Aurum Vale Pty Ltd v Struber[2018] QLC 19

LAND COURT OF QUEENSLAND

1. [1]
   This case concerns a referral to the Land Court by the Chief Executive, Department of Natural Resources and Mines (DNRM) pursuant to s 279A of the Mineral Resources Act 1989 (MRA) for the determination of compensation arising from the renewal of Mining Lease 5102 (ML 5102).

Background

2. [2]
   The applicant, Aurum Vale Pty Ltd (the miner) seeks the renewal of ML 5102 on land owned by the respondents Stephen Struber and Dianne Wilson-Struber (the landowners). The land known as Palmerville Station is more particularly described as Lot 14 on SP 250040 is situated within the Mareeba Shire local government area and is used for grazing purposes. The mining lease area comprises of 5.3ha and a 0.48ha access area.

3. [3]
   The landowners are currently serving a period of imprisonment^[1] and consequently their address for service is:

C/- PUBLIC TRUSTEE

PO BOX 656

CAIRNS QLD 4871

4. [4]
   The relevant Land Court reference and tenure details are set out below:

Relevant legislation

5. [5]
   Section 279(1) of the MRA requires that compensation be settled before the grant or renewal of a mining lease is set out below:

279 Compensation to be settled before grant or renewal of mining lease

3. (1)
   A mining lease shall not be granted or renewed unless—

1. (a)
   compensation has been determined (whether by agreement or by determination of the Land Court) between the applicant and each person who is the owner of land the surface of which is the subject of the application and of any surface access to the mining lease land; or

2. (b)
   there is no person (other than the applicant) who is the owner of any of the land referred to in paragraph (a);

and the conditions of the agreement or determination have been or are being complied with by the applicant.

…

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:

…

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…

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:

3. (4)
   In assessing the amount of compensation payable under subsection (3) –

…

5. (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]
   The assessment to be undertaken in accordance with s 281 was discussed in Wills v Minerva Coal Pty Ltd [No.2]^[2] 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.

The conduct of the proceedings and evidence

9. [9]
   The Court on 9 March 2018 made the following orders regarding the further conduct of this matter:

1. The parties are not required to comply with Practice Direction 1 of 2017.
2. Stephen Roy Struber and Dianne Rose Wilson-Struber must file and serve a response to the Compensation Agreement within 21 days from 12 March 2018.
3. Unless the parties otherwise request in writing, the case will be determined on the filed material, without an oral hearing.

10. [10]
    A copy of these orders were forwarded by the Court to the parties on 12 March 2018.

11. [11]
    On 19 January 2018 material was filed in the Land Court Registry on behalf of the miner which included submissions concerning the determination of landowner compensation in respect of ML 5102 and also included some background details which provided some additional context to the assessment process.

12. [12]
    A summary of the submissions made on behalf of the miner is detailed below:

1. (a)
   Total compensation offered at $10.00 per ha to be paid within 28 days of the renewal of the mining lease and then annually within 28 days of the anniversary of the renewal.

2. (b)
   Methodology is based on average recent compensation determinations of Land Court in similar cases between 2008 and 2017.

3. (c)
   An appropriate case to refer to regarding previous renewal of ML 5102 is Fisher v Struber & Anor [2008] QLC 102.

4. (d)
   The applicant proposes compensation comparable to the amount the Land Court has been awarding in recent years. A rate of $10.00 per ha per annum is supported by the following judgments:

1. (i)
   Fitzgerald & Ors v Struber & Anor [2009] QLC 76

2. (ii)
   Baldwin v Struber [2012] QLC 56

3. (iii)
   Eacham Abrasive Blasting Pty Ltd v Gundersen & Anor [2014] QLC 38

4. (iv)
   Goldhounds Exploration and Mining Pty Ltd v Struber & Anor [2016] QLC 65

5. (v)
   Pavey & Anor v Struber & Anor [2009] QLC.

5. (e)
   The proposed mining will consist of extracting gold bearing ore from underground workings and rock dumps.  The rock will be transported off site for processing.

6. (f)
   Since the date of grant mining activities have been as permitted under the MRA and as regulated under the relevant environmental regulation.

7. (g)
   The area of the mining lease is otherwise capable of being used for livestock grazing. 

8. (h)
   The applicant does not propose to fence the area and livestock will not be precluded from the surface area of the mining lease.

1. (i)
   The miner does not propose to restrict access by landholder to mining area, subject to relevant Mining, Health and Safety Regulations.

10. (j)
    The mining operation will not substantially reduce the availability of grass for livestock and areas where it is safe for livestock will not be fenced off.

10. (k)
    It is not likely that there will be any diminution of the value of the land for the current use. All disturbed areas shall be rehabilitated as required.

10. (l)
    The applicant proposes to remove the existing waste rock dumps and this will in effect improve the land and benefit the landholder.

10. (m)
    There will be no diminution of the current use which may be made of the land which is the subject of the mining lease. There are no improvements owned by the landowner on the mining lease area.

10. (n)
    There will be no severance caused by the renewal of the mining lease.

10. (o)
    It is not expected that there will be any loss or expense that will occur as a result of the renewal of the mining lease.

13. [13]
    No materials or submissions have been filed by or on behalf of the respondent landowners.

Determination

14. [14]
    In this case I have considered all materials referred by DNRM together with the written submissions on behalf of the miner and in my view, given the absence of any valuation or other expert evidence and the lack of any material at all from the landowners, that it is appropriate to rely on earlier Court determinations undertaken in respect of mining activities upon Palmerville Station.

15. [15]
    The judgments set out in the miner’s submission in my view support an assessment of compensation at $10.00 per ha per annum in respect of mining areas and $5.00 per ha per annum in respect of access areas. The assessment undertaken in Fitzgerald & Anor v Struber & Anor^[3] is quite useful as the case involved a full contested hearing with multiple applicants and the current landowners as respondents. Compensation was determined by Member Smith in respect of the mining lease area at an annual rate of $10.00 per ha per annum and the access area at $5.00 per ha per annum.

16. [16]
    In a later case referred to in the applicant’s submission, that of Eacham Abrasive Blasting Pty Ltd v Gundersen & Anor,^[4] Member Smith also allowed the sum of $10.00 per ha per annum for the area covered by the mining lease and $5.00 per ha per annum for access in respect of the renewal of a mining lease in the Mareeba District. Although the assessment in Fitzgerald is the most recent contested determination from within the Mareeba mining district I consider that the rates assessed still represent fair and reasonable compensation in respect of the grazing area of Palmerville Station. 

17. [17]
    On the basis of the aforementioned judicial determinations I consider the amounts of $10.00 per ha per annum for the area covered by the mining lease and $5.00 per ha per annum for access will be adopted in respect of compensation for ML 5102. The calculations are set out below with the relevant mining and access areas being rounded to the next full hectare.

ML 5102

18. [18]
    The final determination in respect of ML 5102 is set out below:

Area covered by mining lease – 6ha @ $10 per ha = $60.00 per annum

Area covered by access – 1ha @ $5 per ha = $ 5.00 per annum

Add s 281(4)(e) for compulsory nature of grant = $ 7.00 per annum

Total $72.00 per annum

19. [19]
    As the landholders are presently serving a period of imprisonment, the compensation will be ordered to be paid to the Public Trustee of Queensland.^[5]

Orders

20. [20]
    Therefore, the orders of the Court are:

1. In respect of ML 5102 compensation is determined in the total sum of $72.00 per annum.
2. The miner pay compensation to the Public Trustee of Queensland the amount set out in order 1 within one month from notification of the renewal of the mining lease by the Department of Natural Resources, Mines and Energy and thereafter on the anniversary of the renewal of the mining lease.

GJ SMITH

JUDICIAL REGISTRAR OF THE LAND COURT