Osborne v Bethel[2022] QLC 17

LAND COURT OF QUEENSLAND

1. [1]
   The towns of Georgetown and Forsayth are in the heart of the Etheridge Shire in north Queensland. Gold rushes began in this region around 1870 and transitioned through periods where it flourished and where it slumped due to market conditions or the attraction of other mining fields. Today the region’s pastoral and mining industry and history is an attraction for outback tourism.

2. [2]
   The Osborne family (applicant Rosslyn Osborne) first pegged what became Mining Lease 3589 (the ML) in 1989.  The ML was granted in 1991 and has been renewed a number of times.  Rosslyn Osborne has applied for a 10 year renewal.  The ML is located just north of Forsayth and about 30km south of Georgetown, on Jenkins Creek Station, a pastoral property owned by Kristy-Leigh and Willi Bethel (the Bethels).

3. [3]
   Before the renewal can be granted Rosslyn Osborne must agree compensation with the Bethels, or if not agreed, compensation must be determined by the Land Court on the basis of the statutory criteria in the Mineral Resources Act 1989 (MRA).^[1] Despite the exchange of compensation offers there was no agreement.  This gives the Land Court jurisdiction and for the reasons that follow I have determined compensation is payable by Rosslyn Osborne only for the diminished use the Bethels will have in the mining lease areas, and some associated administrative costs.^[2]

The Lease

4. [4]
   The area of the ML is 37.53 ha. It is accessed via a 4.2 km by 6 m (1.67 ha) track. The ML is centred on a creek bed, is 100 m wide and approximately 3.75 km long.

5. [5]
   Rosslyn Osborne’s compensation statement included a Renewal Justification Statement. I summarise that information as follows: Aerial imagery overlaid with the ML boundary shows the ML following a north-west south-east path, with an offshoot to the west which I presume is another creek bed or tributary. Marked on the imagery is areas already worked, the camp, and the storage facility for equipment and machinery. Approximately one third of the ground has been worked for eluvial and alluvial gold. Two thirds of the ML remain to be worked on a seasonal basis. The areas yet to be worked are in the west and south-west areas of the ML.

6. [6]
   Rehabilitation has occurred progressively:

“All rehabilitation was being done as the plant completed each section and testing the creek for the next selection was done via costeaning every 100mts and sampled to evaluate if the dirt was worth working.

When utilising wet gravity separation methods bung walls and filtrating walls are set in place to allow catchment of any sediments before the water is released downstream.”

7. [7]
   In their reply to the compensation statement, the Bethels say that in the 10 years they have owned Jenkins Creek Station: there has been no mining on the ML; that water containment areas for mining are “off lease and not rehabilitated”; and that, “the track is off the gazetted track”. Aerial imagery to demonstrate the variation was attached. They also say the plant and equipment is “sitting in a broken down state of repair on and off the lease”.

Jenkins Creek Station

8. [8]
   There is very little information about Jenkins Creek Station, its size, the scale of enterprise, or its development or use particularly in the area of the ML. The Bethels graze cattle and according to their reply to the compensation statement, the property is subject to a 30 year rolling term lease.

9. [9]
   Rolling term leases for agriculture, grazing or pastoral purposes were introduced in 2014. A 30 year rolling term lease can be extended for the period of the initial term of the lease, that is, a further 30 years. The application for renewal may be made at any time during the last 20 years of the term of the lease. There are no restrictions on the number of times a lease may be renewed in this way.

Issues

10. [10]
    I must decide compensation based only on statutory criteria. The criteria are directed at any or all loss a landholder might suffer if they are deprived of the land, if their land is devalued, if the use of the land is diminished, if their land is severed, and for any loss and expense suffered as a result of the mining lease.

11. [11]
    A “proposed compensation agreement template” was sent by Rosslyn Osborne to the Bethels in December 2021. After some ‘follow up’ a ‘counter-offer’ was received on 19 May 2022. A delayed response due to illness was provided on 17 August 2022, and an additional response from the Bethels was received on 18 August 2022.

12. [12]
    In her reply material filed in accordance with Court orders Rosslyn Osborne makes a response to the Bethels.

13. [13]
    The compensable items as framed by the Bethels are: compensation (s281(3)(a)(i) deprivation, and (iii) diminution); biosecurity management; security (grid and camera); fencing (conduct, impact on grazing); and rehabilitation.

What compensation is payable for deprivation and/or diminution?

14. [14]
    The initial offer of compensation from Rosslyn Osborne was a ‘flat’ $100 per annum, consistent with earlier agreements. The Bethels framed compensation on an annual per hectare value guided by recent land sales. They say that because no more than 10 ha can be mined at any one time they are deprived of the use of 10 ha for grazing cattle for the term of the lease. They acknowledge that they will receive the land back after mining but say “we have no use for it at all as it will be disturbed”. This statement is not further explained.

15. [15]
    There is no evidence to suggest that the land will be contaminated, or that it will be in a totally degraded state as a result of mining. Although there is apparently some fencing at the mine site, it does not appear that the landowner will be physically deprived of all of the surface of the land or that any deprivation will be permanent. In my view compensation is payable on the basis that there is a diminution of the use which may be made of the land, rather than the deprivation of possession of the land. The area diminished appears to be agreed to be, and at most, 10 ha.

16. [16]
    The Bethels calculate the value of Jenkins Creek Station at $800 per ha. This seems to be consistent with the recent property sales they identify, although I have no evidence that Jenkins Creek Station is in fact comparable to the sale properties identified. They claim however $267 per ha pa together with CPI. They provide a compensation formula, however I cannot reconcile their calculation. Rosslyn Osborne in her reply material filed 16 September 2022 says she is “willing to agree to the proposed compensation amount proposed by the landowner representing the diminution of the value of the land, this being $267/ha for 10 ha – total $2,670.00 per annum.” Given the willingness of Rosslyn Osborne to pay this sum, I will allow compensation for diminution of the use which may be made of the land at this amount.

Other compensable loss or expense that arises from the lease

17. [17]
    The Bethels claim compensation for biosecurity management; security (grid and camera); fencing (conduct, impact on grazing); and rehabilitation.

Biosecurity management

18. [18]
    The Bethels claim two, two person, four hour, weed inspections per year at a rate of $92.72 per hour together with CPI. The hourly rate they say is derived from rate in Kelly v Chelsea on the Park and Guernier v Chelsea on the Park.^[3]

19. [19]
    I have noted in other decisions^[4] that in Guernier the Court was presented with a joint report from agronomists who agreed that there were declared weeds on the mining lease that required control and management strategies by both the miner and the landholder. That control program included twice yearly inspections.

20. [20]
    There is no evidence presented in this matter for me to determine the necessity or reasonableness for similar inspections. In Guernier there was also evidence that Chelsea on the Park had biosecurity obligations which required biosecurity monitoring.

21. [21]
    There is no evidence of a biosecurity plan for Jenkins Creek Station which would require the actions proposed and the claimed costs.

22. [22]
    Despite this, in her response filed 16 September 2022 Rosslyn Osborne says she is willing to agree to one biosecurity inspection each year with co-payment from the landowner and miner. The miner’s contribution would be $230.18 pa.

23. [23]
    I observed in Summerville v Skelton that it is has been accepted that the very existence of a mining interest and mining activities warrant observation and checking from the landowner from time to time.^[5]  On that basis, and noting the willingness of Rosslyn Osborne to contribute, I would allow the amount of $230.18 per annum. 

Security – grid and camera

24. [24]
    The claim for the installation of a grid on the access road and the installation of a remote-controlled camera are said to be for the purpose of monitoring vehicle movements in and out of the area for control of biosecurity management. They also make a conduct claim as vehicles will be traversing the land “before they go into the mining lease so a vehicle wash down register must be kept.”

25. [25]
    In another recent matter^[6]  I explained that in Kelly^[7] the need for surveillance cameras was tied to the property owner’s biosecurity plan and the risk posed by the entry of any person/s onto the property. The Court found that the surveillance system would not be necessary but for the access track to Kelly’s mine. Kelly was the only user of the track and the Court found that Kelly should pay the installation cost once installed only if the property holder fenced the boundary to the adjacent national park.  There are no similar facts presented to me in this matter.

26. [26]
    The need for the installation of a grid is not explained. In her compensation offer of 17 August 2022 Rosslyn Osborne says she “is happy to discuss the erection of a grid on the access road”. That offer should be taken up – but it is not something which I will order.

27. [27]
    The need for the installation of a security system has not been adequately explained, nor have the costs been quantified. I do not therefore make any order for this claim.

Fencing and rehabilitation

28. [28]
    The issue concerning fencing is better characterised as a matter of conduct. The Bethels ask that all fences erected by the miners on the ML be removed. Matters of compliance and conduct are not compensable items. They are not outcomes that I can order.

29. [29]
    Similarly, matters which concerns compliance with the terms of the mining lease, the environmental authority, or other legal obligations are not matters the subject of a mining compensation application.

Additional amount to reflect the compulsory nature of the payment: s 281(4)(e)

30. [30]
    Pursuant to s 281(4)(e) of the Act, landholders are entitled to an additional amount to reflect the compulsory nature of action taken, which shall not be less than 10% of the aggregate amount determined under s 281(3).

Conclusion

31. [31]
    I am accepting the annual amount of compensation payable for the diminution of the use of the land based on the willingness of Rosslyn Osborne to agree to the rate per ha claimed. I would generally require better valuation evidence and evidence of impact. I make the same comment in respect of the amount awarded for biosecurity inspections. In my view the offer made by Rosslyn Osborne in her 16 September 2022 reply could have been accepted by the Bethels, and the matter settled without the need for a determination by this Court.

Orders

In respect of the application for renewal of ML 3589, compensation is determined as follows:

1. Two Thousand, Six Hundred and Ninety-Six Dollars and Seventy Cents ($2,696.70) per annum representing the diminution of the use made or which may be made of the land ($2,670 plus 10%);

2. Two Hundred and Fifty-Three Dollars and Twenty Cents ($253.20) per annum in biosecurity inspection costs, indexed annually to CPI ($230.18 plus 10%); and

3. The applicant must pay the amount set out in order 1 and 2 to the respondent within one (1) month of the date of the grant of the renewal of ML 3589 by the Department of Resources, and then annually on the date of the grant of the renewal of ML 3589 by the Department of Resources.