Wilkins v Auctus Resources Pty Ltd
[2018] QLC 16
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Wilkins v Auctus Resources Pty Ltd[2018] QLC 16
- Add to List
Wilkins v Auctus Resources Pty Ltd[2018] QLC 16
Wilkins v Auctus Resources Pty Ltd[2018] QLC 16
LAND COURT OF QUEENSLAND
CITATION: | Wilkins & Ors v Auctus Resources Pty Ltd [2018] QLC 16 |
PARTIES: | Maxwell John Wilkins, Robert James Wilkins & Russell Ross Wilkins v Auctus Resources Pty Ltd (respondent) |
FILE NOs: | MRA716-17 MRA717-17 |
DIVISION: | General Division |
PROCEEDING: | Determination of compensation payable for renewal of mining lease |
DELIVERED ON: | 15 June 2018 |
DELIVERED AT: | Brisbane |
HEARD ON: | Submissions closed 27 April 2018 |
HEARD AT: | Heard on the papers |
MEMBER: | PG Stilgoe |
ORDERS: |
|
CATCHWORDS: | ENERGY AND RESOURCES – MINERALS – MINING FOR MINERALS – COMPENSATION – determination of compensation – factors to be considered – material provided – value of land within the mining lease area – useable and unusable land Mineral Resources Act 1989 (Qld) ss 279, 281(3) and (4) ERO Georgetown Gold Operations Pty Ltd v Henry [2015] QLC 22 Fitzgerald & Anor v Struber [2012] QLC 76 Horn v Sunderland Corporation [1941] 2 KB 26 Reddicliffe v Dixon & Anor [2017] QLC 49 Richardson v Barrett [2001] QLRT 89 Shimrad Pty Ltd and Anor v Collins & Ors [2017] QLC 17 Smith v Cameron (1986-87) 11 QLCR 64 Spencer v Commonwealth (1907) 5 CLR 418 |
APPEARANCES: Not applicable
- [1]The three Wilkins brothers, Maxwell, Robert and Russell want to renew two mining leases in far north Queensland but they cannot agree compensation with the landholder, Auctus Resources Pty Ltd (Auctus).
- [2]ML 4959, with an area of 15.86 ha, contains a processing plant, crushing and screening rock from the surrounding area. ML 4597, with an area of 2.99 ha is a limestone mine.
- [3]The mining leases are located within Lot 3 on SP 150971, which has an area of 208,000 ha. It is the largest part of ‘Chillagoe Station’ and is used for cattle breeding and fattening.
- [4]Section 281(3) of the Mineral Resources Act 1989 (Qld) (MRA) sets out what Auctus can receive compensation for. Section 281(4) of the MRA gives additional compensation rights in particular circumstances. Section 281 does not define any method of assessment, and each case depends on its facts.[1] Further, it is not necessary to determine an amount for each head of compensation in s 281(3); they are matters to consider when deciding an overall amount.[2]
- [5]The overriding principle is of equivalence; ensuring that, so far as money can do it, Auctus is placed in the same position as if the mining leases were not granted.[3]
- [6]Both parties calculated the compensation as if Auctus would be deprived of possession of the surface of the land for the term of the lease.[4] Although there is some suggestion in Auctus’ submission that it will also suffer loss of profits, it provided no evidence to support that claim. Auctus’ submission that it has incurred costs in negotiating with Wilkins suffers from the same problem; there is no evidence by which I can calculate that cost. Accordingly, I will only consider compensation based on the deprivation of the surface of the land.
- [7]Wilkins propose a payment of between $7 and $10 per hectare. They base this range on the sale price of Chillagoe Station in 2014 and the current unimproved site value of Chillagoe Station.
- [8]Wilkins say that the proposed payment is much more generous than their previous compensation agreement with the former owners, which was a token payment reflecting an understanding that the land subject to the mining leases did not deprive the landholder of any income from the business of cattle grazing, breeding or fattening.
- [9]Auctus proposes a payment of $30 per hectare. It relies on a valuation report of Chillagoe Station by Taylor Byrne dated 9 May 2016.
- [10]Auctus also increased its claim from $20 per hectare to $30 per hectare to account for the cost of trying to negotiate with Wilkins, and what it says is Wilkins’ behaviour during the negotiation process.
- [11]Taylor Byrne was instructed to assess the market value of Chillagoe Station for financial reporting purposes on 9 May 2016. The valuer’s interpretation of that task - whether “a willing buyer and a willing seller in an arm’s length transaction, after proper marketing, where the parties acted knowledgeably, prudently and without compulsion”[5] - conforms to the Spencer test.[6]
- [12]Taylor Byrne valued the ‘useable area’ of Chillagoe Station at $35 per hectare and the overall per hectare value of the station at $14.40.
- [13]Compensation at the rate of $20 or $30 per hectare is only valid if the leases are in a ‘useable area’. Otherwise, a rate of $14.40 is appropriate.
- [14]Taylor Byrne assessed the useable area as being about 90,000 hectares. That figure coincides with its assessment that there are about 90,000 hectares of fair quality undulating ironbark forest in the western and south western section of the property which provides soft grazing.[7] The logical conclusion is that, if the mining leases are in the ironbark forest in the west or southwest section of Chillagoe Station, then they are on useable land.
- [15]The task of deciding whether the mining leases are on useable land would have been much easier if the parties had provided legible copies of the plans they referred to and if those plans clearly showed the location of the mining leases within Chillagoe Station. There are, however, some telling clues which suggest the mining leases are not located in a useable area:
- Wilkins provided photos of the leases and surrounding area.[8]Those photos show some trees in the area but I would not describe the area as a forest. Rather, I would describe it as open scrub. Taylor Byrne included a series of photos in its report.[9] They are under the heading ‘rough forest hills of generally limited use’[10] but, I suspect they show something different, as the photos range from forest to open country. The Taylor Byrne photos are not helpful. I am prepared to accept the Wilkins’ photos as evidence of the condition of the country around the leases.
- Wilkins assert that the leases are close to the Chillagoe Township.[11] The Environmental Authority issued in 2011 notes that ML 4959 is located near the Chillagoe Smelters Heritage Site.[12] The map attached to the environmental authority for ML 4959 shows that it is located in an area close to small, freehold blocks. I accept that ML 4959 is located in the township.
- Taylor Byrne did not include the township in the useable area.[13]
- ML 4957 is adjacent to the Burke Development Road, which appears to be unfenced. It seems, but it is hard to tell, to be quite close to the township. Although I am not prepared to accept that ML 4957 is in the township, I am prepared to accept that it falls outside the useable area described by Taylor Byrne because of its proximity to the township and the condition of the country shown in the Wilkins’ photos.
- [16]I consider that the mining leases sit on land that is not useable. Using the Taylor Byrne analysis, that land has a value of $14.40 per hectare.
- [17]Auctus says that, at the time of the valuation report, recent sales in the area placed the average value per hectare at $47. It says that, over the last 18 months, there has been an increase in net property values and, if it obtained a revised valuation today, there would be a significant increase in the value per hectare. Without evidence to substantiate the claim that values have increased since the date of that report, I am not minded to increase the figure from $14.40.
- [18]Both parties have referred to comparative cases in the Land Court. Wilkins has referred to the numerous cases where the Land Court has ordered compensation at $10 per hectare. Most of these decisions are from the Mareeba mining district, focussing on the Palmer River goldfields. They all refer back to a 2009 decision of Fitzgerald & Anor v Struber[14] where the Court was required to make a decision in the absence of any supporting evidence. In this case, there is evidence from which I can draw a conclusion, so the reference to the Palmer River goldfields decisions as a benchmark is unhelpful.
- [19]Auctus referred to two decisions. The first is Shimrad Pty Ltd and Anor v Collins & Ors[15]. The Court was faced with a “general inadequacy of evidence on both sides”[16] but there was some evidence that the land the subject of the mining lease could be used for grazing. The Court also had regard to another compensation agreement on similar land which adjoined the subject land. The evidence before me is not so persuasive. I do not have a similar compensation agreement and I have no real evidence of an alternative use for these areas of land.
- [20]The second case Auctus referred to is Reddicliffe v Dixon & Anor.[17] In that case, the Court relied upon a previous decision about land in the same area which had been the subject of a contested hearing with expert evidence.[18] Auctus has not explained why I should accept Reddicliffe as persuasive authority for applying the same rate of compensation in this case, when the facts are different, the mining leases are in a different area and there is no decision from a contested hearing that is relevant to the particular circumstances.
- [21]The rate of $14.40 per hectare is outside Wilkins’ range of $7 to $10 per hectare and less than the $30 per hectare Auctus wants. It is, however, a figure than can be supported by the evidence.
- [22]Auctus is entitled to an additional amount to reflect the compulsory nature of the grant of the lease. It must be not less than 10% of the aggregate amount I have determined.[19] No one has suggested that 10% is not a fair figure and, in light of the small amounts involved, it is my determination that 10% is fair.
- [23]The calculation of compensation is as follows:
ML 4959
Area covered by the lease = 15.86 ha. Area rounded up to 16 ha @ $14.40/ha. | $230.40 |
Plus s 281(4)(e) uplift @ 10% | 23.04 |
Total per annum | $253.44 |
ML 4957
Area covered by the lease = 2.99 ha. Area rounded up to 3 ha @ $14.40/ha. | $43.20 |
Plus s 281(4)(e) uplift @ 10% | 4.32 |
Total per annum | $47.52 |
Orders
- For ML 4959 compensation is determined in the sum of $253.44 per annum.
- For ML 4957 compensation is determined in the sum of $47.52 per annum.
- The compensation will be paid by the applicants to the respondent in each case within one month of the renewal of the mining lease and in each subsequent year of the term of the lease on the anniversary of the date of the renewal.
PG STILGOE
MEMBER OF THE LAND COURT OF QUEENSLAND
Footnotes
[1]Smith v Cameron (1986-87) 11 QLCR 64, 74-75.
[2]Richardson v Barrett [2001] QLRT 89, 9, 10, 4.
[3]Horn v Sunderland Corporation [1941] 2 KB 26, 43 per Jacobs J.
[4]Mineral Resources Act 1989 s 281(3)(a)(i).
[5] Respondent Submissions Taylor Byrne Valuation Report page 6 para 2.2.
[6]Spencer v Commonwealth (1907) 5 CLR 418.
[7] Respondent Submissions Taylor Byrne Valuation Report pages 18 and 21.
[8] Applicant Submissions.
[9] Respondent Submission Taylor Byrne Valuation Report page 19.
[10] Ibid.
[11] Applicant Submissions.
[12] Environmental Authority (Mining Lease) Non-Code Complaint Level 2, page 2, para PH2, PH3.
[13] Respondent Submissions Taylor Byrne Valuation Report page 21.
[14] [2009] QLC 76.
[15] [2017] QLC 17.
[16] Ibid, [67].
[17] [2017] QLC 49.
[18]ERO Georgetown Gold Operations Pty Ltd v Henry [2015] QLC 22.
[19]Mineral Resources Act 1989 s 281(4)(e).