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Shimrad Pty Ltd v Collins QLC 17
LAND COURT OF QUEENSLAND
Shimrad Pty Ltd and Anor v Collins & Ors  QLC 17
Shimrad Pty Ltd and David Oriel Industries Pty Ltd
Bernice Evelyn Collins, Carl Michael Collins & Catherine Collins and Veronica Catherine Wilson & Peter Darren Wilson
Compensation for renewal of mining lease
Application for variation of access
7 April 2017
Submissions closed 18 July 2016
Heard on papers
In respect of ML 5052, compensation is determined in the sum of $3,000 per annum. Such compensation is to be paid annually in advance within four months from notification of the issue of the renewed mining lease and the amended access arrangements.
ENERGY AND RESOURCES – MINING FOR MINERALS – COMPENSATION
Mineral Resources Act 1989, s 85
Slater & Anor v Appleton & Anor (2012) 33 QLCR 32
Sloan & Anor v Weir & Gregcarbil Pty Ltd  QLC 183
Wills v Minerva Coal Pty Ltd (Unreported, Land Court of Queensland, Scott M, 27 November 1998)
AMETS, as agent for the applicants
Peter and Veronica Wilson for the respondents
- Mining lease (ML) 5052 was previously held by Karyl Frances Pratt.
- That lease was approved to be transferred to Shimrad Pty Ltd and David Oriel Industries Pty Ltd (hereafter Shimrad and Oriel) holding 50% each of that lease on 4 March 2014.
- By correspondence dated 10 March 2014 the Mining Registrar for the Northern Region advised Shimrad and Oriel that ML 5052 would expire on 31 August 2014 and therefore required a renewal application to be made prior to that expiry date.
- At an earlier time on 6 November 2013 Pratt, the predecessor in title to Shimrad and Oriel, had lodged on her own behalf an application for variation of access to the mining lease.
- It appears that application was wrongly referred to as ML 5054 but that mistake has been noted by the Department of Natural Resources and Mines (then the Department of Mines and Energy) at Mareeba.
- The mining lease and the access together lie over grazing properties described as Tallwood Station owned by CG and LW Curly and Amber Station at Mt Surprise owned by BE, CM & C Collins and VC & PD Wilson.
- The Amber Station property is described as Lot 6 on plan BW21. The Tallwood Station is described as Lot 3 on plan TE24.
- The application does not identify in any summary way the length of the access but the attachment which gives a metes and bounds description of the access can be calculated to show a distance of 12570.64 m and the access way is described as being 10 m wide.
- On 12 March 2014 Australian Mining and Exploration Titles Services (AMETS) made application to the Mining Registrar at Mareeba for a renewal of ML 5052 for a further 10 year period.
- That application was later than the statutory requirement provides but no issue seems to have been taken by the relevant Minister in respect to that lateness.
- That application identified only the Collinses’ and Wilsons’ Amber Station at Mt Surprise as a land parcel subject to the application.
- It may be surmised that the Tallwood Station property is utilised only for the purpose of access.
- On 7 August 2014 AMETS wrote to the Mining Registrar at Mareeba advising him as follows:
“The transferees decided to continue with the variation of access to the mining leases as lodged and have made several written attempts to communicate with the holders of lot 6 on plan BW21 known as Amber Station in regards to compensation for both the variation of access and the renewal application and to date we have no resolution.
Due to the lack of success with previous attempts to correspond with Amber Station, we respectfully request that both the variation of access and renewal application compensation matters be referred to the Land Court for determination.”
- That correspondence led to the referral of the matters to this Court on 14 August 2014.
- On 22 September 2014 AMETS advised the Court (by email) that their clients were currently negotiating an access compensation agreement with the holders of what was then described as Burlington Station, CJ and LW Curley relating to file MRA290-14. Nothing on the Court file indicates the reason for the earlier referral to Tallwood Station and then a later referral to Burlington Station in the ownership of CJ and LW Curley. In the overall scheme of things it appears that no significance attaches to that inconsistency.
- A directions hearing was conducted on 24 September 2014 but nobody from any of the parties apparently appeared, save for Mr Wilson who was able to advise the Court the Curleys had been mustering on an adjoining property and may not have had notice of the directions hearing.
- The matter was adjourned to 8 October 2014, on which occasion it was adjourned to 20 January 2015 and then further adjourned pending listing for hearing.
- By direction issued on 2 February 2015 the matter was listed for hearing on 28 and 29 April 2015 in Mareeba/Atherton and orders were made for any material to be relied upon by the applicants to be filed and served by 27 February 2015, any material from the respondents to be filed and served by 27 March 2015 and any material in reply by 7 April 2015.
- It was also a requirement for the parties to file written submissions with respect to compensation between 14 and 21 April 2015.
- The hearing on 28 and 29 April 2015 did not occur and on 29 April 2015 the hearing was adjourned to a date to be fixed.
- On 1 December 2015 at a directions hearing of the matter, the matter was set down for hearing on 26 and 27 July 2016.
- Subsequently on 18 July 2016 the matter was directed to be heard on the papers.
- By email dated 2 March 2015 the Court was advised that a compensation agreement in respect of Lot 3 on plan TE24 (i.e. Tallwood Station) had been lodged with the Mining Registrar.
- On 25 February 2015 the Court received from AMETS documents described as a submission lodged with DNRM in August 2014.
- That correspondence indicated that AMETS, on behalf of the applicants, had determined that they had no further submissions in regards to dealings with the owners of Amber Station and that Mr Lane, presumably the principal of the applicant companies, had made an offer of compensation which exceeded previous determinations of compensation for mining leases on this property. The correspondence went on to request that the attached bundle of documents be accepted as the applicants’ submissions to the Land Court in relation to files MRA254-14 and MRA255-14.
- The relevant material contained within the attachments, many of which were irrelevant to the determination that I have to make, included correspondence dated 18 March 2014 from AMETS directed to Collins and Wilson.
- That correspondence included the following, “My clients propose a sum of $5.00 per hectare per year as compensation for the 40 hectare lease and a sum of $20 per kilometre (or part thereof) for the proposed variation of access which will cross Amber Station for a length of 3.6km.”
- The material also contained email correspondence dated 27 May 2014 from AMETS to Mr Wilson of the respondents which indicated the following:
“That the miner agrees to pay to the owner who agrees to accept the sum of $25 per hectare, per annum as compensation in respect of the mining lease and that it is further agreed that this rate shall be accepted for a term of 10 years (*or such lesser term as may apply in the event that the mining lease is surrendered or cancelled) which term shall be the term for which the mining lease is granted. This includes consideration for the access.
That the miner agrees to pay for the installation of gate [sic] on applied for access at the boundary fence line that separates Burlington Station and Amber Station. No cattle grid is to be installed.”
- That offer was made on the basis that the respondents would pose no objection to the variation of access to traverse through Burlington Station in accordance with a map which was attached to the email.
- On 24 March 2015 material was filed by the respondents setting out their position with respect to compensation for the lease and compensation for the road access to ML 5052. Their proposals were as follows, in respect of compensation for ML 5052:
“The boundary to mining lease 5052 (approx 100 acres) is currently not visibly marked. We request that it be fenced for the safety of our livestock and to define the lease. This is not the first time we have requested the above as in our 15 years we have resided at Amber it has never been apparent.
On recent property sales in the last 4 years country in this area has sold for $40/acre and we are requesting $4000/annum compensation for the value of the land.
For loss of grazing/income we are seeking $2800/annum based on 4 head of livestock at a stocking rate of 1:25 acres in alignment with the Department of Primary Industries for this area.
By the code of conduct, all entities will be required at time of entry to have a current wash-down certificate.
We would like to know where and how water for the mining lease is to be sourced.”
In respect of road access to ML 5052:
“The access is 3.6 kms which equates to 10 acres of vegetation our livestock will be unable to graze. The stocking rate is 1:25 acres for dry cattle, we are seeking compensation of $350/annum as we sell our livestock on an average for $700/head.
We also seek compensation to the amount of $300 for Lucerne Stylos seed that the country has been pastured improved with. These legumes are prolific in the paddock this access passes through and are very apparent on the proposed road.
As the access passes through a boundary gate between Burlington Station and Amber Station we are requesting a locked gate that all interested parties hold a key for. This ensures no unintentional or intentional trespassing occurs.
By the code of conduct, travellers of the road will be required at time of entry to have a current wash-down certificate.”
- Included in those materials was correspondence between the respondents and the applicants dated 29 September 2014 which referred to livestock being bogged in a sump on ML 5052 which resulted in the cow having to be shot.
- That correspondence said as follows:
“We have requested many times of the previous owner for this dam to be fenced off as over the years we have lost several head which hurts us financially and means the mining lease interferes with our business. At the first meeting with Mal Lane as a representative of Shimrad & David Oriel Industries after they acquired the lease he asked what concerns we had and I stated the dam needs fencing to protect our livestock. We are seeking a stock proof maintained (by Shimrad and David Oriel Industries) fence and compensation for loss of livestock and associated costs with daily checking.”
- By 20 June 2016, at which time the Wilsons filed an additional document setting out the basis of the claim the claim, for loss of grazing income had increased to $3300 per annum “based on four head of livestock (current prices for a 300 kg female at $2.50/kg equals $825/beast) at a stocking rate of 1:125 acres in alignment with the Department of Primary Industries for this area”.
- Section 85 of the Mineral Resources Act 1989 (MRA) provides at subsection (7) (relevantly to a matter referred to this Court) that:
85 Compensation to be settled before grant or renewal of mining claim
- (7)Upon an application made under subsection (5), or the referral of a matter under section 85A(2), the Land Court shall settle the amount of compensation an owner of land is entitled to as compensation for—
- (a)deprivation of possession of the surface of land of the owner;
- (b)diminution of the value of the land of the owner or any improvements thereon;
- (c)diminution of the use made or which may be made of the land of the owner or any improvements thereon;
- (d)severance of any part of the land from other parts thereof or from other land of the owner;
- (e)any surface rights of access;
- (f)all loss or expense that arises;
as a consequence of the grant or renewal of the mining claim.
- Section 85(8) sets out some qualifications which must be applied in assessing the amount of compensation payable under subsection (7).
- That subsection provides:
- (8)In assessing the amount of compensation payable under subsection (7)—
- (a)where it is necessary for the owner of land to obtain replacement land of a similar productivity, nature and area or resettle himself or herself or relocate his or her livestock and other chattels on other parts of his or her land or on the replacement land, all reasonable costs incurred or likely to be incurred by the owner in obtaining replacement land, the owner’s resettlement and the relocation of the owner’s livestock or other chattels as at the date of the assessment shall be considered;
- (b)no allowance shall be made for any minerals that are or may be on or under the surface of the land concerned;
- (c)if the owner of land proves that the status and use currently being made (prior to the application for the grant or renewal of the mining claim) of certain land is such that a premium should be applied, an appropriate amount of compensation may be determined;
- (d)loss that arises may include loss of profits to the owner calculated by comparison of the usage being made of land prior to the lodgement of the relevant application for the grant or renewal of a mining claim and the usage that could be made of that land after the grant or renewal;
- (e)an additional amount shall be determined to reflect the compulsory nature of action taken under this chapter which amount, together with any amount determined pursuant to paragraph (c), shall be not less than 10% of the aggregate amount determined under subsection (7).
- With respect to this Court’s determination of the appropriate amount of compensation s 85(11) provides as follows:
“The Land Court shall give written notice of its determination to all parties and may make such order as to costs between the parties to the determination as it thinks fit.”
- It is clear that the compensation contemplated by those provisions of the MRA is to be expressed in dollar terms.
- Various aspects of the operations able to be conducted pursuant to the mining lease are generally and relevantly made part of the conditions which might attach to the mining lease.
- In my view, matters such as requirements for the fencing and provision of gates across access to a mining lease are matters that ought to be addressed in the terms and conditions of the mining lease. Compensation as it is commonly understood involves a monetary payment for the disamenity and losses occasioned by the presence of a mining lease over another person’s land whether it be freehold or leasehold.
- On many occasions this Court has observed that the granting of a mining lease is akin to a resumption of land for a period of time.
“As the authorities show, care must always be taken in any determination of compensation under the MRA to ensure that there is not a ‘doubling up’ of compensation over various heads. A classic case where this may occur is where the landholder receives compensation based on the value of the totality of the land the subject of the mining lease (as was the case in Zimmerebner and Salmon decisions) and a case where compensation is claimed purely on the basis of lost carrying capacity. In the latter case, an evaluation is undertaken as to the actual loss in carrying capacity that has occurred taking account of the actual mining impacts on the land, the cost of agistment etc. In that case, it will always come down to a matter of evidence; that is, does the mining lease and environmental authority authorise the total mining of all of the land at one time, such as a large open cut mine, or is mining restricted to a certain number of hectares of significant disturbance at any one time? Evidence as to whether the mining lease is to be fenced or if the landholders’ cattle are to continue to graze on so much of the mining lease not subject to significant disturbance are also relevant.”
- His Honour went on also to refer the reader to the decision of President MacDonald in Sloan & Anor v Weir & Gregcarbil Pty Ltd.
- In that decision her Honour, as Mr Smith points out, was considering valuation evidence as a means of determining the compensation to be paid to the landholder and observed:
“The area of the mining lease is 35ha. Although only a small portion (.60575 ha) of the mining lease will be disturbed from time to time by the mining operations, I have accepted that the loss of value of the land is greater than is reflected by the loss of grazing capacity of that small area. The landowner is entitled to be compensated for the loss of control over the mining lease area as evidenced, for example, by the fact that the mining area may move from time to time to various parts of the leased area without the consent of the landowner. The applicants sought to quantify this loss by a depreciation of 33.3% applied per annum.”
- 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.
- The Land Court in Smith v Cameron (a case which is often cited by this Court) 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.”
- In Smith v Cameron the following observation was made:
“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.”
“What is Compensation?
Both s.279(1) and s.281(3) MRA refer to "compensation", yet the statute does not provide a definition. The term compensation therefore takes its meaning largely from the items listed in ss.281(3)(a) and (4) of the Act which point to the matters that make up the monetary sum. A study of those provisions reveals that whilst s.281(3)(a)(ii) speaks of compensation for "diminution of the value" of land or improvements and s.281(3)(a)(vi) refers to "loss or expense", the other items do not use similar benchmark language, that is language which connotes a measure of some recognisable type. Let me provide by way of example how s.281(3)(a)(v) is to be read:
"(3) Upon an application made under subsection (1), a Wardens Court shall settle the amount of compensation an owner of land is entitled to as compensation for -
(v) any surface rights of access:
as a consequence of the grant … of the mining lease."
Now leaving aside the somewhat truncated form of expression, it is quite clear that Parliament has placed considerable emphasis on the word "compensation" in conveying the meaning of what is intended by s.281(3)(a)(v), for it is compensation with respect to "any surface rights of access" that is to be settled. Similarly, it is compensation which is the critical concept with regard to understanding items (i), (iii) and (iv) and of overriding importance with regard to items (ii) and (vi). There is, therefore, benefit in directing consideration to the nature of "compensation" in gaining an understanding of s.281. I will consider this question by making reference to three cases with quite different backgrounds.
In the context of the then National Security (Wheat Acquisition) Regulations made under the authority of the Natural Security Act 1939 the High Court considered the meaning of "compensation" in Nelungaloo Pty Ltd v The Commonwealth (1948) 75 CLR 495 and Dixon J (as he then was) said this at 571:
"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."
In Re Melden Homes No. 2 Pty Ltd's Land (1976) QdR 79 the Supreme Court had to consider the meaning of "compensation" found in s.32A of the Encroachment of Buildings Act 1995 and held that for the purpose of that Act the ordinary meanings of "recompense" or "amends" were appropriate. That is, the statute was concerned with the loss to the owner of the land encroached upon, not the gain to the encroacher. The Privy Council was concerned with a consideration of s.10 of the "Crown Lands Resumption Ordinance" (Hong Kong) in Director of Buildings v. Shun Fung Ironworks Ltd  1 All ER 846 and Lord Nicholls said this about the matter:
"The purpose of (the compulsory acquisition provisions) is to provide fair compensation for a claimant whose land has been compulsorily taken from him. This is sometimes described as the principle of equivalence. No allowance is to be made because the resumption or acquisition was compulsory; and land is to be valued at the price it might be expected to realise if sold by a willing seller, not an unwilling seller. But subject to these qualification, a claimant is entitled to be compensated fairly and fully for his loss …" (at 852)”
- A mediation of the matter occurred in Mareeba on 25 June 2015 but despite discussions between the parties the matter was not able to be resolved. A heads of agreement document between the parties was finalised but that merely permitted the mediation to be adjourned to a date to be fixed at the request of the parties. Because it was a mediation and the mediation has not been completed I do not have any access to those heads of agreement.
- So much is evident from the certificate by the Judicial Registrar dated 7 November 2015.
- As can be seen there is scant material upon which I can act to make a determination in this matter.
- The formal documents on the file do not indicate the area of the lease, although the correspondence from AMETS to the respondents of 18 March 2014 refers to an area of 40 ha which figure was at no time disputed by the respondents.
- They contend that the mining lease has an area of approximately of 100 acres.
- Using the appropriate multiplier (0.404686) 100 acres converts to 40.469 ha so that there appears to be no disagreement between the parties as to the area of the lease.
- The offers from the applicants appear to be premised upon some sort of bulk or overall figure which initially was proposed to be $5.00 per hectare for the lease but ultimately became an offer of $25.00 per hectare.
- It is clear that a number of the matters which the land owners wished to have imported into any determination about the appropriate compensation which should be paid in respect of the presence of the mining lease are really matters which need or needed to be addressed at the time the mining lease or its renewal was being considered. Matters such as fencing, locked gates and maintenance of roads are not matters which in my view fall within the compensatory provisions of the MRA. The same applies to such matters as the acquisition of water and the requirement to have wash down certificates for vehicles entering onto the grazing property.
- In my view, at the end of the day the Court is left with a necessity to give consideration to compensation for the following matters:
- (a)The access road 3.6 km long;
- (b)The reduction in any stocking capacity;
- (c)Compensation for alleged loss of lucerne stylos;
- (d)The loss of access to the area of the mining lease.
- It is clear that the parties are a considerable distance apart with respect to what the appropriate compensation should be.
- Mining lease 5052 apparently contains an area of 40 ha, more or less. Neither party to this matter has provided expert evaluation evidence as to how the compensation will be calculated. The most recent offers from the miner of $25 per hectare (including the access) calculate to $1000 per year. No basis was provided for that “ballpark” figure.
- On the other hand, the land owners’ proposals for compensation include $4,000 per annum for the value of the land, $2,800 per annum for the loss of grazing/income, $700 for loss of grazing opportunities on the access road and $300 for the loss of lucerne stylos seed. That would appear to add up to about $7,800. Careful consideration of those figures easily reveals that it includes a significant component of double counting. For example the value of the land necessarily reflects the grazing capacity and the likely income to be yielded by utilisation of the land.
- The loss of access to the roadway and the lucerne stylos pastures apparently planted on the roadway is caught up in the value of the stock that might have otherwise grazed upon that roadway. As is commented upon above neither party has provided any real justification for the figures for which they contend nor any proof of the underlying facts which establish those figures.
- There is no evidence that the land owners’ stock are precluded from grazing on those parts of the mining lease area which are not presently being utilised or which are not fenced by the miner.
- Similarly, it is a matter of common experience in northern Queensland that stock continues to graze along access roads to mining sites moving aside only to permit the passing crew of vehicular traffic.
- I note that in the associated matter involving the Curleys, compensation has been agreed between the parties.
- That agreement between the miners and the Curleys has resulted in an agreement that the boundary fence between Burlington Station and Amber Station will be installed. That same boundary fence, of course, is relevant to the current application. If it is subject to a separate agreement with the adjoining owners, there seems to be no need for me to contemplate making it part of any compensation agreement which I might order, given that I am dubious as to whether it properly forms part of a compensation agreement in any case.
- The compensation agreed in respect of Burlington Station and the Curleys is $100 per annum for what, from the plans which were included in the filed material, is a much longer access.
- Faced with a general inadequacy of evidence on both sides but reflecting my view that any compensation awarded ought to be biased towards generosity in favour of the dispossessed land holder in doing the best I can on the material available to me I determine that compensation including compensation for the access road ought to be determined in a figure of $3,000 per year.
- With respect to the variation of the road access, there was no substantial evidence placed before the Court which established whether the access contended for was or was not suitable. The adjoining land owners have agreed to that variation of access and in the absence of any compelling evidence from the Wilsons I can see no reason why that variation of access should not be permitted.
- If it is ineffective for the miner’s purposes or results in unforeseen damage to the property there is an opportunity, pursuant to the provisions of the Mineral Resources Act 1989, for the matter to be brought back before this Court for determination. Accordingly I determine in respect of ML 5052 compensation is determined in favour of the land owners in the sum of $3,000 per annum.
- Their determined compensation sum is to be paid annually in advance within four months from notification of the issue of the renewed mining lease and the amended access arrangements.
In respect of ML 5052, compensation is determined in the sum of $3,000 per annum. Such compensation is to be paid annually in advance within four months from notification of the issue of the renewed mining lease and the amended access arrangements.
MEMBER OF THE LAND COURT
Slater & Anor v Appleton & Anor (2012) 33 QLCR 32.
 Ibid .
  QLC 183.
 Ibid .
 (1986) 11 QLCR 64.
 Ibid, 74-75.
 Ibid, 73.
Wills v Minerva Coal Pty Ltd (Unreported, Land Court of Queensland, Scott M, 27 November 1998).
 Ibid, 20-21.
 Document ‘Compensation for ML 5052’ attached to material filed by the respondents on 24 March 2015.
 Correspondence dated 18 March 2014 and 27 May 2014 from applicants’ agent (AMETS) to respondents.
- Published Case Name:
Shimrad Pty Ltd and David Oriel Industries Pty Ltd v Bernice Evelyn Collins, Carl Michael Collins, Catherine Collins, Veronica Catherine Wilson and Peter Darren Wilson
- Shortened Case Name:
Shimrad Pty Ltd v Collins
 QLC 17
07 Apr 2017