Matrix Metals Limited v The North Australian Pastoral Company Pty Ltd

[2007] QLC 75

LAND COURT OF QUEENSLAND

CITATION:

Matrix Metals Limited v The North Australian Pastoral Company Pty Ltd [2007] QLC 0075

PARTIES:

Matrix Metals Limited
(applicant)

v.

The North Australian Pastoral Company Pty Ltd
(respondent)

FILE NO:

MLC00136/2007

PROCEEDING:

Application for determination of compensation.

DELIVERED ON:

17 October 2007

DELIVERED AT:

Brisbane

MEMBER:

Mr RS Jones

ORDERS:

1.    Compensation is determined in the amount of $8,228.

2.    Matrix Metals Limited is to pay to The North Australian Pastoral Company Pty Ltd the total compensation as determined in the amount of $8,228 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 ss.279 and 281.

APPEARANCES:

Not applicable – Heard on the Papers

1. The North Australian Pastoral Company holds interests, predominantly by way of pastoral holding leases, over significant areas of land in the Mt Isa mining district.  Matrix Metals Limited seeks the renewal of an existing mining lease (ML90092) which affects one of the properties owned by The North Australian Pastoral Company described as Lot 59 on TG40, Parish of Tewinga.  The lease also affects a road reserve which is under the control of the Cloncurry Shire Council. 

2. The total land holdings of The North Australian Pastoral Company are extensive and used for grazing purposes.  The area of the mining lease affecting Lot 59 is identified in the Mining Registrars Notice To The Tribunal dated 17 July 2007 as 85.5 hectares.  The reason for the mining lease is described in the application for renewal in the following terms:

   "To allow the holder sufficient time to proceed with resource and mining studies and carry out mining in conjunction with the other mining leases held in the project."

   and to:

   "Carry out open pit mining of the copper ore and allow sufficient area (for) stockpiling and any infrastructure required for the mining process."

3. The original lease commenced on 1 June 1996 and expired on 31 May 2006.  The renewal application is for a term of a further 10 years. 

Some Relevant Legislation

1. Section 279 of the Mineral Resources Act 1989 (MRA) 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 determination of compensation has been referred to this Court. 

2. In cases where compensation is referred to the Court pursuant to s.279 of the MRA, as is the case here, the owner of the land affected by the granting or renewal of the mining lease is entitled to compensation pursuant to s.281(3)(a) 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 Proceedings and Evidence

1. On 20 July 2007 the Land and Resources Tribunal, as it then was, wrote to Matrix and The North Australian Pastoral Company and the Cloncurry Shire Council enclosing copies of Practice Directions 1 and 2 of that Tribunal.  That correspondence and the Practice Directions were to the effect 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 such a hearing or, where it was considered that a hearing was otherwise necessary.  In this matter no party made a request for a hearing.  Practice Direction 1 also provides for the filing of material by the parties in support of their respective positions concerning compensation.  In this case the only material of any significance forwarded to the Land and Resources Tribunal was the correspondence from The North Australian Pastoral Company dated 11 September 2007.  That correspondence attached what appears to be extracts from a valuation prepared by the valuation firm Taylor Byrne.  The author of the extract is Mr RG Brown a registered real estate valuer.  In the circumstances, the only material of any assistance concerning this application is the valuation extract referred to and the other information contained in the Mining Registrar's Notice To The Tribunal. 

Quantum

1. The application states that the renewal involves no changes to the boundaries of the original lease and access to and from the mining lease area also remains unaltered. 

2. On the very limited evidence before me it seems that the current use of the land is for relatively low intensity grazing.  Also, having regard to the total area of the land available for grazing purposes it is unlikely that the mining operations (including access) over the mining lease area for a period of 10 years would have a major detrimental affect on the overall grazing operations conducted by the owner.

3. The Taylor Byrne valuation assesses compensation for ML90092 in a total lump sum of $9,400.  This approach is consistent with the correspondence by The North Australian Pastoral Company dated 11 September 2007 which seeks payment of compensation in one lump sum rather than by annual instalments over the term of the lease.  The valuation assesses compensation under four headings namely compensation for the land directly affected by the mining operations, injurious affection and/or severance to balance lands (in this case limited to injurious affection and/or severance associated with access), other personal costs incurred by the owner and, lastly, a claim for what is described as a "statutory premium".

4. In the absence of any valuation evidence to the contrary it would seem inevitable that the assessment of Mr Brown ought be accepted.  However, in this case the valuation identifies the area of the mining lease as 91.6 hectares.  I am unable to reconcile this area with the lease area of 85.5 hectares as identified in the public mining lease report and the renewal application itself.  In the absence of any explanation reconciling this difference I propose to adopt the lease area as identified in the application and public report but otherwise adopt the methodology used by Mr Brown.  Accordingly, compensation is assessed in the amount of $7,480 for land and access made up as follows:

   Land  85.5 ha x $80/ha = $6,840
   Injurious Affection/Severance  $640
   Sub Total  $7,480

   I will also order the amount of $748 under s.281(4)(e) of the MRA to reflect the compulsory nature of the actions associated with the renewal of a mining lease which results in a total determination of compensation in the amount of $8,228.

5. I also order that Matrix is to pay the total compensation as assessed above to The North Australian Pastoral Company within a period of two months from the notification of renewal of the mining lease by the Mining Registrar.

6. The valuation material referred to above in paragraph 6 also included a claim under the heading "Other Costs" for two hours of owners time and a "contribution" towards the owners legal and professional fees.  This claim totals $550. 

7. In Sullivan v Oil Company of Australia Ltd(No. 2)[1] the Court of Appeal held that legal fees paid by the owner in preparation of a claim for compensation were not compensable under the Petroleum Act 1923 because such fees could not be properly characterised as damages consequential upon the occupation of land under the relevant mining authorities issued under that Act.  In this matter I feel bound by the reasoning of the Court of Appeal in Sullivan to reject the "Other Costs" claim.

   [1] (2004) 2 QdR 105 at paras [36] – [37].

8. In my opinion the claim could only succeed if its elements reasonably fell within the description "loss or expense that arises as a consequence of the … renewal of the mining lease".[2]  In Sullivan the Court of Appeal considered that valuation and legal fees incurred in the preparation of a claim for compensation should not be treated any differently from costs in any other form of litigation.[3] The wording of s.281(3)(a)(vi) does not, in my opinion, allow me to reasonably distinguish and depart from the reasoning of the Court in Sullivan. 

   [2] Section 281(3)(a)(vi).

   [3] At [37].

9. Turning then to the claim for owner's time, again I do not consider that it could reasonably be said that those costs or expenses arose as a consequence of the renewal of the lease.  It would likely be otherwise had Parliament elected to use words of wider import such as "in connection with " rather than "as a consequence of" but it chose not to.  Accordingly this claim also fails.

10. In Zimmerebner v Hawkins & Anor[4] the President of the Land Court[5] expressed the view that it would seem appropriate to allow legal and valuation costs in preparing a claim pursuant to s.281(3)(a)(vi) for compensation before the Mining Warden. However, that case was decided before the decision of the Court of Appeal in Sullivan.  While I have some sympathy for the views expressed by the President in Zimmerebner, for the reasons expressed above, I do not consider that post Sullivan such an interpretation of s.281(3)(a)(vi) is now open.

    [4] [1999] 20 QLCR 71.

    [5]            At p. 91.

11. For the reasons expressed above I order as follows:

Orders:

1.   Compensation is determined in the amount of $8,228.

2.Matrix Metals Limited is to pay to The North Australian Pastoral Company Pty Ltd the total compensation as determined in the amount of $8,228 within two months of notification of the renewal of the mining lease by the Mining Registrar.

R S JONES

MEMBER OF THE LAND COURT