Skrzypczynski v Hutchinson[2017] QLC 4

LAND COURT OF QUEENSLAND

1. [1]
   These matters involve referrals to the Land Court by the Department of Natural Resources and Mines (DNRM) pursuant to s 279A of the Mineral Resources Act 1989 (MRA) for the determination of compensation in respect of the renewal of mining leases ML 1041, ML 1042 and ML 1043.

Background

2. [2]
   The applicants, Tomasz Skrzypczynski, Irena Skrzypczynski, Mervyn Kenneth McDonald & Dorothy Elsie McDonald, (the applicants) applied for the renewal of mining leases ML 1041, ML 1042 and ML 1043 on 23 October 2015. The land upon which the mining leases are situated is approximately 80 km east south-west of Collinsville, within the Charters Towers mining district and the Whitsunday Regional Council local government area. 
3. [3]
   The subject land is owned by Geraldine Linda Hutchinson (the respondent) and is more particularly described as Lot 136 on SM804305. The holding is approximately 6340 hectares and is used for grazing purposes.
4. [4]
   The specific Land Court references 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 these matters, no agreement has been lodged with DNRM and these matters have 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 when determining compensation. In particular, s 281(3)(a) provides that an owner of land is entitled to compensation for:

“(i)deprivation of possession of the surface of land of the owner;

3. (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;

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

3. (v)
   any surface rights of access;

3. (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:

“(4)In assessing the amount of compensation payable under subsection (3) -

3. (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]
   In Wills v Minerva Coal Pty Ltd [No.2]^[1], when considering s 281 of the MRA the Court observed 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]
   Similarly 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.”

The conduct of proceedings

10. [10]
    On 22 September 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.
11. [11]
    On 9 December 2016 a written submission was received from Tomasz Skrzypczynski setting out points for the Court to consider when undertaking the determination of compensation in respect of each mining lease.  The respondent has filed no material or evidence in respect of any contended amount of compensation.

The applicant’s submissions

12. [12]
    The following points have been addressed in the submissions filed by Tomasz Skrzypczynski on behalf of all applicants:

3. a)
   In respect of ML 1041 only 1 ha of land would not be able to be used by the landholder as the mining is underground and does not impact over the total area.

3. b)
   Only 3.5 ha of ML 1042 will be used for a processing plant, tailings dam, settling dam and pick up dam. Full access will be available to the remaining area of the lease.

3. c)
   Only 4 ha of ML 1043 are excluded for the landowners use. The 4 ha is used for miner’s accommodation, workshops and a spare parts area.

3. d)
   Of the total area of all three leases only 8.5 ha are used by the applicants i.e. this area excludes any use by the respondent.

3. e)
   An earlier determination in Skrzypczynski v Batchelor^[3](Skrzypczynski) determined total compensation for a 5 year renewal period in respect of ML 1042 at $220 in total on the basis of $5 per ha per annum plus a nominal amount of $25 for access and additional sum of $20.

The respondents’ submission

13. [13]
    The respondents filed no evidence or submissions in response to the material relied upon by the applicant.

Compensation

14. [14]
    I have considered the submission provided by Mr Skrzypczynski, the referral documents provided by DNRM and the earlier Skrzypczynski decision concerning ML 1042.  I am unable to adopt the assessed amounts from Skrzypczynski given that the renewal period was for only 5 years, the limited material provided to the Court to assess access and the availability of more recent Court judgments from within the Charters Towers mining district.
15. [15]
    While Mr Skrzypczynski’s contention that the entire surface area of each lease may not be subject to mining activities is understandable, I am unable to conclude that sections of each mining lease should be excluded entirely from consideration when assessing compensation.  Although it may be common for actual mining activity to be confined to specific areas within a mining lease, I consider that the presence of each lease for the renewal period of 15 years would, in the circumstances likely to be considered by a hypothetical prudent purchaser as “as effectively depriving the landowners of possession of the surface area of the land, even though their stock from time to time may graze on that area”^[4].  A much greater level of compensation would be assessed had the entire surface area of each lease been impacted by actual mining activity e.g. excavations.
16. [16]
    In the absence of valuation or other expert evidence I intend to rely on Court judgments concerning more recent determinations from the local Charters Towers mining district.  The Court judgments in Alphadale Pty Ltd v Dore & Ors [2016] QLC 15 (Alphadale) and Keyse v Phillipson & Ors [2016] QLC 40 (Keyse) determined compensation for access at $4/Ha per annum and $5/Ha per annum respectively and $8/Ha per annum and $10/Ha per annum respectively in respect of the mining lease areas.
17. [17]
    Compensation in respect of ML 1041, ML 1042 and ML 1043 is determined at $5/Ha per annum in respect of access areas and $10/Ha per annum in respect of the mining lease areas.  These areas will be rounded to the next full hectare for assessment purposes.

18. [18]
    The determination in respect of each mining lease is as follows:

ML 1041

Area covered by mining lease – 8 ha at $10 per ha= $80.00 per annum

Area covered by access – 2 ha at $5 per ha= $10.00 per annum

add s 281(4)(e) re compulsory nature of grant= $9.00 per annum

Total= $99.00 per annum

ML 1042

Area covered by mining lease – 8 ha at $10 per ha= $80.00 per annum

Area covered by access – 3 ha at $5 per ha= $15.00 per annum

add s 281(4)(e) re compulsory nature of grant= $10.00 per annum

Total= $105.00 per annum

ML 1043

Area covered by mining lease – 39 ha at $10 per ha= $390.00 per annum

Area covered by access – 3 ha at $5 per ha= $15.00 per annum

add s 281(4)(e) re compulsory nature of grant= $41.00 per annum

Total= $446.00 per annum

Orders

1. In respect of ML 1041 compensation is determined in an amount of $99.00 per annum.
2. In respect of ML 1042 compensation is determined in an amount of $105.00 per annum.
3. In respect of ML 1043 compensation is determined in an amount of $446.00 per annum.
4. The applicants pay compensation to the respondent landowner the amounts set out in orders 1, 2 and 3 within three months from notification of the renewal of the mining lease by the Department of Natural Resources and Mines and on the anniversary of the renewal of each lease.

GJ SMITH

JUDICIAL REGISTRAR