Ree v Terry[2018] QLC 10

LAND COURT OF QUEENSLAND

1. [1]
   This matter relates to the referral to the Land Court by the Chief Executive, Department of Natural Resources and Mines pursuant to s 281(1) of the Mineral Resources Act 1989 (MRA) for the determination of compensation in respect of the grant of ML 100117.

2. [2]
   This decision is made to satisfy the requirements of s 279 of the MRA which 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.

3. [3]
   In the present case, no agreement has been lodged with the relevant Department, and consequently the matter has been referred to the Land Court for determination.

Background

4. [4]
   The applicants, Mark William Ree and Alice Lorraine Ree, have applied for the grant of ML 100117 on land which lies 40 km south west of Forsayth in the Etheridge Shire Council.

5. [5]
   The application for the mining lease indicates that the applicants seek elluvial, colluvial and alluvial gold and elluvial, colluvial and alluvial tin.

6. [6]
   The term of the lease sought is 10 years. The mining lease area is located on Howlong Station which is located on Lot 2 on SP 242983 Parish of Howlong and the lease application seeks a tenure area of 53.8 ha with an access area of 8.64 ha over an access length of 21.6 km.

7. [7]
   In carrying out the exercise required by the statute I propose to deal with the tenure area and the access area on a “rounded up” basis so that the tenure area will be treated as 54 ha and the access area will be treated as 9 ha.

8. [8]
   The documentation accompanying the application explained that, by way of justification of the application area and shape, “[t]he shape of the lease has been chosen primarily to include areas of Diggers Creek and adjoining gullies that have been identified as containing suitable material for processing. The shape of the lease also provides an area suitable for the processing plant and associated infrastructure”.

Legal requirements

9. [9]
   Section 281 of the MRA sets out those matters which must be considered by this Court when determining the compensation.

10. [10]
    Section 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… 

11. [11]
    Further s 281(4)(e) provides that in assessing the amount of compensation payable under s 281(3):

5. (e)
   an additional amount shall be determined to reflect the compulsory nature of action taken under this part which amount, together with any amount determined pursuant to paragraph (c), shall be not less than 10% of the aggregate amount determined under subsection (3).

12. [12]
    How the assessment of compensation is to be determined is not fully explained in the MRA itself. The MRA identifies matters to be taken into account but it does not prescribe any particular method of valuation.^[1]

13. [13]
    The usual process reflected in a number of decisions of this Court is that the parties to a determination for compensation provide evidence, often expert evidence, which seeks to demonstrate what the appropriate amount of compensation should be. This is often done by considering the productivity of the land lost to the mining lease, the likely revenue to be gleaned from uninhibited use of that land, stocking rates for livestock or yield rates for cultivation and various items of disamenity caused by the inevitable intrusion into a landholder’s property by machinery and vehicles. In some cases valuers and agronomists are engaged.

14. [14]
    It must be recognised, however, that the cost of such an exercise often results in a cost which far exceeds the revenue to which the dispossessed landowner is entitled.

The conduct of these proceedings 

15. [15]
    A preliminary conference was conducted by Member Stilgoe at the Mareeba Courthouse on 7 November 2017. The information disseminated in that conference and any concessions made by the parties in the course of that conference are without prejudice and cannot be referred to by myself in determining the question of compensation.

16. [16]
    The preliminary conference failed to resolve the issues between the parties and accordingly orders were made by Member Stilgoe on 7 November 2017. Those orders were:

“1. By 4:00pm on Tuesday 5 December 2017 the Respondent/Landowner file in the Land Court Registry and serve on the Applicant/Miner material to be relied upon.

5. 2.
   By 4:00pm on Friday 12 January 2018 the Applicant/Miner file in the Land Court Registry and serve on the Respondent/Landowner material to be relied upon.

5. 3.
   The parties are to meet on-site on a date to be advised.

5. 4.
   The matter is listed for a Directions Hearing at 11:00am on Friday 19 January 2018.”

17. [17]
    At the directions hearing on 19 January 2018 an order was made that the matter should be determined on the papers without an oral hearing, not before Monday 5 March 2018.

18. [18]
    On Wednesday 6 December 2017 the respondent’s filed material in the Court including:

1. (a)
   an extract from mining compensation agreement with Laneway Resources (pages 1-5); and

2. (b)
   an extract from a Taylor Byrne valuation report re property valuations for mining lease application 100030 – Agate Creek on the Howlong Station property, dated 13 June 2016.

19. [19]
    The relevance of the Taylor Byrne report somewhat escapes me given the form in which the information was provided to the Court because the report, judging by the photocopied extract provided to the Court, was 29 pages long but all the Court has been provided with is the coversheet and page 29 of the report which reveals an adopted value of $60 per hectare for what is described as “the subject parcel” which may be the whole of Howlong Station or, arguably, may relate to some other part of that station.

20. [20]
    Also, there is no intimation of the purpose for which the report was created.

21. [21]
    With respect to the compensation agreement between Laneway Resources and the estate of HB Terry, the Court has been provided with the redacted copy of pages 1, 2, 3, 4 and 5 which clearly are not the entire report and which is heavily redacted so that the annual payment for the mining lease is not revealed.

22. [22]
    Moreover, none of the background to the achievement of that compensation agreement is provided and one cannot tell what the various compensation figures relate to in any amount of detail or at all.

23. [23]
    Earlier (13 October 2017) Mr Terry, as representative of the estate of HP Terry, filed in the Court a document entitled “Compensation Terms for Mining Lease Application 100117 on Lot 2 SP 242983”.

24. [24]
    That document set out the following terms and conditions as being required as a minimum for any compensation agreement to be executed:

“1.  Relocate and install a minimum of two water points for stock watering from existing bore which is located on or near proposed ML. Alternatively construct 20,000 cubic metre dam at a suitable location nominated by the land holder.

5. 2.
   Install double steel gate assembly on access road between Old Robinhood and Howlong. Location and materials to be confirmed with the landholder.

5. 3.
   Access road to the proposed ML will be via Kimberly Sue Dam Road directly from the Agate Creak Road.

5. 4.
   Construct entire access road with a suitable formation to a standard set by nominated road engineer.

5. 5.
   Mining lease area compensation; $42 per hectare per annum, access road $42 per hectare per annum (based on recent compensation agreement with Laneway Resources).”

25. [25]
    It is difficult to make any sensible use of that document because no basis for any of the five conditions is set out and nor is there any indication, save for the figure in condition number five, as to how much compliance with any of those conditions would cost nor why they should be exclusively the burden of the proposed mining operation.

26. [26]
    In a sense, the terms and conditions referred to above constitute nothing more than a “wish list” advanced by the landowner.

27. [27]
    In a similar vein, the presentation of elements of the mining compensation agreement between Laneway Resources and the estate of HP Terry (the respondent in the current proceedings) was apparently an agreement reached by mutual consent between the parties with no proper indication as to how any of the figures in it were achieved, nor what they represented.

28. [28]
    Further, presumably because of a confidentiality provision, there is no indication as to what figure was ultimately agreed, on a per hectare basis, between the miner and the landowner.

29. [29]
    Some limited use may be able to be made of the Taylor Byrne report which advances an improved value of $48.60 per hectare for a property described as Heliman Creek which the author (whom is unidentified) suggests is considered superior to the subject Howlong property but which constitutes a comparable sale.

30. [30]
    The unidentified author ultimately concludes “[b]ased upon the sales we have adopted a rate of $60 per hectare to the subject parcel”.

31. [31]
    They contend that the higher figure (presumably higher than the Heliman Creek property) is considered “justified due to the superior carrying capacity, location and access” in some unspecified way.

32. [32]
    The miners for their part filed a document in the Land Court on 12 January 2018 setting out the material upon which they seek to rely for the determination of compensation.

33. [33]
    That document sets out, accurately, the history of the application for mining lease 100117 and asserts, historically, that an offer to the landholders, i.e. the Terry interests, was made at a rate of $10 per hectare per annum for the total of the mining lease and $5 per hectare per year for the total area of the mining lease access.

34. [34]
    That document takes issue with the carrying capacities identified in the fragment of the Taylor Byrne valuation report but does not provide any basis upon which it has relied on to contend that the Taylor Byrne report exaggerates the carrying capacity.

35. [35]
    They do however provide some anecdotal observations including the following:

• “Based on the average carrying capacity of surrounding properties given in the extract of the Taylor Byrne report provided by Mr Terry, the carrying capacity of the area would be approximately 1 head per 17 hectares, which equates to 3.7 head of cattle over the total area of the mining lease and access. Given the majority of the mining disturbance will be within the intermittent watercourse that supports little to no fodder, the carrying capacity of the area actually being disturbed would be further reduced.
• The mining lease will be progressively mined and rehabilitated resulting in minimal areas being disturbed by mining at any one time during the term of the lease. Cattle need only be excluded from the processing/stockpiling/tailings retention area and this combined with the mining area will total approximately 1-2 hectares.
• Cattle will not be excluded from accessing water within the proposed water supply catchment infrastructure for the mine, therefore providing a benefit to the landholder.
• The access to the mining lease is via existing tracks that only require minimal upgrading to accommodate the miners needs. These include, transport of mobile and semi-mobile machinery and plant to the lease upon commencement, and from the lease upon completion of mining, and access between the existing camp on ML30112 and the lease for the miners. All processing will be carried out on the lease and there is no requirement to transport ore from the lease.
• The access as proposed is the shortest route and is considered to be the least disruptive that is available between the current granted mining lease (camp base) and the application area. It is considered very important for safety that the existing camp be retained as the principal camp for the new mining lease as, due to the remoteness of the mining lease, there is no economical possibility of establishing telephone infrastructure on the lease.”^[2]

36. [36]
    The miners also take issue with the reliance by the landowner on the Laneway Resources Limited compensation agreement.

37. [37]
    The miner makes the valid point that the Laneway Resources operation is of an entirely different type and scale to what they propose.

38. [38]
    They conclude by contending that their figures of $10 per hectare per annum for the mining area and $5 per hectare per annum for the access area is appropriate in all of the circumstances but do not indicate to the Court how those various figures have been reached.

39. [39]
    The Court is left in a position where it does not really have any cogent evidence, either expert or anecdotal, upon which it can base its decision in this matter.

40. [40]
    In such circumstances the Court frequently has recourse to other determinations in the same or nearby mining districts.

41. [41]
    In ERO Georgetown Gold Operations Pty Ltd v Henry [2015] QLC 22 (ERO Georgetown) Member PA Smith conducted a contested hearing which included expert evidence tested by cross-examination, submissions, and had the benefit of a site inspection.

42. [42]
    The subject land in the ERO Georgetown decision was, like the subject land in this matter, used for grazing purposes and located in the Georgetown mining district.

43. [43]
    In that case compensation was determined at $17 per hectare per annum in respect of 4 hectares of grazing land but $2 of that amount was attributable to the impact of the mining tenure upon tourist activities carried out on the subject land.

44. [44]
    Judicial Registrar Smith in Reddicliffe v Dixon^[3] relied upon the ERO Georgetown decision to award $15 per hectare in respect of a mining area and $7.50 per hectare in respect of access for a mining lease over a relatively small area.

45. [45]
    Numerous other matters in central and northern Queensland involving the alienation of grazing land have been decided by other Members of this Court.

46. [46]
    In Unimin Australia Limited v Freeman Member Mr RS Jones commented on cases where parties provide little or no material to the Court in the following terms:

“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.”^[4]

47. [47]
    I find myself in a similar position in the present case.

48. [48]
    There are numerous cases in north Queensland where the sum allowed has been between $10 and $15 per hectare, for the mining area and something less for the access area.^[5]

49. [49]
    Having regard to all of the material provided to the Court, taking into account the statutory minimum of 10% of additional compensation required pursuant to s 281(4)(e) to reflect the compulsory nature of the process applied by the MRA. I determine that the compensation for the mining area should be $15 per hectare plus an additional figure of $1.50 to reflect the requirements of s 281(4)(e).

50. [50]
    With respect to the access way and the observations of the miner in its correspondence as to the existing nature of the tracks I am inclined to allow a figure of $8 per hectare for the access area (including the s 281(4)(e) loading).

51. [51]
    The calculation in respect of this proposed mining lease is as follows:

Orders

1. In respect of ML 100117 compensation is determined in the total sum of Nine Hundred and Sixty Three Dollars ($963) per annum.
2. The applicants are to pay compensation to the respondents in the amount set out in order 1 hereof within 1 month of the issue of ML 100117 by the Department of Natural Resources, Mines and Energy and annually in advance thereafter.

WL COCHRANE

MEMBER OF THE LAND COURT