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- Unreported Judgment
Krco v Benney & Anor QLC 9
LAND COURT OF QUEENSLAND
Krco v Benney & Anor  QLC 9
Determination of compensation payable for grant of mining claim
30 January 2019 [ex tempore]
30 January 2019
PG Stilgoe OAM
The Court declares that the agreement filed with the Department of Natural Resources, Mines and Energy is valid.
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – OFFER – REVOCATION – where the applicant sent a signed agreement by registered post to the respondents – where the applicant then sent an amended agreement by registered post to the respondents – where the respondents signed the original agreement without knowledge of the amended agreement – where the respondents did not regularly check their post box due to its distance from their home – whether the original agreement signed by both parties was valid – whether the amended agreement operated as a revocation of the original agreement
ENERGY AND RESOURCES – MINING FOR MINERALS – COMPENSATION – where an agreement was lodged with the mining warden – where a party to that agreement disputed the lodged agreement – whether the agreement lodged with the mining warden was valid
D Krco (agent), for the applicant
S Benney and P Benney, the respondents (self-represented)
- Jovan Krco has been granted a mining claim over land held by Shane and Patricia Benney. As they are required to do, the parties started to negotiate the amount of compensation that Mr Krco would pay to the Benneys. They could not agree. So on 30 April 2018, the Department of Natural Resources, Mines and Energy (‘DNRME’) referred the dispute to the Land Court. The Land Court listed the dispute for review on 27 July 2018. On 23 July 2018, DNRME notified the Court that it had received and accepted a signed compensation agreement. The Court, therefore, closed its file.
- Mr Krco asked for the file to be reopened on the basis the compensation agreement lodged with DNRME is invalid. He gave three reasons why the agreement was invalid: the first was that the Benneys accepted an offer that had been withdrawn by a subsequent offer; the second is that the Benneys made a counter-offer that Mr Krco did not accept; and the third was that the last line of the agreement states that the miner must lodge the agreement. In this case, the Benneys lodged the agreement.
- I have to decide whether or not the agreement was invalid. The agreement that was lodged with DNRME is exhibit J to Mr Krco’s statutory declaration filed on 14 November 2018. He signed the agreement on 26 March 2018. The Benneys signed the agreement on 10 July 2018. To see if the agreement is valid, I must go back before 26 March 2018 and follow the course of negotiations.
- So the timeline is this: on 4 December 2017, Mr Krco sent a signed compensation agreement to the Benneys by registered post. Importantly, the compensation offered in that agreement is $125 per annum. On 27 February 2018, Mr Krco sent another signed compensation agreement to the Benneys by registered post. The compensation nominated in that agreement is $600 per annum.
- On 25 March 2018, the Benneys sent an email to Mr Krco agreeing to the amount of compensation but asking for some changes. They wanted the term of the lease limited to five years. They wanted the compensation agreement to be not transferrable and they wanted some terms about the conduct; batteries were to be included in the items to which cattle did not have access, and that there was no dogfood or animal by-products allowed on site.
- On 26 March 2018, the next day, Mr Krco sent a signed copy of the agreement to the Benneys by registered post. That is the agreement that is exhibit J. Mr Krco agreed to limit access to batteries, and to no dogfood or animal by-products being allowed on site. He did not agree to limit the term of the agreement, or to make the agreement non-transferrable. The amount of compensation in that agreement was $600 per annum.
- On 15 April 2018, Mr Krco emails DNRME advising that the Benneys have accepted the amount of compensation but imposed further conditions that he does not agree to.
- On 17 May 2018, Mr Krco emails the Benneys to advise that there is a technical error in the agreement sent on 26 March 2018. He otherwise confirms that he wants to settle the question of compensation.
- On 29 June 2018, Mr Krco sent the Benneys an unsigned amended agreement by registered post. The compensation was reduced to $125 per annum, but the terms were otherwise unchanged.
- On 10July 2018, the Benneys sign the agreement sent on 26 March 2018.
- A person can revoke or withdraw an offer at any time before an offer is accepted. The revocation of the offer must be communicated if it is to be effective. Mr Krco says that the agreement he sent on 29 June 2018 overrides his offer of March 2018, and so that March 2018 offer was no longer capable of acceptance. He relies on the postal rule. That is a rule where there is a presumption that a contract is formed immediately a properly paid, prepaid and addressed letter is posted.
- Unfortunately, the postal rule does not apply to revocation of offers. It only applies to the acceptance of offers. So an acceptance of an offer will be effective on posting, even if before that time the person making the offer has sent a letter revoking the offer if the accepting party was unaware of the revocation.
- The Benneys say that they were not aware of the 29 June 2018 offer when they signed the March 2018 offer. If Mr Krco is to succeed in his argument that the agreement is invalid, I must be satisfied on the balance of probabilities that the Benneys did not receive the offer.
- As I have mentioned, Mr Krco sent all of the documents to the Benneys by registered post. The postal rule does not operate with registered post because the system ensures that there is no delivery unless a letter is signed for. Today, Mrs [Danica] Krco did provide a proof of delivery receipt, which is exhibit 1, but in this case this is not significant. It is not sufficient. The proof of delivery received is signed by a Mr Purvis. Mr Purvis operates the mail service to the Benneys. When Mr Purvis receives the mail from the post office, he hands it to a contractor who puts the mail in the Benneys’ post-box, which is 15km from their home. Proof of receipt by Mr Purvis, therefore, is not proof of receipt by the Benneys.
- There are other reasons why I am not satisfied that the Benneys received the offer of 29 June 2018. The first is that Mrs Krco sent a copy of that letter to DNRME by registered post on the same date. The Department’s letter, which is exhibit 2, does not include a copy of the unsigned offer. Ms Corkill, the Senior Mining Registrar in the Department, told the Court that the Department had no knowledge of that offer until she received a copy on 24 July 2018. Mr and Mrs Benney gave similar evidence. They say that they did not know about an unsigned agreement until late July 2018.
- Mrs Krco complains that Mr Benney did not tell them which agreement they lodged. They could not have lodged the 29 June 2018 agreement because Mr Krco had not signed it, and the Benneys had no reason to tell Mr Krco which agreement they had lodged, because in their mind there was only one agreement to be lodged, and that was the March 2018 agreement.
- Mrs Krco told the Court that she was careful to include everything in the 29 June 2018 letter. I have already noted that the copy of the letter that she sent to DNRME was not complete. I note too that the cases that she sent to this Court in support of the amount of compensation were also incomplete. One of the cases, which is four pages in length, only had two pages included in the document.
- Further, Mr Krco’s application for a mining claim was deficient. He did not complete section 3.1, which nominates the size or the area of the mining claim. He did not complete a work program template as required at section 7. All of these factors indicate a lack of attention to detail when the Krcos are dealing with paperwork.
- In the circumstances, I am not satisfied that Mr Krco has proved, on the balance of probabilities, that the Benneys received the agreement. Therefore, I am not satisfied that the 26 March 2018 offer was withdrawn. Therefore, the Benneys were entitled to accept that agreement as they did.
- Mrs Krco’s argument about the Benneys’ counter-offer being a reason for the invalidity of the agreement is not supported by the timeline I have just read out. The counter-offer was made by email on 25 March 2018, and the 26 March 2018 offer incorporated the changes that the Krcos were prepared to make. The Krcos confirmed the offer by email of 17 May 2018, when they also pointed out a technical error in the document. That technical error does not affect the validity of the agreement.
- Finally, Mr Krco submits that the agreement is invalid because the last paragraph requires the miner to lodge the agreement and, here, the landowner lodged the agreement. That may be a breach of the terms of the agreement, but it is not a breach that invalidates the agreement. As I have already mentioned, I have determined that the agreement is valid.
- This case highlights some of the problems inherent in the process of parties negotiating compensation.
- Firstly, negotiating the compensation agreement is not the time to negotiate conditions of access. It is too late. If the parties cannot agree, and it goes to the Land Court, the Land Court can only award a sum of money. The time for negotiating conditions of access is when the application for grant comes through. It is to the credit of the parties, however, that they have been able to negotiate terms of access.
- Secondly, the failure to accommodate the difficulty of receiving mail in the bush led to misunderstandings. Good communication is key to a civil relationship during the life of the mining claim, and parties should not rely on unreliable means of communication.
- Thirdly, I referred to the incomplete application for the mining claim. How can a landowner be expected to realistically assess the impact of a claim when there is no area nominated in the application, and no detailed work program nominated in the application for a mining claim?
- I mention those things simply by way of aside. My order will be that the Court declares that the agreement filed with the Department of Natural Resources, Mines and Energy is valid.
PG STILGOE OAM
MEMBER OF THE LAND COURT
- Published Case Name:
Krco v Benney & Anor
- Shortened Case Name:
Krco v Benney & Anor
 QLC 9
30 Jan 2019