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Woels v Hicks[2021] QLC 31

LAND COURT OF QUEENSLAND

CITATION:

Woels v Hicks [2021] QLC 31

PARTIES:

Maximillian Jason Woels

(applicant)

v

Cameron Jeffrey Hicks

(respondent)

FILE NO:

MRA033-21

DIVISION:

General Division

PROCEEDING:

Determination of compensation payable for renewal of mining lease

DELIVERED ON:

16 September 2021

DELIVERED AT:

Brisbane

HEARD ON:

Submissions closed on 20 August 2021

Matter allocated on 3 September 2021

HEARD AT:

Heard on the papers

MEMBER:

JR McNamara

ORDER:

I determine that Maximillian Jason Woels must pay Cameron Jeffrey Hicks compensation in respect of ML 2049 as follows:

  1. Two thousand dollars and zero cents ($2,000).
  2. The applicant must pay the amount set out in order 1 within 1 month of the grant of the renewal of ML 2049 and then annually on the anniversary of the grant of the renewal of ML 2049 by the Department of Resources.

CATCHWORDS:

ENERGY AND RESOURCES – MINERALS – MINING FOR MINERALS – COMPENSATION – where the Land Court has twice before determined compensation payable by the applicant to the respondent – where there is no determination of the diminution of the value of the land – where the Land Court ordered compensation payable for the diminution of the use made or which may be made of the land under s 281(3)(a)(iii) – where no compensation payable for surface rights of access under s 281(3)(a)(v) – where the Land Court awarded compensation for loss or expense and for an additional amount to reflect the compulsory nature of the action taken

Mineral Resources Act 1989 (Qld) s 281

Australian Asiatic Gems Pty Ltd v Grabbe & Anor [2021] QLC 25, cited

Corella Valley Corporation Pty Ltd v Campbell [2021] QLC 26, cited

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

Mitchell v Oakhill and Mitchell (1998) 19 QLCR 66; [1998] QLC 25, considered

Sawyer v Grabbe & Anor [2021] QLC 27, cited

Skilton v 2PL Superannuation Pty Ltd (No 2) [2020] QLC 8, applied

Woels v Hicks [2010] QLC 137, cited

Woels v Hicks [2015] QLC 34, cited

APPEARANCES:

Not applicable

Introduction

  1. [1]
    The applicant Mr Woels was ‘born and raised on the Gemfields’.[1] Keilambete Station (‘Keilambete), owned by the respondent Mr Hicks, is west of Rubyvale. Mr Woels has held ML 2049 which is on Keilambete since late 2007. He mines for sapphire. The mining lease first commenced in 1991. It has been renewed six times since then. Mr Woels has made an application to renew the mining lease again for a further term of 10 years.
  1. [2]
    Because compensation was not agreed between Mr Woels and Mr Hicks, the renewal of the mining lease could not be granted unless compensation was determined by the Land Court. An application was made to the Court for that purpose. Orders were made for a compensation statement and evidence to be provided by Mr Hicks, and a response to that material by Mr Woels. After discussing the matter further at a Review on 13 August 2021, Mr Woels was given a further opportunity to reply to Mr Hicks’ material, and it was agreed that the matter could be determined on the papers, that is, without an oral hearing.
  1. [3]
    The Land Court has twice before (2010 and 2015)[2] determined compensation payable by Mr Woels to Mr Hicks for renewal of this mining lease. On neither occasion were submissions made or evidence led by Mr Hicks to support any claim for compensation, nor any matter raised which would require consideration under s 281(4) of the Mineral Resources Act 1989 (Qld) (MRA). The material filed by Mr Hicks in this application provides some explanation in that regard.
  1. [4]
    In this application, there is a compensation statement filed by Mr Hicks, supported by evidence, which seeks to address the criteria I must consider in determining compensation. Mr Woels has filed a response to that material.
  1. [5]
    It is agreed that on 25 May 2019 Mr Woels made an offer to pay Mr Hicks compensation of $1,700 for a five year term or $3,400 for a term of 10 years – amounts consistent with the amount ordered by Judicial Registrar BR O'Connor in 2010.[3] 
  1. [6]
    As noted in the two previous decisions of the Court, s 281 of the MRA identifies the matters which must be considered by the Court when determining compensation.
  1. [7]
    The approach taken by Mr Hicks in his “Response to Compensation Statement” addresses the mattes I must consider and includes a range of attachments including a Smart Map, Resource Authority Public Report, Queensland Globe map, photographs and correspondence between the parties. Also included in the evidence is a “Statement of Valuation” and a “Livestock Appraisal”.
  1. [8]
    It was noted in the 2015 decision that, where there was no valuation or other expert evidence to be considered and no material submitted by the respondent, the Court considered it appropriate to have regard to the 2010 determination of the Court for guidance. That is clearly not the case now. Accordingly, I give little regard to those earlier decisions.

Information drawn from the filed material

  1. [9]
    The documentation referred to here is annexed to the material filed by Mr Hicks. The Resource Authority Public Report says that the area of ML 2049 is 14.18 ha. The Application to Renew includes a description of the work program and a map/sketch of the lease area and access road.
  1. [10]
    The work program, written by Mr Woels, says he is a small-scale miner and sole owner/operator of ML 2049. While not providing a timetable for the works proposed, the program says the lease will be worked towards untouched areas, turning over the land by utilising light machinery, “to follow the wash runs/evidence, dig, process and separate the wash (dirt)… that feeds into a pulsator that separates the heavier minerals… from the light (worthless) material.” It continues: “I always backfill and rehabilitate the land as I go to prevent minimal environmental impact and disturbance and have always maintained appropriate land use and land management”. Attached to the work program is a map, reproduced here:

Image 1 – Map of ML 2049

Woels v Hicks [2021] QLC 31

  1. [11]
    The map is at best indicative, and I accept unlikely to be to scale. It does however locate key ‘fixed’ areas of activity on ML 2049, that is for example the dam, pump, caravan, wash plant and more. The area marked “open cut” could mean the area being mined at the time of the application or the area proposed to be mined during the term of the renewal, if granted.
  1. [12]
    The map does not indicate where there is fencing. In his compensation statement filed 27 May 2021, Mr Woels says: “Cattle still have full access over my lease, other than dam area, which has to be fully fenced off. As per Cameron’s conditions of the original lease”. It may be that the area marked “DAM” illustrates the fenced area within which the dam sits.
  1. [13]
    Mr Hicks does not articulate a claim under s 281(3)(a)(i) of the MRA for deprivation of possession of the surface of the land. However, a claim is made for diminution of the value of the land under s 281(3)(a)(ii); for diminution of the use made or which may be made of the land under s 281(3)(a)(iii); for surface rights of access under s 281(3)(a)(v); loss or expense under s 281(3)(a)(vi); and for an additional amount to reflect the compulsory nature of the action taken pursuant to s 281(4)(e).

Diminution of the value of the land – s 281(3)(a)(ii)

  1. [14]
    Mr Hicks says that approximately 10 ha of the mining lease area is currently disturbed, “including areas that have been mined by the applicant and areas still needing to be rehabilitated by the applicant since taking ownership of the ML”.[4]
  1. [15]
    It is the value of those 10 ha within the area of the ML they say has been diminished.
  1. [16]
    Mr Woels contests the level of rehabilitation completed. He says most of the area mined has been rehabilitated “and I still have some to do”.
  1. [17]
    When considering compensation for the grant of a mining lease, or in this case the renewal of a mining lease, the compensation is for the impact, should the renewal be granted, not compensation for the impact of activities in the past.
  1. [18]
    Mr Hicks accepts that the surface area is not being permanently devalued “as the renewal is being sought for a fixed time-frame of 10 years and the applicant is to rehabilitate the surface area pursuant to its Environmental Authority”.[5] He submits that the diminished value of the 10 ha “should be 50% of the market value”.[6] The market value, based on a letter of advice from Registered Valuer John Moore, is $2,500/ha. Mr Moore had assessed loss of value on the basis that the entire area of the lease would be significantly disturbed and would not be suitable for grazing.
  1. [19]
    Mr Woels challenges the valuation based on the “Council valuation of the lease”[7] which is $1,184.04/ha. He says that the respondent has access to approximately 80% of the lease to graze, and the only area not available to access is the fenced dam area.
  1. [20]
    The mining lease is over 14.18 ha of Lot 19, an area of 3694 ha, which is part of Keilabete Station which has a total area of 19537 ha.
  1. [21]
    President Trickett in Mitchell v Oakhill and Mitchell[8] commented that a hypothetical purchaser will consider that a property affected by a mining lease will suffer a diminution in value. It is difficult to place a specific value on the diminution of the land. However, if there is to be a calculation of the diminution of the property, it should be calculated against the whole of the aggregation. If the basis for applying a nominal discount is to address issues created by the presence of the mining lease such as biosecurity, livestock disturbance, and additional management time, all those matters can be considered under s 281(3)(vi) of the MRA.
  1. [22]
    The comparative sales used by Mr Moore in determining the valuation are all, but for one, smaller in area than Lot 19 (alone) and considerably smaller in area than the aggregation. The basis for the assessment of diminution in value at 50% of Mr Moore’s valuation for 10 ha is not explained.
  1. [23]
    As noted by Member Stilgoe in Skilton v 2PL Superannuation Pty Ltd (No 2)[9] the Court does not look at each head of compensation under s 281 of the MRA, assign a value to each head of compensation, and then calculate the total compensation by adding each of those values if that exercise results in “double dipping”. The better way to address this aspect of the claim for compensation is by considering a claim for loss and expense.
  1. [24]
    In my view any diminution in value during the currency of the mining lease will be offset by the compensation I determine below.

Diminution of the use made, or which may be made, of the land – s 281(3)(a)(iii)

  1. [25]
    The applicant Mr Woels says in the Originating Application that, “Anecdotely [sic] it is common for stocking rates in the vicinity and for that land type to range from 1 adult ox/cow to 4-6 hectares”. Mr Hicks says, “The respondent grazes young cows, waiting to give birth to their first calf in the paddock where the ML is located as the paddock contains superior pasture quality… In the Respondent’s experience as a grazier, it is submitted that the average stocking rate of 1 unit of cow & calf (up to 6 months) is 5 hectares”.[10]
  1. [26]
    The respondent exhibited a livestock appraisal from Matthew Beard, Livestock Agent, to the response material.[11] Mr Beard says he is familiar with the respondent’s herd and provides an estimate of livestock value based on available market information as at 28 July 2021, noting regular market movement. Mr Beard concludes that the market value for a cow and calf unit to be between $3,000 and $3,500 plus GST. In the Response document, Mr Hicks accepts the current market value for one adult cow and calf to be up to $3,250 (excluding GST). Mr Hicks’ assessment of diminution of the loss of use of 10 hectares to be 2 weaners at $1,300 over 10 years to total $26,000.
  1. [27]
    Despite concerns expressed by Mr Hicks about the extent and quality of rehabilitation of the mining lease area he says that it “contains superior pasture quality”. Mr Woels says that only the dam area is fenced, such that grazing stock would have access to most of the mining lease area, apart from any area being actively mined and any area undergoing rehabilitation. The location and area so available is not clear. Mr Woels says it is 80%. As noted earlier, the map at [10] is not to scale. It is also unknown what, if any, impact mining activities have on the behaviour of cattle in this area.
  1. [28]
    I accept that there is not a total loss of access to the mining lease area for grazing purposes. The applicant says the loss might be 20%, a little less than 3 ha (that is, 80% remains available). The respondent says that the loss is the 10 ha “currently disturbed”. I note that Mr Woels accepts anecdotally stocking rates in the vicinity of the mining lease to be 1 AE to 4-6 ha. I assess loss at 5-6 ha. In terms of livestock value, I take a conservative view that the loss might be one weaner at $1,300 per year, payable annually.

Surface rights of access – s 281(3)(a)(v)

  1. [29]
    The respondent, Mr Hicks, says the access track used by Mr Woels is approximately 3 m wide and 150 m in length, which he says is a surface area of 0.045 ha. He applies a land valuation (as noted at [18] above) of $3,250/ha over 10 years to claim $1,462.50.
  1. [30]
    Mr Woels says the track is a little over 2 m wide and 100 m from gate to lease. He says it mainly consists of two tyre tracks through the grass and is used on average 2-3 times per week. He says that the previous mining lease holder established the track and installed the gate as he held leases on both sides of the gate.
  1. [31]
    There is no evidence to suggest that the track is fenced, or graded in a way which would reduce pasture, except in the tracks themselves. It is assumed that cattle are free to access the area. It is unclear what purpose the gate serves or if it benefits or is a burden to either Mr Woels or Mr Hicks.
  1. [32]
    In my view there is no loss of access to Mr Hicks over the area in use for access to the mining lease. No allowance should be made for the loss of land due to access.

Loss or expense – s 281(3)(a)(vi)

  1. [33]
    The respondent raises historic relationship issues as the basis for claiming that boundary inspections will be required “to prevent further breaches from occurring or identify when they do”.[12] While described as costs of inspections, the respondent claims 40 minutes per month at $120/hour for the 10 year term of the renewal, totalling $9,600. The basis, both time and amount per hour of the calculation is not explained. It is not clear if what is being claimed is in fact physical inspection time, or “administration costs” in relation to the agreement. It may be both.
  1. [34]
    There is no evidence which informs me that the mining activity will not be occurring year round. I appreciate that many small mining operations are seasonal. Although there is no evidence, I will round down the overall annual compensation to reflect the likelihood that mining activity will be for a period less than 12 months of the year.
  1. [35]
    Mr Woels says it is not a condition that the respondent do monthly patrols of the lease and boundary, it is his choice to do so.
  1. [36]
    I appreciate the concern of a landowner when it comes to other users of the land. It is not the landholder’s responsibility to monitor in order to “prevent further breaches” or to ensure compliance with conditions of a lease or environmental authority of another land user, but where there is a possibility of adverse impacts on the landowner’s enterprise it is understood that they have a strong interest in the overall management of the property.
  1. [37]
    I accept that physical inspection is one aspect of undertaking management responsibilities on a grazing enterprise, however, management time will also extend to administrative activities, including attending to any arrangements which form part of a mining compensation or land access agreement. I understand that neither may exist in this case, however, this decision does determine the compensation arrangements which will be imposed. I have in some recent decisions of the Land Court adopted a calculation for administrative costs of a grazier,[13] as determined by Member Stilgoe in Land & Anor v Grabbe & Anor,[14] at $78.12 per hour. In this case, the amount claimed is for 40 minutes/month. At the determined rate this amounts to $624.96.

Additional amount to reflect the compulsory nature of the action taken – s 281(4)(e)

  1. [38]
    Section 281(4)(e) of the MRA provides that there should be an additional amount determined to reflect the compulsory nature of the mining lease regime, which shall not be less than 10%. The respondent submits that a premium of 20% is more appropriate because of alleged threats and hostility from the applicant and the applicants’ failure to properly rehabilitate areas of the ML which they allege causes the disturbed area to exceed the Environmental Authority permissions.
  1. [39]
    Although not required by legislation, the negotiation or re-negotiation of compensation can be a platform to discuss and agree on conduct or relationship arrangements between landholder and miner. The Court cannot impose conduct conditions on a grant or renewal of a mining lease in a mining compensation application, and mining compensation is not a vehicle to penalise or sanction a party for grievances outside the criteria that must be considered in determining compensation.
  1. [40]
    Accordingly, I consider an additional amount of 10% appropriate in this case.

Conclusion

  1. [41]
    In respect of ML 2049:

Head of compensation

Calculation

Amount

Diminution of the use made, or which may be made, of the land

s 281(3)(a)(iii)

Loss at 5-6 ha of 1 weaner/year at $1,300/year

$1,300

Loss or expense

s 281(3)(a)(vi)

($52 x 12)

$624

Amount to reflect compulsory nature of the action taken

s 281(4)(e)

10% x $1,300

10% x $624

$130

$62

Annualised compensation (rounded down per [34])

$2000

Orders

I determine that Maximillian Jason Woels must pay Cameron Jeffrey Hicks compensation in respect of ML 2049 as follows:

  1. Two thousand dollars and zero cents.
  2. The applicant must pay the amount set out in order 1 within 1 month of the grant of the renewal of ML 2049 and then annually on the anniversary of the grant of the renewal of ML 2049 by the Department of Resources.

Footnotes

[1]Applicant’s Response filed 19 August 2021.

[2]Woels v Hicks [2010] QLC 137; Woels v Hicks [2015] QLC 34.

[3]Woels v Hicks [2010] QLC 137.

[4]Respondent’s Response to Compensation Statement filed 30 July 2021 [27].

[5]Ibid [31].

[6]Ibid [32].

[7]Applicant’s Response filed 19 August 2021.

[8](1998) 19 QLCR 66.

[9][2020] QLC 8 [15].

[10]Respondent’s Response to Compensation Statement filed 30 July 2021 [35].

[11]Respondent’s Response to Compensation Statement filed 30 July 2021, exhibit K.

[12]Respondent’s Response to Compensation Statement filed 30 July 2021 [45]-[47].

[13]Sawyer v Grabbe & Anor [2021] QLC 27; Corella Valley Corporation Pty Ltd v Campbell [2021] QLC 26; Australian Asiatic Gems Pty Ltd v Grabbe & Anor [2021] QLC 25.

[14][2021] QLC 1.

Close

Editorial Notes

  • Published Case Name:

    Woels v Hicks

  • Shortened Case Name:

    Woels v Hicks

  • MNC:

    [2021] QLC 31

  • Court:

    QLC

  • Judge(s):

    JR McNamara

  • Date:

    16 Sep 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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