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CITE

Unreported Judgment

Birla Mt Gordon Pty Ltd v Calton Hills Pty Ltd[2015] QLC 2MacDonald P
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Birla Mt Gordon Pty Ltd v Calton Hills Pty Ltd[2015] QLC 2

LAND COURT OF QUEENSLAND

CITATION:

Birla Mt Gordon Pty Ltd v Calton Hills Pty Ltd [2015] QLC 2

PARTIES:

Birla Mt Gordon Pty Ltd

(applicant)

Calton Hills Pty Ltd

(respondent)

FILE NOS:

MRA 283-09	MRA 289-09	MRA 295-09	MRA301-09
MRA 284-09	MRA 290-09	MRA 296-09	MRA302-09
MRA 285-09	MRA 291-09	MRA 297-09	MRA303-09
MRA 286-09	MRA 292-09	MRA 298-09	MRA304-09
MRA 287-09	MRA 293-09	MRA 299-09
MRA 288-09	MRA 294-09	MRA 300-09

DIVISION:

General Division

PROCEEDINGS:

Determination of compensation payable for renewal of mining leases

DELIVERED ON:

30 January 2015

DELIVERED AT:

Brisbane

HEARD ON:

Submissions closed 17 October 2014

HEARD AT:

Heard on the papers

PRESIDENT:

CAC MacDonald

ORDERS:

In the case of ML 5489 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5467 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5420 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5459 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5412 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5407 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5413 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5418 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5442 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5419 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5429 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5430 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5441 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5443 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5444 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5485 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5451 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5486 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5454 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5549 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5500 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5457 compensation is determined in the total sum of Five Thousand Dollars ($5000).
The applicant miner is to pay the respondent landowner the amounts in Orders 1 to 22 within 60 days of the date of renewal of the relevant tenures.

CATCHWORDS:

MINING LEASE – renewal – determination of compensation – uncontradicted expert evidence

Mineral Resources Act 1989, ss 279,281

Wills v Minerva Coal Pty Ltd [No.2] (1988) 19 QCLR 297

Smith v Cameron (1986) 11 QLCR 64

Australian Granites Pty Ltd v Venlock Pty Ltd [2013] QLC 27

APPEARANCES:

Not applicable

[1]
These proceedings concern referrals to the Land Court by the Mining Registrar, Mt Isa District pursuant to s 279(5) of the Mineral Resources Act 1989 (the Act) for the determination of compensation in respect of the renewal of mining leases.

Background

[2]
The applicant, Birla Mt Gordon Pty Ltd (the miner) seeks the renewal of 22 leases located on land described as Lot 5 on CP865892. This property is owned by the respondent Calton Hills Pty Ltd. (the landowner). Lot 5 is currently used for grazing by the landowner.

[3]
The specific Land Court references and individual lease and tenure details are set out as follows:

Land Court Reference	Mining Lease Tenure ID	Area	Term	Lease Purpose
MRA 283-09	5489	47.7 ha	21 years	Camp.
MRA 284-09	5467	40.45 ha	21 years	Plant, laboratory, workshop, office.
MRA 285-09	5420	6.22 ha	21 years	Waste dump, offices.
MRA 286-09	5459	8.09 ha	21 years	Waste dump.
MRA 287-09	5412	2.023ha	21 years	Waste dump.
MRA 288-09	5407	4.1 ha	21 years	Site access.
MRA 289-09	5413	4.05 ha	21 years	Waste dump.
MRA 290-09	5418	8.09 ha	21 years	Ventilation fan.
MRA 291-09	5442	32.36 ha	21 years	Underground mining.
MRA 292-09	5419	36.03 ha	21 years	Dump, road-access.
MRA 293-09	5429	5.67 ha	21 years	Site access.
MRA 294-09	5430	9.17 ha	21 years	Pit, drilling, exploration.
MRA 295-09	5441	32.42 ha	21 years	Underground mining.
MRA 296-09	5443	14.4 ha	21 years	Esperanza pit.
MRA 297-09	5444	20.64 ha	21 years	Portal, offices, workshops.
MRA 298-09	5485	9.7 ha	21 years	Road-site Access.
MRA 299-09	5451	15.68 ha	21 years	Site access.
MRA 300-09	5486	76.9 ha	21 years	Dam, dump, access.
MRA 301-09	5454	3.97 ha	21 years	Site access.
MRA 302-09	5549	0.01 ha	21 years	Waste dump.
MRA303-09	5500	6.1 ha	21 years	Waste dump.
MRA304-09	5457	11.5 ha	21 years	Waste dump.
Total Area		395.273 ha

[4]
After an extended period of negotiations the matters remained unresolved and on 11 July 2014, directions were made regarding the filing of evidence and material by the parties in preparation for the allocation of a hearing date for these matters. However, since the making of those directions, the parties’ legal representatives have confirmed their clients’ consent to all matters being finalised “on the papers” without the necessity of a formal hearing.
[5]
The only material before the Court was filed by the applicant miner and is set out as follows, namely:

(a)
Affidavits of Mark Albert Borman (land manager) filed 18 and 25 July 2014;

(b)
Expert valuation report (the valuation report) of Timothy Rabbit filed 18 July 2014.

[6]
Mr Borman’s evidence largely addresses historic and administrative matters however he does depose “that the Applicant is the holder of several other mining leases which, together with the Mining Leases, are operated as a single integrated operation known as the Mt Gordon Mine”^[1]

Relevant Legislation

[7]
Section 279(1)(a) of the Act relevantly provides that a mining lease shall not be renewed unless compensation has been determined (whether by agreement or determination of the Land Court). As the parties have not reached agreement as to the amount of compensation payable in respect of the renewal of the leases, the question of compensation has been referred to the Land Court for determination, pursuant to s 279(5) of the Act.

[8]
Section 281 of the Act identifies matters that must be considered by the Court in determining the compensation. Relevantly the section provides:

"281 Determination of compensation by Land Court

(1)
… …..

(2)
………

(3)
Upon an application made under subsection (1), the Land Court shall settle the amount of compensation an owner of land is entitled to as compensation for -

(a)
in the case of compensation referred to in section 279 -

(i)
deprivation of possession of the surface of land of the owner;

(ii)
diminution of the value of the land of the owner or any improvements thereon;

(iii)
diminution of the use made or which may be made of the land of the owner or any improvements thereon;

(iv)
severance of any part of the land from other parts thereof or from other land of the owner;

(v)
any surface rights of access;

(vi)
all loss or expense that arises;

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

(4)
In assessing the amount of compensation payable under subsection (3) -

…

(e)
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 no less than 10% of the aggregate amount determined under subsection (3).

(5)
In any case the Land Court may determine the amounts and the terms, conditions and times when payments aggregating the total compensation payable shall be payable.

…

(7)
The Land Court shall give written notice of its determination to all parties and may make such order as to costs between the parties to the determination as it thinks fit".

[9]
In assessing compensation under s 281, regard must be had primarily to the words of the section.^[2] Section 281 of the Act neither prescribes nor suggests a method of assessment of valuation and the selection of an appropriate method is a matter for the relevant expert who should be careful not to duplicate items by simply accumulating figures assessed independently under each of the items listed in s 281(3)(a)(i) to (vi).^[3] The assessment of compensation may be made by the before and after method or the summation or piecemeal approach.^[4]

Evidence - valuation and compensation

[10]
As previously mentioned, the only evidence before the Court in respect of the assessment of compensation is a valuation report of Mr TJ Rabbit filed on 18 July 2014. Mr Rabbit states that he is currently managing director of Taylor Byrne, Valuers and Property Consultants and is a Certified Practising Valuer with expertise in “Acquisition, Litigation, Urban, Rural and Commercial valuations”.
[11]
The valuation report is said to have been conducted on a “desktop” basis i.e. whilst no physical inspection was undertaken, reference was said to be had to “aerial photography and soil mapping relating to the property, sales evidence and Taylor Byrnes’s knowledge of the area”. I am prepared to accept the desktop approach as reasonable^[5] in this case given the nature of the task and the parties’ agreement regarding an “on the papers” determination of the compensation issue. The valuation report also includes both “before and after” and “piecemeal” approaches to the assessment of the compensation. I do not consider the approaches taken or the methodology applied to be inappropriate and in the absence of any other evidence, the valuer’s assessment and conclusions are adopted by the Court.
[12]
The nature of the land is detailed in the valuation report as follows:

“Calton Hills comprises undulating to hilly country with a series of ranges running north-south through the property, with these ranges divided by valley floors, which are level to undulating in nature. Soils on the property range from sand to sandy red loams through to gently shallow stoney soils on the hilly country and ranges. The property is predominantly spotted gum, turpentine and spinifex country with large areas of red sandy gidgee country throughout. Coolibah is predominant along watercourses with other timbers including bloodwood and beefwood. A range of native pastures exist throughout the property including kerosene grass, black spear grass, spinifex and grader grass.”

[13]
Three sales are considered in the valuation report namely “Vergemont” (Sale 1) which sold for $6,500,000 in December 2012 and reflects a land value of $18.50/ha, “Marqua” (Sale 2) which sold for $7,220,000 in November 2011 and reflects a land value of $8.26/ha and “Tobermorey” and “Linda Downs” (Sale 3) which sold for $17,500,000 in February 2010 and reflects a land value of $13.50/ha.
[14]
The rates reflected from the sales evidence have been applied and the valuation report records an assessment of value for the subject land of $30/ha. This rate has then been applied by the valuer to the total area of the mining leases and an amount of $11,858 determined. This amount is described in the report as reflecting a “full loss or loss in perpetuity” of the land “directly impacted within the lease area” on the basis of the proposed renewal term of 21 years for each lease.
[15]
The valuation report then assesses the impacts of the operations on the subject land outside the lease areas. The following conclusion is recorded “Pastoral land outside the lease areas is not likely to be majorly impacted by the mining activities, other than from some impacts from noise, dust and light issues. The impact will lessen with distance.” The valuer plots a radial 5 km buffer zone adjoining the lease areas for the purpose of assessing the impacts outside the mining lease areas on the basis that the mining impacts will be mostly limited to this zone. An aerial photograph depicting the notional buffer area, the leased areas and the relevant boundary is included in the valuation report. Using this aerial photography, the valuer concludes that the buffer area encompasses some 8,187 hectares.
[16]
The valuation report then details an approach undertaken to assess the extent of the impact of the mining operations and associated compensation for this buffer area. The valuer concludes that a 25% discount to the valuation of the buffer area would be required to properly reflect the impact of the mining activities. The calculation of the compensation assessment for that area can be seen to be a multiple of the buffer area, (8,187 hectares) and the reflected rate/hectare ($30/ha) and 0.25 or 25%. An amount of $61,402 is included in the compensation calculations as attributable to injurious affection to the balance land as a consequence of the mining operations.
[17]
The following table^[6] of compensation calculations is included in the valuation report:

Land Directly Impacted within Lease Area
395.273 ha @ $30/ha at full loss.	$ 11, 858
Injurious Affection to the Balance Land
8,187 ha @ $30/ha @ 25%	$ 61, 402
	$ 73, 260
Plus Statutory Premium @ 10%	$ 7, 326
	$ 80 ,586
Adopt	$ 80, 000

[18]
This resultant amount of $80,000 is then apportioned between the 22 individual leases, deriving an amount $ 3,636 per lease. However, in light of the number of leases and the areas involved the valuer’s concluded assessment is that $5,000 is a reasonable total amount of compensation per lease.

Conclusion as to the determination of compensation.

[19]
It is apparent from Table 10.2^[7] of the valuation report that the compensation amount of $5,000 assessed in respect of each lease is inclusive of the additional amount envisaged by s 281(4)(e) and accordingly no further or additional amount will be added in respect of this factor. Compensation in respect of each lease is accordingly determined in the sum of $5,000.
[20]
This determination is made on the basis of the only expert valuation and compensation evidence available to the Court upon which an assessment could be made. I have accepted the valuation methodology adopted by Mr Rabbit, and can find no error in his approach. I consider compensation of $5,000 in respect of each lease to be reasonable and in view of this amount and the length of the proposed renewals consider that the compensation should be paid within 60 days of the date of grant of the relevant tenure.

Orders

In the case of ML 5489 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5467 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5420 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5459 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5412 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5407 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5413 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5418 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5442 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5419 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5429 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5430 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5441 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5443 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5444 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5485 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5451 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5486 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5454 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5549 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5500 compensation is determined in the total sum of Five Thousand Dollars ($5000).
In the case of ML 5457 compensation is determined in the total sum of Five Thousand Dollars ($5000).
The applicant miner shall pay the respondent landowner the amounts in Orders 1 to 22 within 60 days of the date of renewal of the relevant tenures.

CAC MacDONALD

PRESIDENT OF THE LAND COURT

Footnotes

[1] Para 6 affidavit of Mark Albert Borman filed 18 July 2014.

[2] Wills v Minerva Coal Pty Ltd [No.2] (1988) 19 QCLR 297 at 313.

[3] Wills v Minerva Coal Pty Ltd [No.2] (1988) 19 QCLR 297 at 313.

[4] Smith v Cameron (1986) 11 QLCR 64 at 74.

[5] Australian Granites Pty Ltd v Venlock Pty Ltd [2013] QLC 27.

[6] Table 10.2 Valuation Report, Timothy Rabbit filed 18 July 2014.

[7] Refer para [17] of judgement.

Editorial Notes

Published Case Name:
Birla Mt Gordon Pty Ltd v Calton Hills Pty Ltd
Shortened Case Name:
Birla Mt Gordon Pty Ltd v Calton Hills Pty Ltd
MNC:
[2015] QLC 2
Court:
QLC
Judge(s):
MacDonald P
Date:
30 Jan 2015

Appeal Status

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

Cases Cited List of Cases Cited by this judgment

Case Name	Full Citation	Frequency
Australian Granites Pty Ltd v Venlock Pty Ltd	[2013] QLC 27	2 citations Jump To Cite 1 - [2013] QLC 27 Cite 2 - [2013] QLC 27
GJ SMITH JUDICIAL REGISTRAR	(1988) 19 QCLR 297	3 citations Jump To Cite 1 - (1988) 19 QCLR 297 Cite 2 - (1988) 19 QCLR 297 Cite 3 - (1988) 19 QCLR 297
Smith v Cameron	(1986) 11 QLCR 64	2 citations Jump To Cite 1 - (1986) 11 QLCR 64 Cite 2 - (1986) 11 QLCR 64

Cases Citing List of cases on Queensland Judgments citing this Judgment

Case Name	Full Citation	Frequency
Henry v ERO Georgetown Gold Operations Pty Ltd	[2015] QLC 13	2 citations
QGC Pty Limited v Vogt	[2017] QLC 20	2 citations

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Birla Mt Gordon Pty Ltd v Calton Hills Pty Ltd[2015] QLC 2