McDowall v Reynolds[2015] QLC 32

LAND COURT OF QUEENSLAND

Background

1. [1]
   This is the decision in a matter which has been referred to this Court by the Mining Registrar at Mareeba for determination of the compensation which may be payable in respect of an application to renew a mining lease, ML 5402, which has an area of 8.088 ha.
2. [2]
   The mining lease is on land located in the Mareeba mining district and owned by the respondent John Keith Reynolds.
3. [3]
   The land is otherwise described as Lot 110 on C157150, Parish of Mowbray, County of Solander and is located at the Mowbray River Road at Mowbray, approximately 10 km south-west of Port Douglas in Far North Queensland.
4. [4]
   The subject lot is said to contain 39.66 ha and is serviced by the bitumen-sealed Mowbray Road which is reached by travelling along the Captain Cook Highway.
5. [5]
   The subject lease ML 5402 was originally granted in 1974 for a period of 16 years and was renewed in 1990 for a further term of 21 years ending 31 May 2011. It is the renewal of that lease with which this Court is now concerned.
6. [6]
   There is a background of a long-running dispute between the applicant and the respondent as to the actual ownership of the subject land.
7. [7]
   It is beyond the jurisdiction of this Court to resolve a dispute as to the identity of the proper owner.
8. [8]
   John Keith Reynolds is the registered proprietor of the subject land and compensation is determined upon the basis that he is properly identified as the registered proprietor.
9. [9]
   The matter comes before this Court consequential upon a referral by the mining registrar at Mareeba for determination of compensation.
10. [10]
    The matter has been the subject of a mediation conducted by the then Judicial Registrar of this Court but agreement was not able to be reached in that mediation.
11. [11]
    The matter of compensation for the lease was last determined by the then Land and Resources Tribunal in 2003 at which time it was directed that compensation in the sum of $1,705 per annum should be payable.
12. [12]
    Other proceedings MRAA00010/2001 in the Land and Resources Tribunal resulted in an order being made, inter-alia, that Mr Reynolds was required to restore access to ML 5402 by installing a helicore pipe or equivalent in a drain which ran across the accessway to the mining lease.^[1] 
13. [13]
    Mr Reynolds, in an affidavit filed in these proceedings,^[2] deposes to having restored that right of way by installing a pipe in the drain and compacting a gravel surface across the pipe for the width of the right of way.
14. [14]
    He goes on to say that the applicant was advised by Mr Reynolds’ solicitor of that restoration of right of way.

The Law – Mineral Resources Act 1989

15. [15]
    Section 279 of the Mineral Resources Act 1989 (“the MRA”) provides that a mining lease shall not be granted or renewed unless an agreement in relation to compensation has either been filed at the office of the mining registrar or, in the absence of such an agreement being filed, a determination with respect to compensation has been made by the Land Court.
16. [16]
    In the present case, no agreement has been able to be reached between the parties and accordingly it falls to this Court for determination.
17. [17]
    Section 281(3) of the Mineral Resources Act sets out the matters which are to be considered by the Court in that determination of compensation.
18. [18]
    Although s 281 sets out in a somewhat compendious fashion the matters to be considered it does not specify any particular method or mode of assessment.
19. [19]
    In Smith v Cameron^[3] (a case which is often cited by this Court) the learned Member (Mr DM White) had, in the context of an appeal against a determination of the Mining Wardens Court for Compensation of the Grant of Mining Lease, to consider the principles governing the assessment of compensation.
20. [20]
    In the course of his decision the learned Member held a number of matters including, inter alia:^[4]

“(ii) That the use of land for mining purposes is in the nature of a compulsory acquisition of land for a limited period.

3. (iii)
   That the various principles and practices of valuation applied in determining compensation for the taking of limited rights over land for public purposes are applicable in the assessment of compensation.

4. (iv)
   That the test in assessing compensation is the attitude of the hypothetical prudent purchaser and the extent to which in the opinion of such a person the owner’s land has suffered diminution in the value of his property resulting from the mining operations on his land and the creation of the encumbrance including where appropriate severance and injurious affection damage.

…

6. (vi)
   That each case will depend on its own facts and circumstances but either the ‘before and after’ method of valuation or piecemeal assessment is open to the valuer.

…

8. (viii)
   That the applicant for the leases stands in the shoes of a construction authority and his evidence as to what will be the nature and extent of the operations must be accepted in making the assessment of compensation.

9. (ix)
   That compensation must be assessed on the assumption that the applicant for the leases will act reasonably and at all times according to law and in accordance with the terms and conditions of the proposed leases.

10. (x)
    That the principle of allowing as part of the compensation claimed in cases of the compulsory acquisition of land for public purposes legal and valuation fees incurred preparatory to lodgement of the claim is applicable in the assessment of compensation under the Mining Act.

(xi) That compensation must be determined once and for all and be paid prior to the grant of the leases.”

21. [21]
    In that case the learned Member was considering the provisions of the now repealed Mining Act 1968 – 1983 and in particular ss 43GA, 43HA, 43IA and 43JA.
22. [22]
    The Member in Smith v Cameron^[5] held that:

“The section in my opinion merely identifies matters which shall be taken into consideration in making the assessment. It does not prescribe a method of valuation. No doubt each case will depend on its own facts and circumstances but it seems to me that either method is open to the valuer.”^[6]

23. [23]
    The following observation was then made:^[7]

“In the end result Mr Todd's valuation of the property at $266,750 was accepted by the Warden and depreciated by him by one-sixth after finding that he had cause to consider matters listed in paragraphs (a) to (f) of Section 431A(5) and that there was no evidence to enable him to make any specific finding in relation to paragraphs (g) and (h) of the subsection. In doing so he likened, rightly in my opinion, the use of the land for mining purposes to a compulsory acquisition of land for a limited period which in my view opens the door for the application of the various principles and practices of valuation applied in determining compensation for the taking of limited rights over land for public purposes. In particular I see an affinity and similarity between the imposition of an encumbrance on the appellants' land by means of the grant of a mining lease and that of the compulsory taking of an easement over land for public purposes. These similarities are evident in the principles laid down by the Land Appeal Court for consideration in the latter and no better set out than in the case of P. Joyce v The Northern Electric Authority of Queensland (1974) Q.L.C.R. p.171 where in dealing with the taking of an easement for electric line purposes the Court at page 177 said –

‘The test is the attitude of the hypothetical prudent purchaser and the extent to which in the opinion of such a person the claimant has suffered diminution in the value of his property resulting from the erection of the transmission line over his land and the creation of the easement including where appropriate severance and injurious affection damage.’

and at page 178 –

‘Each case must be considered according to the terms and conditions of the easement created and the frequency and magnitude of the disturbance likely to result in consequence to the claimant’s proprietary rights.’ ”

24. [24]
    In the case of V.P. Joyce v Northern Electric Authority of Queensland to which the Member referred in Smith v Cameron, the following appeared:^[8]

“The principles to be applied in the compulsory taking of an easement are no different from those applying when the full fee-simple is taken. This Court must restore, as best it may, the Claimant in money form, to the position which he enjoyed prior to the taking of the easement. For practical purposes it becomes a matter of assessing the extent to which he has been disadvantaged as a natural and reasonable consequence of the taking of the easement.

The test is the attitude of the hypothetical prudent purchaser and the extent to which in the opinion of such person the Claimant has suffered diminution in the value of his property resulting from the erection of the transmission line over his land and the creation of the easement including where appropriate severance and injurious affection damage.

The approach adopted by the Court below is one often followed in these cases mainly to allow full fee-simple value for land occupied by the base of the pylons or in tracks made by the Constructing Authority and to assess the diminution in value of the land otherwise subject to the easement by adopting a percentage which it is considered fair and reasonable having regard to the terms of the easement by which the Claimants proprietary rights to such easement land have been diminished.”

25. [25]
    Reading the whole of the Smith v Cameron decision, it is clear that the learned Member applied his mind to the impacts of the proposed use for mining purposes on the operation which was being carried out on the land.
26. [26]
    That is to say he accepted the utility of the “before and after” method of valuation and its impact on activities on the subject land.
27. [27]
    I am satisfied that with respect to the matters of compensation the principles identified by the Member in the case of Smith v Cameron are directly relevant to the determinations now required to be made pursuant to the Mineral Resources Act.
28. [28]
    In particular the provisions of s 281(3)(a)(i)–(vi) all reflect the same language as was used in s 431A of the Mining Act 1968.
29. [29]
    It is appropriate to identify, at this point, the provisions of s 281(3). That section provides:

3. (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—

3. (a)
   in the case of compensation referred to in section 279—

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

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

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

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

5. (v)
   any surface rights of access;

6. (vi)
   all loss or expense that arises;

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

3. (b)
   in the case of compensation referred to in section 280—

1. (i)
   diminution of the value of the land of the owner or any improvements thereon;

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

3. (iii)
   all loss or expense that arises;

as a consequence of the grant or renewal of the mining lease.”

30. [30]
    I have had regard to the observations in Smith v Cameron and the decision of Member Scott in Wills v Minerva Coal^[9] and also the observations of the then President of the Land Court in Mitchell v Oakhill and Mitchell^[10] where His Honour observed, in respect of s 281(3) that:

“The latter section does not prescribe a method of valuation. In my view, as long as the amount of compensation finally determined sufficiently accounts for each of the matters referred to in the sub-section, it is not necessary to quantify an amount in respect of each of the matters referred to.”

31. [31]
    His Honour Member Smith in Fitzgerald & Anor v SR Struber & Anor^[11] observed, having regard to the judgment of Member Scott in the Wills v Minerva Coal, as follows:^[12]

“I tend to agree with the observations of Member Scott of the Land Court in Wills v. Minerva Coal when dealing with a compensation matter under the MRA. He stated that the matters set out in the MRA were compensation concepts to be taken into account in determining compensation, not a figure accumulated by amounts arrived at following a separate and discrete treatment of them as if they were separate heads of compensation. In determining compensation, the overriding principle is of equivalence ensuring that, so far as money can do it, the landholders are placed in the same position as if the mining lease was not granted.”

32. [32]
    In his closing submissions to the Court Mr D Morzone, counsel for the Respondent, also referred to the decision in Wills v Minerva and its reference to the decision of the High Court in Nelungaloo Pty Ltd v The Commonwealth.^[13]
33. [33]
    In Wills v Minerva Coal Pty Ltd^[14] His Honour Member Scott considered at length the notion of compensation in context of s 281 and s 282 of the Mineral Resources Act.
34. [34]
    In the course of that decision he said:

“That is, s 281 MRA is concerned with the loss occasioned to the owner by the grant of a mining lease and consideration of the individual aspects of ss 281(3)(a) and (4) needs to be considered within that paradigm.”^[15]

35. [35]
    He then went on to examine in considerable detail the structure of compensation provisions within the MRA.
36. [36]
    In the Minerva Coal case Member Scott was prepared to find that, as a consequence of the granting of a mining lease across a property which is cultivated both for grain production and for the breeding and fattening of beef cattle on improved pastures and on crop stubble, there was a reduction in the value of the property as a consequence of the loss of access to land, severance and injurious affection.
37. [37]
    It is important to observe, as Member Scott did in the Minerva Coal case, that the taking of the land for mining purposes is for a limited period. In this case that limited period is for a period of 21 years. In my view, granting a lease for that period of time is very proximate in effect to a complete resumption of the land.
38. [38]
    That is particularly so in a case where the mining lease has been held over the property for a considerable period of time during which no effort has been made to access the resource. It appears, although it is not made clear in the evidence, that the resource is being held in reserve until such time as profitable access to it can be achieved. The consequence of that is of course that the landowner has, in effect, a blot on his title constituted by the presence of the mining lease.
39. [39]
    In the Nelungaloo decision Dixon J (as he then was) said:

“Now 'compensation' is a very well understood expression. It is true that its meaning has been developed in relation to the compulsory acquisition of land. But the purpose of compensation is the same, whether the property taken is real or personal. It is to place in the hands of the owner expropriated the full money equivalent of the thing of which he has been deprived.

Compensation prima facie means recompense for loss, and when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. As the object is to find the money equivalent for the loss or, in other words, the pecuniary value to the owner contained in the asset, it cannot be less than the money value into which he might have converted his property had the law not deprived him of it.”^[16]

40. [40]
    Mr D Morzone placed particular reliance upon the analysis of the MRA compensation provisions which was carried out by Member Scott in Wills v Minerva Coal [No. 2].^[17]
41. [41]
    A number of the principles from that case are ubiquitous and well known by practitioners before this Court but it is useful, nonetheless, to recite below some of those as articulated by Mr D Morzone of counsel in his written submissions. It should be noted that the propositions contended for by Mr Morzone were not sought to be contradicted by the representative of the applicant.
42. [42]
    I have commented on a number of occasions of the difficulties necessarily confronted by parties before this Court acting for themselves. Those difficulties are made more obvious when other parties to a proceeding engage competent experienced legal practitioners to represent them and competent and experienced experts to provide evidence in support of their case.
43. [43]
    In the present case Mr McDowall called no expert evidence in respect of matters relating to compensation and, while ably represented by his son, was not able to embark upon the kind of forensic cross-examination of either Mr Reynolds or Mr Teves the valuer that might have been expected from a legal practitioner.
44. [44]
    A significant evidentiary consequence of calling no expert evidence is that unless the evidence called by another party is able to be successfully challenged or contradicted by careful forensic cross-examination, the Court is generally bound to accept such expert evidence as is placed before it. In the present case the absence of a valuer called by the Applicant has significant consequences for the outcome of this determination.
45. [45]
    The relative principles as articulated by Mr Morzone, utilising substantially the language of Member Scott in the Wills v Minerva [No. 2] decision, are as follows:

1. (a)
   “Section 281 MRA neither prescribes nor suggests a method of assessment or valuation either. The selection of an appropriate method is a matter for the relevant expert.” However, it is not a matter of accumulating figures separately assessed under each of the items listed in s 281(3)(a)(i) to (vi) and thereby duplicating in items comprising compensation.^[18]

2. (b)
   The various items listed in the "charter" provision in s 281(3) “are to be considered having regard to subsection (4) to the extent they may be relevant^[19]”.

3. (c)
   The "land of the owner or any improvements thereon" in s 281(3)(a)(ii) refers to the land and improvements held by the owner before the imposition of the mining lease.^[20]

4. (d)
   “The intention of Parliament was that the phrase "value of the land of the owner" is concerned with value to the owner ascertained in accordance with the authority of Spencer v. The Commonwealth (1907) 5 CLR 418 especially at 441. Such a value includes not only that reflected in the current use of the land, but the present value in the marketplace of any potentialities in the land.”^[21]

5. (e)
   Section 281(3)(a)(ii) should be understood to refer to the diminution in value of the whole of the land "consequent on the grant of the mining lease". To confine subsection (3)(a)(ii) to the mining lease area would mean that subsection (3)(a)(iii) would be similarly confined – a result not intended by the legislature.^[22]

6. (f)
   Since the language of s 281(3)(a){ii) does not refer exclusively to the value of the land over which the mining lease is to be granted but to the "diminution of the value", it therefore invites the use of the "before and after" method of valuation if practicable, or at least a method of valuation which recognises that compensation to be assessed under s 281(3)(a)(ii) is the measure of the difference between the value of the owner's land before the grant of the mining lease and the value after the grant. Such an approach to valuation will draw into it the aspect of the encumbrance of the mining lease per se and any "severance" and "injurious affection".^[23]

6. (g)
   Section 281(3)(a)(iii) comprises what is usually called "injurious affection" arising from the impact of activities on the mining lease area. It refers to the "diminution" in use either present or potential of the "land of the owner or any improvements thereon" thus repeats part of the language in item (ii). Again the provision is not directed towards the mining lease area, but to the balance land of the owner and improvements. “Sections 235 and 403 MRA ensure virtual exclusive occupation of that area to the holder of the mining lease.”^[24]

8. (h)
   The "value of the land of the owner" in s 281(3)(a)(ii) does not include the concept of "special value", being a term used with respect to the compensation for the compulsory acquisition of land.^[25]

1. (i)
   The concept of "statutory special value" (so called by Mr Scott, in Wills v Minerva),^[26] is included under ss 281(3)(a)(vi) and 281(4) (c) with all the appearances of being equivalent to special value as explained in the Pastoral Finance Association Ltd v The Minister, as "...probably the most practical form in which the matter can be put is that they were entitled to that which a prudent man in their position would have been willing to give for the land sooner than fail to obtain it".^[27]

10. (j)
    The words "use currently being made" of land in s 281(4)(c) refer to an “actual use involving an activity on the land in question at the time relevant to the assessment of compensation. …  Thus, if the use currently being made of the land is such that it leads one to conclude that compensation to the owner should take into account the additional worth reflected in that use, a sum in addition to the par or market value should be included in the award of compensation.”^[28]

(k) “For a use of the land to be said to support such conclusion, that is a conclusion sounding in an additional sum of money, the use would be one which is of economic benefit to the owner - that it represents an added value to him for that use.”^[29] A use of the type under consideration would have some of the characteristics of what is often referred to as "special value" though, given the provision of the statute under consideration would be confined to the current use.

(l) Section 281(4)(c) “does not extend to the added value that the land might have for some intended use. It is confined to a current use.”^[30] However, the term "loss" in s 281(3)(a)(vi) suitably covers, amongst other things, compensation for the loss in value occasioned by the owner having to yield up the opportunity to put his land or part of it to a particular use which would not sound in the market value of the land but which has a present economic value to him. For this reason, Mr Scott in Wills v Minerva referred to the combined compensation arising under s 281(3)(a)(vi) and s 281(4)(c) as "statutory special value".

(m) “Whilst one may speak of a "use currently being made", one may not grammatically speak of a "status" currently being made. It follows therefore that a correct reading of the subsection would be to "the status ... (prior to the application for the grant of the mining lease) of certain land ..."^[31]

(n) “The question of status must apply to the same land involved in the current use. This is indicated by the use of the conjunctive ‘and’ and the words ‘certain land’. That is, the same land is being referred to. Given this, it is sensible that the status would be associated with the current use. Such a connection is indicated also by reference to the singular ‘a premium’.”^[32]

(o) “Section 281(4)(c) is concerned with a current use of certain land and a status of certain land which, together, have an economic consequence which should sound in the addition of a premium to the par or market value.”^[33] It is not open to conclude that a "premium should be applied" under s 281(4)(c) in circumstances other than those resulting in an economic benefit.^[34]

(p) The phrase "certain land" appears to be included to allow a consideration to be given to the application of a premium to something less than the whole of "the land of the owner" (s 281(3)(a)(ii)), though it would clearly be the case that if the use being made of the whole of the land, together with the appropriate status, was such that a premium should be added, then the subsection would apply.^[35]

(q) “There is nothing in s 281(4)(c) which requires that any premium assessed under that provision be expressed as a percentage of any figure in s 281(3)(a). It need only be expressed as a percentage for the purpose of considering any interrelationship with s 281(4)(e) that arises.”^[36]

(r) “A premium will not be assessable as part of the process employed in the "before and after" valuation method in reliance on market transactions alone. Such a process will reveal diminution in market value only. Equally, it would be wrong in principle to express the premium as being additional to the figure resulting by any process designed to reveal a diminution in market value. Any statutory special value will be found in the value of the owner's land before the grant of the mining lease and the measure of compensation will be found by considering what value the owner's land has after the grant of the mining lease…including any surviving statutory special value, or to what extent its previous overall value has diminished.”^[37]

(s) The process to be adopted is to determine any premium under s 281(4)(c) and compensation under s 281(3)(a)(i) to (vi) before turning to s 281(4)(e).^[38]

(t) “If it is the case that no amount is determined under s 281(4)(c) then s 281(4)(e) operates to allow, at a minimum, an additional amount based on the calculation of 10% of the aggregate amount determined under s 281(3)(a)(i) to (vi). If, however, an amount has been determined under s 281(4)(c) then this should be taken into account in considering any additional amount to be awarded under s 281(4)(e). The percentage figure required to be considered in s 281(4)(e) is calculated by considering first what percentage the premium determined under s 281(4)(c) is of the combined amount under s 281(3)(a) items (i) to (vi) inclusive and S 281(4)(c). If the percentage revealed is less than 10%, then s 281(4)(e) requires at a minimum that an additional amount is awarded to increase the combined s 281(4)(c) and s 281(4)(e) figures up to 10%.”^[39]

(u) It is not the “quantum of the amount by itself determined under s 281(4)(c) that would properly motivate the Court to reduce a figure in s 281(4)(e) below a calculated 10%… The case would need to have characteristics where the determination of the premium under s 281(4)(c) was intimately involved with some aspect of the "compulsory nature of the action taken" for some reduction to properly be given effect to under s 281(4)(e). That is, the connection between s 281(4)(c) and s 281(4)(e) as expressed in the Act is directed to ensuring there is no "double dipping".… The question needs to be asked whether there is anything in the determination of a premium under s 281(4)(c) which indicates that something less than 10% should be awarded as an additional amount under s 281(4)(e).”^[40]

5. (v)
   Any additional amount awarded under subsection (4)(e) must be of such character that it is connected with the land of the owner impacted upon by the mining lease.”^[41]

(w) “The legislature has decided, in effect, that an additional amount of 10% will cover all of the unquantifiable consequences of the grant of the mining lease for the usual case falling for consideration under s 281 and that adjustments of the resultant figure downwards can only apply if subsection (4)(c) is properly brought into play and upwards if the case is brought into the category of being demonstrably different from the usual case. To move a Court to award an additional amount greater than 10%,” (emphasis added) the owner will need to show that more than the standard 10% additional amount is appropriate. For example, where the owner will be greatly affected more than usual. Such matters must be of “such a nature that they arise by virtue of the "compulsory nature of the action taken" and the amount determined must "reflect" that.”^[42]

Witnesses

46. [46]
    The applicant, Mr McDowall, was represented by his son Lee Richard Albert McDowall.
47. [47]
    Mr McDowall relied upon:

    1. A statutory declaration sworn by his father on 17 February 2012.^[43]
    2. A letter to the Land Court dated 11 January 2012.^[44]
    3. A lengthy document supplied to the Land Court dated 16 February 2012.^[45]
    4. A letter dated 27 August from Mr DK McDowall to the Land Court.^[46]
    5. An affidavit of Donald Keith McDowall sworn 30 July 2012.^[47]
    6. An affidavit of Donald Keith McDowall sworn 30 July 2012.^[48]
48. [48]
    The respondent, John Keith Reynolds, gave evidence himself and relied upon an affidavit sworn by himself on 19 July 2012.^[49]
49. [49]
    Mr Reynolds also engaged the services of a qualified valuer, Mr Neil Teves of Asset Advance. Mr Teves prepared a report dated 4 July 2012^[50] and a supplementary report dated 13 August 2012^[51] in which he revised his approach to the valuation exercise. Both Mr Teves and Mr Reynolds were cross-examined by Mr McDowall.

The Evidence of Mr Reynolds

50. [50]
    Mr Reynolds’ affidavit set out the background to the granting of the lease and referred to the dispute between himself and the McDowall family with respect to ownership.
51. [51]
    As I pointed out to the parties in this application I did not have any jurisdiction to resolve any issues with respect to ownership of the land and was obliged to proceed on the basis that the registered proprietor was that party evidenced on the register of titles.
52. [52]
    Mr Reynolds also referred to earlier proceedings in the (then) Land and Resources Tribunal of Queensland, a determination by then Deputy President Kingham with respect to both the payment of compensation which had been fixed in the sum of $1,705 per annum and in a later matter where she made orders requiring Mr Reynolds to restore access by carrying out some drainage works and installing a gravel surface on part of the accessway.
53. [53]
    None of those earlier proceedings have any impact upon the determination required now to be made by me. Nor am I concerned with any issue with respect to a failure by McDowall to pay compensation to Reynolds for the period 2010-2011.
54. [54]
    With respect to valuation matters Mr Reynolds informed the Court through his affidavit that he relies upon the evidence and calculations done by Mr Teves.^[52]  With respect to the impact on the value of his property Mr Reynolds referred the Court to the sale by him of another adjoining lot Lot 81 which is located also on the Mowbray River Road. He sold that Lot 81, which he says is comparable to the subject property, in 2012 for a sum of $800,000 which represented $101,381 per Ha for the total 7.891 ha.^[53]
55. [55]
    Mr Reynolds said that that property had been sold as a rural lifestyle property utilising exceptional views and asserts that Lot 110 on CP157150 (the subject land) would similarly constitute an excellent rural lifestyle block.^[54]
56. [56]
    Mr Reynolds also pointed out in his affidavit that the subject mining lease has not been worked for many years and he asserts that it is “unrealistic, unfeasible and uneconomical for future mining to occur on the land”.^[55]
57. [57]
    That may be so but so long as Mr McDowall wishes to renew the lease which he has lawfully obtained the utilisation of it is a matter for him subject only to his ongoing obligation to pay such compensation as may be determined.
58. [58]
    This is not an application for the cancellation of the lease.
59. [59]
    Should Mr McDowall, upon mature reflection and consideration of the amount of compensation found to be appropriate by me in this decision, decide that the sums involved make retaining the lease as some sort of reserve for future exploitation uneconomic he has, of course, the option of surrendering the lease in which case compensation would cease to be payable.
60. [60]
    Until he took such a step the lease would, of course, remain in force.
61. [61]
    In his affidavit Mr Reynolds suggests that if the mining activity permitted pursuant to the lease were to actually commence then:

“There will be the prospect of silt rubble runoff from the mine onto the nearby cane paddock that will require remedial work from time to time by me. I propose an amount of $4,000 per year for such remedial work.”^[56]

62. [62]
    There was no explanation provided in the affidavit material as to how that $4,000 for remedial work was calculated. I do not accept that figure.
63. [63]
    Under cross-examination with respect to his claim for $4000 for remedial work, Mr Reynolds told the Court that he had to carry out remedial work on his cane farm some 40 years ago as a consequence of silt, stone and rubble coming down the hill.^[57]
64. [64]
    Mr McDowall put to Mr Reynolds that the current environmental conditions operated to control a mines operation so that things such as silt and rubble runoff are currently the subject of relatively strict conditions. Such conditions are of course liable to be enforced by the relevant State Government authorities. Ultimately Mr Reynolds’ request for compensation in respect of potential silt and rubble was based upon his expectation that the Environmental Code would not be policed.^[58]
65. [65]
    It must be contemplated, of course, that we are here dealing with mining activity which has not occurred for 40 years and which would now have to be carried on subject to the requirements of the Environmental Code.
66. [66]
    Further, he goes on to assert that the farm house on the subject site presently rented by him for about $250 per week, yielding a net income of $7,000 per year, would, as a consequence of blasting, dust and noise associated with mining activities, become uninhabitable with the consequence that the farm house would be left vacant because “no reasonable person would tolerate such activities in close proximity to their home.”^[59]
67. [67]
    Further again Mr Reynolds goes on to assert that if the mine operated then the dust which would be produced from the mining activities would impact upon the house (which he asserts would be unable to be rented) and which would then require additional cleaning at a cost of $1,500 per annum “regardless of whether the farm house is tenanted.”^[60]
68. [68]
    Later in his affidavit Mr Reynolds says:

“I then claim on the second alternative basis the sum of $15,000 per year with a ten percent arrogate of $1,500 pursuant to s 281(4)(e) of the Mineral Resources Act resulting in an ordinate claim for compensation of $16,500 per annum.”^[61]

69. [69]
    There is no explanation proffered as to how that base sum of $15,000 has been calculated or even estimated.
70. [70]
    Mr Reynolds may have been prudent to check the meaning of the word “arrogate” before swearing his affidavit.
71. [71]
    The Macquarie Concise Dictionary defines “arrogate” as:

“to claim unwarrantably or presumptuously; assume or appropriate to oneself without right.”

72. [72]
    I am sure he meant something else.
73. [73]
    Mr Reynolds does say, however:

“Some of these heads of compensation were determined in the previous proceedings regarding the renewal of the lease for the period 1990 – 2011. However, I have allowed for the natural increase in price to match commercial rates.”^[62]

74. [74]
    Again nowhere in the evidence is there any explanation as to what the relevant “natural increase” or relevant interest rates were.
75. [75]
    With respect to access Mr Reynolds deposes to previous issues with respect to access which resulted in a Court order requiring him to reinstate access by carryout the installation of a pipe and the laying of gravel.
76. [76]
    The issue of access in not disputed in this case and the legal entitlements of the applicant remain in place.
77. [77]
    Mr Reynolds does complain that the access, which was not disputed by the applicant to involve a total area of about a hectare (300 m in length), deprives him of the use of that area to grow sugarcane as well as other potential uses of the land.
78. [78]
    In his affidavit Mr Reynolds asserts that in addition to his claim for compensation regarding the freehold value of ‘the effected [sic] land’:

“I am also seeking a second and alternate basis of compensation based on the direct losses suffered by me by mining activity which could be conducted on the land.”^[63]

79. [79]
    Mr Reynolds makes claim for the loss of profit on the accessway to the lease. Curiously in his affidavit Mr Reynolds deposes that utilisation of the access proposed by Mr McDowall “reduces the area available for me to grow sugar cane as well as other potential uses of the land”^[64]. He says, and this was not disputed by the applicant Mr McDowall or his representative, that the accessway constitutes a total area of 1 ha.
80. [80]
    In his sworn affidavit Mr Reynolds says that on an area of 1 ha he could produce 1.25 tonnes of sugar which would lead to a net income loss of approximately $2,000 per year.^[65]
81. [81]
    No detailed calculations were provided to substantiate that figure of $2,000 per year.
82. [82]
    Under cross-examination by Mr Lee McDowall for the applicant, Mr McDowall asserted that there were errors in the figures contained in Mr Reynolds’ affidavit.^[66]
83. [83]
    He told the Court that he currently gets about $33 per tonne for sugar.^[67]
84. [84]
    The mining resources plan of ML 5402 dated 28 February 1992 shows that the surveyed area of the mining lease is 8.088 ha and an access way measured at 149.137 m in length with a width of 5.22 m.^[68]
85. [85]
    A simple mathematical calculation shows that the surveyed access road has an area of 778.495 m².
86. [86]
    The plan which forms part of Exhibit 5 has previously been considered by the Land and Resources Tribunal.^[69]
87. [87]
    In that earlier hearing the Land and Resources Tribunal held that Mr McDowall was entitled to ingress and egress from the mining tenement by the right of way recorded in Plan 35832.
88. [88]
    Within the text of that judgment the Deputy President Kingham usefully set out the background history to the dispute about the access way.
89. [89]
    She said:

“[14] Mr McDowall sought a declaration that the survey carried out by Mr Peter Stopford of Chapman & Balderson in or about March 1992 correctly delineates the area, dimensions and boundaries the subject of ML 5402. … 

[15] Mr Reynolds did not call any evidence about the area, dimensions and boundaries of ML 5402. He accepted the nature, extent and dimensions of plan 35832 and submitted that there was no evidence to justify the order sought by Mr McDowall.

[16] Because of the state of the evidence in this case, the only evidence before the Tribunal is the bundle of documents provided by the Acting District Mining Registrar referred to above.

[17] In 1989, for a reason that is not apparent from the documents, Philip Verrall, a surveyor with the predecessor to NR&M surveyed ML 5402 (then known as ML 43), in consultation with and under the supervision of JD Bell the Senior Staff Surveyor of the Department. That survey was subsequently registered as plan 35832 in the NR&M’s records for ML 5402.

[18] Mr McDowall was dissatisfied with the survey. He appeared to have two concerns with the survey. One related to the area of the lease and the other to the commencement point for marking out the lease. It should be noted that Mr McDowall did not raise any issue regarding the right of way recorded on that plan.

…

[And later]

[29] Firstly, there is the right of way recorded on plan 35832, which I have declared to be the access conferred pursuant to the grant of ML 5402. It follows the eastern boundary of Portion 110 from the southeast corner of Portion 110 to the southeast corner of ML 5402. I will refer to this route as the right of way. Set out below is plan 35832, which illustrates the location of the right of way. Mr McDowall gave evidence that he used that route from 1934 to about 1947, but that it was very steep and was difficult to use.”

90. [90]
    In the event Deputy President Kingham made the following orders, inter alia^[70]

1. “Mr McDowall is, and was from the date of the grant of ML 5402 (formerly ML 43), entitled “to ingress into and egress from the tenement” by the right of way recorded in plan 35832.”

91. [91]
    There is no evidence before this Court on this occasion which sought to challenge the accuracy of what is shown in plan MP 35832. Accordingly I proceed in accordance with the determination by Kingham DP that that plan sets out the relevant dimensions for ML 5402.
92. [92]
    Earlier in another decision Kingham DP had dismissed a claim by Mr McDowall for access to the mining lease ML 5402 over the adjoining Lot 81, on which had been constructed a mine road but which was outside the boundaries of Lot 110.
93. [93]
    In coming to her decision the Deputy President gave the following explanation:^[71]

“[20] It should be noted that the access route described in Mr McDowall’s statement of claim traverses land that is not the subject of the dispute with Mr Reynolds. That land, referred to as lot 81,^[72] is owned by Mr Reynolds and May Chalmers Reynolds. Mr McDowall has claimed no right or interest in lot 81. The access described in the plan Mr McDowall submitted with his application does not traverse lot 81 at all. It appears, therefore, that the access referred to in Mr McDowall’s statement of claim is different to the access described in the plan and correspondence between the Acting Mining Warden and the Under Secretary. Mr McDowall has not applied to vary access to include lot 81. The statement of claim asserts no other basis for a legal right of access across lot 81. To the extent that Mr McDowall seeks any orders in relation to lot 81 his claim must fail and I find for the Mr Reynolds in that respect.”

94. [94]
    The length of the accessway observed by me appears to be contradicted by the graphic plot provided by the Mining Registrar.^[73]  Using the scale attached to that graphic plot the access road appears to scale off at about 300 m in length. It is not possible to glean from that graphic plot the width of the accessway.
95. [95]
    The application for renewal of mining lease^[74] included as an appendix a letter of 3 December 1970 over the signature of Philip Davis, a mining geologist. This was presumably intended to satisfy the then equivalent of s 269(4)(b) of the current MRA, namely to demonstrate the existence of mineralisation on the subject site.
96. [96]
    That letter forming part of the attachments observes that:

“The limestone occurrence is located approximately 5 miles south of Port Douglas and a quarter of a mile off the old Cook Highway.”

97. [97]
    That correspondence–which appears to have gone unchallenged over a long period of time would seem to support the contention that if the resource is 440 m off the old Cook Highway then the access might reasonably be thought to be of the order of 300 m long.
98. [98]
    That figure also accords with the measurements marked out on the mining resources plan of ML 5402 (formerly ML 43) which also formed part of the application for renewal of the mining lease. Using the measurements shown on that plan the accessway calculates at 298.534 m.^[75]
99. [99]
    That mining resources plan also shows the accessway to be 5.22 m wide which accords with earlier correspondence, again attached to the mining application from Mr McDowall, in which he makes reference to a proposal that access be 16 feet wide.
100. [100]
     I also observe that an accessway 298.534 m long with a width of 5.22 m generates an area of 1,558.345 m2.
101. [101]
     It is difficult then to see how Mr Reynolds is able to contend, as he does, that the accessway constitutes a lost area of 1 ha.^[76]
102. [102]
     Similarly in his respondent’s compensation statement of 9 February 2012 Mr Reynolds repeats the assertion that the net income lost would be $2,000 in respect of 1.25 ha of land which as he says in that document would produce 1.25 tonnes of sugarcane.^[77] 
103. [103]
     Under cross-examination Mr Reynolds was unable to explain the change in assertion from 1.25 ha in his compensation statement to 1 ha in his affidavit.^[78]  Ultimately he responded that it was due to “typing error, it’d be.”^[79]
104. [104]
     Further, with respect to the loss of potential cane production on the access road which was described in the compensation statement as being “the small access over the Respondent’s property (being an area of 1.25 ha)”^[80], under cross-examination Mr Reynolds then asserted that the yield would be 40 tonnes per acre but did not inform the Court as to what the yield per hectare was. However it might be assumed, applying the appropriate conversion factor,^[81] that the yield might be thought to be 100 tonnes per ha on Mr Reynolds’ evidence.
105. [105]
     He asserted a price of $33 per tonne^[82] for sugar but that does not seem to result in a calculation of a loss of $2,000 a year. It may be that 40 tonnes per ha may yield a net income of about $2,000 although there was no compelling evidence to that effect.
106. [106]
     The figure is of course premised upon the access road being 1 ha in area.
107. [107]
     Having regard to all of the material placed before the Court that figure does not seem, to my mind, to be sustainable.
108. [108]
     The applicant’s representative, Mr Lee McDowall, to my mind summed up the situation quite concisely when he observed, in his submissions:

“The applicant testified that the access road from Mowbray River Road to the mineral lease is approximately 200m long, (which includes 50m of road licence) and 5.22 m wide. This equates to a surface area for the access road for 1044m² or 0.104 ha. This represents approximately 8.3% to 10% of the respondents [sic] claim of either 1 ha or 1.25 ha of the land affected by the access road.”^[83]

109. [109]
     Mr Reynolds’s claim for compensation in respect of the access road was further confused by his apparent insistence that the area in which he was unable to grow cane, consequential upon the existence of accessway, was two or three chains wide i.e. 40 to 60 m wide.^[84]
110. [110]
     In that context there was some confusion as well about whether what was shown in the photographs, tendered as part of his valuer’s report and purporting to show the access road both looking into the lot and out of the lot, had cane growing up to its verges or not. The photographs clearly show vegetation of some sort right up to a track which appears to be about the width of 1 standard vehicle.
111. [111]
     Mr Reynolds asserted that it was not cane but what he called fallow, in response to some questions from myself.
112. [112]
     I asked Mr Reynolds quite clearly:

“You are saying the area where the cane is growing is two chains wide?”^[85]

113. [113]
     To which he responded:

“Could be growing, yes.”

114. [114]
     Mr Reynolds’ oral evidence quite clearly flies in the face of photographic evidence.
115. [115]
     Further, the photographic evidence which appears as Appendix E to the report of Mr Teves^[86] clearly shows that at least part of the accessway also provides access for the farm house. The farm house seems to be reached by travelling part-way up the access road and turning left to the west.
116. [116]
     The evidence of Mr Reynolds seemed to be that the distance from that accessway to the farm house on his property was of the order of 400 m.^[87]
117. [117]
     So much was confirmed by Mr Reynolds in re-examination by Mr Morzone.^[88]
118. [118]
     As a consequence the Court is left in a position where the potential loss of usable land may be of the order of 1 ha but not more and at least part of that land is used, in any event, as part of the access to an existing dwelling on the subject land.
119. [119]
     The area lost to the potential for growing of cane seems, then, to be less than or approximately half a hectare.
120. [120]
     Photographs apparently taken by a member of the firm GH & D were tendered in re-examination by Mr Morzone for Mr Reynolds.^[89]
121. [121]
     Exhibit 16 consists of 10 photographs, some of which show the actual access track and show it passing through what can only be described as very rough country which appears to be entirely unsuitable for any form of cultivation, as its surrounding land is all given over to natural vegetation and rocky outcrops.
122. [122]
     Earlier in his cross-examination, apparently relevant to the claim contained in his compensation statement for a loss of profit on the agistment of cattle,^[90] Mr Reynolds told the Court that it would be economically viable and likely for him to fence off allotment 110 for the purpose of agisting five cattle, in circumstances where he already has a well-established and very good grazing property in the Daintree area.^[91]
123. [123]
     Earlier Mr Reynolds had said the cost of erecting a fence on Lot 110 would be about $800 per mile so $500 per kilometre.
124. [124]
     He then followed that with some evidence that the mining site could be used for agisting cattle in conjunction with the adjoining lot of land also owned by Mr Reynolds.
125. [125]
     That assertion was somewhat diminished by his concession shortly thereafter that the adjoining property was not fenced for the purpose of agisting cattle and that he had no plans to do so.^[92]
126. [126]
     Mr Reynolds also claims what he describes as a “nominal sum” of $250 per annum^[93] to monitor the mine activities.
127. [127]
     When asked to explain that figure Mr Reynolds said it would be for administration and overseeing at a rate of $50 per hour.^[94]
128. [128]
     He told the Court that he visited the farm once every so often to make sure that the miners were doing the right thing. When pressed^[95] he said that he did that about once a month or 12 times a year and that that activity involved driving up and looking and driving back and, Mr Reynolds added, “walking over it”.^[96]
129. [129]
     As explained later in this decision a figure of $250 grew quite dramatically to the figure of $500 in his affidavit. This remained unexplained.
130. [130]
     Mr Reynolds confirmed in cross-examination that that doubling was attributable to “cost increases”.^[97]
131. [131]
     Precisely in his affidavit Mr Reynolds says:

“At the base of the area where the Mining Lease is located I have a farm house.”^[98]

132. [132]
     That assertion is directly and emphatically contradicted by the aerial photograph which appears appended to the report of Mr Teves.^[99]
133. [133]
     The aerial photograph clearly shows that the farmhouse is separated from the densely forested mining lease area by what appears to be fallow ground and at least one cane field through which the access road to the mining lease passes.
134. [134]
     Mr Reynolds statement makes it sound as though the residence is directly adjacent to the mining lease area.
135. [135]
     The falsity of that proposition is also demonstrated by the photos of more recent currency which appear in Mr Teves’ report.^[100]
136. [136]
     In my view it is more likely that any dust nuisance suffered by residents of that house would arise from the cane farming activities already carried on.
137. [137]
     Further Mr Reynolds goes on^[101] to assert that the dust which might be produced from any mining activities would impact on the house with a consequence that additional cleaning of the farmhouse would be incurred for which he claims $1,500 per annum “regardless of whether the farm house is tenanted”.
138. [138]
     The lack of foundation for and the extravagance of such a claim is self-evident. That is particularly so in the light of oral evidence from Mr Reynolds that he paid no compensation to the existing tenants of the farm house for cleaning expenses due to the farming of sugar cane.^[102] 
139. [139]
     At times under cross-examination Mr Reynolds seemed unreasonably to refuse to acknowledge what he had in fact written either in his compensation statement or in his affidavit.
140. [140]
     For example when asked by Mr McDowall about paragraph 51 of his affidavit^[103] which said:

“I am of the view that the blasting noise, dust and other activities of the mining site would result in the farm house being left vacant as no reasonable person would tolerate such activities in such proximity to their home. Accordingly, I then seek the sum of $7,000.00 per annum for potential lost rental.”

141. [141]
     Mr Reynolds was asked:^[104]

“In paragraph 51, you claim that you wish to be compensated $7,000 per annum for potential loss of rental income because no reasonable person would tolerate the activities of running the mine?” 

With which Mr Reynolds, somewhat surprisingly, informed the Court that he did not agree.^[105] 

142. [142]
     He later changed that answer to the affirmative asserting:

“I misunderstood there.”^[106]

143. [143]
     Some indication of the “natural increases”^[107] which Mr Reynolds has apparently in mind can be gleaned from his claim for what he describes as “administration costs”.^[108]
144. [144]
     Mr Reynolds complained in re-examination of the effect of blasting when the old quarry used to operate 40 years ago. He said that when the mining activity was occurring, blasting occurred about once every three days.^[109]
145. [145]
     A significant part of Mr Reynolds’ evidence related to photographs including the photographs taken by GH & D^[110] as well as photographs taken by himself.^[111]
146. [146]
     On this point Mr Reynolds’ evidence was quite confusing as to whether he provided the GH & D photographs or his own photographs or some other photographs to Mr Teves and indeed when the photos were taken. At one point it was said they were taken in 1968 and on another occasion they seem to relate to a report prepared in about 1990.^[112]
147. [147]
     Despite Mr Morzone’s best efforts, that particular point remained unclear, notwithstanding that the final position as revealed in re-examination seemed to be that there were photographs taken by somebody else in about 1990.^[113]
148. [148]
     As to the qualities of Lot 81 upon which much store was placed with respect to comparability the only evidence from Mr Reynolds regarding the attributes of that property were that it was:

“Similar”^[114]

The Evidence of the Valuer Teves

149. [149]
     Mr Reynolds engaged a registered valuer Mr Neil Teves to produce a valuation report.
150. [150]
     That report was tendered into evidence^[115] and subsequent to that report (dated 4 July 2012) Mr Teves produced a further and apparently supplementary report dated 13 August 2012 which also became an exhibit before the Court.^[116]
151. [151]
     In his initial report Mr Teves came to the conclusion that compensation should be assessed by calculating the value of the subject property.
152. [152]
     It is appropriate to repeat the valuation conclusion of Mr Teves’ first report. He said:

“Based on the sales data shown here-in and based on the considerations within the previous paragraph, it is considered that an appropriate valuation figure (compensation) for the subject property in the prevailing market conditions, is $750,000 (seven hundred and fifty thousand dollars).

Such amount is considered appropriate and correct for compensation payable due to the proposed granting of a mining lease over a section of Lot 110 as shown on the Mining Lease Plan forming part of this report.”^[117]

153. [153]
     That is a mildly surprising conclusion considering that even with the grant of the mining lease his client Reynolds would retain ownership of the property and there was no suggestion that any cane farming activities on the subject land would have to come to a halt.
154. [154]
     By way of explanation of his reasoning, Mr Teves said as follows:

“The Mining Lease shall be for an extended period, and history indicates that a further application for renewal may occur at the end of the proposed present lease period. For this reason, the realisation of a just price by way of sale, of Lot 110 encumbered by the Mining Lease is impossible to achieve and therefore it is considered that the Equivalent of Freehold Value attributable to the mining lease sector of the total aggregation should apply. This amount is $750,000.”^[118]

155. [155]
     It should also be remembered that the mining lease occupies an area of 8.088 ha out of a total lot area of 39.66 ha.
156. [156]
     Mr Teves told the Court that he had carried out his valuation exercise pursuant to the provisions of the Mineral Resources Act.
157. [157]
     In conducting his analysis underlying his conclusion Mr Teves drew the Court’s attention to the land being designated as “Rural” pursuant to the Cairns Regional Town Planning Scheme.^[119]
158. [158]
     On that basis he contended that the highest and best use for the property would be for rural pursuits or for the individual lots forming the total aggregation to be used as rural lifestyle properties.
159. [159]
     Reading Mr Teves’ initial report, it is difficult not to form a conclusion that he has carried out an exercise akin to a valuation exercise to assess compensation for a permanent resumption of the land, having regard to the terms contained within the Land Valuation Act.^[120] 
160. [160]
     Mr Teves’ approach was to identify the subject land as having a highest and best use as some sort of rural retreat or rural residential development. He spent a considerable period of time identifying the particular features of the subject land which rendered it suitable for what was described as a rural lifestyle property.^[121] 
161. [161]
     He referred to trends apparent in the area to convert property use “from rural to rural residential estates and rural lifestyle properties.”^[122]  He went on to say: 

“The subject property would be ideally suited as a Rural Lifestyle Lot, should there be no mining lease encumbering such lot. Should the mining lease be granted, it would eliminate the potential use of the property as a Rural Lifestyle Lot and limit its potential to partly purely agricultural land plus a balance area of unusable land.”^[123] 

162. [162]
     He does not identify the balance of unusable land nor explain why it is rendered unusable.
163. [163]
     He went on to describe how land high on an elevated ridge could be developed for rural residential use dependent upon the construction of a new road.
164. [164]
     In doing that he drew comparisons to an adjoining Lot 81 which had been sold by Mr Reynolds in April 2012 with an area of 7.891 ha and a selling price of $800,000 or $101,381 per ha.^[124]
165. [165]
     Mr Teves differed from Mr Reynolds who, in his affidavit,^[125] described the consequence of the mining lease as having “devalued the entire property as an asset”, whereas Mr Teves alleges that the property is rendered worthless.
166. [166]
     Generally I must observe that I do not find the initial report from Mr Teves as being of much use in calculating the appropriate compensation to be paid.
167. [167]
     In his second report Mr Teves backed away a little from his initial contention as to the appropriate compensation which should be paid and produced an amended report which contended for compensation in the sum of $490,000.
168. [168]
     In his report he explained the reason for his changed view in the following terms:^[126]

“3. In my original report the compensation payable was assessed on the basis of the Diminution Value of the freehold land held by Mr John Reynolds considering that there would be a renewal of a previous lease, or the granting of a new lease for a period of 21 years over the land for mining purposes (lime/lime stone). On of [sic] my valuation considerations in such report was that previous mining leases had been granted over this section of Lot 110 and with the proposed current renewal of lease, the total past and future lease period covers 63 years.

4. The historical evidence suggests that it is highly likely at the end of each renewal period another renewal of the lease shall occur for additional 21 year periods. For this reason I considered that the Land will continue to be encumbered in Perpetuity as opposed to being restricted to a 21 year period. The assessment of compensation in my original report was established considering that the Lot 110 would be encumbered on a continuing basis and therefore in the Before and After Concept of Valuation adopted, such land was considered on a “After” basis as being diminished in value in Perpetuity and not for a 21 year period.

5. I have now been instructed to consider an alternative scenario whereby the current proposed Renewed Lease, which would be for a 21 year period, would not continue thereafter and should there be a renewal or granting of any additional lease, the Freehold Owner would have the right, at the commencement of any renewal of such lease, which would further extend the period of encumbrance, to again apply for compensation at that time.”

169. [169]
     Mr Teves continued to use the “Before and After Valuation Methodology” which he utilised in his previous report.
170. [170]
     He treated the property as a total aggregation having two elements. In the first place he identified the value of the cane land and the existing house.
171. [171]
     Mr Teves contemplated the continuing utilisation of the land suitable for cane farming.
172. [172]
     In the before situation Mr Teves contemplates the “hilltop lifestyles site” as being worth $750,000.
173. [173]
     After renewal of the mining lease he contemplates that “hilltop lifestyles site” as being worth only $260,000.
174. [174]
     He explains how he reached that figure in this way:^[127]

“But as this land is being considered encumbered for a 21 year period its value is diminished to the extent that it shall not be saleable at this figure until after the expiration of the Lease. To calculate this we assess the Present Value of $750,000 considering that receipt of such amount is deferred for 21 years @ 5%. i.e.:  $750,000 x 0.35894”

That calculation yielded a value of $460,000.

175. [175]
     It is clear from both of his reports that Mr Teves places great weight upon the sale of Lot 81 which adjoins Lot 110 and which was previously in the ownership of Mr Reynolds.
176. [176]
     That property sold for $800,000 on 5 April 2012 and has an area of 7.891 ha.^[128]
177. [177]
     In his analysis of comparable sales^[129] Mr Teves reveals that Lot 81 contains cane land which is leased back by the vendor on a 5 + 5 year lease.
178. [178]
     Nowhere in the report is it revealed what the area of that cane land is or what the income which might be derived from it would be.
179. [179]
     Reference to the site plan^[130] shows that Lot 81 shares its western boundary with the eastern boundary of Lot 110 and has a direct road frontage to the Mowbray River Road. It was able to be sold because clearly it is in a separate title.
180. [180]
     It is noteworthy that as a professional valuer Mr Teves comes to the view that the existing residence on Lot 110 is capable of achieving rental income after the renewal of the mining lease, whereas Mr Reynolds contends that it would not be rentable at all or with great difficulty.
181. [181]
     Mr Teves’ extolling of the virtue of the mining lease area as being suitable for a hilltop rural lifestyle site must be viewed with some reservation as it became clear in the course of cross-examination that his inspection, carried out in the presence of Mr Reynolds, did not in fact involve going onto the mining lease area but stopped at a point (where Mr Reynolds had earlier been directed by the Court to restore a drain crossing).^[131]
182. [182]
     Mr Teves did inspect Lot 81 which had been sold by Mr Reynolds.^[132]
183. [183]
     It appears, although it is not clear, that they may have inspected the house pad which exists on Lot 81.
184. [184]
     For his knowledge of the mining lease area Mr Reynolds told the Court that Mr Teves had been provided with some photographs that may have been taken in 1968, although when pressed in cross-examination Mr Reynolds revealed that the photographs that appeared in the first of Mr Teves’ reports were presumably taken by him because they were not the photos that he had provided to him.^[133] 
185. [185]
     Mr Teves report contains a photograph described as mining lease area with power pole on left (notwithstanding that the power pole exists at the right hand side of the photograph). Notwithstanding that he had not inspected the mining lease area Mr Teves felt able to say in his report:

“It would be possible to construct a new road up through the slopes to very elevated ridge top (which is encompassed by the proposed mining lease area) house site from where there are panoramic views out over the Mowbray River Valley and to forested mountains – to the east and south; and out over Craiglie and Port Douglas and the Pacific Ocean to the east and the north-east. Such house site would be similar to that established on the adjoining Lot 81 which is a primary sale used as a basis for the assessment of compensation.”^[134]

186. [186]
     Mr Teves goes on to say:

“The construction of the access road and the ridge top house site could be achieved without any major destruction to the existing vegetation.”^[135]

187. [187]
     It is clear that to achieve the sort of theoretical objective contended for by Mr Teves would require:

     1. Reconfiguration of the Lot 110 to create one lot representing the mining lease area.
     2. The construction of a road through what Mr Reynolds describes as a very rough area of the land.
     3. The development of a house site in that very rough area.
     4. The taking of power from the lower level of Lot 110 to the proposed house lot.
188. [188]
     Mr Teves does however caveat in his report that:

“No soil tests or environmental studies have been available to us, therefore our valuation is subject to there being no surface or sub-surface soil problems including instability, or building material hazards in or on the property that would adversely affect its existing or potential use or reduce its marketability. Should any problem be known or arise then the valuation should be referred back to us for comment.”^[136]

189. [189]
     Almost as a contradiction to his contention about the ease of creating the access road and the house site, later in his report, Mr Teves observes as follows:

“A new road would have to be constructed from the end of the existing common access road up to the quarry site. This may disrupt management of the property in the hands of Mr Reynolds and, would certainly impact on the amenity of the land due to the specifications of such road required to be pushed through the forest vegetation and which would be used by heavy equipment.

This would NOT be the same as a road required for traffic to a residential hilltop site which would have a much less visual and physical impact.”^[137]

190. [190]
     It seems to me that Mr Teves has no basis for such an assertion. He has not identified where the house site would be nor has he identified any potential track for the “much less visual and physically impact(ing)” access road.
191. [191]
     I found Mr Teves to be somewhat coy in some aspects of his responses to cross-examination. By way of example, he was asked by Mr McDowall for the respondent whether he had actually walked upon and inspected the land the subject of the mining lease.^[138]  The answer to that question:

“We went on to the land that contained the mineral lease. We went on to the lower section of the land; we didn't go on to the escarpment, on to the hillside.”^[139]

192. [192]
     He took the point that the mineral lease starts at the Mowbray River Road and upon further cross-examination, when pressed by Mr McDowall, Mr Teves conceded that he never crossed the drain along the access road and so never actually walked onto, nor did he inspect, the mining lease proper. The highest that could be said of Mr Teves’ inspection of the mining lease was that he had driven on part of the access track.
193. [193]
     Mr Teves was asked some questions about his inspection of Lot 81, the adjoining lot sold by Mr Reynolds at an earlier time and relied upon by Mr Teves as founding his valuation exercise.
194. [194]
     It is clear from his evidence that Mr Teves believed that his visit onto Lot 81 took him to a point at the rear of the mining lease.
195. [195]
     He said:

“The house site on Lot 81 is an extension of the ridge that runs from 81 through the rear part of the mining lease.”^[140]

196. [196]
     Mr Teves said this:^[141]

“I have inspected the whole of that property. There is a access road running from the bottom to the house site at the top and yes, I have. And that property is immediately adjacent to the subject property and the house site is actually immediately adjacent to the higher section of Lot 110 which is above the mining lease.”

197. [197]
     Reference to the site plan provided by Mr Teves in his report^[142] and referenced to the graphic plot of ML 5402 shows quite clearly that Mr Teves’ answer cannot be correct. Lot 81 has a rear northern boundary which finishes approximately halfway along the boundary of the mining lease and the rear of Lot 81 is constituted by a Lot 52. Further, the mining lease runs right to the rear northern boundary of Lot 110 and was described by Mr Reynolds in re-examination as having had mining of limestone “carried out on the top of the ridge which was a very rough portion of the property.”^[143]
198. [198]
     I am satisfied that Mr Teves neither went on to the actual mining lease land (other than partway along the access track as far as the “drain”) and nor was he in a position from Lot 81 to look “down” onto the mining lease area.
199. [199]
     Accordingly, Mr Teves is in the unfortunate position of having prepared a valuation report opining as to the value of land without having walked on the land and without having the benefit of detailed photos, apart from those few photos which appear in his earlier report^[144] and possibly the photos which had earlier been taken by some unidentified person from GH & D. None of those photos provide particular details of the mining site sufficient, in my opinion, to inform a valuer as to the proper nature of the land.
200. [200]
     The photos which were appended to his report are of the accessway and one distant photo taken of the mining lease area. The photos from GH & D are all generally of an access track save for one panoramic photo and two other somewhat distant photos taken from an unidentified position on the south side of the Mowbray Valley. Only three photos show actual vision of the quarry site itself.^[145]
201. [201]
     To the extent that Mr Teves believes that his visit to Lot 81 put him in a position where he was above the entire mining lease he is mistaken. So much is confirmed by both the photographic and the mapping evidence.
202. [202]
     In his evidence Mr Teves, the valuer, confirmed that he had not actually gone beyond the drain which crossed the access road onto the mining lease and certainly did not go onto the land that contained the mining lease proper.
203. [203]
     He seemed to take comfort in the fact that he went somewhere on the adjoining Lot 81 where there is a house site and looked across towards the mining lease area.^[146]
204. [204]
     I am satisfied from the evidence of Mr Reynolds and Mr Teves that Mr Teves could not have looked down and across onto the furthest boundary of the mining lease area, as a view to that area is only available from adjoining Lot 52 onto which he never went.
205. [205]
     Mr Teves also clarified certain matters with respect to the access road on the property. He said this:

“It's used as the access to this part of the sugar cane farm,^[147] it's used as an access to the - the farm, the house, the farmhouse on Lot 110 and it's also used, as I understand, as access to the - a rear fallow paddock at the bottom of the mining lease and onto the mining lease itself.^[148] 

206. [206]
     I am satisfied that the access way used to achieve access to the mining lease proper is also used for the purposes of the cane farm and the residence thereon.
207. [207]
     Under cross-examination Mr Teves provided this description of the mining lease: 

“The mineral lease is now overgrown with thick leaves; vegetated with forest trees.”^[149] 

208. [208]
     Challenged under cross-examination as to his failure to actually walk on the mining lease proper (as distinct from the access) Mr Teves said:

“I don't think I would be any better informed whatsoever, particularly having regard to the adjoining property, going up along - outside the eastern boundary, gave me an overview of the type of country without having to slash through undergrowth and being amongst the forest vegetation where you can see very little anyway. And also bearing in mind, sir, the application of value in relation to my report is based on the site, the rear section of the site, as a real lifestyle property. Topographic details are important when you're looking at agricultural country - agricultural country or horticultural country. The type of soil, the contour lines then become important. For the purposes of - rural lifestyle property, what's important is the fact that this particular section of the site has an elevated area at the - at the rear with panoramic views overlooking the Mowbray Valley and out to the Pacific Ocean and this is what people are desirous of in relation to a lifestyle property particularly in this area where most of the purchasers have in mind, privacy, seclusion, in a forested environment and these spectacular views being paramount (sic) importance to the purchasers.”^[150]

209. [209]
     With respect to the prospect of constructing a road to reach the house site for which Mr Teves contends on the top of the mining lease area, in response to a question asked in cross-examination he relied upon his assertion that:

“There has been a road there previously^[151]”

and because he had

“seen [it] marked on maps.”^[152]

210. [210]
     It is unnecessary to recite in its entirety Mr Teves’ evidence with respect to the prospect of building a road to reach an unidentified housing site on the top of the mining lease. I found his evidence in that regard to be speculative and without foundation, including his contradictory evidence in which he suggested that there could be a road constructed without any major destruction of the existing vegetation, notwithstanding his earlier evidence that the whole site was extensively overgrown.
211. [211]
     Indeed in response to some questions from me, Mr Teves conceded that the house site does not presently exist, is not presently cleared and indeed has never been cleared.^[153]
212. [212]
     Further, with respect to the road, while I accept that there has been a road constructed to the mining lease, Mr Teves concedes that there is not a road constructed to where he says the house site would be.
213. [213]
     Apparently, as it transpired, his basis for asserting the viability of a road with a house site is premised upon a road having been constructed on the adjoining property.
214. [214]
     Further as to the house site, when I asked Mr Teves as to whether his proposed house site was in an area that has been mined, he told me that it was in an area that was part of the mining lease but it had not been mined:

“Otherwise it wouldn't be a house site. But the ideal - the ideal spot for the house site would probably be where the mine is now.”^[154]

215. [215]
     With respect to engineering works which would necessarily have to be undertaken, should a house pad exist at the top of the mining lease and access be sought to it, Mr Teves took no engineering costs into account, simply saying that any purchaser would be aware of there being civil engineering costs involved in establishing a residence.^[155]
216. [216]
     Later in his evidence Mr Teves opined a figure of $50,000.
217. [217]
     That same figure appeared in Mr Teves first report.^[156] 
218. [218]
     There it was said:

“The cost of establishing such improvement [i.e. a form gravel access road and a levelled building site] is estimated to be around $50,000 (maximum).

219. [219]
     The genesis of that figure was never explained, save in his oral evidence where Mr Teves said:

“What I did with that, I - I spoke to - as I mentioned just earlier I had some actual machinery operating costs and we discussed what happened on - on the adjoining property as far as establishing the road [with which] he was concerned”^[157]

220. [220]
     Earlier in his oral evidence in respect of that $50,000, Mr Teves said as follows:

“At the same time I did ask Mr Reynolds about machinery costs because he has some experience in - in hiring machines and we did establish the costs there for which I used a costing for the - cost of construction of an access road up to this site, and I've allowed $50,000 deduction in the value of my rural lifestyle property to account for that factor.”^[158]

221. [221]
     Once again there were no details as to where that $50,000 figure was calculated or indeed whether it was ever validated via another enquiry.
222. [222]
     Another area in which Mr Teves was subjected to some cross-examination and some questions from me was with respect to the notion of treating the mining lease as though it were a separate lot.
223. [223]
     Mr Teves gave evidence that the subject land is in the Rural Zone under the Planning Scheme.
224. [224]
     That was not disputed by the applicant.
225. [225]
     Mr Teves told the Court that in the Rural Zone the minimum lot size was 40 ha. The subject site is, it must be remembered, 39 ha in area.
226. [226]
     With respect to the prospect of putting two residential houses on one lot, Mr Teves told the Court that one of those would have to be deemed to be a caretaker’s residence which, he conceded, would require an application for a change of use to the relevant local government.
227. [227]
     In that regard, extracts from the Douglas Shire Planning Scheme were tendered to the Court.^[159]
228. [228]
     In the extracts from the Planning Scheme the Scheme provides that a caretaker’s residence is built pursuant to a Code and the purpose of the Code is said to be “facilitate the establishment of a caretaker’s residence which is used for genuine caretaking or property management purposes; and to ensure that an acceptable level of amenity is provided for the occupant.”^[160]
229. [229]
     The relevant performance criteria states:

“Only one Caretaker’s Residence is established on one site and in association with a legitimate caretaking or property management purpose operating on the site.”

230. [230]
     The Planning Scheme sets out acceptable solutions for achieving those performance criteria and requires that, amongst other things, the caretaker’s residence is located on the same lot as the primary use and that the caretaker’s residence is occupied only by the proprietor, manager or caretaker of the primary use established on the site, together with any immediate family of that person.
231. [231]
     I am satisfied from the evidence that what Mr Teves was contemplating in his valuation report was not the construction of a caretaker’s residence but the contemplation of a separate lot for what Mr Teves described as a “Rural/Residential Lifestyle Property”.^[161]
232. [232]
     I am further satisfied that to achieve the separation of the mining lease so that it could sensibly be contemplated for future use as a Rural Residential Lifestyle Property would require reconfiguration of Lot 110.
233. [233]
     I am also satisfied that that reconfiguration pursuant to the current provisions of the Douglas Shire Planning Scheme is unlikely to be achievable because it would require a lot smaller than the minimum 40 ha size contemplated by the Planning Scheme.
234. [234]
     There was no compelling evidence placed before the Court that established with any degree of optimism that such an application for reconfiguration was likely to be successful.
235. [235]
     Mr Teves in his oral evidence said:

“but that's what's happening in Mowbray - Mowbray and Spring Creek Valley up in this particular area, that's what has happened on a lot of the properties there.”^[162]

236. [236]
     He then told the Court that he had “no basis for saying that it would necessarily happen on this property” only that, in his mind, some “precedent has been set on these other properties”.^[163]
237. [237]
     In the course of discussion during Mr Teves’ evidence about the necessity for an impact assessable application, counsel for the respondent Mr Morzone pointed out that:

“A caretaker's residence is code assessable” under the Planning Scheme.^[164]

238. [238]
     That may be the case but that only assists in the context of an intention to make bona fide use of the caretaker’s residence for the purposes set out in the Planning Scheme.
239. [239]
     With respect to the matters mentioned above, Mr Teves in his second report^[165] observed as follows:

“21. Properties located in elevated positions on the hills and mountain slopes – particularly those with dense green forest vegetation, have been sought after over a number of years by purchasers wanting “Lifestyle” Properties that are different to the usual Rural Residential Properties available in other localities. The elevated Rural Lifestyle Properties in this district provide magnificent sea and mountain vistas. There is a demand for such properties by people desirous of establishing exclusive, secluded retreats whereby they have good infrastructure services, are close to offshore coral reefs and islands, and are also close to a major airport with national and international flights, and also close to a major provincial city. These properties command high prices in the property market.

22. There is no impediment to retaining and the continued use of existing residence of Lot 110 whilst establishing a new residence on the elevated Lifestyle section of the property. Town Planning would allow for the existing residence to become the Caretakers Residence and then any new residence the primary House. There are other properties in the Mowbray River Valley and also in other parts of this region which have two legal residences approved on this basis. It is not envisaged that there be any subdivision of Lot 110 into smaller lots.”

240. [240]
     What Mr Teves says in those two paragraphs is correct but seems to me not to be consistent with the proposition he advances as the basis for his valuation exercise, namely that the mining lease area of part of Lot 110 ought be regarded as a separate lot of land capable for sale as a rural lifestyle property, when the only way that could occur is by reconfiguration into a lot size which would be squarely in conflict with the provisions of the Town Planning Scheme.
241. [241]
     Under cross-examination Mr Teves described the mining lease in the following terms:

“This happens to be one of the ideal locations in the Mowbray Valley, which is environmentally and aesthetically a desirable place to live, as decided on by people coming to the area; not - this is not my interpretation, this is - the market has interpreted this, and they pay these prices for this - these types of properties. You have property here which has got a panoramic view, elevated, fits ideally into the - into the requirements of these people, and it has a mining lease over the - the best part of the property for a rural lifestyle property;  not for agricultural use but for a rural lifestyle property. It actually destroys - that mining lease there actually destroys any sale of this property which would benefit from - from increased prices for a life - rural lifestyle property. It - it only has the value now of the cane land; it’s the only valuable part with this mining lease over it. It's unfortunate it's there, but that's - the mining lease is over it, and - and that's the way I see this property, as a - as an ideal rural lifestyle property, which is proven by the purchase of the property immediately adjoining which is, for all intents and purposes, the same topography, elevation as the - as the subject, and - and that's - that's the way I saw it and that's the way I believe it is.”^[166]

242. [242]
     Later under cross-examination Mr Teves explained his approach to the valuation exercise contended for by him in the following terms:

“I've just apportioned the - the 12 hectares of cane land, which excludes the road licence - the 12 hectares of cane land, at - at a figure which is the - just cleared arable land, excluding the added value of any structural improvements or - or plant and equipment and crop, et cetera, and then I've taken the balance of the hillside, which is the lifestyle property, and applied a figure of 800,000 less the $50,000 access road to that part - part of the property;  it's an apportionment. So, the total property still is worth $950,000;  this is on the basis I consider that having 12 hectares of land on - on this property, as opposed to one hectare on - or less than one hectare, taking the road licence out, on the adjoining property which is for sale, you could still lease out that 12 acres of cane land and retain it as productive cane land supplying to the mill - it's not - one of the neighbours could lease that back, as has happened in the case of the - the small little bit of cane land on Lot 81 adjoining. The Reynolds have leased that little area back for five years plus [indistinct]. They still paid 800,000 there, so - but in this particular case, I - I believe that the 12 hectares of land is - cane land is worth something on this property, where the one hectare on the other one's not - not so important. And you've got the - the value of the hillside site as it sits without access - well, with a part-access road running up, but still some left to be done, at $750,000. That's the way I've done it and that's in relation to the sale of the adjoining property and other lifestyle properties in the district.”^[167]

243. [243]
     While Mr Teves, in the course of his evidence, referred to sales which had occurred in other areas there was no identification of any other sales than the adjoining Lot 81.
244. [244]
     The calculated figure of $260,000 was the discounted present value over 21 years of $750,000 using a discount rate of 5% per annum.
245. [245]
     With respect to the value of the house which Mr Reynolds says he was unable to rent, Mr Teves gave evidence^[168] that he didn’t pay any particular attention to the residence because he saw no difference in the before and after situation.
246. [246]
     Presumably that would then lead one to the view that the house would retain the same rental value in the before and after situation insofar as Mr Teves was concerned from a valuer’s point of view.

The Evidence of Mr Donald Keith McDowall

247. [247]
     Pursuant to an order of the Court made in December 2003 Mr Reynolds was required to carry out drainage works to restore access to ML 5402.
248. [248]
     Mr McDowall in his evidence told the Court that the drainage works carried out by Mr Reynolds had, what he called, dissected the access road and because Mr Reynolds had dug a drain for a distance of approximately 400 m on the northern end of his cane paddock and about 1½ m wide, this diverted all of the water that used to go in overland flow across the other paddocks’ natural terrain into the drain, which then cuts the access road.
249. [249]
     In effect Mr McDowall was denying that the presence of the mining lease causes any damage to the cane paddock.
250. [250]
     Under cross-examination Mr McDowall confirmed that part of the process for recovery of the limestone had involved blasting but no details were elicited from him as to the frequency of those blasting events.
251. [251]
     Mr McDowall also told the Court that the mine was last worked in about 1985.^[169]  He said that the mining activity ceased because of issues with access and safety and he has no proposal to work there himself but does intend at some point in time to exploit the resource.^[170] 
252. [252]
     Later in his evidence Mr McDowall informed the Court that although blasting had occurred in the past, it wasn’t proposed any longer to utilise blasting because rock breakers are now available to extract the lime.^[171]
253. [253]
     He also informed the Court that he proposed to notify the mining registrar that the conditions of his proposed renewal of the mining lease did not need to include blasting.^[172]
254. [254]
     Mr McDowall conceded to Mr Morzone in cross-examination that on the mining lease site there was at least one area, if not two, on which a house could be built dependent upon the size of the house.^[173]
255. [255]
     Mr McDowall did point out however that any house constructed on the loading flat spot would necessarily be built with its back door right at the toe of the mining operations and with a hundred foot of workface right behind it.
256. [256]
     Mr McDowall was unable to assist the Court with a speculative figure as to the cost of obtaining an access track but did suggest that it might take about 40 hours bulldozer work plus such uses as may be made of a truck.
257. [257]
     It seems from the evidence before me that it is a matter of lifestyle rather than a matter of generating an economic return from the land that motivates the purchasers of such land.
258. [258]
     The evidence from Mr Reynolds of the sale of the adjoining Lot 81 is evidence of such demand for that kind of land in this area (i.e. rural lifestyle blocks).
259. [259]
     Mr Teves in his oral evidence also referred to a demand for some land of that sort in the Mowbray and Spring Creek Valley area.
260. [260]
     There is however no evidence of any intention by Mr Reynolds, either in the past or in the present or in the future, to attempt to sell the subject land for the purpose of a rural lifestyle block.
261. [261]
     As I comment above it seems unlikely, given the proscription in the Douglas Shire Planning Scheme against lots of less than 40 ha, that Mr Reynolds would have any prospect of success in having the mining lease area reconfigured into an 8 or 10 ha lot.
262. [262]
     I do accept however that there is a prospect that the land could be sold for the purposes of such a rural lifestyle ambition.
263. [263]
     In the absence of any other evidence I am bound to accept the views of Mr Reynolds and Mr Teves that, notwithstanding the subject land is presently used as a cane farming lot, it does have the potential for sale for the purposes of a rural lifestyle block.
264. [264]
     Such a sale would necessarily leave the cane farming activity intact and it is possible that the existing residence on the subject land would be accepted by the local authority as a caretaker’s residence (contingent upon satisfactory evidence in that regard).
265. [265]
     The existence of the farmed cane land has the capacity to generate an income for any owner of the land but insufficient detail has been provided to the Court to enable any proper estimation of that income.
266. [266]
     This is a case where changing lifestyles in the passage of time have caused a substantial change in the basis upon which compensation for the presence of the mining lease has to be calculated.
267. [267]
     In times past the presence of the lease was simply an intrusion into a rural activity.
268. [268]
     The land size is much smaller than this Court typically contemplates where mining leases occur on large grazing properties.
269. [269]
     In the present case the land has gone from having a highest and best use for cane farming purposes to a situation in which the land is now (it seems) highly regarded and saleable as a rural lifestyle block at a price similar to that achieved by Mr Reynolds for his adjoining Lot 81.
270. [270]
     The presence of the mining lease completely inhibits that use of the land and accordingly, and not without some considerable trepidation, I feel obliged to assess the appropriate compensation on the basis that the presence of the mining lease takes away (on a basis similar to a permanent resumption) the opportunity to use and to sell the land as a rural lifestyle block.
271. [271]
     That blot is no less consequential merely because the land is described as rough because, the evidence in the present case satisfies me that the land does hold potential for what Mr Teves referred to as a rural lifestyle block.
272. [272]
     The consequence of that is that I have recourse to the second report of Mr Teves.
273. [273]
     Having regard to the 21-year lease term which is contemplated by the renewal application it is, in accordance with other decisions of this Court, clearly appropriate to regard the granting of the lease as akin to a resumption for a long period of time.
274. [274]
     The consequence of such alienation of part of the block is that it would, likely, cease to be attractive to a prospected purchaser seeking a rural lifestyle block at the present time.
275. [275]
     It also seems clear from the evidence of both Mr Teves and Mr Reynolds, that the only prospect for sale of the subject block to a prospective purchaser would be for the sale of the whole of the block including the land under cultivation to cane.

Conclusion

276. [276]
     In this case the landowner contends, both in his own evidence and that of his valuer Mr Teves, that compensation for the presence of the limestone mine on his property (with an area of 39.66 ha) should be calculated having regard to the potential value of the area of the mining lease (which has an area of 8.088 ha) as a rural lifestyle block.
277. [277]
     They draw comfort from the sale by the landowner of an adjoining lot (Lot 81) in 2012 for $800,000 which represented $101,381 per annum for the total of that block of 7.891 ha.
278. [278]
     The evidence suggests that that block must have been a historic block of that size because under the current Douglas Shire Planning Scheme such blocks in the Rural Zone cannot usually be reconfigured with an area of less than 40 ha.
279. [279]
     There was no evidence to suggest that the area constituting the mining lease could itself be created into a separate lot by an application for reconfiguration of the whole of Lot 110.
280. [280]
     So much was conceded by counsel for the respondent Mr Morzone who said:

“It certainly won't be contended by the respondent that this land is capable of subdivision. So, your Honour will be asked to look at it from the point of view of a valuation there is this tension, as Mr Teves has in his report about a demand for rural lifestyle blocks, but it means buying what would be a small farm, a minimum of the size. And his approach to the valuation is not like Lot 81, for example, which was around $101,000 per hectare; his approach differs from that. He says: "Well, look, it's probably going to be only payable to a lesser amount of some $16,000 per hectare for rural areas and where it has that – those characteristics of a rural lifestyle block, there's a premium to be paid there. But in the end, it certainly doesn’t get up to the 101; it's probably more of the order of $23,000 per hectare. So, compared to 81 it still is racheted down, but it does require your Honour to consider a couple of things.”^[174]

281. [281]
     Mr Morzone was also frank in conceding that it was not possible to make a direct comparison between the Lot 81 which had been the subject of the sale by Mr Reynolds and the mining lease area.
282. [282]
     He said:

“So, there's many features which is why it's not a terrific, direct comparative to Lot 81 …”^[175]

283. [283]
     The mining lease area is itself 8.088 ha.^[176]
284. [284]
     In the present case I am satisfied, as was contended by the respondent, that the “before and after” method of valuing the subject land is the appropriate approach to compensation.
285. [285]
     The respondent drew the Court’s attention to and relied upon the decision of the Land Appeal Court in Brisbane City Council v Lansbury.^[177]
286. [286]
     In the Lansbury case the Land Appeal Court observed:

“We are satisfied that the “before and after” method is not contrary to statute and is an appropriate one to apply in determining compensation where cases involve severance, injurious affection and/or enhancement.

The object of the valuation exercise in all compensation cases is to place the dispossessed owner, as far as money can do it, back in the position he was before the resumption – Horn v Sunderland Corporation (1941) 1 AER 480 at p 491.”

287. [287]
     In an observation somewhat apposite to the present case the Land Appeal Court went on to say:

“In the present case this will be achieved, in our view, if firstly the value of the claimants’ property before resumption is ascertained on an ‘as is’ improved rural homesite basis. Secondly the value of the two residues, including improvements thereon, are ascertained on the basis that the pieces are two separately surveyed parcels capable of independent sale, but having regard in the respective valuations to the adverse effect, if any, which the construction of the reservoirs may have on the value of the residues. The between the first mentioned valuation and the total of the last mentioned values must represent the total loss suffered by the claimants in that such difference must include the value of the land taken and injurious affection to the residues reduced by any enhancing factor that may arise as a consequence of the resumption and which is automatically reflected in the values of the residue areas. In our view this approach is a lucid and commonsense one.”^[178]

288. [288]
     The respondent conceded that if I were (as I indicate I am) inclined to accept that the before and after method of assessment was appropriate in the present case then there should be no claim for injurious affection, as that would constitute double counting of compensation already assessed under the before and after method.
289. [289]
     As Mr Morzone of counsel correctly contends, relying upon observations in Spencer^[179] and Boland v Yates^[180] the value of land can generally be measured by consideration of the prices that have been obtained in the past for land of a similar quality, in a similar position and having similar potentialities to the subject land.
290. [290]
     In the present case the application for renewal of the mining lease was made on 26 May 2011^[181] and the evidence of Mr Reynolds and Mr Teves is that the adjoining Lot 81 with an area of 7.891 ha sold on 5 April 2012 for $800,000 or $101,381 per ha.
291. [291]
     I am satisfied that the timing of the application and the sale of Lot 81 are sufficiently proximate to provide some guidance as to value of the subject lot.
292. [292]
     Similarly I am satisfied that the characteristics of that lot closely parallel but are not identical to the features of the mining lease site and the parent lot.
293. [293]
     In particular Lot 81:

     1. Adjoins the subject property;
     2. Retains some sugar cane land;
     3. Was suitable for utilisation as a lifestyle property;
     4. Had the capacity to provide good views.

294. [294]
     However, unlike the subject land, Lot 81 had a formed gravel access road, a cleared hill-top building site and cane land that was leased back by the vendor on a 5 x 5 year lease.
295. [295]
     I find it unlikely that Mr Reynolds would have been able to reconfigure his land so as to create a separate lot constituting the mining lease. Moreover I am satisfied that it contains some significant disadvantages as compared with Lot 81. Amongst those disadvantages are that it is a much rougher area of land, does not have the benefit of an adequate formed road and, as it exists at present, is blinded by previous mining activities.
296. [296]
     Compensation has previously been payable in respect of the mining activities which have carried on on site and in my view any contemplation of the mining lease area must recognise that.
297. [297]
     In his second report^[182] Mr Teves observed:

“The house and appurtenances, and the land on which the house sits could also be leased out to derive a rental income. (As the dwelling can be retained in both the Before and After scenarios, no value has been attributed to for [sic] this improvement in either valuation).”^[183]

298. [298]
     Mr Teves’ valuation in both the before and after is with respect to the value of the property with the mining lease in place and absent the mining lease.
299. [299]
     Mr Teves’ valuation before and after renewal contemplates the sale of the property and accordingly the selling price would reflect the potential for gathering rental income from the existing house on the subject land.
300. [300]
     I am of the view that the compensation is to be calculated in the way for which Mr Teves and Mr Reynolds contend and I am also of the view that the revenue received as rental must be viewed as an offset to the sum required to be paid by the miner.
301. [301]
     Mr Teves contends that the compensation for the 21 year period ought be assessed at $490,000.
302. [302]
     Simple arithmetic produces an annual figure of $23,333 per annum (in round terms $23,300). However Mr Reynolds told the Court that the house on the property yields an annual net rental of $7,000 per year which he contended would be lost if the mining lease is renewed.
303. [303]
     I do not accept that that is the case. Indeed I was comforted that Mr Teves, as a professional valuer, was able to find that the house would continue to be rented and would yield the figures identified by Mr Reynolds.
304. [304]
     The valuation exercise carried out by Mr Teves involved the notional selling price and a deferred date at which conveyance of the property could occur. In each case the “market price” inevitably included the income generating potential of the property with the consequence that failing to take the rental income of the house into account would otherwise result in double dipping. (This is pointed out in [301] above.) 
305. [305]
     I am equally unconvinced that any allowance needs to be made to the rental property for the cost of additional cleaning as a consequence of dust generated by the mining activity.
306. [306]
     Mr McDowall’s evidence referred to above was that no blasting was intended to be used in the future as rock breaking technology was available and accordingly I am unwilling to find that there is any disamenity caused by blasting. Similarly I am unwilling to accept that there is any extra dust generated by the mining activity. The miner has a statutory obligation to comply with the Environmental Code.
307. [307]
     As indicated earlier in this decision Mr Reynolds also contended for other bases upon which the compensation payable should be calculated. Mr Morzone of counsel told the Court that his case was developed upon the basis that that other method calculation constituted a fall-back position. Because of the conclusion to which I have come regarding the approach adopted by Mr Teves it is not, in my opinion, necessary to address the alternative bases for calculating compensation. However I note that outcome of that approach would have been, as Mr Morzone contended in his written outline of submissions, a figure of $9,383 per annum. Such figure includes the 10% figure contemplated by s 281(4)(e).
308. [308]
     In any event the compensation which I calculate as being payable is $17,930. This is calculated using a base figure of $23,300 from which the rental income of $7,000 is deducted to provide a figure of $16,300 and to which the s 281(4)(e) figure of $1,630 is added.
309. [309]
     I was not addressed about when compensation should be paid, but in accordance with the usual practice, it should be paid annually in advance with the first payment to be made within two months of the grant of the application for renewal.
310. [310]
     If, as may be possible, the miner finds that the compensation determined by me is such as to render the lease uneconomic to either hold in reserve or exploit then he retains the option of surrendering the lease pursuant to s 309 of the MRA.
311. [311]
     I note that the compensation found to be payable by me is dramatically higher than the figure that was determined by Deputy President Kingham back in 2003. I note the submission by counsel for the Respondent that that compensation was determined on a limited and piecemeal approach not relying upon the valuation approach adopted in the present case. That is relevant.
312. [312]
     It is also noteworthy that it seems likely that the value of the land as a rural lifestyle lot is something that has only emerged in the recent past. The consequence of that is that the land has changed in character from being rough and unusable rural land to being land which has, because of its views and outlook (and notwithstanding its rough terrain), attractiveness as a residential site with close proximity to the coastal areas.
313. [313]
     There was also an issue raised in the early material in this application about whether the miner had paid all of the compensation due in the past. That is not a matter which is live in this determination. It may be a matter to be raised with the Minister who has to be satisfied pursuant to s 286A(1)(a)(i) that the holder of the lease has complied with “the terms of the lease”.

WL COCHRANE

MEMBER OF THE LAND COURT