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Land v Grabbe

[2021] QLC 1

LAND COURT OF QUEENSLAND

CITATION:

Land & Anor v Grabbe & Anor [2021] QLC 1

PARTIES:

David John Lisle Land

(applicant)

Susan Elizabeth Land

(applicant)

v

Anthony Grabbe

(respondent)

Lynette Grabbe

(respondent)

FILE NO:

MRA015-20

PROCEEDING:

Determination of compensation payable for renewal of mining claim

DELIVERED ON:

15 January 2021

DELIVERED AT:

Brisbane

HEARD ON:

22 October 2020

Submissions closed 16 December 2020

HEARD AT:

Cunnamulla

MEMBER:

PG Stilgoe OAM

ORDER:

I determine that David John Lisle Land and Susan Elizabeth Land must pay Anthony Grabbe and Lynette Grabbe compensation in respect of MC 300085 as follows:

  1. Six Hundred and Thirty-Eight dollars and Thirty-Six cents; plus
  2. One Thousand and Thirty-One dollars and Eighteen cents per year for the term of the renewal, indexed to CPI.

CATCHWORDS:

ENERGY AND RESOURCES – MINERALS – MINING FOR MINERALS – COMPENSATION – where the applicants own a mining claim on the respondents’ land – where the respondents use their land to operate a carbon abatement project under the Emissions Reduction Fund – whether and, if so, how much the applicants should compensate the respondents under s 85 of the Mineral Resources Act 1989 for deprivation of the surface of the land, diminution in the value of the land, time spent inspecting the claim, signage costs and the cost of preparing a valuation report

Land Court Act 2000 s 7

Mineral Resources Act 1989 s 85

Deimel v Phelps & Anor[2019] QLC 4

Kelly v Chelsea on the Park Pty Ltd [2020] QLC 36

Mitchell v Oakhill & Mitchell[1998] QLC 25

APPEARANCES:

N Land (agent), authorised holder representative for MC 300085, for the applicants

T Marland (solicitor), Marland Law, for the respondents

  1. [1]
    To the casual observer, the land around Cunnamulla is monochrome, dry and lifeless. To those who are prepared to spend time and effort getting to know the country, it is a rich, varied and multi-coloured landscape.
  1. [2]
    Anthony and Lynette Grabbe have owned Nooralaba, a 21,238.28 ha property 85 km north west of Cunnamulla since 2012. They love their land and they are working hard to rehabilitate it and make it productive after a prolonged drought.
  1. [3]
    David and Susan Land find the variety and colour of the landscape in the opal they want to extract from mining claim MC 300085.
  1. [4]
    The claim was first granted in 1999 and renewed in 2009. The Lands’ predecessor applied to renew the claim again in 2018. The Lands bought the claim in February 2020.
  1. [5]
    The 2018 application for renewal remains outstanding because the parties cannot agree on the compensation to be paid. I must decide compensation, having regard to the factors in s 85 of the Mineral Resources Act 1989.

A preliminary matter

  1. [6]
    The hearing ended on 22 October 2020. Mr Marland, for the Grabbes, wanted the opportunity to file written submission 14 days after receipt of the transcript and I ordered accordingly. The submissions were due on 25 November 2020. By consent, I granted an extension to 14 December 2020. The Lands filed their submission on time. Mr Marland sought a further extension to 16 December, which I granted, but he didn’t file his submissions until 17 December 2020.
  1. [7]
    Mr Land submits that I should ignore Mr Marland’s submissions filed on 17 December 2020. That is not the course I have taken.
  1. [8]
    It may seem to the Lands that they have been denied procedural fairness when a legal practitioner has been allowed to breach orders and obtain indulgences whereas they have always complied with relevant orders. Despite this apparent unfairness, I have considered Mr Marland’s submissions in writing this decision because, in fact, the Lands have not suffered any disadvantage from Mr Marland’s delay in filing submissions.
  1. [9]
    However, it is appropriate that I say something about a failure to comply with the Court’s orders. A breach of this nature would normally be dealt with by an order for costs. This is of little comfort to the Lands who were self-represented throughout this case.
  1. [10]
    Mr Marland often appears before this Court and, therefore, should be familiar with the Court’s expectations. Practitioners should manage their caseload to comply with the reasonable timetables set in consultation with the parties. Compliance with Court orders should not be optional nor subject to the demands of a busy practice. If an order for costs was an option, I would be inclined to order that Mr Marland, not the Grabbes, pay any costs consequent on the delay.

The claim

  1. [11]
    The Grabbes have claimed $102,560.00 compensation, calculated as follows:

Head of compensation

Calculation

Amount

Diminution of possession of the surface of the land: s 85(5)(a)

15.75 ha x $100/ha

$1,575.00

 

Access road - 4.3 km x 5 m = 2.15 ha x $100/ha x 1/3

71.60

Diminution of the value of the land: s 85(5)(b)

21,222,53 ha x $100 x 1%

21,225.35

Loss or expense that arises:

s 85(5)(f)

Management time

3 hrs x 26/year x $100/hr capitalised over 10 years at 2.2%

69,350.00

 

Speed monitoring signs

12 speed signs x $20/sign

8 pipe signs x $6/sign

Star pickets 18 x $6/picket

Landowner time and travel to install 5 hrs x $100/hr

1,008.00

 

Valuation report

6,932.70

Additional amount to reflect compulsory acquisition: s 85(6)(e)

 

9,325.00

Total

 

$102,560.00

Diminution of possession of the surface of the land: s 85(5)(a)

  1. [12]
    When the Grabbes bought Nooralaba it was in poor condition. They have upgraded the water infrastructure, fencing, holding yards and accommodation.[1] Because of the drought, there is no stock on Nooralaba but the Grabbes anticipate that it will be re-stocked “in the near future”.[2] Nooralaba is used for an Emissions Reduction Fund (ERF) project that provides the Grabbes with an income. They have been harvesting some feral goats, which has also provided them with an income.
  1. [13]
    They obtained a valuation report from Denis Cupitt.[3] He thought that the highest and best use of Nooralaba is as a beef cattle grazing property in conjunction with the ERF. Based on comparable sales, Mr Cupitt valued Nooralaba at $100/ha.
  1. [14]
    The Lands suggest that $100/ha is excessive. They say that the comparable sales don’t show the same land quality or carrying capacity. They say I should adopt an unimproved value for the land, giving a global value for the area of the claim and access at $450.
  1. [15]
    The highest comparable sale Mr Cupitt used was $114/ha for a property with a carrying capacity of 1 AE:40 ha. The three other comparable sales had a value of $75/ha, with similar carrying capacities. Mr Cupitt thought all properties were inferior because they didn’t have an ERF. All of the comparable sales were purchased to participate in an ERF.
  1. [16]
    Mr Cupitt assessed the carrying capacity of Nooralaba at 1 AE:28 ha. Given that the property has no stock at present, and the Grabbes state that it is destocked because of the ERF,[4] I think Mr Cupitt’s stocking rate is aspirational at best. I accept that the value of Nooralaba is in the ERF, not its carrying capacity.
  1. [17]
    As Nooralaba already has an ERF, which represents a considerable income stream to the Grabbes,[5] it is logical that the value of Nooralaba should be higher than similar properties without an ERF. The Grabbes’ ERF is a forest regeneration project and they have to maintain and grow vegetation which provides the carbon offset. There is almost no vegetation on the claim and certainly none on the access track. The plan attached to the ERF shows the Nooralaba NCAS (National Carbon Accounting System) area in bright green. The claim, by contrast, sits in an area coloured light brown, suggesting, as is the fact, that there is no vegetation cover on the site. For this reason, I consider a more appropriate value per hectare for the claim is $75, similar to the comparable sales with no ERF. However, for the purpose of determining compensation, I am prepared to accept the rate of $100/ha.
  1. [18]
    I note there is some discrepancy in the calculation of the area of the access track. As I have noted, the Grabbes claim 4.5 km x 5 m. The referral from the Department of Natural Resources, Mines and Energy (as it then was) records the access track as being 4.14 km x 4 m, a total of 1.66 ha. I prefer the Department’s assessment.
  1. [19]
    Mr Cupitt’s assessment also assumes that the current application for renewal results in a total loss of possession of the surface of the land.[6] Of course, that is not the true position. The application for renewal is for a period of 10 years only and, given the history of this mining claim, it is clear that its productive potential was lost well before the application was lodged. Given that this is the second application for renewal, and the claim has already existed for 20 years, I think it appropriate that the Lands’ liability for deprivation of the surface of the land should be one third of the value. In doing so, I note that the Grabbes were prepared to concede that the Lands should only pay for one third of the diminution in possession of the access track, presumably because the Grabbes also use the track. I suspect the Grabbes have conflated the cost of maintenance with the diminution in the possession. In any event, for the access track at least, the result is the same.
  1. [20]
    My calculation of the compensation payable for deprivation of the surface of the land is 15.75 + 1.66 = 17.41 ha. 17.41 ha x $100/ha/3 = $580.33. 

Diminution of the value of the land: s 85(5)(b)

  1. [21]
    Mr Cupitt relied on the statement of Trickett P in Mitchell v Oakhill & Mitchell[7] that “a property affected by a mining lease will suffer a diminution in value” to justify a 1% reduction in the value of the balance of Nooralaba. The difficulty with Mr Cupitt’s proposition is that when the Grabbes bought Nooralaba it was already subject to this mining claim (and others) and, therefore, the diminution in value was built into their purchase price.
  1. [22]
    Mr Cupitt reported of his conversations with real estate agents who advise that properties with small scale mines are more difficult to sell because purchasers are concerned with third party access to the land. Again, this factor must have exercised the Grabbes’ minds when they purchased the property.
  1. [23]
    Mr Cupitt also expressed the view that the Lands’ access will create problems with biosecurity and that a potential purchaser will see the need for additional management time because of the existence of the claim. Once again, that must have been a factor when the Grabbes purchased Nooralaba. Those factors are also covered by a separate head of compensation.
  1. [24]
    Any diminution in the value of the land because of the presence of a mining claim must have existed when the Grabbes bought Nooralaba. To compensate them again would, in my view, be double dipping. When asked whether the Grabbes were double dipping, Mr Cupitt said that it was hard to assess whether that was so. When he was asked if the Grabbes were compensated elsewhere for any alleged diminution in the value of the property, Mr Cupitt said it as “hard to assess”.
  1. [25]
    There is no real evidence that the value of the balance of Nooralaba is diminished by the renewal application. I give no compensation for this head of loss or damage.

Management time: s 85(5)(f)

  1. [26]
    Mr Cupitt opined[8] that the Grabbes will inspect the mining claim area, access roads and gates every two weeks in addition to their inspection of the balance of Nooralaba. Mr Cupitt calculated each inspection would take three hours at $100/hour. When Mr Cupitt was asked how he valued Mr Grabbe’s time, he referred to the Court’s decision in Deimel v Phelps & Anor[9] but said that it was probably closer to $150/hour, taking into account all the costs.
  1. [27]
    Advisers to landowners should be cautious about adopting rates in other cases to justify a claim. Although the Court is not bound by the rules of evidence[10] it does require evidence to support a proposition. Deimel is a guide only. Another guide is Kelly v Chelsea on the Park Pty Ltd.[11] In that case, the landowner took the trouble to calculate the cost of management time.[12] The calculation in Kelly suggests that Mr Grabbe would be entitled to hypothetical wage of $150,000/p.a. That equates to an hourly rate of $78.12.
  1. [28]
    Mr Grabbe told the Court that he didn’t need to be on the property if the only activity was the ERF. Indeed, in the period from Christmas 2019 to the hearing on 22 October 2020, the Grabbes had visited Nooralaba only once or twice.
  1. [29]
    Mr Grabbe’s inspection regime when he is at Nooralaba is wide ranging and designed for him to know who is on the property. He told the Court that other miners left the gates open and they went where they wanted. So, Mr Grabbe checks the front gate. He checks for tracks and, if they are present, he follows them. He checks the boundary fence because he is “pedantic” about the fencing. He checks the water point just inside the paddock closest to the claim. He says that this inspection regime can take up to three hours.
  1. [30]
    The Lands’ mining claim is not the only claim on Nooralaba, so the presence of “strangers” on the property cannot be solely attributable to their claim. The gates are now locked, and the Lands have a key. It seems to me that Mr Grabbe’s inspection regime is informed by his general concern for Nooralaba and his poor experiences with previous miners, rather than the renewal of the claim.
  1. [31]
    Mr Land told the Court that he has been on the claim three to four days per week every week since February 2020, although he has not been working the claim. He has not seen Mr Grabbe on or near the claim at all during that time.
  1. [32]
    Based on the evidence as a whole, I cannot accept that a fortnightly inspection regime of three hours’ duration is justifiable. The evidence suggests that the increase in the inspection regime required under the current land use due to the application for renewal is, at best, modest. I assess the increase in inspection time at one hour per month. The Lands must pay the Grabbes $1,031.18, i.e. $78.12 x 12 + 10% uplift, annually and indexed to CPI.

Speed monitoring signs

  1. [33]
    The Grabbes have recently installed speed signs and warning signs at points where the water pipe traverses under the access track. I accept the cost of erecting those signs, subject to a reduction in the owners’ time from $100/hour to $78.12/hour.
  1. [34]
    However, I am not satisfied that the signs are the necessary consequence of the application for renewal. The access track has been in use since 1999 without the benefit of cautionary signs. There was no evidence before me that the Lands have abused the access track by travelling at an excessive speed, or that they have not been aware of the pipe crossing points. I understand that the Grabbes might want to upgrade certain infrastructure to address their fears, but those upgrades cannot be the subject of compensation unless there is a clear link between the application for renewal and the need for the infrastructure. I do not award compensation for this head of loss.

Valuation report

  1. [35]
    This matter was referred to the Court in January 2020. Mr Cupitt was engaged in April 2020. The report is a cost of litigation, not an expense incurred because of the application for renewal.

Conclusion

  1. [36]
    The Lands’ proposed mining claim is a very modest 16 ha in a property that is over 21,000 ha. Their impact on the land will be minimal, particularly as the claim is already denuded of vegetation and has a very large hole in it. For that reason, the compensation should also be modest. I assess it as follows:

Head of compensation

Amount

Diminution of possession of the surface of the land:
s 85(5)(a)

$580.33

Diminution of the value of the land: s 85(5)(b)

nil

Loss or expense that arises:

s 85(5)(f) – management time

(annually, indexed to CPI) $1,031.18 

Signage

nil

Valuation report

nil

Additional amount to reflect compulsory acquisition:
s 85(6)(e) – on s 85(5)(a) claim only

$58.03

 

$638.36

Order:

I determine that David John Lisle Land and Susan Elizabeth Land must pay Anthony Grabbe and Lynette Grabbe compensation in respect of MC 300085 as follows:

  1. Six Hundred and Thirty-Eight dollars and Thirty-Six cents; plus
  1. One Thousand and Thirty-One dollars and Eighteen cents per year for the term of the renewal, indexed to CPI.

Footnotes

[1]Ex 1, 55-56.

[2]Ibid 55.

[3]Ibid 71.

[4]Ibid 56.

[5]Carbon Abatement Contract provided confidentially to the Court on 18 November 2020.

[6]Ex 1, 87.

[7][1998] QLC 25, 10.

[8]Ex 1, 90.

[9][2019] QLC 4.

[10]Land Court Act 2000 s 7(a).

[11][2020] QLC 36.

[12]Ibid [55].

Close

Editorial Notes

  • Published Case Name:

    Land & Anor v Grabbe & Anor

  • Shortened Case Name:

    Land v Grabbe

  • MNC:

    [2021] QLC 1

  • Court:

    QLC

  • Judge(s):

    PG Stilgoe OAM

  • Date:

    15 Jan 2021

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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