Bear Hill Mining NL v Kennedy[2016] QLC 42

LAND COURT OF QUEENSLAND

1. [1]
   This matter involves a referral to the Land Court pursuant to s 279 (5) of the Mineral Resources Act 1989 (MRA) for the determination of compensation in respect of the grant of mining lease ML 100028.

Background

2. [2]
   The applicant, Bear Hill Mining NL (the applicant) applied for the grant of ML 100028 on 18 March 2015.  The land upon which the proposed mining lease is located is approximately 13 km south-east of Croydon in the Georgetown district and within the Croydon Shire Council local government area.  The purpose of the proposed grant is for the mining of Gold, Silver and Tin.
3. [3]
   The proposed mining lease will be situated on land owned by Peter Robert Kennedy (the respondent).  The land is more particularly described as Lot 2 on SP 117603, has an area of approximately 23,300 hectares and is used for grazing purposes.
4. [4]
   The specific Land Court reference and tenure details are set out as follows: 

Relevant Legislation

5. [5]
   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 the Department of Natural Resources and Mines (DNRM) and the matter has been referred to the Land Court for determination.

6. [6]
   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.

7. [7]
   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) —

…

2. (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).”

8. [8]
   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.”

9. [9]
   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.”

10. [10]
    The principles from these judgments have been applied in determining compensation under s 281 of the MRA.

The Conduct of Proceedings

11. [11]
    On 15 January 2016, 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 6 of 2015.

12. [12]
    No materials or submissions have been filed on behalf of either party in respect of the assessment of compensation for ML 100028, however referral documents relevant to the proposed mining operations have been provided by DNRM.

Consideration of Evidence and Materials

13. [13]
    In the absence of any expert or other evidence the preceding documents are the only materials before me for consideration.  In such cases the views expressed by Member Jones [as he then was] in Unimin Australia Limited v Freeman^[3], regarding the nature of the assessment process are relevant:

“I realise that my determination of compensation in this case is the result of little more than calculated guesswork or speculation.  However, in circumstances where the parties have elected to provide little or no material to the Court concerning their position about compensation there is not much more that the Court can do.”   

14. [14]
    In the circumstances I consider it appropriate, given the lack of material from the parties, to examine relevant Court judgments from within the local district for guidance with the assessment and determination of compensation in this matter.
15. [15]
    The decision in ERO Georgetown Gold Operations Pty Ltd v Henry [2015] QLC 22 (ERO Georgetown) is the most recent Court judgment within the Georgetown district that is considered to be of assistance.  This determination concerned the renewal of a gold mining lease over grazing land approximately 50 km south-west of Georgetown.  The area of the mining lease was 3.252 ha with an access area of approximately 0.5 ha.  The Court in ERO Georgetown determined compensation in an amount of $15 per ha for the renewal period following a contested hearing involving expert valuation evidence.

Compensation

16. [16]
    Accordingly I consider that the Court judgment in ERO Georgetown provides a proper basis for the assessment of compensation in respect of ML 100028.  I have rounded the mining and access areas to the next full hectare for assessment purposes. The determination in respect of ML 100028 is as follows:

ML 100028

Area covered by mining lease – 49 ha @ $15 per ha per annum = $735.00 per annum.

Area covered by access – 4 ha @ $7.50 per ha per annum  = $  30.00 per annum.

add 281(4)(e) re compulsory nature of grant    = $  80.00 per annum.

Total                                                                                     = $845.00 per annum.

ORDERS

1. In respect of ML 100028 compensation is determined in an amount of $845 per annum.

2. That the applicant pay compensation to the respondent the amount set out in Order 1 within three months of the date of grant of the mining lease by Department of Natural Resources and Mines and in each subsequent year on the anniversary of the date of grant.

GJ SMITH

JUDICIAL REGISTRAR