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- Unreported Judgment
LAND COURT OF QUEENSLAND
Wallace v O’Shea & Ors; Wallace v O’Shea & Anor  QLC 6
Ian Earl Wallace
Lance Frank O’Shea
Bradley Thomas O’Shea
Emma Elizabeth O’Shea
Ian Earl Wallace
James William Malcolm O’Shea
Janelle Lynette O’Shea
Determination of compensation payable for grant of mining lease
26 February 2021
Submissions closed 29 January 2021
Heard on the papers
PG Stilgoe OAM
ENERGY AND RESOURCES – MINERALS – MINING FOR MINERALS – COMPENSATION – where the applicant owned a mining leases situated on the land of the respondents – whether and, if so, what compensation was payable under s 281 of the Mineral Resources Act 1989 – where the respondents had not engaged with the Court
Mineral Resources Act 1989 s 281
Kelly v Chelsea on the Park Pty Ltd  QLC 36, cited
Land & Anor v Grabbe & Anor  QLC 1, applied
Lonergan & Anor v Friese  QLAC 3, cited
- Ian Earl Wallace has in principle approval for a mining lease on land near Almaden, in far north Queensland (ML100188). The lease is for a period of five years. The mine and part of the access track lies in Lot 418 of OL47, covering 15.85 ha. The balance of the track lies in Lot 355 of OL428.
- Lot 355 is owned by James William Malcolm and Janelle Lynette O’Shea. Lot 418 is owned by Lance Frank O’Shea, Bradley Thomas O’Shea and Emma Elizabeth O’Shea. The two lots are collectively known as Spring Valley Station.
- Mr Wallace must pay the O’Sheas compensation before the mining leases are granted. The parties have not agreed on compensation so the Department of Natural Resources, Mines and Energy (DNRME), as it then was, referred the issue to the Court.
- The factors I must consider when determining compensation are those set out in s 281(3) of the Mineral Resources Act 1989 (MRA). Despite numerous invitations in the form of Court orders and notifications of review hearings, the O’Sheas have not engaged with the Court. Therefore, I am compelled to decide compensation with some information from Mr Wallace and none from the O’Sheas.
Deprivation of the surface of the land – s 281(3)(a)(i)
- Mr Wallace submits that there is no deprivation of the surface of the land as a result of the mining leases.
- That proposition is true of the access track, because it already exists to service another lease Mr Wallace holds. The additional traffic generated by the mining lease will not operate to deprive James William Malcolm and Janelle Lynette O’Shea of access to the surface of the land.
- As to the mine itself, Mr Wallace points to a number of factors to suggest that the O’Sheas will not suffer any deprivation of the surface of the land.
- Mr Wallace submits that the mining lease consists mainly of recycled tailings from previous mining operations. He intends to mine gold, garnet, ironstone, clay and quarry sand and gravel. The lease consists of hard rock outcrops and reusable grades of tin in the finer fractions of the sand and rock residue. Mr Wallace submits that the mining program may involve possible drilling or blasting of the hard rock outcrops. It will involve stockpiling and it may involve wet washing to remove the garnet from the ironstone. Mr Wallace says that there will be minimal infrastructure on the site. There may be a temporary machinery/staff shed and there may be crushing and wet wash facilities located on the site during the mining season.
- Mr Wallace points out that the mining program is seasonal, operating only during the drier months of the year. He also says that his mining program is part-time.
- Although the O’Sheas will not suffer permanent deprivation of the surface of the land, I am satisfied that they will suffer intermittent deprivation of parts of the surface of the land during the term of the lease.
- The difficulty for me, however, is that I have no basis for quantifying the impact of the proposed mining lease on the value of Spring Valley Station. I have no valuation evidence. I have no evidence about the condition of the country in this area and I have no evidence of its carrying capacity.
- If parties want the assistance of the Court, then they must engage with it. In the absence of any evidence on which I can assess this head of compensation, I decline to award any.
Diminution of the value of the land – s 281(3)(a)(ii)
- If I could assess the compensation payable for the deprivation of possession of the surface of the land, then that amount would also account for any diminution in the value of the land. Without any evidence, I cannot take this head of compensation any further.
All loss or expense that arises – s 281(3)(a)(vi)
- The Court generally accepts that the presence of a mining lease adds to the supervision and management obligations of the landowner and that this should be the subject of compensation. There has been a trend in recent cases for the parties to accept an hourly rate of $100 as the cost of that supervision. As always, the Court prefers that parties provide evidence of the cost, rather than accept a rate adopted in one case. The risk of the latter course, as we have seen, is that parties adopt a “going rate” which may have no relationship with the true cost of the item being claimed.
- Nonetheless, in this case, I have no choice.
- The extra supervision required as a consequence of this mining lease must be minimal. Mr Wallace already operates mining leases in the area so, if the O’Sheas are already monitoring those operations, it seems to me that an additional half an hour per month during the mining season (six months per year) would be sufficient. The appropriate compensation, therefore, is $100 per hour x ½ hour/month x 6 months = $300.
- As the proposed mining lease is only for five years, I consider it appropriate to capitalise that amount. I will not discount the capital amount for early payment as that will offset any increase that may occur during the term of the lease. Therefore, Mr Wallace should pay Lance Frank O’Shea, Bradley Thomas O’Shea and Emma Elizabeth O’Shea $1,500 plus $150 being the uplift required by s 281(4)(e) of the MRA.
- Mr Wallace says that the cost of maintaining the access track is already covered by an agreement with the O’Sheas. Mr Wallace did not provide me with a copy of the agreement, but I have no reason to doubt his word. Therefore, I do not propose to award any further compensation for loss and expense.
- no compensation in respect of ML 100188; and
- compensation in respect of ML 5131 in the sum of One Thousand, Six Hundred and Fifty Dollars ($1,650) including an uplift pursuant to s 281(4)(e) in the sum of One Hundred and Fifty Dollars ($150).
- Published Case Name:
Wallace v O'Shea & Ors; Wallace v O'Shea & Anor
- Shortened Case Name:
Wallace v O'Shea
 QLC 6
PG Stilgoe OAM
26 Feb 2021