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Theuerkauf v Usher Pastoral Company Pty Ltd[2023] QLC 23

Theuerkauf v Usher Pastoral Company Pty Ltd[2023] QLC 23

LAND COURT OF QUEENSLAND

CITATION:

Theuerkauf v Usher Pastoral Company Pty Ltd

[2023] QLC 23

PARTIES:

Ashleigh Theuerkauf

(applicant)

v

Usher Pastoral Company Pty Ltd

(respondent)

FILE NO:

MRA139-23

DIVISION

General

PROCEEDING:

Determination of compensation payable for renewal of mining lease and claim

DELIVERED ON:

8 December 2023

DELIVERED AT:

Brisbane

HEARD ON:

Submissions closed 10 November 2023

HEARD AT:

On the papers

MEMBER:

JR McNamara

ORDERS:

  1. 1.
    In respect of the application for renewal of ML60469 compensation is determined in the amount of One Hundred and Five Dollars and Twenty Cents ($105.20) per annum representing the diminution of the use made or which may be made of the land including 10% reflecting the compulsory nature of the mining lease; and
  1. 2.
    In respect of the application for renewal of MC300080 compensation is determined in the amount of Twenty Dollars and Twenty Cents ($20.20) per annum representing the diminution of the use made or which may be made of the land including 10% reflecting the compulsory nature of the mining claim.
  1. 3.
    The applicant must pay the amount set out in order 1 and the amount set out in order 2 to the respondent within one (1) month of the date of the grant of the renewal of ML60469 and/or MC300080 by the Department of Resources, and then annually on the date of the grant of the renewal, unless otherwise agreed with the respondent that compensation for the full terms of renewal be paid upon grant.

CATCHWORDS:

ENERGY AND RESOURCES – MINERALS – MINING FOR MINERALS – COMPENSATION – where the applicant had applied for the renewal of a mining lease and mining claim partially situated on the respondent’s land – where the mining lease and claim will be used for opal mining – whether and, if so, what compensation was payable under s 281 of the Mineral Resources Act 1989 (‘MRA’) – whether and, if so, what compensation was payable under s 85 of the MRA

Mineral Resources Act 1989 ss 85, 281

Hoffman v Blue Bay Tas Pty Ltd [2022] QLC 10

APPEARANCES:

Not applicable

  1. Background
  1. [1]
    A mining claim[1] or a mining lease[2] cannot be granted or renewed unless compensation between the miner and any affected landholder is agreed or determined by the Land Court.
  1. [2]
    In this case, the applicant for the renewal of both MC300080 (the MC) and ML60469 (the ML) is Mr Ashleigh Theuerkauf. The landholder is the Usher Pastoral Company Pty Ltd. Mr Theuerkauf applied to the Land Court to determine compensation because negotiations concerning compensation failed.
  1. [3]
    Orders were made for the filing and exchange of Compensation Statements. The filed material is comprised of those statements and the applicant’s reply statement, together with the Originating Application and the material filed in compliance with the Practice Direction. An oral hearing was not requested.
  1. [4]
    Although they fall under different sections of the MRA the criteria for determining the amount of compensation for the grant or renewal of a MC and an ML are in identical terms.[3] 
  1. [5]
    Both the MC and the ML are located on Mount Margaret Station (Lot 447 on SP196201), approximately 50 km west of Eromanga. Mount Margaret Station was acquired by the Usher Pastoral Company in 2017.
  1. The ML
  1. [6]
    ML60469 was first granted in 2012 and most recently expired on 31 December 2022. Mr Theuerkauf filed a renewal application on 20 June 2022.[4]
  1. [7]
    ML60469 is over an area of 23.89 hectares.[5] The purpose of the ML as stated in the public resource authority report is “stock pile ore/overburden”.[6] The applicant says ML60469 is to be mined for opal in the renewal term. The applicant says there is no infrastructure constructed on ML60469, “We have our infrastructure base on MC300081” (presumably another MC held by Mr Theuerkauf).[7]
  1. [8]
    Attached to the Originating Application is the Application for Renewal which includes a sketch of ML60469 marked “Proposed Work Program 2023-2032”. The sketch marks the areas to be worked, and a rehabilitation area. Also attached is a printout from the Public Register for Environmental Authority EPSL00954713 (the EA) which indicates that a standard EA was granted to the applicant for a number of MLs and exploration tenements, including ML60469, effective 30 July 2012.
  1. The MC
  1. [9]
    MC300080 was first granted in 1993 and most recently expired on 30 April 2023. MC300080 covers an area of 4.59 ha. Its purpose in the resource authority public report is not identified. It appears that part of the MC area is over a stock route. A compensation agreement has apparently been reached with the Quilpie Shire Council as landholder for the area of the stock route affected.
  1. [10]
    Sketches which were attached to the Originating Application indicate that the MC is adjacent to the larger EPM 26039 ‘Broken River Mining’ held jointly by Mr Theuerkauf and Ms Sue Cooper. Another sketch shows an oval area in the centre of the roughly square shaped MC marked “Rehabilitation” with the sections marked “Stockpile”. Another smaller oval shape below is marked “working” with arrows directed to the words “Future direction of workings”.
  1. The criteria
  1. [11]
    The assessment of compensation is not arbitrary, and it is not necessarily determined in the way that a commercial agreement might be.
  1. [12]
    A landholder is to be compensated for:
  • the deprivation of possession of land – (will the landowner be physically deprived, will the deprivation be temporary or permanent?);
  • the diminution of the value of the owner’s land (the diminished value of the property: will the value of Mount Margaret Station be devalued?);
  • the diminished use of the land (will the applicant’s activities diminish the landholders enterprise by occupying and using the land?);
  • any severance of the land from other parts;
  • any surface rights of access; and
  • all loss or expense that arises.
  1. [13]
    A landholder is also 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.[8]
  1. The applicant’s contentions
  1. [14]
    The applicant says that both the MC and ML are located in “Bush Paddock” on Mount Margaret Station; that Bush Paddock is classed as an arid region with average rainfall of less than 250mm per year and average summer temperatures of 38°C.  The applicant says that opal mining primarily occurs in higher elevations of Bush Paddock; that livestock rarely frequent the area because of the unsuitable vegetation and limited water.
  1. [15]
    Although the evidence is vague, it appears that the Bush Paddock is approximately 70,000 ha, and that Mount Margaret Station is in total approximately 470,000 ha.
  1. [16]
    The applicant is effectively saying that there is no deprivation of possession and no diminution of the value of the land. They say that because there have been mining claims and leases within Bush Paddock for over 50 years, the mining on the MC and ML will not result in a decline in business.
  1. [17]
    While the diminution of use they say is minimal, they propose compensation of $2 per hectare per year for the duration of the tenures (both the MC and ML), and their intention to continue to maintain Telephone Bore Road as ‘in kind’ compensation. They say that Telephone Bore Road is a vital access route through the Bush Paddock.
  1. [18]
    The applicant argues that $2 per hectare per year is appropriate because of the condition of the land, the minimal impact to livestock and land use, and on the basis of compensation agreed with the Quilpie Shire Council of $1 for the term of the MC.
  1. [19]
    In support of their submission the applicant includes maps and photographs of the Bush Paddock and the location of the MC and ML. The high country they describe as: mostly escarpment, gibber country with rugged rocky hard terrain; little vegetation; vegetation with little nutritional value – mainly bastard turpentine, turkey bush, and sparse areas of mulga and gidgee. On that basis, they assert that stocking rates and income derived from that area would be negligible.
  1. [20]
    The applicant distinguishes the area it mines from the lower channel country which would produce higher stocking rates and greater income.
  1. [21]
    The applicant does not make any submission regarding “loss or expense” that arises – such as management time.
  1. The respondent’s contentions
  1. [22]
    The respondent claims compensation should be $80 per hectare which they deem the current ‘market price’, based on a compensation agreement entered into with Worldmin Pty Ltd. The respondent claims that the impacts of mining and the use of access tracks on its land cause ongoing monitoring costs and time required for inspection.
  1. [23]
    The respondent filed its response statement together with attachments on 27 October 2023. Attached to the response statement is an attachment marked ‘1’: Land Managers Impact Statement by Mr Alun Hebbes (the Hebbes statement).
  1. [24]
    The Hebbes statement addresses the impact of “prior mining” as the basis for submitting there would be ongoing costs to monitor and inspect mines “to ensure appropriate maintenance procedure is being followed through within the mining lease parameters”. This sets up a claim for “loss or expense” – which is developed in paragraph 5 of the statement where it says:

“The lessees have noticeably failed to attend to these issues on their part which therefore increases the need to continuously monitoring [sic] which results in valuable time and energy being diverted from more profitable work on the lessor’s pastoral properties”.

  1. [25]
    The Hebbes statement was also filed in compensation application Daunis v Usher Pastoral Company Pty Ltd [9] (‘MRA199-23’) brought by another miner and currently before the court. The image labelled ‘2’ is the same photograph filed by the respondent in MRA199-23. There is nothing to indicate which mine is pictured nor its relevance to this application.  In reply, the applicant says the mine shown is MC300044 (not subject to this application) which has been actively mined since the 1970’s “and complies with all regulations and environmental codes”.
  1. [26]
    The Hebbes statement also says that because of the particular ecosystem in the area, “specialised rehabilitation is required to prevent erosion and restore nature positive growth”. It says that “access tracks require water diversion works and continuous maintenance”. I note earlier that the applicant offers to maintain Telephone Bore Road – it is unclear if this is the access track Mr Hebbes is referring to. However, its designation as a ‘road’ suggests that it is public land and not part of Mount Margaret Station. In reply, the applicant says that they have invested in machinery and resources to ensure the upkeep of access tracks.
  1. [27]
    The respondent also included in its response statement: 3. a letter from Worldmin Pty Ltd dated 10 November 2022; 4. an email from Worldmin Pty Ltd dated 30 August 2023 to the respondent explaining their compensation methodology; 5. a letter from the respondent to the applicant dated 20 September 2023; 6. satellite maps including boundaries of MC300080 and ML60469; 7. satellite imagery of leases held by Worldmin Pty Ltd and Mr Theuerkauf.
  1. [28]
    The 10 November 2022 correspondence from Worldmin Pty Ltd to the respondent says: “we have calculated the compensation fee at an average of current market prices in the Eromanga area at $80 per hectare”. In the 30 August 2023 correspondence Worldmin say that they have executed compensation agreements “with $80 per hectare as the compensation amount” for mining leases on similar property to Mount Margaret in size, “type of country etc and also in the Eromanga district”. They say the “$80 figure” was reached and agreed to “mainly on the basis of values achieved in property sales in the Eromanga area over the last 3 or 4 years.”[10]
  1. [29]
    So, there appear to be two bases of claim – that is a claim for “loss or expense” to monitor and management impacts on the land and the business of Mount Margaret, and a claim for deprivation of possession of the land, because what is being claimed is the market price which suggests total and permanent loss – that is, a s 85(5)(a) claim for the MC and s 281(3)(a)(i) claim for the ML.
  1. The Statutory Criteria
  1. Will there be deprivation of possession of the surface of the land? s 281(3)(a)(i) and s 85(5)(a)
  1. [30]
    Nowhere in the filed material is any detailed information provided regarding the activities the applicant intends to conduct on the MC and the ML, nor is there any information concerning the pastoral activities on Mount Margaret Station in the area of the MC and the ML. I am left to assume that the whole of the MC and ML area will be used for mining activity, and that the whole of the area will be unavailable for use by the respondent for the term of both the MC and the ML.
  1. [31]
    The $80 per hectare amount is presented as a “full and final” proposal, that is, it would incorporate compensation under any of the other criteria, including “loss or expense” such as management time. No additional compensation amount was put forward by the respondent.
  1. [32]
    What is not clear from the Worldmin correspondence is whether the $80 per hectare (which was an amount agreed between the parties, not an amount assessed by the court) is a ‘one off’ payment, or an annual payment. If the basis for the compensation is the deprivation of possession of the surface of the land, because the value is determined on an expected sale price, then it is likely that the amount is a one-off payment. If it is in fact an annual payment, it is unclear why compensation at the market price would be made year after year. The agreement itself might make this clear.
  1. [33]
    If a land valuation approach (or an approach based on sales data) is to be adopted, I have little detailed information to work with. The comparable sales are expressed in dollars per acre, rather than hectare, and there is insufficient evidence to explain why those sales would in fact be comparable to Mount Margaret Station. There are many components to be considered in determining comparability. Property valuation is an area of expertise. On the evidence presented, I do not consider compensation is payable for deprivation of possession of the surface of the land under s 281(3)(a)(i) and s 85(5)(a).
  1. Will there be diminution of the value of the land? s 281(3)(a)(ii) and s 85(5)(b)
  1. [34]
    The applicant is not responsible for impacts to the land caused by other miners. The applicant maintains that he complies with relevant legislation, codes (Land Access Code; Small Miners Code etc.) and practices and is subject to the requirements of the Mineral Resources Act 1989, the Environmental Protection Act 1994 and in respect of the ML the Environmental Authority. The applicant filed with its reply statement, 4 photos taken in 2016 of seed collection storage and planting of native Cassias on ML60469. Due to a lack of water and drought conditions, it was not successful, but there is demonstration of a history of attempted rehabilitation on the lease.
  1. [35]
    There is no evidence to support a claim that the value of Mount Margaret Station will be diminished as a result of the renewal of the MC and the ML, which have operated on the property since 1993 and 2012 respectively.
  1. Will there be diminution of the use made or which may be made of the land? s 281(3)(a)(iii) and s 85(5)(c)
  1. [36]
    In my view, the respondent will not be permanently deprived of the land the subject of the MC and the ML, and there is no evidence that the productivity of the land will be permanently diminished, apart from concerns with the quality of rehabilitation and their relevance to the applicant which are not adequately specified. For that reason, compensation should be assessed under s 85(5)(c) and s 281(3)(a)(iii) for diminution of use.
  1. [37]
    I have formed the view that the land the subject of the MC and the ML will not be available for use for the terms of the respective tenements. That said, the mining operations will have minimal impact on land availability for grazing, stocking rates, or land value.[11]
  1. [38]
    I do not consider compensation agreed between the applicant and the Quilpie Shire Council for the impact the relevant tenement might have on the stock route to be the basis for assessing compensation payable to the landholder of a pastoral enterprise. The impacts on the Councils interests are entirely different to those of the landholder.
  1. [39]
    It is a reasonable assumption that Mount Margaret Station is made up of land of varying quality and value to production. If I accept that at sale Mount Margaret Station might achieve $80 per hectare, in determining mining compensation I also take account of the fact that the land to be mined is, based on the applicant’s evidence, of a lower quality than the best Mount Margaret Station land.
  1. [40]
    Taking account of the poorer quality of the land in question and that the impacts being compensated are short term, that is for 10 years only, I assess loss on a ‘once only’ basis at 50% of the amount claimed by the respondent. For renewal of both the ML and the MC that amounts to $1,140 or $114 per annum. That is at $40 per hectare (total), not per annum.
  1. Are there any surface rights of access? s 281(3)(a)(v) and s 85(5)(e)
  1. [41]
    The map[12] shows that the access tracks to the lease and the claim overlap Mount Margaret Station. The originating application says that the compensation is only for tenure (the options for ‘tenure and access’, and ‘only for access’ is left unchecked). There is no material filed specifying the area of access, or the current state of the access track.
  1. [42]
    The applicant says that it has invested in machinery and resources to ensure the upkeep of the access tracks and roads.[13] The applicant’s material suggests that access is largely via the stock route and the agreement with the Quilpie Shire Council addresses that issue.  If that is not correct, I find that the compensation determined in this application is also compensation in respect of access to the MC and the ML.
  1. Is there any other loss or expense that arises? s 281(3)(a)(vi)
  1. [43]
    I have said in other mining compensation decisions that the very existence of a mining interest and mining activities warrant observation and checking with the landowner from time to time.[14] The respondent claims that there are continuous monitoring costs due to a lack of maintenance by miners. The respondent does not, however, make a specific claim for compensation. I have taken account of compensation under this criteria which is included in the global award I have determined pursuant to s 281(3)(a)(iii) and s 85(5)(c).
  1. Additional amount to reflect the compulsory nature of the payment: s 281(4)(e)
  1. [44]
    10% is added to reflect the compulsory nature of the payment.
  1. Conclusion
  1. [45]
    I have assessed total compensation for the renewal of both the ML and the MC for the full term of the renewal of both to be $1,254 ($1,140 plus 10%). To ensure that compensation is properly determined by the court for each tenement, I must apportion that compensation liability. I would, however, urge the applicant to pay full compensation, that is $1,254 at the time of grant, unless the respondent requests otherwise.
  1. [46]

Head of compensation

Amount ($) per annum

Diminution of the use made or which may be made of the land of the owner or any improvements thereon, together with the additional 10% (then rounded)

  ML: s 281(3)(a)(iii) and s 281(4)(e)

$105.20

  MC: s 85(5)(c) ands 85(6)(e)

$20.20

  1. Orders
  1. 1.
    In respect of the application for renewal of ML60469 compensation is determined in the amount of One Hundred and Five Dollars and Twenty Cents ($105.20) per annum representing the diminution of the use made or which may be made of the land including 10% reflecting the compulsory nature of the mining lease; and
  1. 2.
    In respect of the application for renewal of MC300080 compensation is determined in the amount of Twenty Dollars and Twenty Cents ($20.20) per annum representing the diminution of the use made or which may be made of the land including 10% reflecting the compulsory nature of the mining claim.
  1. 3.
    The applicant must pay the amount set out in order 1 and the amount set out in order 2 to the respondent within one (1) month of the date of the grant of the renewal of ML60469 and/or MC300080 by the Department of Resources, and then annually on the date of the grant of the renewal, unless otherwise agreed with the respondent that compensation for the full terms of renewal be paid upon grant.

Footnotes

[1] Mineral Resources Act 1989 (Qld) s 85 (‘MRA’).

[2]  MRA s 279.

[3]  MRA s 85(5) for Mining Claims, and MRA s 281 (3) for Mining Leases.

[4]  Application supporting documents, Application for Renewal dated 20 June 2022.

[5]  The public resource authority report says 23.89 ha. The past compensation agreement shows that ML60469 is 24.219 ha.

[6]  Public resource authority report, 4.

[7]  Applicant’s application for renewal filed 20 June 2022, 3.

[8]  MRA ss 85(6)(e), 281(4)(e).

[9]  (Land Court of Queensland, MRA199-23, commenced 9 August 2023).

[10]  Respondent’s response statement filed 27 October 2023, 6.

[11]  Applicant’s compensation statement filed 12 October 2023, 1.

[12]  Applicant’s compensation statement filed 12 October 2023, 2, Figure 2.

[13]  Applicant’s reply statement filed 9 November 2023, 2.

[14] Hoffman v Blue Bay Tas Pty Ltd [2022] QLC 10 [53].

Close

Editorial Notes

  • Published Case Name:

    Theuerkauf v Usher Pastoral Company Pty Ltd

  • Shortened Case Name:

    Theuerkauf v Usher Pastoral Company Pty Ltd

  • MNC:

    [2023] QLC 23

  • Court:

    QLC

  • Judge(s):

    JR McNamara

  • Date:

    08 Dec 2023

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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