2001] QLRT 89, applied -- 1 of 10 -- Zimmerebner v Hawkins & Anor (1999) 20 QLCR 71, referred to COUNSEL: Mr A.C. Barlow for the Applicant* SOLICITORS: N/A AGENT: Mr G.T. Houen for the Landholders * The Applicant was self-represented for a substantial part of this matter. Background [1] SMITH DP: On 18 November 1999 Mining Warden Windridge recommended that Mining Lease Application 70188 be granted over an area of 35.26ha situated on lot 22 on CLM582, County of Clermont, Parish of Keilambete. The property is known as ‘Keilambete’ and the Landholders are Russell Brendon Hicks and Cameron Jeffrey Hicks. The Applicant/Miner is Ronald Leslie Deeley. [2] As compensation as between the Applicant and the Landholders was not agreed, the Mining Registrar, Emerald, on 6 June 2000, pursuant to s. 279(5) of the Mineral Resources Act 1989 (hereinafter “the MRA”), referred the question of the amount of compensation payable in respect of MLA 70188 to the Warden’s Court for determination. As the Mining Warden had not heard and determined this matter as at 18 September 2000, the matter became a proceeding in this Tribunal.1 [3] The hearing of the matter took place in Emerald on 21 February 2001, and 2 and 3 April 2001, including a site inspection on Keilambete on 2 April 2001. The hearing of this matter has also been subject to what the parties refer to as ‘cross pollination’ with three other proceedings2, one of which has since been abandoned. In particular, the submissions in this case are directly linked to interlocutory proceedings in Elliot v Hicks3, and the timing of submissions. These interrelated matters and other issues, and issues of a letter and a newspaper article sent directly to Chambers by a party, have been the subject of a number of interlocutory points, the last of which (that of the newspaper article) was dealt with by the judgment in this proceeding and the related proceedings on 1 November 20014. It is not necessary for the purposes of this 1 Land and Resources Tribunal Act 1999 s 83. 2 Weir, Rasmussen & Barrett (matter no. MLC00024/01); Deeley & Hicks (matter no. MLC00018/01) and Elliot and Hicks (matter no. LXX40066/2000). 3 [2001] QLRT 38. 4 [2001] QLRT 77. -- 2 of 10 -- determination to detail all the dates that this and the related matters have been before me on all interrelated issues. [4] No expert valuation evidence was called at the hearing of this matter. It is particularly relevant that the Landholders did not rely on the evidence of an expert valuer, despite the fact that as a normal principle the cost of legal and valuation fees incurred in the preparation of a claim for compensation are allowed as items of disturbance. As was said by Trickett P. in Zimmerebner v Hawkins & Anor: “In my opinion, the claim for such disturbance items is not well founded. In Smith v Cameron, the Land Court pointed out that in cases involving the compulsory acquisition of land, legal and valuation fees incurred in the preparation and lodgment of a claim for compensation are allowed as items of disturbance. The Court saw no reason why the principle should not be applied to an application for compensation under the Mining Act. That reasoning was followed by this Court in Mitchell. However, in this case there is, of course, no claim for compensation in the same manner as there would be under the Acquisition of Land Act. In the circumstances, it would seem appropriate to allow reasonable legal and valuation costs in preparing a claim for compensation before the Mining Warden.”5 [5] Evidence at the hearing was given by Reuben Bradford, the Applicant Ronald Leslie Deeley and one of the Landholders, Cameron Jeffrey Hicks. Further expert evidence was given by George Fraser Bourne, an agricultural scientist, who specialises in soil conservation and land use suitability. Unfortunately, as conceded by Mr Bourne, his evidence was not as useful as it may otherwise have been, as due to extremely wet conditions he was unable to physically view the subject land, relying instead on aerial photography and the like for a desktop report. As regards the evidence of the other witnesses, whilst I do not believe that there have been any cases of the giving of evidence deliberately knowing same to be false, much of this evidence nonetheless is in conflict. In effect, their evidence has been tainted by the predominant underlying interest of each witness – either as a miner or landholder. In some respects, the evidence has been based on assumptions, validly held (particularly by Mr Deeley), but unfortunately based more on inference and hearsay than fact. The evidence on occasions also strayed into matters not particularly relevant to the matters at hand. Accordingly, in reaching my decision in this matter, I have considered the totality of all evidence before me, taking account of the factors referred to in this paragraph, and drawn my own conclusions. When it is necessary to do so, I have referred to the evidence that I have relied upon with respect to particular aspects of this matter at the relevant parts of the decision. 5 [2001] QLRT 89. -- 3 of 10 -- [6] In considering this matter, I have taken into account all the evidence before me, including material provided to the Tribunal by the Mining Registrar, Emerald, as part of the referral process, and material from the Warden’s Court. These reasons refer to the salient points, but not all the relevant evidence, that I have taken into account in making my decision. The principles of compensation [7] As was said during the course of the proceedings, Judgment in this matter would follow shortly after the delivery of my judgment in Richardson v Barrett,6 which case was treated by the parties as a form of ‘test case’ as to how the Tribunal would approach mining compensation matters in the Central Queensland gemfields. In light of my decision in Richardson v Barrett, it is unnecessary to detail in this matter the principles of compensation. Suffice it to say that, wherever relevant, I rely and adopt into this decision my reasoning as set out in Richardson v Barrett. This includes my findings on relevant cross-pollinated evidentiary points, such as the newspaper article. [8] I further note that this matter concerns the determination of compensation on the property ‘Keilambete’. Keilambete was the subject of a decision of the Land Court, on appeal from a determination of compensation by the Acting Mining Warden under s. 281 of the MRA, in Zimmerebner v. Hawkins & Ors,7 a decision to which detailed attention was given in my decision in Richardson v Barrett. This MLA is in fact on the other side of Retreat Creek from the MLA under consideration in Zimmerebner. [9] In determining compensation in this matter, in accordance with s. 281 of the MRA, whilst making reference to various components that I have taken account of and considered in reaching my conclusion as to the quantum of compensation, the ultimate award of compensation will not be an aggregate of all previous figures, but a figure arrived at by taking into account those figures, considering the issue of doubling up, and, in all the circumstances, arriving at a sum which I believe properly compensates the Landholders taking into account all issues as set out in s. 281 of the MRA. 6 [2001] QLRT 89. 7 (1999) 20 QLCR 71. -- 4 of 10 -- The claims for compensation [10] In submissions received on 29 June 2001 the Applicant submits that the determination of compensation should be $12 - $15 per ha for disturbed land. It appears from his EMOS commitments that the maximum disturbance at any one time will be something under 4 ha, meaning that the Applicant believes compensation should be $48 to $60. I gather that the Applicant means to pay this amount per annum for the 5 years, which sets the total amount of compensation that the Applicant believes is payable at between $240 and $300. [11] On the other hand, the Landholders’ position is that the compensation should be set at $31,224 (excluding the Landholders’ GST claim). As was the case in Richardson v Barrett, the divergence of opinion as to the quantum of compensation flowed over into the manner in which both sides presented their cases. Assessing Compensation [12] I turn first to the impact of the mining lease on the land the subject of the mining lease. The area of the lease is said in the Mining Warden’s recommendation to be 35.26 ha. In his evidence and his submissions, the Applicant said that the overall area of his MLA had been reduced due to changed commitments in his EMOS. In his submissions, Mr Houen argues that as the Applicant has not abandoned part of the MLA under s. 307 of the MRA, the Tribunal has no alternative but to assess compensation on the original 35.26 ha. [13] A close evaluation of the material provided by the mining registrar indicates that the original application area was not 35.26 ha but 38.0477 ha. This is evident from the notice of application for mining lease number 70188 dated 2 June 1999, and from the advertisement placed in the Central Queensland News on Friday, 11 June 1999 which both indicate an area applied for of 38.0477 ha. I also note that by letter dated 1 September 1999 to Mr Deeley, the Environmental Officer, Central Region, with the then Department of Mines and Energy advised the Applicant that it was a requirement that mining does not come to within 15 metres of the lease boundary in the area adjacent to Retreat Creek and that the EMOS should be revised to ensure that this point was acknowledged. The letter further stated that “further processing of the mining lease application will be withheld until this matter is finalised”. A memorandum dated 20 September 1999 from the Environmental Officer Central -- 5 of 10 -- Region Department of Mines and Energy (as it then was) to the Mining Registrar Emerald advised that the Applicant had revised the EMOS as requested. The memorandum further recommended that the application be processed forthwith. Subsequently, on 18 November 1999, the Mining Warden made his recommendation referring to an area of 35.26 ha. It would appear that the reduction from 38.0477 ha as advertised to 35.26 ha as recommended takes account of the Applicant’s revised commitments in his EMOS. I accordingly will proceed with my determination of compensation in this matter on the basis of the MLA area being 35.26 ha. [14] The landholders values this area of land at $175 per hectare. He provides additional evidence to show that, since the hearing of the matter, the value may have increased to $185 per hectare. I note however that the landholders base their valuation in this regard on material supplied by a real estate agent and that the agent, Tim Maguire, in a letter dated 19 June 2001, exhibit CJH2 to an affidavit of Cameron Jeffrey Hicks sworn 4 July 2001, states as follows: “This letter should not be considered as a formal valuation and should only be used as a general indication of a price likely to be achieved upon the open market. This opinion is based upon the attached sale comparisons and is directed more specifically to the areas of mining lease disturbance as expected.” [15] Although not overly clear, it would seem that the Applicant argued that the value of the land was something in the order of $100 per hectare. I note that in Zimmerebner,8 a decision made in March 1999, that a value of $125 per hectare was applied to land which the evidence in this matter shows to be quite similar to the land in this matter, being on the other side of Retreat Creek. [16] In applying a value to the subject land, the evidence puts up another conundrum. On the one hand, the landholder, Cameron Hicks, says in evidence that he was not aware that there would be mining on the property when he purchased it in 1999 and that, had he been aware, he would have proceeded very differently with the purchase. I find Mr Hicks’ evidence in this regard quite surprising, given that he purchased Keilambete on 4 March 1999 and the Zimmerebner decision was handed down on 30 March 1999, and further given the presence of pegging on the property. Be that as it may, clearly from Mr Hicks’ evidence he would value Keilambete at a lower price due to the mining activity which he is now aware of on Keilambete, with prospects for more mining activity in the future. However, on the other hand, Mr Hicks has also indicated 8 20 QLCR 71 at 90. -- 6 of 10 -- that due to the high prices being received for cattle, the prices of properties are quickly increasing, resulting in the increased property valuation as provided by Mr Maguire. Clearly, the landholders cannot have it both ways. For the purposes of this part of the assessment, I am prepared to value the subject land at $160 per hectare. [17] Accordingly, 35.26 ha at $160 is $5,641.60. In Richardson v. Barrett, I considered a depreciation of 331/3%. In Zimmerebner, I note that the amount depreciated under a similar assessment was 25%. Mr Houen, on behalf of the Landholders, seeks a depreciation of 80%. I consider a depreciation amount, given the nature of the land and the five year term of the lease, to appropriately be 331/3%. Applying such depreciation, the sum for the lease area is $1,880. [18] I now turn to consider the impact of the existence of the mining lease on the balance land. Under a heading entitled ‘Loss or Expense Arising’, the Landholders, through Mr Houen claims the sum of $13,450. Further, under a heading titled “Loss of value of owners’ other lands”, Mr Houen claims $10,000. Mr Houen, in his submissions, supported by the evidence of Mr Hicks, arrives at these figures as follows: “b) Loss of value of owners’ other lands (MR Act section 281 (43) (a) (ii) (ie.) Bush Paddock of 4,287 hectares) market value of Bush Paddock @ $100/ha $428,000 loss of value due to grant of ML70188 not less than $10,000 c) Loss or Expense arising (MR Act section 281 (3) (a) (vi) ) loss of grazing capacity in surrounding area 13 head agistment basis for 5 years $8,450.00 general disturbance, extra working costs, poor utilisation of feed $1,000 x 5 years $5,000.00” [19] There is a clear conflict in the evidence when it comes to the carrying capacity of the property and the general nature of the subject land. Without doubt, I should give some weight to what the Mining Warden said in his recommendation of 18 November 1999. At page 5 of his recommendation, the Mining Warden had this to say: “The land appears to be used for low intensity grazing under favourable conditions, and it seems the proposed mining operation will cause no significant disturbance to stock or stock watering or management facilities. The general nature of the land is described as “undulating” with “spear grass”. The Field Officers Report indicates the country is loamy clayey soil with scrub and grassland. There is no arable top soil. Rainfall is low. Stock fodder is generally of poor quality on the application area with little or no fodder in deficit rainfall years.” -- 7 of 10 -- It is apparent that the Mining Warden’s findings are consistent with the then Department of Mines and Energy’s Field Officer’s report. [20] In his report,9 Mr Bourne assesses the carrying capacity of this type of land as 1 beast to 4-6 ha. He further states that graziers have said that this type of land will carry 1 beast to 3-4 ha. Although he concedes that he has not conducted a site inspection, it is his view that: “The effect mining this lease would have on the property in the short term would simply be to reduce the carryingy [sic] capacity of “Kielembete” by the 5-7 head per year. Therefore there would only be a slight impact on profitability of the property. However, unless fenced out, the mining lease could be a hazard to stock ranging from a physical accident to poisoning etc.” Although Mr Bourne qualified his figures somewhat during cross-examination by Mr Houen, his overall evidence remained that for long term viability his stocking rates per ha were less than the landholders. He based his assessment on many years of work and research in the area. [21] Mr Hicks puts the loss of carrying capacity at 13 head and considers that the impact, it would seem, would be felt at least to some degree on the whole of bush paddock which is 4,287 ha. I reject the evidence of Mr Hicks that the impact will be felt to some degree over the whole of bush paddock. [22] With respect to the evidence, I prefer that of Mr Bourne to that of Mr Hicks or the Applicant. Applying what I said in Richardson v. Barrett, I consider it would be appropriate to take into account a sum in the order of $1,000 per year for impact on the balance area of the land. I base this figure in part on the fact that the land area to be mined is only slightly over half that of the area concerned in Zimmerebner, thereby reducing the overall effect on surrounding land. I also note, from the Applicant’s evidence, that the area to be actually mined in this matter will be somewhat less than the 35.26 ha due to part of the area, in effect, being used for access. I also note the significantly higher value of the relevant surrounding land in Richardson v Barrett to that applicable in this case. [23] As set out above, Mr Houen’s submissions were based in part on Mr Hicks’ evidence that the carrying capacity of Mount Clifford will be reduced by the equivalent of 13 head as a result of the mining lease. 9 Exhibit 1 -- 8 of 10 -- [24] Accepting primarily the evidence of Mr Bourne, but also taking into account all the evidence, it is my view that the existence of the mining lease on Mount Clifford will reduce the carrying capacity of the property by approximately 7 cattle per year. This is based on the evidence that the subject land has a carrying capacity of approximately 1 beast per 5 ha, and that the agistment cost in the district is $2.50 per beast per week. Applying these assumptions, in my view there will be, at any one time, a total loss of 1 beast for the area of actual disturbance of the mining lease in the area of say 4 ha, being more than the total area that can be disturbed at any one time. For the balance of the area of the mining lease of 31 ha, in my view, as the evidence is that cattle will have access to the balance lease lands throughout the 5 year term of the lease, there will be a loss in carrying capacity of approximately 50% of the normal carrying capacity. This equates to the loss of approximately 3 head per year. As regards the land surrounding the mining lease, in my view there would be an impact for say the surrounding 50ha of the mining lease area, but that impact should be reduced down to one third of the otherwise carrying capacity of the land. This equates to a loss in carrying capacity of about 3 head per year for the term of the lease. Averaging this to the loss of approximately 7 head per year as a consequence of the grant of the mining lease, at an agistment rate of $2.50 per week for 52 weeks for 5 years, this amounts to $4,550. [25] With respect to the sum of $4,550, it is my view that this figure is substantially reflected in the sums that I have already referred to for both the land to be mined and the surrounding land and is therefore in many, but not all, respects a doubling up. [26] The material is lacking when it comes to the question of compensation for access to the mining lease. From the material provided by the Mining Registrar, it appears that access to the mining lease is required over an area a of 240 m² (60mx4). Neither party has placed any compensable value on this area. For the purposes of this determination, I will take into account a nominal sum for access. [27] As regards legal and valuation fees incurred by the Landholders in the preparation of the claim for compensation, I note that the Landholders have presented no expert valuation evidence. I have no evidence before me of either the existence or quantum -- 9 of 10 -- of any legal fees incurred by the Landholders.10 I accordingly make no allowance in my determination for legal and valuation fees. Conclusion [28] Taking full account of the foregoing, and, as previously indicated, assessing compensation in a total sum, it is my view that in the circumstances an award of compensation in the sum of $8,000 is appropriate in this matter. Applying s. 281 4(e) of the MRA which states that an additional amount must be determined to reflect the compulsory nature of the action taken under this part regarding the grant of the mining lease, I award an additional amount of 10% on $8,000. Accordingly, I assess the total compensation in this matter at $8,800. [29] The landholders seek payment of at least the greater proportion of the compensation at the time of grant. Mr Deeley seeks the payment of a yearly instalments for each of the 5 years. It is my view that compensation for amounts such as the total in this case should in most cases be paid “up front”. However, accepting the Applicant’s submissions in part, I am prepared to depart to some degree from requiring a full payment at the commencement of the mining lease in the circumstances of this case. [30] I direct that the Applicant pay the total compensation of $8,800 to the Landholders in instalments, the first payment of $4,800 within 1 month of the grant of the mining lease, and the balance of $4,000 within 13 months of the grant of the mining lease. 10 Transcript 6 April 2001 135 lines 29-44. -- 10 of 10 --