Glencore Coal Queensland Pty Ltd v Keys
[2014] QLAC 2
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- Unreported Judgment
- Glencore Coal Queensland Pty Ltd v Keys[2014] QLAC 2
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Glencore Coal Queensland Pty Ltd v Keys[2014] QLAC 2
Glencore Coal Queensland Pty Ltd v Keys[2014] QLAC 2
LAND APPEAL COURT OF QUEENSLAND
CITATION: | Glencore Coal Queensland Pty Ltd & Ors v Keys & Ors [2014] QLAC 2 |
PARTIES: | GLENCORE COAL QUEENSLAND PTY LTD ACN 098 156 702 (formerly Xstrata Coal Queensland Pty Ltd) (first appellant) SUMISHO COAL AUSTRALIA PTY LTD ACN 061 524 249 (second appellant) ICRA WANDOAN PTY LTD ACN 106 260 619 (third appellant) v COWAN WILLIAM KEYS AND HELEN MCINTYRE KEYS (first respondents) SKY GROVE PTY LTD (second respondent) JOHN GERARD ERBACHER (third respondent) THOMAS WILLIAM EDMONDS AND JANICE ANN EDMONDS (fourth respondents) |
FILE NO: | LAC005-13 Land Court Nos. MRA092-11 and EPA093-11, MRA098-11 and EPA099-11, MRA105-11 and EPA106-11 |
DIVISION: | Land Appeal Court of Queensland |
PROCEEDING: | Appeal from the Land Court of Queensland |
ORIGINATING COURT: | Land Court at Brisbane |
DELIVERED ON: | 7 May 2014 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 6 September 2013 |
THE COURT: | Peter Lyons J WL Cochrane, Member of the Land Court WA Isdale, Member of the Land Court |
ORDER: | The appeal is dismissed. |
CATCHWORDS: | ENERGY AND RESOURCES – MINERALS – MINING FOR MINERALS – COMPENSATION – where the Land Court determined compensation for the respondents as a condition precedent to the grant of mining leases over their properties – where the appellants are mining companies and submit that the Land Court erred in adopting the approach of applying sales evidence in a “generous and not niggardly spirit” used in Wills v Minerva Coal Pty Ltd [No 2] (1998) 19 QLCR 297 in assessing the amount of compensation to be awarded to the respondents – where the appellants argue that in Wills the court was faced with a depressed property market and an uncertain date for payment of compensation and that this was not a comparable case – whether the Land Court erred by taking the approach identified in Wills ENERGY AND RESOURCES – MINERALS – COURTS OR TRIBUNALS EXERCISING JURISDICTION IN MINING MATTERS – QUEENSLAND – APPEAL OR REVIEW – nature of appeal to Land Appeal Court for a determination of compensation – where the appellants submit that the Land Appeal Court must give the judgment which ought to have been given at first instance – whether, in the circumstances, the Land Appeal Court is in as good a position as the Land Court to reach conclusions about the value of land REAL PROPERTY – VALUATION OF LAND – METHODS OF VALUATION – COMPARABLE SALES – GENERALLY – where the expert valuer for the respondents treated the sale of two properties as comparable sales in assessing the value of the respondents’ properties – where the expert valuer for the appellants rejected that the properties were comparable – where the first property was bought by a resource company and was not publicly marketed for sale – where the appellants submitted that the second property was superior to the respondents’ properties because it had better water access, was very well improved, and included a sum for plant and equipment – whether the Land Court erred in its consideration of these properties in assessing the value of the respondents’ properties REAL PROPERTY – VALUATION OF LAND – ENCUMBRANCES AND RESTRICTIONS – GENERALLY – where some parcels of the respondents’ lands were not intended to be subject to the mining leases – where the Land Court determined that the only way the balance lands could be offered for sale was by offering the whole of the land for sale, subject to the mining leases, adversely impacting the balance lands – whether the Land Court erred in determining the value of the balance lands Mineral Resources Act 1989 (Qld), s 281, s 282, s 283A, s 283B Chief Executive, Department of Natural Resources and Mines v Kent Street Pty Ltd [2009] QCA 399 Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia Ltd (1947) 74 CLR 358; [1947] HCA 10 Emerald Quarry Industries Pty Ltd v Commissioner of Highways (South Australia) (1979) 142 CLR 351; [1979] HCA 17 Federal Commissioner of Taxation v St Helen's Farm (ACT) Pty Ltd (1981) 146 CLR 336; [1981] HCA 4 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 Lacey v Attorney-General (Qld) (2011) 242 CLR 573; [2011] HCA 10 Wills v Minerva Coal Pty Ltd [No 2] (1998) 19 QLCR 297 |
COUNSEL: | D G Clothier QC, with S J Webster, for the appellants R G Bain QC, with D A Skenner, for the respondents |
SOLICITORS: | Allens for the appellants Alroe and O'Sullivan Solicitors for the respondents |
THE COURT:
- [1]This is an appeal against determinations by the Land Court of compensation under s 281 of the Mineral Resources Act 1989 (Qld) (MR Act).
Background
- [2]The determinations relate to five rural properties located generally to the north west of Wandoan. Avon View is owned by Mr and Mrs Keys. Another of the properties, Langowan, is owned by Sky Grove Pty Ltd, a company associated with the Keys family. These two properties are operated in conjunction with one another and with some other properties. Mr Erbacher owns two of the properties which are the subject of these proceedings, Tamara and East Lynne. The fifth property is Turraden, owned by Mr and Mrs Edmonds[1].
- [3]The appellants are mining companies. They made applications for the grant of mining leases over the properties, though some parts of them (balance lands) were not to be the subject of the leases. On 27 March 2012, the Land Court gave a decision recommending the grant of the mining leases, subject to conditions[2]. It was necessary to determine compensation before the mining leases could be granted[3]. Hence the proceedings in the Land Court, which have led to this appeal.
- [4]The matters for which compensation may be awarded, and relevant considerations, are identified in s 281 of the MR Act. The manner in which the proceedings were conducted in the Land Court and on this appeal make it unnecessary to refer to these provisions in detail.
- [5]It was common ground between the parties that the appropriate valuation methodology for the determination of compensation was the "before and after" methodology[4]. It was also common ground that compensation should be assessed on the basis that the land which is to be the subject of the leases is lost in perpetuity[5].
- [6]The appellants called Mr Tim Cavanagh to give valuation evidence on their behalf. Valuation evidence for the respondents was given by Mr Peter Jinks. The Land Court did not accept the ultimate conclusions of either of these valuers, though evidence of some importance from Mr Jinks was accepted in preference to that of Mr Cavanagh.
- [7]The appellants made submissions about the nature of the appeal, and the circumstances in which this Court could interfere with findings made in the Land Court. They also submitted that the Land Court erred in relying on sales evidence from Mr Jinks relating to the sale of two properties, Gledswood and Woodroyd, which played a significant role in the determinations of compensation. It was also submitted that the Land Court erred by approaching the sales evidence in a "generous not niggardly spirit", an approach adopted in Wills v Minerva Coal Pty Ltd [No 2][6]. It was submitted that Mr Cavanagh's valuations should have been adopted. It was also submitted that the Land Court erred in not accepting Mr Cavanagh's valuations of the balance lands. The respondents' submissions, broadly speaking, controverted the submissions of the appellants.
Appeal to Land Appeal Court
- [8]This appeal is heard by s 282 of the MR Act, which is as follows:
"282 Appeal against Land Court’s determination upon compensation
- (1)A party aggrieved by a determination of the Land Court made under section 281 may, within 20 business days of the date of that determination or within such further period as the Land Appeal Court, on the application of that party in that behalf prior to the lodgement of the appeal, considers appropriate in any particular circumstances, appeal against the determination to the Land Appeal Court.
- (2)The appeal shall be instituted by, within the time and in the manner prescribed—
- (a)lodging in the Land Court, written notice of appeal which shall include the grounds of appeal; and
- (b)serving copies of the notice of appeal on the chief executive and each other party.
- (3)The Land Appeal Court shall have jurisdiction to hear and determine an appeal under this section.
- (4)In deciding an appeal, the Land Appeal Court must consider the things relevant to the appeal that the Land Court was required to consider when making the decision appealed against.
- (5)Upon hearing an appeal under subsection (1) the Land Appeal Court may—
- (a)vary the determination of the Land Court in such way as it thinks just; or
- (b)disallow the appeal and confirm the determination of the Land Court and may make such order as to costs of the appeal as it thinks fit.;
- 6)The Land Appeal Court shall not admit further evidence upon an appeal from a determination of the Land Court under subsection (1) unless—
- (a)it is satisfied that admission of the evidence is necessary to avoid grave injustice and there is sufficient reason that the evidence was not previously adduced; or
- (b)the appellant and respondent agree to its admission.
- (7)The determination of the Land Appeal Court on appeal shall be final and conclusive."
- [9]The appellants submitted in chief that this Court must give the judgment which ought to have been given at first instance, after making its own assessment of the evidence and giving its own conclusions as to law and facts, with due deference to the advantages enjoyed by the Land Court. It was submitted that, since the Land Court judgment did not prefer or reject valuation evidence on the basis of the demeanour of either witness, this Court was in as good a position as the Land Court to determine the appropriate conclusions to draw from the evidence, relying on a passage from Fox v Percy[7]. It was submitted, relying on passages from the judgment of the Court of Appeal in Chief Executive, Department of Natural Resources and Mines v Kent Street Pty Ltd[8], that this Court is generally in as good a position to form its own views about sales evidence and valuation, as the Land Court. It was submitted that this Court is obliged to conduct a rehearing on the record, both in relation to errors of fact and errors of law, and that it is obliged to give the judgment which, in its opinion, should have been given at first instance.
- [10]In their oral submissions, the appellants made it plain that they do not submit that the appeal could succeed unless error was shown in the judgment of the Land Court. It would be difficult for them to take a different position, in view of the decision of the High Court in Lacey v Attorney-General (Qld)[9].
- [11]In reliance on Emerald Quarry Industries Pty Ltd v Commissioner of Highways (South Australia)[10] and Federal Commissioner of Taxation v St Helen's Farm (ACT) Pty Ltd[11], the respondents submitted that a determination of valuation was in the nature of a discretionary judgment, which would only be overturned on the basis of the principles relating to an appeal against such a judgment; and the appellants’ submissions did not recognise these principles.
- [12]In Kent Street, it was suggested that there may be tension between the provisions of s 55 of the Land Court Act 2000 (Qld) (LC Act), and the restraint typically adopted by an appellate court, when reviewing a finding of a court at first instance. That tension was not ultimately resolved. Nevertheless it did not deny that there are likely to be cases in which a court at first instance will enjoy advantages not available to an appellate court[12]. Nor did it displace the traditional approach to the determination of an appeal in relation to a valuation, by reference to the principles relating to appeals against discretionary judgments[13]. Kent Street was an unusual case. At first instance, the Land Court had determined the value of land by reference to another determination of value by that court. The earlier valuation was overturned by this Court on appeal, after the determination by the Land Court in Kent Street. Moreover, the legislation had changed. In those circumstances, it was inevitable that this Court had to form its own view about the value of the land; and the Court of Appeal in Kent Street recognised the appropriateness of its doing so.
- [13]While there will be cases where this Court may be in as good a position as the Land Court to reach conclusions about matters of fact, including the value of land, there will inevitably be other cases where the Land Court, having observed the valuers giving evidence, will enjoy advantages not available to this Court. Thus, whether or not a sale is sufficiently comparable to the property to be valued, to provide useful evidence is a matter of expert opinion, which may not be capable of an exact "exposition of reasoning"[14]. The adjustments which may have to be made to the value of a property as shown by its sale, in order to reach a conclusion about the value of another property, will involve judgments, which sometimes can be "nothing more than the best guess that can be made"[15]. In determining whether to accept or reject a valuer's evidence of this nature, an exposition of judicial reasoning to explaining findings of fact is "inherently an incomplete statement of the impression which was made upon [the judge] by the primary evidence"[16]. There will inevitably be cases where a court at first instance, in choosing between the conflicting evidence of experts, is influenced by matters of impression[17]. In such cases it is still necessary to recognise the advantages enjoyed by the Land Court.
The Gledswood sale
- [14]This was a sale which Mr Jinks treated as a comparable sale, but was rejected by Mr Cavanagh. As mentioned, it was relied upon for the Land Court's determination of value.
- [15]For the appellants, it was submitted that Mr Cavanagh's evidence that this sale should not be relied upon should have been accepted. Mr Cavanagh expressed the view that Gledswood was not sold at market value, because it had not been publicly marketed for sale; and Mr Cavanagh was aware that the purchaser had been "actively paying premiums in the market at the moment", which led him to believe the premium was paid for that property[18]. In addition he gave evidence based on an analysis of sales in the Taroom/Wandoan area since 2006, that the sale of Gledswood was "out of line with the broader market"[19]. He had not inspected Gledswood, but had reviewed aerial photography and soil mapping[20].
- [16]In dealing with this sale, the starting position adopted in the Land Court was that a sale should not be disregarded simply because it was a sale to a resource company; and accordingly it did not automatically follow that the sale price exceeded the market value of the property[21]. However it was recognised that the sale might not reflect market value, and accordingly should be treated with some care[22]. There is no error in this approach.
- [17]It was orally submitted for the appellants that Mr Jinks did not say that the price paid for Gledswood reflected market value. However, that was the clear implication of his reports. It was one of six sales which he identified as providing the basis of his valuation, where he set out details relevant to the utilisation of this sale, without qualification[23]. He subsequently compared these properties with the properties to be valued[24]. In cross-examination it was suggested to him that it was not appropriate for him to have regard to this sale for the purpose of determining market value, which he rejected by saying it was an agreed sale between parties[25]. When it was suggested to him that it was incorrect to use the sale of Gledswood as a comparable sale, he answered that in his opinion there was nothing wrong with it[26]. The clear implication of this evidence, and indeed of the questions, was that Mr Jinks regarded the sale of Gledswood as reflecting its market value.
- [18]The principal line of attack in cross-examination, and a proposition advanced on this appeal, was that reliance should not have been placed on the Gledswood sale because it was a sale to a resource company, QGC, who had approached the vendor to purchase the property, and who, on Mr Cavanagh’s evidence, was known to pay a premium above market value. However Mr Jinks gave evidence that he knew of three instances on which QGC had offered to buy properties at below market value[27]; and of circumstances which might suggest it was less likely to pay a price above market value for land, than a mining company would be[28].
- [19]It was submitted for the appellants that Mr Jinks was content to disregard the particular circumstances surrounding the sale of Gledswood, and not to investigate them, contrary to normal valuation practices. The circumstances which, as seen from the appellants' case, were potentially relevant, were the motivation of a purchaser, and whether that had led it to pay a price in excess of market value. Mr Jinks' evidence was that, in his experience, a purchaser was unlikely to provide the information[29]. That evidence was not challenged. Although Mr Cavanagh commented on this sale, he did not make enquiries of the purchaser, relying simply on the sale price and his belief as to market value[30]. In the circumstances, the fact that Mr Jinks did not make enquiries of QGC does not provide a substantial basis for rejecting his evidence in relation to the sale of Gledswood.
- [20]It was submitted that Mr Jinks’ evidence should not have been accepted, because his view of the market was affected by his reliance on the sale of Kerang, rejected by the Land Court; a comparison of his descriptions of Woodroyd and Nalgar and their sale prices showed that the price paid for Gledswood was out of line; and that Mr Jinks’ acceptance of the Gledswood sale was based on mining sales to Xstrata. It was submitted that Mr Cavanagh’s opinion that the sale of Gledswood was out of line should have been accepted, because it was based on his analysis of a number of other sales.
- [21]It is clear that Mr Jinks had regard to a number of other sales, not just Kerang. No evidence was identified which showed that Mr Jinks’ acceptance of the sale of Gledswood was in any significant way dependant on his acceptance that the sale of Kerang reflected market value. The submission that Mr Jinks’ acceptance of Gledswood was dependent on the mining sales is mistaken; that evidence related to his acceptance of Kerang. Indeed, Mr Jinks made it plain that in determining market value, he was not using "mining sales"[31]. He was not cross-examined with a view to demonstrating, by reference to his descriptions, that the sale price for Gledswood was inconsistent with the sale prices for Woodroyd and Nalgar. Such descriptions are necessarily relatively brief, and, without more, do not provide a reliable basis for the submission.
- [22]The evidence of Mr Jinks that the sale of Gledswood reflected market value involved a matter of professional judgment by him. Although Mr Cavanagh expressed a different view by reference to a schedule of other sales, his approach inevitably involved professional judgments relating to circumstances of those sales to the sale of Gledswood. While it would have been open to the Land Court to accept the evidence of Mr Cavanagh, rather than that of Mr Jinks, it does not follow that error was demonstrated because the evidence of Mr Jinks was in those circumstances accepted. Particularly is that so when the Land Court relied on the fact that Mr Cavanagh had not inspected Gledswood[32].
- [23]It was submitted that the Land Court erred in concluding that the sale of Gledswood reflected market value, because it fell "within the range of market value"[33]. It was pointed out that, on a rate per hectare, the sale of Gledswood reflected a higher price than any of the other sales referred to, excluding Kerang, the reliability of which was rejected by the Land Court. The submission fails to recognise that the Land Court did not make a finding that the rate per hectare was within the range of rates reflected by the other sales; rather, it was, in effect, a finding the sale represented market value for that property, bearing in mind its features and the circumstances of the sale.
- [24]In the appellants’ oral submissions, there was a suggestion that Mr Jinks did not give evidence that the properties to be valued were superior to Gledswood[34]. That is incorrect. In his comparison between the sale properties and those to be valued, he identified them as superior to Gledswood in all of the respects to which he referred[35]. His view that they were superior is also implicit in the rates he applied for the valuations.
- [25]Some of the submissions for the appellants identified potential difficulties with the evidence of Mr Jinks, and the use of Gledswood, but they do not demonstrate that the Land Court erred in relying on the sale of this property.
- [26]Accordingly, it has not been shown that the Land Court erred in relying on the sale of Gledswood, for the purpose of determining compensation.
Woodroyd
- [27]In the appellants’ written outline, it was submitted that there was not a proper evidential foundation for concluding that each of the properties the subject of the determinations was superior to Woodroyd. It was submitted that the Land Court overlooked the fact that Mr Jinks compared the sale of this property with East Lynne and Tamara, on the incorrect assumption that the operation of these two properties as an aggregation was their highest and best use. It was submitted that the Land Court did not have proper regard to the fact that Woodroyd had comparable or superior water access to that available for the properties the subject of the determinations. It was also submitted that the Land Court failed to take into account the fact that Woodroyd was very well improved. It was submitted that the Land Court wrongly declined to have regard to Mr Cavanagh's approach of analysing the value of improvements, and comparing properties on a "treated, fenced and watered" (TFW) basis. It was also submitted that the Land Court erred in not taking into account the fact that the sale of Woodroyd included a sum of $100,000 for plant and equipment.
- [28]It should be noted that a substantial premise of the appellants’ submissions relating to the Land Court’s reliance on Woodroyd was the proposition that Gledswood should not have been relied upon[36]. That proposition has been rejected in these reasons.
- [29]Mr Cavanagh did not deal with Woodroyd in his primary reports. In his response report, he gave evidence that his investigation into the sale of Woodroyd "indicates that approximately $100,000 of plant and equipment was included in the sale"[37]. Mr Jinks gave evidence that the advertisement of the sale made no reference to plant; nor was plant mentioned in his discussions with the losing bidder two days after the sale[38]. The evidence raised some doubt about whether the sale price included plant and equipment. The issue was not disregarded by the Land Court[39]. In that state of the evidence, the Land Court decided to give the benefit of the doubt to the respondents[40]. It was not submitted that to do so was, itself, an error; nor would it be an error to do so. That is sufficient to dispose of the submission. However it might be noted that the written submissions for the appellants did not recognise that Mr Cavanagh regarded his allowance for plant and equipment resulting in only a "slightly different figure" from that relied on by Mr Jinks[41]. On an improved basis, Mr Cavanagh's analysis provided a rate per hectare of $2,743; while that of Mr Jinks provided a rate of $2,793.15. Woodroyd was but one of four sales relied on by the Land Court for determining value. It is by no means clear that a different approach to this issue would have affected the Land Court’s decision.
- [30]In the circumstances, the Land Court did not err in allowance for plant and equipment, in relation to the sale of Woodroyd.
- [31]It was orally submitted for the appellants that Mr Jinks did not "land on" a view about the comparability of Woodroyd to the properties the subject of the proceedings; and accordingly did not provide a basis for concluding that he considered them to be superior. Nor did he justify the uplift in rates applied to those properties.
- [32]It is at least implicit in the rates adopted by Mr Jinks that he considered the properties to be superior to Woodroyd. While his rates were substantially influenced by the Kerang sale, they were the result of his consideration of a panel of sales, including Woodroyd. Had he considered the properties to be comparable or inferior to Woodroyd, it is to be expected that he would have adopted rates much closer to the rate derived from the sale of Woodroyd.
- [33]Nor can it be demonstrated that the differences in Mr Jinks’ descriptions could not justify the higher rates applied by the Land Court. For example, for East Lynne and Tamara, he recorded that improved pastures were well established on all of the land used for grazing, which was approximately 50% of the total area; whereas on Woodroyd, some 70 hectares (approximately 3.5%) had some form of improved pasture. The properties were contoured, not suggested by the description of Woodroyd. The balance area, save for shade lines and watercourses, was currently used for cultivation, with a greater area subject to cultivation in the past. Of the currently cultivated area, 75% was described as having top quality soils with a gentle slope. The description of Woodroyd does not suggest that it has similar quality soils, or (proportionately) similar capacity for cultivation[42]. Similarly for Turraden, Mr Jinks’ description indicated extensive improved pastures, with the majority of the property capable of cultivation, and the presence of some contouring[43]. Langowan and Avon View were described as having in the past been contoured and cultivated in the eastern part. There were well established improved pastures, the properties being used for fattening. As part of a larger aggregation, Mr Jinks described these properties as benefitting from “the synergies of scale”[44]. When Mr Jinks’ descriptions, and his views of the superiority of the properties to Woodroyd are considered, it cannot be said that the Land Court has been shown to be in error in its determinations of value.
- [34]The submissions of the appellants criticised the adoption of Mr Jinks’ evidence relating to Woodroyd, because he did not "enter upon Woodroyd to inspect it"[45]. On Mr Jinks' evidence he travelled on roads "up the middle of (Woodroyd)"; which he considered to be sufficient to form an opinion of it[46]. The cross-examination referred to by the appellants does not suggest that in taking this approach, Mr Jinks would not be able to get a reliable appreciation of the quality of the country.
- [35]The Land Court made specific reference to the comparison by Mr Jinks of the water access of Woodroyd to the water access available to the properties to be valued[47]. Specific reference was also made to the evidence relating to the water access available to the properties to be valued[48]. While the submissions for the appellants assert that the Land Court did not recognise the comparability of water access between Woodroyd and the other properties, they do not demonstrate this assertion to be correct. As has been mentioned, reference was made in the reasons for judgment of the Land Court to the evidence relating to water access both for Woodroyd and for the properties to be valued, and to Mr Jinks’ evidence about the comparability of water access. In those circumstances it is unlikely that this evidence was not taken into account when the Land Court determined the rates to be applied. Accordingly, the appellants have failed to make good their submission.
- [36]
- [37]In the course of the appellants’ oral submissions relating to a comparison of the water access available to the five properties, and to Woodroyd, it was submitted that the Land Court did not fairly characterise Mr Cavanagh’s consideration of the water access available to the properties[51]. In his primary reports, Mr Cavanagh had in fact made reference to the availability of water to the properties. It might be observed that Mr Jinks gave evidence that the properties were “totally securely watered” and “extremely well and reliably watered”[52]; “totally, reliably and cheaply watered” with “excellent water”[53]; and “reliably watered” and “extremely well watered”[54], reflected in the Land Court’s acceptance of the “superior water supply” available to the properties. In cross-examination Mr Cavanagh said he had reflected this in his rates[55]. The Land Court, however, noted that in his reports, when describing the properties, he made no reference to the water supply. It was not submitted that this was incorrect. The relevant passages appear to be those where the use of the land is described[56]. Notwithstanding Mr Cavanagh’s evidence in cross-examination, it was open to the Land Court to come to the view which it reached. It should be borne in mind that the finding related to the weight Mr Cavanagh gave to the availability of water, not to whether he took it into account at all. Bearing in mind the advantages available to it but not to this Court, it cannot be said it was in error.
- [38]It was submitted for the appellants that the Land Court member wrongly declined to have regard to Mr Cavanagh's approach of analysing sales by disregarding improvements; that is, deriving a rate of a TFW basis. Though made in the course of submissions relating to Woodroyd, if the submission were good, it would appear to be a submission relevant to the use by the Land Court of all of the sales evidence. The difficulty with the submission is that Mr Cavanagh himself acknowledged that it was common practice in rural valuation to analyse sales on a fully improved basis[57]. No evidence has been identified to suggest that in the present case, it would not be a proper approach to valuation to analyse sales of properties including their improvements. In those circumstances, it cannot be said that the Land Court erred by having regard to rates which reflect the improved condition of the properties which were the subject of the sales evidence. The submissions for the appellants did not seek to demonstrate that, had regard been had to an analysis of sales on a TFW basis, the Land Court would have come to a different conclusion. Accordingly, no error has been shown in the approach taken by Land Court.
- [39]It was submitted that in relation to two of the properties, East Lynne and Tamara, the Land Court overlooked the fact that Mr Jinks' comparison with Woodroyd was based on an assumption that the highest and best use of the two properties was as an aggregation, an assumption rejected by the Land Court. Many of the points of comparison are unlikely to be affected if the properties are valued separately, rather than as an aggregation. One consequence, specifically taken into account by the Land Court when determining the rates per hectare to be applied to East Lynne and Tamara, was that, as an aggregation, it would have an enhanced capacity for diversification[58]. The appellants have not demonstrated that the Land Court failed to recognise that the sales evidence, including that derived from the sale of Woodroyd, was to be applied to the properties separately; nor have the appellants demonstrated that the Land Court failed to do so.
- [40]The appellants have accordingly failed to demonstrate the Land Court erred in the treatment of the sale of Woodroyd.
The "generous" approach
- [41]It was submitted that the Land Court erred in adopting the approach of applying the sales evidence in a "generous and not niggardly spirit", used in Wills[59]. It was said that, in that case, the court was faced with an arguably depressed property market, where there was a prospect the market might improve; and the date on which compensation would be paid was not certain; whereas in the present case, the evidence suggests, if anything, the opposite of a depressed market. It was also submitted that Wills was decided prior to the introduction of s 283B of the MR Act, which would make the adoption of the approach inappropriate.
- [42]In Wills, the combination of two factors, the depressed market, and the uncertainty as to when compensation might be paid and a replacement property might be sought, led the learned member to adopt the approach[60]. The obvious justification for the approach is the potential movement in market prices before compensation is paid. That justification does not depend upon the existence of a depressed market. Moreover, the approach is consistent with the “liberal estimate” approach referred to by Dixon J in Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia Ltd[61]. In principle, and subject to a consideration of the effect of s 283B of the MR Act, the approach might be adopted without error.
- [43]As the submissions for the respondents point out, it is a condition of the application of s 283B of the MR Act that there has been "a material change in circumstances for the mining lease". An example is given in the section, namely, the adoption of a different mining method, which changes the impact of mining operations under the lease. While the example cannot limit the meaning of the expression used in s 283B(1), that expression is to be read with the example[62]. The explanatory memorandum for the amending legislation which introduced s 283A and s 283B identified "operational change" as the circumstance of which would make an adjustment to compensation appropriate[63]. These considerations suggest the section is not made applicable simply because of a change in market value over time. Once the condition is satisfied, questions of then current market value become relevant[64]; but that does not assist in identifying the proper construction of the provision which makes the section applicable.
- [44]The circumstances in which s 283B might be applicable were not fully argued in this Court. Nor is it necessary in this case to determine its scope. It is sufficient to note that there is real reason to doubt that it would become available, simply because of a movement in the market for land between the date of the determination, and the date when compensation is paid.
- [45]In oral submissions, the appellants submitted that in some cases, the approach taken in Wills may be appropriate for the assessment of compensation under s 281 of the MR Act, but this was not such a case, there being no “legitimate ambiguities” which would make it applicable[65]. The appellants drew attention to only one occasion on which the Land Court made reference to this approach[66]. It was to the adoption of a rate per hectare to be applied to the valuation of Avon View and Langowan. There is inevitably an element of judgment in determining such a rate. It cannot be said that this is a context in which the approach can not be applied.
- [46]In the circumstances, the Land Court member did not err by taking the approach identified in Wills.
Balance lands
- [47]Some parts of the parcels of land of the respondents are not intended to be the subject of a mining lease. Those areas are areas which are restricted land, as that expression is defined in the MR Act; and land occupied by water pipelines, together with land within 50 metres laterally of the pipelines[67]. The balance lands accordingly are a series of somewhat irregular corridors of land, together with occasional isolated parcels of land[68]. They are generally to be surrounded by lands intended to be the subject of mining leases.
- [48]Mr Cavanagh valued the balance lands first by applying his per hectare rate, on a TFW basis, with a substantial discount, and his valuation of structures also substantially discounted; and, as a check, for each of the five properties, treating the balance lands as a rural home site[69].
- [49]Mr Jinks was not prepared to attribute any value to the balance lands because of the effect of the mining leases and mining activities, and the absence of separate title.
- [50]The Land Court concluded that the only way the balance lands could be offered for sale, was by offering the whole of the land for sale, subject to the mining leases. That was not the way that Mr Cavanagh had valued the land[70]. It was also noted that there was no evidence as to whether the balance lands could be subdivided from the parent parcels, or whether it would be economically viable to do so[71]. The Land Court took the view that "it would be difficult to overstate the lack of amenity … in the after situation" as a consequence of the mining leases, which were for very large open cut coal mines[72]. Accordingly the Land Court rejected Mr Cavanagh's evidence; but considered that the balance lands were likely to retain some nominal value, assessed at $20,000 for each of the five properties.
- [51]For the appellant it was submitted that the Land Court erred, because Mr Cavanagh had valued the balance land for each property on the basis the property was to be sold as a whole. Reliance was placed on a passage of cross-examination where Mr Cavanagh was asked how he thought the land might be sold, given the state of the titles. His answer was, in substance, that the whole of each property would be sold, encumbered by the mining lease[73].
- [52]It remains correct to say that that is not the way that Mr Cavanagh carried out his valuation. His primary method was to consider the area of the balance lands, and to apply the discounting factors, as has been previously mentioned. More significantly, the Land Court considered that the discounts applied by Mr Cavanagh did not "provide a realistic reflection of the deterrent effect" of the mining leases on the mind of a prudent purchaser[74]. That reason for rejecting Mr Cavanagh's valuations of the balance lands was independent of the adverse comment regarding his method of valuation.
- [53]The appellants have accordingly not demonstrated that the Land Court erred in determining the value of the balance lands.
Conclusion
- [54]The appeal should be dismissed.
ORDERS:
The appeal is dismissed.
PETER LYONS J
WL COCHRANE
MEMBER OF THE LAND COURT
WA ISDALE
MEMBER OF THE LAND COURT
Footnotes
[1] See generally the reasons for judgment of the Land Court at first instance (RJ) at [2013] QLC 34 [5]-[7].
[2]Xstrata Coal Queensland Pty Ltd v Friends of the Earth-Brisbane Co-Op Ltd [2012] QLC 013.
[3] See s 279 of the MR Act.
[4] RJ at [10].
[5] RJ at [10].
[6] (1998) 19 QLCR 297 (Wills), 339-340.
[7] (2003) 214 CLR 118 at [25].
[8] [2009] QCA 399 (Kent Street) at [39], [171], [216], [217].
[9] (2011) 242 CLR 573, especially at [58].
[10] (1979) 142 CLR 351.
[11] (1981) 146 CLR 336.
[12] See the passage from Fox v Percy at [25] cited in Kent Street at [213]; see also Kent Street at [217].
[13]Kent Street at [219].
[14] See Commissioner for ACT Revenue v Rosnet Pty Ltd (1994) 94 ATC 4424 at 4430; cited in Jacobs Law of Compulsory Land Acquisition (Law Book Co, 2010) (Jacobs) at [19.450].
[15] Per Hope JA in Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409, 434, cited in Jacobs at [19.105].
[16]Biogen Inc v Medeva Plc [1997] RPC 1, 45 as cited by Kirby J in Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 194 ALR 485, 510 at [ 97]; in turn referred to in Guest v Nominal Defendant [2006] NSWCA 77 at [102], itself cited in Freckleton and Selby, Expert Evidence (Lawbook Co, 5th ed, 2013) (Expert Evidence) at [4.0.80].
[17] See Public Trustee v Commonwealth (unreported, NSWCA, Kirby P, Mahoney and Clarke JJA, 20 December 1995) per Mahoney JA; cited in Expert Evidence at [4.0.80].
[18] Appeal Book Vol 1 (1 AB) p 34, lines 35-39.
[19] Appeal Book Vol 2 (2 AB) p 403.
[20] 2 AB p 403.
[21] RJ at [59].
[22] RJ at [59]-[60].
[23] See for example 2 AB pp 360-361.
[24] See for example 2 AB p 362.
[25] 1 AB p 86, line 19.
[26] 1 AB p 87, lines 17-18.
[27] 1 AB pp 82-83.
[28] 1 AB pp 85-86.
[29] 1 AB p 87, lines 5-10.
[30] 1 AB p 34, lines 15-16; see also 1 AB p 33, lines 1-35.
[31] 1 AB p 69, lines 25-38.
[32] RJ at [69].
[33] A reference to RJ [69].
[34] See the transcript of the hearing of this appeal (T) 1-7, lines 35-41. Although the reference is to Woodroyd, in context the submission appears to be intended to refer to Gledswood.
[35] 2 AB pp 362, 379, 395.
[36] See, for example, T 1-36, lines 13-14; T 1-32, line 29.
[37] 2 AB p 402.
[38] 1 AB p 76, lines 20-36.
[39] RJ at [79].
[40] RJ at [79].
[41] 2 AB p 402.
[42] See 2 AB pp 352, 361.
[43] See 2 AB p 369.
[44] See 2 AB p 385.
[45] Appellants’ submissions, p 8, para 22(a)(i).
[46] 1 AB p 75, lines 33-55.
[47] RJ at [42], [78], [194], [229].
[48] RJ at [18], [27], [31], [32], [82], [174], [190], [220], [227].
[49] RJ at [41].
[50] RJ at [18], [27], [174], [221].
[51] T 1-40, line 30, referring to RJ at [82].
[52] East Lynne and Tamara, 2 AB pp 352, 354.
[53] Turraden, 2 AB pp 369, 372.
[54] Langowan and Avon View, 2 AB pp 385, 387.
[55] 1 AB p 30, lines 55-56.
[56] 1 AB pp 153-155; 220-222; 2 AB pp 267-268; 317-318.
[57] See, for example, 2 AB p 273.
[58] RJ at [200]-[201].
[59] At 340.
[60]Wills at 340.
[61] (1947) 74 CLR 358, 373-374.
[62] See s 14D of the Acts Interpretation Act 1954 (Qld).
[63] Referred to in Re Benney v Vella [2003] QLRT 80 at [9].
[64] See ss 283B(3), s 281(3) and 281(4)(a).
[65] T 1-43, lines 33-34.
[66] RJ at [83].
[67] See 1 AB p 191.
[68] See 1 AB pp 200, 247; 2 AB pp 297, 344.
[69] 1 AB pp 179-181, 237-239; 2 AB pp 286-288, 333-335.
[70] RJ at [106].
[71] RJ at [107].
[72] RJ at [108].
[73] 1 AB p 40.
[74] RJ at [108].