Queensland Judgments
Authorised Reports & Unreported Judgments
  • sclq logo
  1. Caselaw
  2. QLC
  3. 2016
  4. Strategic Minerals Corporation N.L. v Burnett Holdings (NQ) Pty Ltd - [2016] QLC 51

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

Strategic Minerals Corporation N.L. v Burnett Holdings (NQ) Pty Ltd[2016] QLC 51

Strategic Minerals Corporation N.L. v Burnett Holdings (NQ) Pty Ltd[2016] QLC 51

LAND COURT OF QUEENSLAND

CITATION:

Strategic Minerals Corporation N.L. v Burnett Holdings (NQ) Pty Ltd [2016] QLC 51

PARTIES:

Strategic Minerals Corporation N.L.

(applicant)

 

v

 

Burnett Holdings (NQ) Pty Ltd as Trustee under Instrument 708966815

(respondent)

FILE NO:

MRA543-15

DIVISION:

General Division

PROCEEDING:

Determination of compensation for grant of mining lease

DELIVERED ON:

2 September 2016

DELIVERED AT:

Brisbane 

HEARD ON:

Submissions closed 8 March 2016

HEARD AT:

Heard on the papers

JUDICIAL REGISTRAR:

GJ Smith

ORDER:

  1. In respect of ML 90238, compensation is assessed to be $45,000 for the first year. The said sum of $45,000 is to be paid within three months from notification of the grant of the mining lease by the Department of Natural Resources and Mines.
  1. In the case of the second and all subsequent years of ML 90238, the amount of compensation is to be calculated by increasing the sum of $5,131.25 by the percentage necessary to reflect any increase in the All Groups Consumer Price Index applicable to Brisbane for the preceding year and is to be paid yearly in advance on the anniversary of the grant of the mining lease.
  1. Pursuant to s 281(7) of the MRA, the applicant pay the costs of the respondent’s valuation report in the sum of $4,750 within 1 month from the date of this Order.

CATCHWORDS:

MINING LEASE – grant – determination – compensation statement – factors to be considered – hearing statement – compensation agreement – valuation report – on the papers – desktop basis – referral documents – access road – severance – market overview – stock water – water points – double dip – gazettal – trustee – valuation expense –staged payment – CPI increase.

Mineral Resources Act 1989 ss 279(5), 281

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

Sullivan v Oil Company of Australia Ltd (No.2)

(2004) 2 Qd R 105

Wills v Minerva Coal Pty Ltd [No.2] (1998) 19 QLCR 297

APPEARANCES:

Not applicable

  1. [1]
    This proceeding concerns a referral 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 Mining Lease  90238 (ML 90238).

Background

  1. [2]
    The applicant, Strategic Minerals Corporation N.L. (the miner) seeks the grant of ML 90238 over land located approximately 120 km north of Richmond in the Mt Isa District and within the Richmond Shire local government area. The land within proposed ML 90238 is owned by Burnett Holdings (NQ) Pty Ltd as Trustee under Instrument 708966815 (the landowner) and is more particularly described as Lot 2 on WLR 12. The holding is known as Mount Norman Station and is used for grazing purposes. 
  2. [3]
    The specific Land Court reference and individual lease and tenure details are set out as follows: 

Court Reference

Tenure ID

Lease Area

Term

Lease Purpose

Relevant Area

MRA543-15

ML 90238

765 ha

17 years

Copper, Gold, Lead, Silver, Zinc.

765 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]
    In determining compensation under s 281 of the MRA the principles from these judgments have been applied.

The Conduct of the Proceedings and Evidence

  1. [10]
    On 23 November 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. 6 of 2015. 
  2. [11]
    On 18 December 2015, Ellem Warren Lawyers filed the following material on behalf of the miner pursuant to the practice direction:
  1. Affidavit of James Bernard Lyons, annexing a compensation statement;
  2. A hearing statement;
  3. Confirmation of service on Respondent.
  1. [12]
    By letter dated 15 January 2016, Mr Edgar Burnett, director and secretary of Burnett Holdings (NQ) Pty Ltd requested a two-week extension to the timetable for filing the materials. This request was not opposed and the timetable for both the miner and landowner was extended by two weeks.
  2. [13]
    In accordance with the amended timetable, a compensation assessment undertaken by Herron Todd White, valuers in Townsville was filed by Mr Burnett on behalf of the landowner.
  3. [14]
    On 8 March 2016, the following materials were received from the solicitors for the miner:
  1. Letter from Mr James Bernard Lyons as an addendum to his compensation statement;
  2. Submissions in reply;
  3. Copy of a signed Private Access Compensation Agreement (Richmond Shire);
  4. Confirmation of service on Respondent.
  1. [15]
    The preceding material from the parties, together with the referral documents provided by DNRM, comprise the totality of the materials upon which this determination will be based

Miner’s position

  1. [16]
    The miner’s position is based largely on a desktop Compensation Assessment Report (the miner’s report) by Mr James Lyons, director and manager of the valuation firm Taylor Byrne, in Townsville. The miner’s report suggests the following items and amounts as appropriate compensation in respect of ML 90238:

Contended MRA provision

Description

Compensation

s 281(3)(a)(i)

Loss of Land

$49,746

s 281(3)(a)(ii)

Loss of Water Points

$40,000

s 281(3)(a)(ii)

General Injurious Affection

$17,000

continued over

s 281(3)(a)(iii)

Diminution in use of land

Nil

s 281(3)(a)(iv)

Severance

Nil

s 281(3)(a)(v)

Surface rights of access

Nil

s 281(3)(a)(vi)

N/A

Nil

Sub-total

 

$106,746

s 281(4)(a)(b)(c) & (d)

N/A

Nil

s 281(4)(e) 10% of total

Compulsory nature of action

$10,675

Total

 

$117,421

Adopt

 

$117,500

Landowner’s Position

  1. [17]
    The landowner has relied upon a “Valuation Report - Rural Property Compensation Assessment” undertaken by Mr Roger Hill, director and certified practising valuer of Herron Todd White in Townsville (the landowner’s report). The report is 32-pages in length and includes an inspection date and details and analysis of sales upon which the conclusions of Mr Hill have been based. The report also annexes photographs, title searches, plans and maps.  
  2. [18]
    The landowner’s report sets out following items as appropriate compensation in respect of ML 90238:

Report Description

Compensation

Loss of Land

$53,000

Loss of Water Points

$45,000

Disturbance – roads, dust, noise

$17,500

Diminution in use of land, etc.

Nil

Severance

$26,500

Surface rights of access

TBA

Valuation expense (ex GST)

$4,400

Total

$146,400

  1. [19]
    Mr Hill does not cross-reference the items of compensation claimed with specific sections of the MRA and no formal submission was filed which addressed the statutory provisions applicable to the determination process (the landowner was not legally represented). For example, while Mr Hill’s report notes that his assessment is exclusive of GST (Goods and Services Tax) it provides no statutory reference for an additional 10% that is included in the total compensation. Notwithstanding these matters the report identifies the items of compensation with sufficient clarity to enable the relevant connection to be reasonably identifiable with the relevant provision with the MRA.

Miner’s Reply to Landowner’s Position

  1. [20]
    As mentioned earlier, the miner’s legal representatives filed a reply to the landowner’s report on 8 March 2016, including an addendum to Mr Lyons’s report. The reply contained the following submissions:
  1. (i)
    The invoiced cost of the landowner’s report is to be accepted for inclusion as an item of compensation in the amount of $4,750.
  2. (ii)
    No amount of compensation should be paid in respect of severance.
  3. (iii)
    No compensation should be assessed in respect of any access road and further that the issue of compensation for access should not be “reserved” and determined at some later date.
  4. (iv)
    The remaining disputed items of compensation should be resolved at the mid-point between the parties’ contended amounts, that an additional 10% amount be included pursuant to s 281(4)(e) of the MRA and that payments be staged with an initial payment of $20,000 followed by equal payments plus CPI throughout the remaining period of the grant.

Consideration of Submissions

  1. [21]
    The reports and submissions filed by the parties have been considered together with the referral documents provided by DNRM. With the agreement of the parties, the determination has been undertaken “on the papers” without the need to conduct a hearing with full oral evidence from expert witnesses or parties.
  2. [22]
    As detailed above, the valuation evidence from the miner is set out in the report and addendum by Mr James Lyons. The report is well presented, but is undertaken on a desktop basis and does not reference any sales evidence or analysis in support of valuation conclusions reached.  It would appear some information relied upon by Mr Lyons was gleaned from an earlier valuation of the subject undertaken by Taylor Byrne.
  3. [23]
    The valuation report prepared for the landowner by Mr Roger Hill is quite extensive and included a market overview, sales analysis and reconciliation together with approximately 16 unreferenced photographs taken during an inspection of the property on 13 February 2016. 
  4. [24]
    As can be gleaned from the tables set out at [16] and [18], the respective positions of the parties are reasonably close with the exception of the landowner’s claim for severance. In respect of this item, the landowner claims an amount of $26,500 whereas the miner contends that no amount is payable at all.
  5. [25]
    In respect of the other items where specific amounts have been contended, i.e. loss of land, loss of water points and general injurious affection, the differences amount to less than $5,000 in total. Given that this determination has been undertaken “on the papers”, it is not readily discernible which valuers conclusions should be preferred in respect of these items. 
  6. [26]
    Mr Lyons has provided a short form assessment undertaken on a desktop basis without the inclusion of any sales evidence. In the circumstances in respect of the items other than severance, I am inclined to prefer the conclusions of Mr Hill given his fully detailed report and analysis of sales evidence.

Severance

  1. [27]
    The suggested basis of the claim for severance by the landowner is set out in the landowner’s report as follows[3]:

“… cattle to graze from the north eastern corner of the Pastoral Holding through the ML area on their way to water at Mayday Dam. This was being a hindrance to the mining operations.

Once the ML is fenced, then the cattle that graze the north eastern corner of the station are not able to graze back towards the two stock dams for water. There is an awkward corner area that is severed by this ML.

To prevent cattle perishing in that area once the ML is fenced, then compensation for severance of that corner is required or the paddock should be fenced and a pipeline with tank and trough installed in the area for the cattle…”

  1. [28]
    The landowner’s report also includes the following additional comments regarding the severance claim:

“There is the issue regarding the north eastern corner that is severed from the water points. It is suggested that $ 26 500 be adequate compensation for the partial loss (half of the ML surface area they appear to be of similar size) or for the fencing and watering of a paddock (similar costs).”[4]

  1. [29]
    Although the miner’s report included a nil allowance in respect of severance, the issue was explained further by Mr Lyons’s statement in reply (his addendum statement) which provided more detailed reasoning, including the following observations:
  1. (i)
    The north eastern corner of the paddock is serviced by the same stock water supplies. The dams located within the mining lease area water the river frontage country. This is rough country with a limited carrying capacity.
  2. (ii)
    Based upon the available mapping, the property owner uses trap squares around water points which are connected to laneways to facilitate easy mustering. It is assumed that the north eastern corner of the property is used as relief country in the wet season, and then later in the dry season cattle water either from Patience Tank or other water facilities to the southern end of the paddock. Prior to the mining lease some cattle would have watered at May Day Dam. The cattle would have grazed the area generally within the mining lease area to the west of the rough country which makes up the north eastern corner of the paddock.
  3. (iii)
    Assuming the mining lease area is fenced by the mining company and the waters are replaced there is not considered to be any severance issues created by the existence of the mining lease area.
  4. (iv)
    The means of calculating the severance within the Herron Todd White report has not been made showing any calculation or basis for the assessed compensation amount. Normally this would be calculated based upon the percentage of value lost to the severance area.
  5. (v)
    The existing water points located in the north eastern section of the parcel are not affected by the mining lease and this part of the paddock is not considered to be affected in relation to grazing after the mining lease area is fenced.
  6. (vi)
    The natural features of the country sever the northern part of the paddock by way of a spinifex hill and rough country as shown in the map below. The mining lease is not considered to cause any severance or injurious affection other than the impact on the water supply which has been included in the overall compensation assessment. Therefore the Herron Todd White assessment is considered to ‘double dip’ in the relation to compensation in allowing for redistribution of water supplies and severance for part of the paddock.
  1. [30]
    The preceding points were supplemented by detailed aerial photographs of the paddock within Mt Norman Station showing the configuration of the water points, the mining lease area, access, fencing and the general topography of the surrounding area.
  2. [31]
    A formal submission from the miner’s solicitor stresses that “[a]ssuming the mining lease area is fenced by the mining company and the waters are replaced there is not considered to be any severance issues created by the existence of the mining lease area” and ultimately contends that there “is no basis or justification provided by the landowner to warrant compensation pursuant to s 281(3)(a)(iv) of the MRA”.
  3. [32]
    The materials and contentions before the Court relating to the landowner’s claim for severance from the water points have been given much consideration. The task undertaken by the valuers has necessarily required them to reach conclusions which to some extent involve attempting to predict the likelihood of future events relating to stock movements, water points and mining operations. On balance however, given the detailed materials and reasoning by Mr Lyons, and the absence of any calculation or basis for the amount of severance claimed in the landowner’s report, I am unable to accept that a compensation amount of $26,500 for severance has been established on the evidence. 

Access 

  1. [33]
    The landowner’s report notes that “a short section of road will be required to secure access to the mining lease” and also that “[t]his assessment does not include compensation for an access road. Once the route is agreed, this can be assessed for compensation to the leaseholder”.
  2. [34]
    On behalf of the miner it is contended that no compensation should be assessed in respect of access and that the assessment should not be “reserved” from this determination. The basis of the submission is that the access road is the subject of a gazettal process and an agreement is in place between the miner and Richmond Shire Council (as trustee) which requires the miner to rehabilitate and restore the property, rectify any damage to the access road, construct a diversion road if necessary and pay compensation to the Richmond Shire Council if rectification is not possible. 
  3. [35]
    In the circumstances, and on the evidence and submissions before the Court regarding the pending gazettal process and associated agreement between the miner and the local council I am not able to conclude there is any basis to determine an amount of compensation in respect of access to ML 90238.

Compensation

  1. [36]
    Having considered the submissions and materials before me in regard to proposed ML 90238, I determine that appropriate compensation pursuant to s 281 of the MRA comprises the following heads:

Loss of Land $   53,000

Loss of Water Points$   45,000

Injurious affection $   17,500

Subtotal$115,500

Amount s 281(4)(e) MRA @ 10%$   11,600

Total$127,100

  1. [37]
    The landowner’s report claims a “valuation expense” in the amount of $4,400 plus GST. The reply submissions on behalf on the miner proposes that an alternative amount of $4,750 be paid in respect of valuation expenses on the basis that this amount corresponds with the Herron Todd White invoice included within the landowner’s report. 
  2. [38]
    Although the miner’s submission has included this amount as an “assessment expense” pursuant to s 281(3)(a)(vi) of the MRA, I consider the authority of Sullivan v Oil Company of Australia Ltd (No.2)[5] precludes such an expense being included in this determination as compensation. Despite this, and in light of the miner’s quite proper offer to pay this expense, I intend ordering the amount as a cost pursuant to s 281(7) of the MRA.    

Staged Payment

  1. [39]
    The parties have agreed generally that the payments be “staged” however no specific payment amounts have been contended by the landowner. The miner has contended that an initial amount of $20,000 be paid upfront with the balance to be paid in equal instalments annually with the annual amounts to be adjusted with any CPI increases.
  2. [40]
    I have considered the miner’s contention and am reluctant to adopt initial payment of $20,000 as part of the suggested “staged” payment sequence. I consider that the amount of compensation attributable to the loss of water points, namely $45,000, should be made available to be applied by the landowner as soon as practicable after the granting of ML 90238 rather than spread over the initial 4 to 5 years of the mining lease. Accordingly, I intend to substitute $45,000 in place of the $20,000 contended on behalf of the miner as an upfront payment.

ORDERS

  1. In respect of ML 90238, compensation is assessed to be $45,000 for the first year. The said sum of $45,000 is to be paid within three months from notification of the grant of the mining lease by the Department of Natural Resources and Mines.
  2. In the case of the second and all subsequent years of ML 90238, the amount of compensation is to be calculated by increasing the sum of $5,131.25 by the percentage necessary to reflect any increase in the All Groups Consumer Price Index applicable to Brisbane for the preceding year and is to be paid yearly in advance on the anniversary of the grant of the mining lease.
  3. Pursuant to s 281(7) of the MRA, the applicant pay the costs of the respondent’s valuation report in the sum of $4,750 within 1 month from the date of this Order.

GJ SMITH

JUDICIAL REGISTRAR

Footnotes

[1]  (1998) 19 QLCR 297 at 315.

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

[3]  Landowners report page 7

[4]  Ibid page 12

[5]  (2004) 2 Qd R 105 

Close

Editorial Notes

  • Published Case Name:

    Strategic Minerals Corporation N.L. v Burnett Holdings (NQ) Pty Ltd

  • Shortened Case Name:

    Strategic Minerals Corporation N.L. v Burnett Holdings (NQ) Pty Ltd

  • MNC:

    [2016] QLC 51

  • Court:

    QLC

  • Judge(s):

    Smith

  • Date:

    02 Sep 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
Sullivan v Oil Company of Australia Ltd[2004] 2 Qd R 105; [2003] QCA 570
2 citations
Jump To
Cite 1 - [2004] 2 Qd R 105
Cite 2 - [2004] 2 Qd R 105
Wills v Minerva Coal Pty Ltd (No 2) (1998) 19 QLCR 297
2 citations
Jump To
Cite 1 - (1998) 19 QLCR 297
Cite 2 - (1998) 19 QLCR 297

Cases Citing

No judgments on Queensland Judgments cite this judgment.

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.