Matrix Metals Limited v AJ McDonald
[2007] QLC 72
•10 October 2007
LAND COURT OF QUEENSLAND
CITATION: Matrix Metals Limited v AJ McDonald [2007] QLC 0072 PARTIES: Matrix Metals Limited
(applicant)v. Archibald James McDonald
(respondent)FILE NO: MLC00134/2007 PROCEEDING: Application for determination of compensation. DELIVERED ON: 10 October 2007 DELIVERED AT: Brisbane MEMBER: Mr RS Jones ORDERS: 1. Compensation is determined in the amount of $10,742.
2. Matrix Metals Limited is to pay to Archibald James McDonald the total compensation as determined in the amount of $10,742 within two months of notification of the renewal of the mining lease by the Mining Registrar.
CATCHWORDS: Renewal of mining lease – determination of compensation – Mineral Resources Act 1989 ss279 and 281. APPEARANCES: Not applicable – Heard on the Papers
Mr McDonald holds interests, predominantly by pastoral holding leases, over significant areas of land located south of Cloncurry. Matrix Metals Limited seeks the renewal of an existing mining lease (ML90082) which affects one of the land holdings of Mr McDonald namely Lot 427 on SW805054 – PH13/2427.
The total land holdings of Mr McDonald comprises 176,644 hectares and is used for grazing purposes. The mining lease area affecting Lot 427 is 272.5 hectares in area. The purpose of the mining lease is for the mining of various metals including gold, silver, copper and zinc. The term of the original mining lease which commenced on 1 June 1996 was for 10 years. The renewal application is for a term of a further 10 years.
Some Relevant Legislation
Section 279 of the Mineral Resources Act 1989 requires compensation for a mining lease to be settled before the grant or renewal of a lease. Compensation may be agreed upon by the parties or determined by the Court. In this instance, as no agreement has been reached between the parties, the matter of compensation has been referred to this Court for determination.
In the case of compensation being referred to the Court pursuant to s.279 of the Act, which is the case here, the owner of the land affected by the granting or renewal of the mining lease is relevantly entitled to compensation pursuant to s.281(3)(a) of the Act for:
"(i) deprivation of possession of the surface of land of the owner;
(ii)diminution of the value of the land of the owner or any improvements thereon;
(iii)diminution of the use made or which may be made of the land of the owner or any improvements thereon;
(iv)severance of any part of the land from other parts thereof or from other land of the owner;
(v)any surface rights of access;
(vi)all loss or expense that arises;
as a consequence of the grant or renewal of the mining lease."
The Conduct of the Hearing and the Evidence
On 19 July 2007 the Land and Resources Tribunal, as it then was, wrote to Matrix and Mr McDonald enclosing copies of Practice Directions 1 and 2 of that Tribunal. Relevantly that correspondence and the Practice Directions pointed out that the determination of compensation would be dealt with on the papers and without an oral hearing, unless either party made a written request for a hearing or, where it was considered that a hearing was otherwise necessary. In this matter neither party made a request for a hearing. Practice Direction 1 also provided for the filing of certain material by the parties in support of their respective positions concerning compensation. Neither party filed any material. As a consequence the only meaningful material before the Court is that to be found in the Mining Registrars Notice To The Tribunal dated 17 July 2007.
The only evidence before the Court which gives any insight to the value of the subject land is a computer extract, apparently from the records of the Department of Natural Resources dated 16 May 2006. This document reveals, among other things, that the total land holdings of Mr McDonald was assigned an unimproved value of $1,900,000 as at 1 October 2005. This date is not in my opinion too far removed from the date of renewal, 1 June 2006. This valuation reflects an average rate of about $10.75 per hectare.
Quantum
The application for the renewal of the lease involves no changes to the boundaries of the original lease and access to and from the mining lease area also remains unaltered.
On the very limited material before me it appears that the current use of the land by Mr McDonald is for relatively low intensity grazing. Also, having regard to the total area of land available to Mr McDonald, mining operations (including access) over an area of 272.5 hectares for a period of 10 years would not be likely to have any major detrimental affect on the overall grazing operations conducted on his property. There is no evidence that the renewal of the mining lease is likely to cause any significant severance of one part of the property from any other part.
Relying on the Department of Natural Resources extract referred to above I intend to adopt the rate of $10.75 per hectare as the starting point for the assessment of compensation. This results in a total figure of $29,294. However, I intend to discount this figure by two thirds to take into account the term of the lease and the fact it is likely that there would have already been some disruption to and diminution of the value of the affected land as a consequence of the grant of the original lease.
There is no evidence before me as to how the access arrangements affecting the subject property will affect the operation of that property. Accordingly, I will make no award for access.
Compensation is therefore assessed in the amount of $9,765 calculated as follows:
272.5 ha x $10.75/ha x 10 years = $9,765
3I will also award the amount of $977 under s.281(4)(e) of the Act to reflect the compulsory nature of the actions associated with the renewal of a mining lease. This results in a total award of compensation in the amount of $10,742.
I will also order that Matrix is to pay the total compensation as assessed above to Mr McDonald within a period of two months from the notification of renewal of the mining lease by the Mining Registrar.
I realise that the amount determined as compensation will likely exceed the full market value of the land affected by the lease, even allowing for the fact that the Department of Natural Resources assessment of unimproved value usually tends to be under market value. But, in my opinion, an amount less than $9,765 is unlikely to be sufficient to properly take into account the matters required to be considered under s.281(3)(a) of the Act.
I realise that the above assessment of compensation is little more than a calculated guess. However, in circumstances where the parties have elected to not put before the Court any evidence in support of their respective positions, such an approach is the best the Court can do.
Order:
1. Compensation is determined in the amount of $10,742.
2.Matrix Metals Limited is to pay to Archibald James McDonald the total compensation as determined in the amount of $10,742 within two months of notification of the renewal of the mining lease by the Mining Registrar.
R S JONES
MEMBER OF THE LAND COURT
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