Loading...
Queensland Judgments
Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

Haines v Smith & Anor

 

[2019] QLC 35

LAND COURT OF QUEENSLAND

CITATION:

Haines v Smith & Anor [2019] QLC 35

PARTIES:

Norman Graham Haines

(applicant)

v

Kenneth Noel Smith

(first respondent)

and

Deborah Allison Smith

(second respondent)

FILE NO:

MRA237-18

DIVISION:

General division

PROCEEDING:

Determination of compensation for renewal of mining lease

DELIVERED ON:

­­6 September 2019

DELIVERED AT:

Brisbane

HEARD ON:

Submissions closed 10 May 2019

Matter allocated on 7 May 2019

HEARD AT:

Heard on the papers

MEMBER:

WL Cochrane

ORDERS:

  1. In respect of the application for renewal of ML 10331, compensation is determined in the amount of Four Hundred and Twenty-Nine Dollars ($429) per annum, which is Four Thousand, Two Hundred and Ninety Dollars ($4,290) for the life of the lease.
  1. Norman Graham Haines is to pay to Kenneth Noel Smith and Deborah Allison Smith compensation in the amount set out in Order 1, namely, Four Hundred and Twenty-Nine Dollars ($429), within thirty (30) days from the notification of the renewal of the mining lease by the Department of Natural Resources, Mines and Energy and annually thereafter on or before the anniversary of the issuing of the lease.

CATCHWORDS:

ENERGY AND RESOURCES – MINERALS – MINING FOR MINERALS – COMPENSATION – where mining leaseholder applied for Land Court to determine compensation – where subject land used for grazing – where parties filed compensation statements unsupported by evidence – where Court relies on previous determinations to reach a compensation figure

Land Court Rules 2000 r 36A

Mineral Resources Act 1989 s 279, s 279A, s 281

Alphadale Pty Ltd v Dore & Ors [2016] QLC 15, considered

Aurum Vale Pty Ltd v Struber & Anor [2018] QLC 19, considered

Eacham Abrasive Blasting Pty Ltd v Gundersen & Anor [2014] QLC 38, considered

Fitzgerald v Struber & Anor [2018] QLC 18, considered

Fitzgerald v Struber & Anor [2019] QLC 6, considered

Great Mines Pty Ltd v Titley [2010] QLC 32, cited

International Parts & Equipment Pty Ltd v Struber & Anor [2018] QLC 23, considered

Keyse v Phillipson & Ors [2016] QLC 40, considered

Markert v Struber & Anor [2019] QLC 7, considered

McDowall v Reynolds [2015] QLC 32, cited

Pavey & Anor v Struber & Anor [2017] QLC 63, considered

Pavey & Anor v Struber & Anor [2018] QLC 24, considered

Plethora Pty Ltd v Struber & Anor [2018] QLC 26, considered 

Re Australian Diatomaceous Earth Pty Ltd v Marsterson [2004] QLRT 49, cited

Re Queensland Tantalite Pty Ltd and A T Batchelor [2005] QLRT 84, cited

Skrzypczynski & Ors v Hutchinson [2017] QLC 4, considered

Thomsen v Struber [2017] QLC 33, considered

Wallace & Ors v Bottomer & Ors [2015] QLC 23, considered

Wills v Minerva Coal Pty Ltd (No. 2) (1998) 19 QLCR 297, considered

APPEARANCES:

Not applicable

  1. [1]
    This matter is a referral by the chief executive of the Department of Natural Resources, Mines and Energy (DNRME) to the Land Court pursuant to s 281(1) of the Mineral Resources Act 1989 (MRA) for the determination of compensation in respect of the grant of a renewal of a mining lease ML 10331.

Background

  1. [2]
    In late-June 2018, the applicant miner, Mr Norman Haines, applied to renew ML 10331. In the application by Mr Haines, he elected for compensation to be determined by the Land Court.
  1. [3]
    The application sought a renewal of ML 10331 for a term of 10 years set to expire on 31 December 2028.
  1. [4]
    The subject ML 10331 is located on property owned by the respondents, Mr Kenneth Smith and Mrs Deborah Smith, which property is described as Lot 4 on GF 194 (or “Oakvale Station”).
  1. [5]
    The total area of the mining lease is 25.6269 hectares (including an access area of 0.25 ha) which is entirely located on the respondents’ land known as Oakvale Station.
  1. [6]
    The minerals sought pursuant to the mining lease are copper ore, gold, lead ore, monazite, rare earths, silver ore, tantalum/tantalite, tin ore, titanium ore and zinc ore. From the material on the file it appears as though the main focus has been upon the recovery of gold from the mining lease site. The file also contains a document which is identified as an amendment to the compensation agreement between the parties entered into on the twenty-ninth day of September 2010. That is an agreement separate from the determination of compensation from this Court and should not be disturbed by any dollar amount determined by the Court.

Relevant legislation

  1. [7]
    This decision is made to satisfy the requirements of s 279(1) of the MRA which provides that a mining lease shall not be granted or renewed unless an agreement in relation to compensation has been filed or, in the absence of such an agreement, a determination of compensation has been made by the Land Court.
  1. [8]
    In the present case, no agreement has been lodged with the relevant Department, and in his application for renewal of ML 10331, Mr Haines has sought this Court determine the amount of compensation payable by him to the respondents rather than electing to continue negotiations with them.
  1. [9]
    Section 281 of the MRA sets out those matters which must be considered by this Court when determining the compensation.
  1. [10]
    Section 281(3)(a) provides that an owner of land is entitled to compensation for:
  1. deprivation of possession of the surface of land of the owner;
  2. diminution of the value of the land of the owner or any improvements thereon;
  3. diminution of the use made or which may be made of the land of the owner or any improvements thereon;
  4. severance of any part of the land from other parts thereof or from other land of the owner;
  5. any surface rights of access;
  6. all loss or expense that arises;

as a consequence of the grant or renewal of the mining lease…

  1. [11]
    Further s 281(4)(e) provides that in assessing the amount of compensation payable under s 281(3):
  1. 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).
  1. [12]
    How the assessment of compensation is to be determined is not fully explained in the MRA itself. Rather, the MRA identifies the only matters to be taken into account without prescribing any particular method of valuation.[1]
  1. [13]
    The usual process reflected in a number of decisions of this Court is that the parties to a determination for compensation provide evidence, often expert evidence, which seeks to demonstrate what the appropriate amount of compensation should be. This is done often by reflecting the productivity of the land lost to the mining lease, the likely revenue to be gleaned from uninhibited use of that land, stocking rates for livestock or yield rates for cultivation and various items of disruption to the use of the subject land caused by the inevitable intrusion into a landholder’s property by machinery and vehicles. In some cases, valuers and agronomists are engaged.
  1. [14]
    It must be recognised, however, that the cost of such an exercise often results in a cost which far exceeds the revenue to which the dispossessed landowner may be entitled.

The conduct of these proceedings 

  1. [15]
    This Court gave notice to the parties that a directions hearing was proposed to be heard by Member Stilgoe on 24 August 2018.
  1. [16]
    At the directions hearing, Member Stilgoe ordered the parties participate in mediation. A mediation was conducted by the Judicial Registrar of this Court on 4 December 2018 and Judicial Registrar Smith recommended that a further mediation not be undertaken and that the matter proceed to Court.
  1. [17]
    At that time, no material had been filed by either party setting out their approach or their preferred options for the determination of compensation.
  1. [18]
    Accordingly, on 14 December 2018, Member Stilgoe had the parties come before the Court for review and made orders for the filing of material.
  1. [19]
    Subsequent to the applicant filing a Compensation Statement with this Court on 23 January 2019, the timetable for filing was amended on 5 February 2019 to allow the respondents to provide material to the Court.
  1. [20]
    On 11 February 2019, the respondents filed a Compensation Statement detailing the amount of compensation they consider they are entitled to for the loss of their cattle operations.
  1. [21]
    On 27 March 2019 a further order was made varying the order of 5 February and containing an order that, absent any request in writing from either party, the application would be determined on the filed material without an oral hearing.

The contentions of the parties

  1. [22]
    The applicant, Mr Haines, in his Compensation Statement highlights what he says is the poor quality of the land on Oakvale Station. He points out that on the good basalt soils of Amelia Downs in Charters Towers up to 4,000 head of cattle can be grazed on 21,000 ha representing one beast per 5.25 ha. He says that Oakvale is not as fortunate in terms of its grazing capacity but adopting those Amelia Downs figures he submits that the loss to the mining lease of 25.369 ha represents a loss of ability to graze less than five cattle.
  1. [23]
    I shall refer in more detail to the submissions filed by Mr and Mrs Smith but I note that in their submission they draw attention to Oakvale Station being 16,400 ha in size and having an estimated carrying capacity of 3,000 head of cattle. Simple mathematics reveals that that is about one beast per 5.46 ha which is not very different from the figure contended for by Mr Haines.
  1. [24]
    Mr Haines points out that the Oakvale Station lands are mapped by DNRME as a dark reddish-brown loam over red clays on alluvial plains within agricultural land class C3, meaning that it is pasture land suitable only for light grazing. That contention appears to be consistent with the photographs contained in the submission of Mr and Mrs Smith at least insofar as those photos relate to the land on the mining lease. With respect to any vegetation on the mining lease area, Mr Haines points out that it is currently mapped as “Category X non-remnant vegetation” which means that much of the area has been pre-cleared. Again, that appears to be confirmed by the photographs provided by Mr and Mrs Smith in their Compensation Statement.
  1. [25]
    Mr Haines in his submission draws the Court’s attention to a number of decisions made in far North Queensland with respect to compensation and, seizing upon the figures contained in those decisions, contends that the figure of $10 per hectare for the lease area and $5 per hectare for the access area would be appropriate compensation. I shall return to those decisions later.
  1. [26]
    In the Compensation Statement filed by Mr and Mrs Smith they describe Oakvale Station in the following terms:

“Oakvale Station is situated 26.86 kms from the Flinders Highway north of Pentland in the Charters Towers Regional Council Area. Oakvale is bordered by 5 other renowned Cattle Stations, in which one of is Organically Registered, [sic] and the White Mountains National Park.

Oakvale is 16400ha in size with an estimated carrying capacity of 3000 head of cattle. A 1500 head capacity unregistered feedlot, an extensive Station Homestead Complex and Main Stock Yards are situated adjacent to the Mine Lease ML10331, currently being renewed by Mr Norman Graham Haines.

Oakvale comprises of 15kms double frontage to the Cape River which are rich loamy flats suitable for improved pastures or crops, where in which there is approximately 150 ha of improved pasture already use, [sic] in close proximity of the Station Homestead complex and Mine Lease ML10331 along with 4050ha of previously pulled and seeded country.

Oakvale has approximately 3000ha of this loamy undeveloped rich country along the Cape river suitable for improved pastures and/or cropping.

The balance of country is of undulating ridges full of quality native and introduced grasses, herbage and legumes, suitable for the grazing of quality breeding, growing and fattening Beef cattle breeds.”

  1. [27]
    Within their written submission, the Smiths make complaint about the conduct of the miner and his alleged failure to comply with the conditions of the lease and presumably the associated environmental permit. They provide photographs to support their assertions about the apparently poor conduct of the miner.
  1. [28]
    There may well be something in their complaints including allegations of attempts to sabotage their moving of vehicles around their property by use of what they describe as “nail traps” of which they provide photographs. Such conduct is clearly deplorable. However, it is not relevant, in my mind, to my determination of the appropriate compensation. It does not fall under any of the matters referred to in section 281 of the MRA.
  1. [29]
    A failure to comply with the terms of the mining lease or an environmental permit is a matter for complaint to the administering authority and pressing that authority to take action to enforce compliance.
  1. [30]
    The photographs of the land surrounding and on the mining lease provided by Mr and Mrs Smith show the generally poor quality of the country in which the mining lease is located. It is open sandy looking rough country with few trees and virtually no vegetation.
  1. [31]
    It is noteworthy, considering the aerial photography, to observe that this particular mining lease is in close proximity to the homestead and other buildings on the property than is usually the case with other mining leases in far North Queensland. Accordingly, the potential for impact on amenity is greater than might otherwise be expected.
  1. [32]
    Other photographs provided by Mr and Mrs Smith do show that they have carefully and successfully nurtured some of the land on their property. Aerial photographs show the setting of the station homestead and photographs of the natural grasses as well as improved pasture on the site.
  1. [33]
    As to their estimates of the appropriate amount of compensation, Mr and Mrs Smith say:

“The Smith’s [sic] do not accept Mr Haines compensation of $277.75 per annum. This is a far cry from what the rehabilitated area could offer as improved grazing or cropping.

As improved grazing land, the 25ha represented could make the Smith’s [sic] $25,000.00 per year, triple that figure, if it was used for cropping ($75,000.00).

Between Oakvale and the Flinders Highway (no less than 26 kms of Cape River frontage) there is 5/6 properties with improved pastures grazing cattle and cropping areas, currently under crops. Growing a variety of Vegetables for human consumption, Sugar Cane, Grain and Hay/Silage. There are many, many more south of the Flinders Highway on the Cape, all along the way to the Burdekin River.

Three paddocks of improved pasture surround and cover part of the mining lease. To the East, South and West of the Mine Lease. [Sic] Representing approximately 150ha of improved pastures. Paddock South of the mine, which part of the mine lease covers, has successfully been cropped with Forage Sorgrum [sic] and grazed for a profit.

These improved pastures make for the Smith’s [sic] $150,000.00 per year, in earnings from own bred cattle, grazed, fattened and then sold off. These pastures graze 1 beast to the hectare, per year/season, yielding in an animal worth between $1000 and $1800each, without added feed and supplementation costs.

The whole of the mining lease is situated on the same rich loamy soils...”

  1. [34]
    I pause there to observe that that assertion about the quality of the land on the mining lease is not supported by the photographic evidence provided to the Court by the Smiths. Similarly, there are no details given of how the $150,000 referred to by Mr and Mrs Smith is calculated or substantiated by accounting records or tax returns.
  1. [35]
    Finally, the Smiths say they will not accept any figure under $53,000 per annum, with conditions also to be negotiated including such things as police screening of workers or caretakers on-site and authorised copies of such served to the Smiths, current machinery operators tickets to be provided if machinery is used and water tanks and troughs supplied with piped water to be erected for livestock where instructed to be located by the Smiths.
  1. [36]
    All of those matters are, as I observe above, matters for the conditions attaching to the mining lease and/or any environmental permit. They may also be matters for discussion with the local police.
  1. [37]
    In explaining their calculations to the Court, the Smiths include the following in their Compensation Statement:

Loss of production (lease area)     $25,000.00

Loss of Production (area surrounding lease,

approximately hundred and 25 ha due to noise and

activity on mining lease)      $23,000.00

Costs (stationery, telephone, Internet, personal time)  $5000.00  

                                                                                        $53,000.00

  1. [38]
    With respect to the figure of $25,000 per year as representing the loss on the mining lease area, there is no real indication as to how that figure is reached. The figures of $25,000 and $75,000 referred to in the quote above seem to me to be entirely inconsistent with the statement by Mr and Mrs Smith that Oakvale Station, with an area of 16,400 ha, has an estimated carrying capacity of 3,000 head of cattle which represents 5.46 ha per beast. The approximate 25 ha mining lease would seem to be capable of carrying between four and five beasts and it is impossible to comprehend how four or five cattle would yield an income of between $25,000 and $75,000 per year. Also, there is nothing in the material filed by Mr and Mrs Smith which indicates an intention to create improved pasture on the mining lease.
  1. [39]
    Mr and Mrs Smith’s filed material contains two documents headed “Feedback sheet for cattle sold off Oakvale 1” and “Feedback sheet for cattle sold off Oakvale 2”. Those headings seem to have been attached to documentation provided by JBS Australia Pty Ltd (Townsville).
  1. [40]
    Careful perusal of those two documents indicate that they show the processing of cattle through an abattoir and, read carefully, the documents show, inter alia, the body number, the categorisation, the fat reading and analysis of the left and right side of the carcass and the total body weight and purchase price of each beast. There is also other data not relevant to this determination.
  1. [41]
    The sheet referred to as Oakvale 1 relates to 33 beasts sold for a total price of $29,063.69 or an average of $880.71 per beast.
  1. [42]
    The sheet referred to as Oakvale 2 similarly relates to 44 beasts sold for a total price of $49,703.60 or $1,129.63 per beast.
  1. [43]
    Neither of those figures comes close to the figure of $1,800 raised by Mr and Mrs Smith in their filed material which was quoted above.
  1. [44]
    Further, even if those sales results were to be applied, no account is taken of the costs of producing the cattle including the breeding of them, supplementary feeding of them, veterinary care of them and their transport to market.
  1. [45]
    There is an additional matter and that is that a careful reading of those feedback sheets shows that the vendors may well have been Mr and Mrs Smith but that the origin of the beasts is identified as Limbri Station which is located approximately “250kms, by road, south west of Oakvale”.[2] No explanation is provided as to why the sale of cattle ostensibly from Limbri Station should be taken into account in respect of the Oakvale property.
  1. [46]
    I find myself unable to rely upon those figures advanced by Mr and Mrs Smith. I accept that by virtue of the proximity of the mining operation to the homestead of the property, the MRA does not specifically provide for compensation to be paid or calculated having regard to the direct impact on the amenity of the owners of the land over which the mining lease is to be granted.
  1. [47]
    The Court is left in the position of having to provide a decision about compensation based upon very little admissible or useful evidence from each party. All that is contained in the file is a lot of unsupported assertions.
  1. [48]
    As unsatisfactory as it may be, and in lieu of simply declining to determine any compensation whatsoever, the Court, on previous occasions, has resorted to other decisions from throughout Queensland as offering guidance as to the figure that should be settled upon.
  1. [49]
    In this case, the mining district is in the Charters Towers in north Queensland.
  1. [50]
    There have been recent decisions made in respect of land in the Charters Towers mining district in which the Court has settled upon a figure of $4 per ha per annum and $5 per ha per annum for access,[3] and $8 per ha per annum and $10 per ha per annum respectively for mining lease areas.[4]
  1. [51]
    The table set out below shows the various awards of compensation for both leases and access that have been made in recent times.

No.

Case

Location

&

Land use

Evidence?

Compensation per hectare of ML

Compensation per hectare of access

1

Fitzgerald v Struber & Anor [2018] QLC 18

Far north Qld

Grazing use

$10/ha (see [13] to [15])

$5/ha (see [13] to [15])

2

Aurum Vale Pty Ltd v Struber & Anor [2018] QLC 19

Far north Qld

Grazing use

No evidence relied upon by JR

$10/ha (see [17])

$5/ha (see [17])

3

International Parts & Equipment Pty Ltd v Struber & Anor [2018] QLC 23

Far north Qld

Grazing use

$10/ha (see [16])

$5/ha (see [16])

4

Pavey & Anor v Struber & Anor [2018] QLC 24

Far north Qld

Grazing use

$10/ha (see [16] to [18])

$5/ha (see [16] to [18])

5

Plethora Pty Ltd v Struber & Anor [2018] QLC 26

Far north Qld

Grazing use

$10/ha (see [15])

$5/ha (see [15])

6

Fitzgerald v Struber & Anor [2019] QLC 6

Far north Qld

Grazing use

$10/ha (see [16])

$5/ha (see [16])

7

Markert v Struber & Anor [2019] QLC 7

Far north Qld

Grazing use

$10/ha (see [14])

$5/ha (see [14])

8

Eacham Abrasive Blasting Pty Ltd v Gundersen & Anor [2014] QLC 38

Far north Qld

Use not disclosed

$10/ha (see [16])

$5/ha (see [16])

9

Wallace & Ors v Bottomer & Ors [2015] QLC 23

Far north Qld

Use not disclosed

$10/ha (see [16])

$5/ha (see [16])

  1. [52]
    In their filed material Mr and Mrs Smith refer to four decisions of this Court.
  1. [53]
    The first of those decisions is Re Queensland Tantalite Pty Ltd and A T Batchelor.[5] The distinguishing feature of that decision is that the Land and Resources Tribunal had before it formal valuation evidence. No such evidence was available in this case and accordingly the Tantalite decision is of little use.
  1. [54]
    The second decision referred to was McDowall v Reynolds;[6] a decision of mine from 2015. That decision was fully argued in Court before me including expert evidence given by valuers. Again, no such evidence was before me in this case and accordingly the McDowall decision is of little or no use.
  1. [55]
    The third decision referred to by Mr and Mrs Smith is Great Mines Pty Ltd v Titley.[7] In the Titley decision, a figure of $1,000 per hectare was utilised by the Judicial Registrar based upon the valuation information provided by the Chief Executive, Department of Environment and Resource Management for areas to be disturbed temporarily by mining. Once again, no such evidence was placed before me and accordingly the case has little utility.
  1. [56]
    The final case referred to by Mr and Mrs Smith was Re Australian Diatomaceous Earth Pty Ltd v Marsterson.[8]  Once again, this was a case in which the Court had the benefit of expert evidence from a valuer. In the absence of such evidence in this case, the Diatomaceous Earth case is of no assistance to me.
  1. [57]
    In the present case, having regard to the apparent quality of the surrounding land and the potential for some improvement to the area the subject to the mining lease (having regard to the arrangement between the miner and the landowner to permit cropping of an area of approximately 6 acres at the south-east corner of the mining lease area), I am inclined to determine compensation at the rate of $15 per ha per annum in respect of the mining lease area including access with those areas to be rounded up to the next full hectare for assessment purposes.
  1. [58]
    In this case, the determination in respect of ML 10331 is as follows:
  1. Area covered by the mining lease and access 26 ha (rounded from 25.6269 ha) at $15 per ha = $390 per annum;
  2. Section 281(4)(e) of the MRA component of $39 per annum making a total of $429 per annum.
  1. [59]
    I direct that the annual compensation for the lease period of 10 years for ML 10331 be paid within 30 days of notification by the Department of Natural Resources, Mines and Energy of the issue of the renewed mining lease and annually thereafter on or before the anniversary of the issuing of the lease.

Orders

  1. [60]
    Therefore, the orders of the Court are:
  1. In respect of the application for renewal of ML 10331, compensation is determined in the amount of Four Hundred and Twenty-Nine Dollars ($429) per annum, which is Four Thousand, Two Hundred and Ninety Dollars ($4,290) for the life of the lease.
  1. Norman Graham Haines is to pay to Kenneth Noel Smith and Deborah Allison Smith compensation in the amount set out in Order 1, namely, Four Hundred and Twenty-Nine Dollars ($429), within thirty (30) days from the notification of the renewal of the mining lease by the Department of Natural Resources, Mines and Energy and annually thereafter on or before the anniversary of the issuing of the lease.

WL COCHRANE

MEMBER OF THE LAND COURT

Footnotes

[1]  See Wills v Minerva Coal Pty Ltd (No. 2) (1998) 19 QLCR 297, 305–16 (particularly at 315).

[2]  See Compensation Statement filed by Mr and Mrs Smith on 11 February 2019.

[3]  See Alphadale Pty Ltd v Dore & Ors [2016] QLC 15; Keyse v Phillipson & Ors [2016] QLC 40.

[4]  See Thomsen v Struber [2017] QLC 33; Pavey & Anor v Struber & Anor [2017] QLC 63; Skrzypczynski & Ors v Hutchinson [2017] QLC 4.

[5]  [2005] QLRT 84.

[6]  [2015] QLC 32.

[7]  [2010] QLC 32.

[8]  [2004] QLRT 49.

Close

Editorial Notes

  • Published Case Name:

    Haines v Smith & Anor

  • Shortened Case Name:

    Haines v Smith & Anor

  • MNC:

    [2019] QLC 35

  • Court:

    QLC

  • Judge(s):

    Member WL Cochrane

  • Date:

    06 Sep 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
Help

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.