Nicholls v Stephens[2018] QLC 32

LAND COURT OF QUEENSLAND

1. [1]
   This matter is a decision on referral by the Chief Executive of the Department of Natural Resources and Mines (DNRM) to the Land Court pursuant to s 279A of the Mineral Resources Act 1989 (MRA) for the determination of compensation in respect of the renewal of mining lease 4157.

Background

2. [2]
   On 24 June 2016 the applicant miner, Dean George Nicholls, applied to renew ML 4157.

3. [3]
   The application sought a renewal of ML 4157 for a term of 5 years set to expire on 30 June 2021.

4. [4]
   The subject ML 4157 is located in part on property owned by the respondents, Manfred Henery Stephens and Maxwell George Hazel, which property is described as Lot 1 on CP 900986.

5. [5]
   The total area of the mining lease is 5.666 hectares, of which, 3.391 hectares is located on the Stephens/Hazel property.

6. [6]
   The mining lease area located on Lot 1 on CP 900986 is an obliquely truncated rectangle running from the north-west to the south-east. Included on the file for this matter is a decision in the matter of Nicholls v Hazel & Anor^[1] which is a decision of the then mining registrar, Mr Windridge, in respect of the lease ML 4157 in which case Mr Windridge observed:

“In the absence of detailed submissions and valuation evidence by the parties I adopt the analysis of the legislative provisions, compensation principles and methodology as applied in Lowe & Anor v Struber & Anor [2005] QLRT 33.”^[2]

7. [7]
   The mining registrar went on to observe:

“In summary, there was no evidence called to support any claim under any other head of compensation, nor was any matter raised which would necessitate consideration under paragraphs (a), (c), (d), or (e) of subsection 4 of section 281 of the Act.”^[3]

8. [8]
   Accordingly, the mining registrar in January 2007 in respect of a renewal of the lease for a period of 15 years ordered that the total compensation be one dollar for the term of the renewal.

Relevant legislation

9. [9]
   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.

10. [10]
    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.

11. [11]
    Section 281 of the MRA sets out those matters which must be considered by this Court when determining the compensation.

12. [12]
    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…

13. [13]
    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).

14. [14]
    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.^[4]

15. [15]
    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 reflecting 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.

16. [16]
    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 may be entitled.

The conduct of these proceedings 

17. [17]
    This Court gave notice to the parties that a directions hearing was proposed to be heard by her Honour, Member PG Stilgoe.

18. [18]
    Eventually, on 7 November 2017, a preliminary conference was conducted at the Mareeba Courthouse by her Honour.

19. [19]
    At that time no material had been filed by either party setting out their approach or their preferred options for the determination of compensation.

20. [20]
    Accordingly, Member Stilgoe made orders for the filing of material.

21. [21]
    Despite the Registry of this Court being notified on 24 May 2018 by Mr Hazel that the parties had reached an agreement with respect to compensation, no information about that matter has been notwithstanding that on 3 July 2018 the parties or their representatives were notified by email in the following terms:

“His Honour has noted that there is no material on the file to provide guidance as to what each party regards as appropriate compensation. It is important that His Honour should be given details of what agreement has been reached between the parties. Unless such details are received by the Registry before 4:00pm on 18 July 2018, His Honour will proceed to determine the matter on the papers, having regard only to compensation which has been awarded in other cases.”

22. [22]
    No response was received to that communication.

23. [23]
    The Court is left in the position of having to provide a decision about compensation based upon no evidence whatsoever provided by either party.

24. [24]
    No detail has been provided of the activity carried on on the Stephens and Hazel property but I surmise that it is a grazing property.

25. [25]
    The mining lease area affecting the property, as indicated above, is 3.391 hectares.

26. [26]
    As unsatisfactory as it may be, and in lieu of simply declining to determine any compensation whatsoever, the Court, on previous occasions has resorted to other decisions from throughout Queensland as offering guidance as to the figure that should be settled upon.

27. [27]
    In this case the mining district is in the Mareeba District, that is to say that it is in far north Queensland.

28. [28]
    There have been recent decisions made in respect of land in the Charters Towers mining district in which the Court has settled upon a figure of $4 per ha per annum and $5 per ha per annum for access,^[5] and $8 per annum and $10 per annum respectively for mining lease areas.^[6]

29. [29]
    In the present case, I am inclined to determine compensation at the rate of $10 per ha per annum in respect of the mining lease area with those areas to be rounded up to the next full hectare for assessment purposes.

30. [30]
    In this case the determination in respect of ML 4157 is as follows:

1. Area covered by the mining lease – 3.5 ha (rounded from 3.391 ha) at $10 per ha = $35 per annum;
2. Section 281(4)(e) of the MRA component of $3.50 per annum making $38.50 per annum or $192.50 for the life of the lease.

31. [31]
    Due to the relatively modest amount of compensation ordered to be paid, and, in order to relieve the landowners of the burden and expense associated with annual claims for compensation, I direct that the totality of the compensation for the lease period of five years for ML 4157 be paid as a lump sum within 30 days of notification by the Department of the renewal of the mining lease. Accordingly, the miner is to pay to the landowners the total sum of $192.50.

Orders

32. [32]
    Therefore, the orders of the Court are:

1. In respect of the application for renewal of ML 4157, compensation is determined in the amount of Thirty-Eight Dollars and Fifty Cents ($38.50) per annum, which is One Hundred and Ninety-Two Dollars and Fifty Cents ($192.50) for the life of the lease.
2. Dean George Nicholls is to pay to Manfred Henery Stephens and Maxwell George Hazel compensation in the amount set out in Order 1, namely, One Hundred and Ninety-Two Dollars and Fifty Cents ($192.50), within thirty (30) days from the notification of the renewal of the mining lease by the Department of Natural Resources, Mines and Energy.

WL COCHRANE

MEMBER OF THE LAND COURT