Queensland Judgments
Authorised Reports & Unreported Judgments
  • sclq logo
  1. Caselaw
  2. QLC
  3. 2016
  4. Tinpitch Pty Ltd v Cook Shire Council - [2016] QLC 34

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

Tinpitch Pty Ltd v Cook Shire Council[2016] QLC 34

Tinpitch Pty Ltd v Cook Shire Council[2016] QLC 34

LAND COURT OF QUEENSLAND

CITATION:

Tinpitch Pty Ltd v Cook Shire Council [2016] QLC 34

PARTIES:

Tinpitch Pty Ltd ACN 096 734 306

(applicant)

 

v

 

Cook Shire Council

(respondent)

FILE NOS:

MRA155-15

MRA156-15

MRA157-15

PROCEEDINGS:

Determination of compensation payable for grant of mining leases.

DELIVERED ON:

 10 June 2016

DELIVERED AT:

Brisbane

HEARD ON:

Submissions closed 11 January 2016

HEARD AT:

Heard on the papers

JUDICIAL REGISTRAR:

G J Smith

ORDERS:

  1. In the case of ML 20290, compensation is determined in the total sum of $133.00 per annum.
  2. In the case of ML 20302, compensation is determined in the total sum of $11.00 per annum
  3. In the case of ML 20303, compensation is determined in the total sum of $165.00 per annum
  4. The applicant pay compensation to the respondent in the amounts set out in orders 1 to 3 within two months from notification of the issue of the mining leases by the Department of Natural Resources and Mines and thereafter on the anniversary of the issue of the mining leases.

CATCHWORDS:

MINING LEASE – grant – jurisdiction to order parties to sign compensation agreement – determination of compensation – period of grant – encumbrance – level of activity – road reserve – miner – ratepayer – use of Court judgments for determination purposes.

Mineral Resources Act 1989, ss 279, 281 

Barrett v Weir and Gregcarbil Pty Ltd [2009] QLC 182

Corella Valley Corporation Pty Ltd v Power & Anor [2014] QLC 46

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

Fitzgerald & Anor v Struber & Anor [2009] QLC 0076

Fitzgerald & Anor v Struber & Ors [2014] QLC 29

Hudson & Ors v Pedracini [2014] QLC 10

McGrath v Emu Creek Bar-Barrum Aboriginal Corporation [2014] QLC 40

Mitchell v Oakhill and Mitchell (Unreported, Land Court of Queensland, JJ Trickett, President, 10 March 1998)

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

SG & PM Smith v RA Cameron [1986] 11 QLCR 64

APPEARANCES:

Not applicable

  1. [1]
    These proceedings concern referrals to the Land Court by the Chief Executive, Department of Natural Resources and Mines (DNRM) pursuant to s 279(5) of the Mineral Resources Act 1989 (MRA) for the determination of compensation in respect of the grant of three mining leases. The relevant area of each mining lease is partially situated within a road reserve under the control of the Cook Shire Council (the respondent).

Background

  1. [2]
    The applicant, Tinpitch Pty Ltd (the applicant) seeks the grant of three mining leases over land located approximately 145km west of Laura in the Mareeba District and within the Cook Shire local government area.
  2. [3]
    The specific Land Court references and individual lease and tenure details are set out as follows: 

Court Reference

Tenure ID

Lease Area

Term

Lease Purpose

Relevant Area

MRA155-15

ML 20290

30 ha

21 years

Gold

12.48 ha

MRA156-15

ML 20302

14.71 ha

21 years

Gold

0.04 ha

MRA157-15

ML 20303

50.5 ha

21 years

Gold/Silver

14.11 ha

Relevant Legislation

  1. [4]
    Section 279 of the MRA provides that a mining lease shall not be granted or renewed unless an agreement in relation to compensation has been filed or, in the absence of such an agreement, a determination of compensation has been made by the Land Court. In this matter, no agreement has been lodged with DNRM and the matter has been referred to the Land Court for determination.
  2. [5]
    Section 281 of the MRA identifies the matters which must be considered by the Court in determining the compensation. In particular, s 281(3)(a) provides that an owner of land is entitled to compensation for:
  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.

  1. [6]
    Section 281(4) enables various additional factors to be included in the compensation determination. In the present case, only paragraph (e) is relevant. It provides as follows:
  1. “(4)
    In assessing the amount of compensation payable under subsection (3) —

…

  1. (e)
    an additional amount shall be determined to reflect the compulsory nature of action taken under this part which amount … shall be not less than 10% of the aggregate amount determined under subsection (3).”
  1. [7]
    The assessment process to be undertaken in accordance with s 281 has been addressed in the judgment of Wills v Minerva Coal Pty Ltd [No. 2][1] as follows:

“It is beyond question as I have written above that the primary source of law is the statute under consideration and it seems to me that the learned Member acknowledged this when he said:

‘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.’

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, there is one warning that I should post. If the expert was to approach the assessment of compensation by simply accumulating figures assessed independently under each of the items listed in s.281(3)(a)(i) to (vi) and without regard to the prospect of a matter being dealt with under more than one item, the chance that there will be a duplication of items assessed will be high.”

  1. [8]
    Furthermore, in Mitchell v Oakhill and Mitchell[2], the then President of the Land Court observed in relation to s 281 of the  MRA:

“…..the latter section does not prescribe a method of assessment. 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.”

  1. [9]
    The principles from these judgments have been applied in determining compensation under s 281 of the MRA.

The Conduct of the Proceedings and Evidence

  1. [10]
    On 12 June 2015, the Land Court registry forwarded correspondence to the parties setting out a timetable for the delivery of materials and submissions in accordance with Land Court Practice Direction No 5 of 2013. 
  2. [11]
    On 6 July 2015, the Court received correspondence dated 6 July 2015 from MacDonnells Law on behalf of the applicant. The correspondence sought an extension of the timetable to enable the parties to liaise regarding the finalisation of a compensation agreement. On 20 August 2015, the Cook Shire Council advised by email that “the Council was happy to extend the date for submissions to the Court.”  On 24 August 2015, the Court extended the timeframes for the filing of material and submissions by the parties. 
  3. [12]
    Further extensions on this basis were granted by the Court on 11 September 2015 and 22 October 2015.
  4. [13]
    On 10 December 2015, an affidavit of ML Knight was filed on behalf of the applicant. Ms Knight has been appointed as administrator for Mr Donald Robin Walker in respect of financial matters pursuant to a decision of the Queensland Civil and Administrative Tribunal.  Mr Walker is the sole director of Tinpitch Pty Ltd and is Ms Knight’s father.
  5. [14]
    On 13 January 2016, the applicant’s submissions were received by the Court together with a draft Order. No materials or submissions have been received on behalf of the respondent.
  6. [15]
    A summary of the submissions received on behalf of the applicant is set out below.

The Applicant’s Contentions

  1. [16]
    On behalf of the applicant it is contended that:
  • Mining activities are not being carried out on the mining leases. The activities being undertaken on the mining leases comprise exploration, care and maintenance only.
  • Any mining activities that may be undertaken in the future will not impact or impede public access on the road as the road is a gazetted local authority road under the Land Act 1994.
  • It is not the applicant’s intention now or in the future to undertake any activities on the mining leases that will in any way affect the surface of the road.
  • The applicant currently does not have any plans to escalate the activities on the mining leases given the downturn in the mining industry generally.
  • Pursuant to s 281(3)(a) of the MRA, the use that is presently being made of the mining leases will not:
  1. (a)
    deprive the respondent of possession of the surface of the road;
  2. (b)
    result in any diminution of the value of the road;
  3. (c)
    result in any diminution of the use that the respondent (or other road users) may make of the road;
  4. (d)
    sever the land on which the road is located from other parts of the road;
  5. (e)
    affect surface rights of access in respect of the land on which the road is located;
  6. (f)
    give rise to any other loss or expense to the respondent.
  • No operations currently taking place, or planned to take place, at the mining lease give rise to a compensation liability.
  • The respondent is presently suffering no loss as a result of the applicant’s use of the road, because:
  1. (a)
    the applicant pays rates and charges to the respondent in its capacity as a ratepayer in the local government area and such contributions are typically used by local authorities to maintain the local authority’s road network;
  2. (b)
    the use that the applicant is presently making of the road is of no greater impact than the use any other ratepayer in the Council’s local government area would ordinarily and reasonably make of the road.
  • The most appropriate way of dealing with compensation in the circumstances is by executing an agreement that imposes “make good” obligations on the applicant in the event that activities were to escalate and trigger a compensation liability. The affidavit of Ms Knight exhibits a proposed “Compensation Agreement” in those terms.
  • Compensation flowing as a result of the applicant’s performance under the proposed “Compensation Agreement” will most fairly and accurately be determined where there is actual loss, if any, suffered by the respondent in the unlikely event the applicant’s activities impact unduly on its roads in the future.
  • The respondent is protected by the provisions of the Local Government Act 2009, in particular s 75 of that Act, which provides a statutory action in favour of the respondent for any damage caused as a result of the interference of a road or its operation.
  • The award of a fixed sum of compensation will not fairly account for the matters referred to in s 281(3) of the MRA, and will result in a windfall gain to the respondent in circumstances where no damage has been, or is anticipated to be, caused.
  1. [17]
    Ultimately the applicant submits that this Court ought to deal with compensation pursuant to s 281(5) of the MRA by ordering that the applicant and respondent enter into a compensation agreement in the same terms as the document exhibited to Ms Knight’s affidavit.  According to the applicant, the agreement will sufficiently account for each of the matters referred to in s 281(3) of the MRA.

Consideration of Submissions

  1. [18]
    The determination of compensation in respect of these leases has been undertaken on the basis of the written materials filed by the applicant and the referral documents provided by DNRM. With the agreement of the parties, a hearing with full evidence from witnesses was not required.
  2. [19]
    I have examined all of the materials provided by DNRM as part of the referral pursuant to s 279(5) of the MRA, including mapping and plans. I have noted the location, area, programs, purpose and the period for which the grants are sought.
  3. [20]
    The parties have also elected to proceed without reliance upon valuation or expert evidence in relation to the factors set out in s 281(3) of the MRA. This approach is not uncommon in the circumstances.
  4. [21]
    The applicant’s ultimate contention is that this Court should order the applicant and the respondent to enter into a compensation agreement.  Paragraph 1 of the draft Order provides:

“1.   Pursuant to section 281 of the Mineral Resources Act 1989, the Applicant and the Respondent shall both sign the compensation agreement (“Agreement”) attached hereto as “Attachment A” in full and final settlement of compensation matters arising as a result of the renewal of Mining Lease 20290, Mining Lease 20302 and Mining Lease 20303.”

  1. [22]
    Although this contention has been given due consideration I am not able to accept that s 281(5) of the MRA (as contended) or any other provision of the MRA empowers the Court to make the order sought.  In relation to the task faced by this Court in undertaking the determination process, Member Isdale in Corella Valley Corporation Pty Ltd v Power & Anor[3] observed:

“In order for it to perform its duty of determining compensation as set out in the MRA a sum of money must be set by the Court. There is no provision under the MRA for the Court to deal with any matters other than this.”

  1. [23]
    Accordingly, the Court is unable to order the parties to sign the proposed compensation agreement and must proceed to determine a monetary amount of compensation.
  2. [24]
    Although in certain circumstances it may be open to this Court to adopt an amount from a proposed compensation agreement as the determined amount, such a course is not an option in the present proceedings.  The compensation envisaged by the proposed agreement, namely $1.00, would not adequately reflect a reasonable determination of compensation in my view.
  3. [25]
    Although the applicant’s contentions are noted, it is considered that the following matters must also be considered when making the determination pursuant to s 281 of the MRA:
  1. (a)
    Although the submissions appear to address the assessment of compensation in terms of a “renewal” of the leases, the present proceedings concern the initial “grant” of the mining leases.  In this regard no submission has addressed the impact of each mining lease as an encumbrance consequent upon the grant for a 21 year period[4] i.e. is the land with the lease in place worth less than it would be if unencumbered by the leases?[5]
  2. (b)
    The submissions concerning activities “being undertaken on the Mining Leases” or the “use presently being made of the Mining Leases” are also made on the basis of the “renewal” of the three mining leases.  However as noted above, the leases have not yet been granted so it appears that, in reality, these activities are not conducted pursuant to the mining leases.  This level of activity although used as a guide may not properly reflect the level of activity permitted pursuant to the leases or the potential for a greater level of utilisation throughout the initial 21 year grant period.
  3. (c)
    The applicant’s submissions also appear to focus on the use and potential impact of mining activities on Kimba Road.  However the road reserve in question as depicted by mapping provided by DNRM has a substantially greater area than the area identified as Kimba Road in Item 3 Exhibit A to the affidavit of ML Knight (Image of the Mining Leases and the Road). 
  1. [26]
    It would appear from the submissions that the nominal level of compensation contended for by the applicant does not take into account the preceding matters and as a result is likely to have been underestimated. I am not able to accept that a nominal or nil assessment of compensation reflects a fair and reasonable determination in respect of ML 20290, ML 20302 and ML 20303.
  2. [27]
    The affidavit of ML Knight also made reference to s 75 of the Local Government Act 2009 “Unauthorised works on roads” and Chapter 10, Part 3 of the MRA “Compensation for notifiable road uses”.  Although mindful that these provisions may become applicable in certain circumstances, the current determination does not assume any unauthorised works on the part of the applicant or purport to include compensation for notifiable road uses as contemplated by Chapter 10, Part 3 of the MRA.  In this context it must be remembered that the determination of compensation pursuant to s 281 of the MRA is necessarily required to be undertaken “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.”[6] 
  3. [28]
    Further, I am not able to accept the contention that the respondent “is presently suffering no loss as a result of the applicant’s use of the road” because the applicant pays rates and charges as a ratepayer in the local government area, which would typically be used to maintain the local authority’s road network and because the applicant’s use of the road is of no greater impact than any other ratepayer in the Council’s local government area.  The applicant’s use of the road reserve area for mining activities pursuant to the proposed mining leases, granted for a 21 year period, clearly involves vastly different legal and factual considerations to that of a ratepayer traversing Kimba Road for private purposes.  In these circumstances, I am not persuaded that a nil or nominal amount of compensation could be justified on the basis of this analogy.

Compensation

  1. [29]
    In the circumstances of each lease, particularly given the proposed term of 21 years, I consider a realistic assessment of compensation may be achieved through consideration of Court judgments concerning other compensation determinations within the Mareeba District.  Such determinations range from $5 per hectare per annum through to $15 per hectare per annum.[7]
  2. [30]
    The judgment in Walker v Cook Shire Council[8] delivered in July 2015, concerned compensation in relation to the grant of a mining lease over an area of 5.85 ha located within a road reserve under the control of the Cook Shire Council. This determination was also guided by earlier Court judgments within the Mareeba District.  The term of the initial grant was for a period of 20 years for the purpose of mining gold, silver, garnet, ilmenite, platinum, rare earths, rutile, xenotime and zircon.  The applicant was Mr Donald Robin Walker, who is the sole director of the applicant, Tinpitch Pty Ltd, in the present proceedings. 
  3. [31]
    Having considered the evidence and materials before me and taking into account the earlier relevant judgments, I consider that an amount of $10.00 per hectare per year for the relevant area of each mining lease within the road reserve is appropriate.  This determination does not purport to assess the impacts that might flow from full scale mining activities that may commence at some future date.  In the event of such impacts arising this determination of compensation may be reviewed pursuant to s 283B of the MRA.
  4. [32]
    In respect of each mining lease the relevant area has been rounded to the next full hectare for assessment purposes. The following determinations are considered fair and reasonable:

ML 20290

Area covered by mining lease rounded to 13 ha @ $10 per/ha = $130 per annum

Add additional sum pursuant to s 281(4)(e) MRA @ 10%    = $  13 per annum

Total                   $133 per annum

ML 20302

Area covered by mining lease rounded to 1 ha @ $10 per/ha   = $10 per annum

Add additional sum pursuant to s 281(4)(e) MRA @ 10%  = $  1 per annum

Total                   $11 per annum

ML 20303

Area covered by mining lease rounded to 15 ha @ $10per/ha  = $150 per annum

     Add additional sum pursuant to s 281(4)(e) MRA @ 10%        =  $ 15 per annum

Total              $165 per annum

ORDERS

  1. In the case of ML 20290, compensation is determined in the total sum of $133.00 per annum.
  2. In the case of ML 20302, compensation is determined in the total sum of $11.00 per annum.
  3. In the case of ML 20303, compensation is determined in the total sum of $165.00 per annum.
  4. The applicant pay compensation to the respondent in the amounts set out in orders 1 to 3 within two months from notification of the issue of the mining leases by the Department of Natural Resources and Mines and thereafter on the anniversary of the issue of the mining leases.

G J SMITH

JUDICIAL REGISTRAR

Footnotes

[1]  (1988) 19 QCLR 297 at 315.

[2]  Unreported, Land Court of Queensland, JJ Trickett, President, 10 March 1998.

[3]  [2014] QLC 46 at [12]

[4] Hudson & Ors v Pedracini [2014] QLC 10 at [57]

[5] Barrett v Weir and Gregcarbil Pty Ltd [2009] QLC 0182 at [25]

[6] SG & PM Smith v RA Cameron [1986] 11 QLCR 64

[7] Fitzgerald & Anor v Struber & Anor [2009] QLC 0076, Fitzgerald & Anor v Struber & Ors [2014] QLC 29, Eacham Abrasive Blasting Pty Ltd v Gundersen & Anor [2014] QLC 38, McGrath v Emu Creek Bar-Barrum Aboriginal Corporation [2014] QLC 40

[8]  [2015] QLC 19

Close

Editorial Notes

  • Published Case Name:

    Tinpitch Pty Ltd v Cook Shire Council

  • Shortened Case Name:

    Tinpitch Pty Ltd v Cook Shire Council

  • MNC:

    [2016] QLC 34

  • Court:

    QLC

  • Judge(s):

    Smith

  • Date:

    10 Jun 2016

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
Barrett v Weir and Gregcarbil Pty Ltd [2009] QLC 182
2 citations
Jump To
Cite 1 - [2009] QLC 182
Cite 2 - [2009] QLC 182
Corella Valley Corporation Pty Ltd v Power [2014] QLC 46
2 citations
Jump To
Cite 1 - [2014] QLC 46
Cite 2 - [2014] QLC 46
Eacham Abrasive Blasting Pty Ltd v Gundersen & Anor [2014] QLC 38
2 citations
Jump To
Cite 1 - [2014] QLC 38
Cite 2 - [2014] QLC 38
Fitzgerald & Ors v Struber [2009] QLC 76
2 citations
Jump To
Cite 1 - [2009] QLC 76
Cite 2 - [2009] QLC 76
Fitzgerald v Struber [2014] QLC 29
2 citations
Jump To
Cite 1 - [2014] QLC 29
Cite 2 - [2014] QLC 29
GJ SMITH JUDICIAL REGISTRAR (1988) 19 QCLR 297
2 citations
Jump To
Cite 1 - (1988) 19 QCLR 297
Cite 2 - (1988) 19 QCLR 297
Hudson & Ors v Pedracini [2014] QLC 10
2 citations
Jump To
Cite 1 - [2014] QLC 10
Cite 2 - [2014] QLC 10
McGrath v Emu Creek Bar-Barrum Aboriginal Corporation [2014] QLC 40
2 citations
Jump To
Cite 1 - [2014] QLC 40
Cite 2 - [2014] QLC 40
Smith v Cameron (1986) 11 QLCR 64
2 citations
Jump To
Cite 1 - (1986) 11 QLCR 64
Cite 2 - (1986) 11 QLCR 64
Walker v Cook Shire Council [2015] QLC 19
1 citation
Jump To
Cite 1 - [2015] QLC 19

Cases Citing

Case NameFull CitationFrequency
O'Shane v Cook Shire Council [2016] QLC 772 citations
1

Require Technical Assistance?

Message sent!

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

Message not sent!

Something went wrong. Please try again.