McGrath v Callaghan & Ors
[2011] QLC 29
•4 May 2011
LAND COURT OF QUEENSLAND
CITATION: McGrath v Callaghan & Ors [2011] QLC 0029
PARTIES:In the matter of Mining Leases No 20349 – Application by William David McGrath for determination of compensation payable to KJ, SM, SB, DL, TJ and CA Callaghan and CG Gostelow
FILE NO:MRA1342-08
PROCEEDING: Application for determination of compensation
DELIVERED ON: 4 May 2011
DELIVERED AT: Brisbane
MEMBER:His Honour PA Smith
ORDERS:1. Total compensation awarded under all heads in the sum of $27.50.
2.The miner pay the total compensation of $27.50 to the landowners within a period of three months from notification of grant of the mining lease by the Mining Registrar.
CATCHWORDS: MINING LEASE – ACCESS – DETERMINATION OF COMPENSATION – offer by miner – offer significantly above award of compensation – offer not accepted by landholders – Court has obligation to determine quantum of compensation notwithstanding offer
Mineral Resources Act 1989, ss 279, 281
Smith v Cameron [1986-87] 11 QLCR
Shaw v Heritage Holdings Pty Ltd [1992-93] 14 QLCR
Mitchell v Oakhill and Mitchell (10 March 1998) unreported
Re Fitzgerald & Anor and SR Struber & Anor [2009] QLC 0076
APPEARANCES: Not applicable – Heard on the Papers
Background
The applicant William David McGrath (the miner) seeks the grant of Mining Lease 20349 in the Mareeba District for a term of 5 years.
The mining lease was applied for on 23 October 2001. Thereafter, due to the native title requirements of the Mineral Resources Act 1989 (“MRA”), a significant period of time elapsed. Recently, all formal native title processes under the NTA were satisfactorily completed.
The mining lease application was not subject to any objections. Accordingly, pursuant to s.773 (3) of the MRA, the amended s 265 applies to this application.[1]
[1] See Mines and Energy Legislation Amendment Act 2010.
Part of the access to Mining Lease 20349 is over land described as Lot 1 on MPH 35537, County of Chelmsford, Parish of Palmerville, owned by KJ, SM, SB, DL, TJ and CA Callaghan and CG Gostelow (“the landholders”). The access over Lot 1 is approximately 350 metres long and 10 metres wide, making a total area of 3500 square metres, or about 1/3 of a hectare.
The MRA
Section 279 of the MRA provides that a mining lease shall not be granted or renewed unless an agreement in relation to compensation has been filed at the office of the Mining Registrar, or in the absence of such an agreement, a determination of compensation has been made by the Court. In this instance, the miner requested the Mining Registrar that the matter be referred to the Land Court as he had been unable to reach a negotiated agreement with the landholders. The Mining Registrar subsequently referred the matter to the Court for determination.
The matters which must be considered by the Court are set forth in s.281(3) of the MRA. Although s.281 sets out the matters to be considered, it does not define any method of assessment. In Smith v Cameron (1986) 11 QLCR 64, the Land Court held at p.74:
“The section in my opinion merely identifies matters which shall be taken into consideration in making the assessment. It does not prescribe a method of valuation. No doubt each case will depend on its own facts and circumstances but it seems to me that either method is open to the valuer.”
In Shaw v Heritage Holdings Pty Ltd (1992-93) 14 QLCR 139, the Court at p.146 said:
“The method of assessment remains a matter which will be governed by the facts and circumstances of each case in which event emphasis may shift from one method to another.”
In considering Mitchell v Oakhill and Mitchell (10 March 1998) unreported, the then President of the Land Court, referring to s.281(3) of the Mineral Resources Act, found:
“… the latter section does not prescribe a method of assessment. In my view, as long as the amount of compensation finally determined sufficiently accounts for each of the matters referred to in the sub-section, it is not necessary to quantify an amount in respect of each of the matters referred to.”
The evidence
Following the usual procedures of the Court, the parties were required to file and serve their material in accordance with a specified timeline in 2008. The landholders failed to file and serve any material, and made no contact whatsoever with the court. The miner made very limited submissions, and offered to pay compensation in the sum of $75 per year. The matter then sat in abeyance, awaiting resolution of the native title issues.
As neither party provided the Court with formal valuation evidence to consider, the Court does not have that assistance in arriving at a determination. This situation is perfectly understandable as, due to the very small area involved, the cost of a valuation would far outweigh any award for compensation.
It is always difficult for the Court when the parties to mining compensation matters either choose to place no submissions before the Court, or only very limited submissions. Fortunately, with respect to the Palmerville area, the Court is able to obtain assistance from a number of determinations of compensation under the MRA. In particular, I rely on the Fitzgerald decision of the Land Court on 21 May, 2009 which followed a formal hearing in Cooktown, with both the miner in that matter and landholder providing sworn evidence to the Court.[2] It is appropriate that I repeat some of my observations in Fitzgerald:[3]
[2] See Fitzgerald v Struber [2009] QLC 0076.
[3] At paragraphs 11-17.
“Principles of Compensation
11.It has often been stated that the principles of compensation under the MRA are littered with inherent difficulties relating to doubling-up; issues as to whether or not separate heads should be awarded as separate monetary sums under each provision in s.281 of the MRA; or whether an all-up sum should be determined taking into account all of the heads. I tend to agree with the observations of Member Scott of the Land Court in Wills v. Minerva Coal[4] when dealing with a compensation matter under the MRA. He stated that the matters set out in the MRA were compensation concepts to be taken into account in determining compensation, not a figure accumulated by amounts arrived at following a separate and discrete treatment of them as if they were separate heads of compensation. In determining compensation, the overriding principle is of equivalence ensuring that, so far as money can do it, the landholders are placed in the same position as if the mining lease was not granted.[5]
[4] (1998) 19 QLCR 297.
[5] Horn v. Sunderland Corporation [1941] 2 K.B. 26 at 43 per Jacobs J.
12.I concur with Member Scott's observations in that regard. I also note with approval the lengthy determination of compensation principles set out by then President Trickett of the Land Court in the case of Zimmerebner v. Hawkins & Ors.[6] One problem that immediately springs to mind is that most of the case authorities deal with compensation for mining leases. The authorities regarding the amount of compensation to be determined for access are limited indeed. It is not surprising in circumstances where the authorities are limited and the terminology of the MRA is complex and the factual matrix of the matters under consideration here are so unique that I have not had any valuation evidence placed before me and I have also had little evidence as to the actual value that should be applied to the particular land in question in this particular matter.
[6] (1999) 20 QLCR 71.
13.As Member Jones said in the case of Unimin Australia Limited v. Maurice and Tricia Freeman[7]:-
[7] (2007) QLC 76.
"I realise that my determination of compensation in this case is a result of little more than calculated guesswork or speculation. However, in circumstances where the parties have elected to provide little or no material to the Court concerning their position about compensation there is not much more than the Court can do."
14.I accept of course that the parties in this case have certainly not provided no information to the court. However, in a pure valuation sense the actual evidence that would be appropriate in applying all valuation principles in order to arrive at the proper amount of compensation in this matter remains scant. Living in a time of uncertain economic conditions, rising costs and the expense of obtaining professional valuation reports, one can completely understand from both parties a reluctance to spend many thousands of dollars engaging expert valuation opinions which may indeed only tend to create differing opinions lengthening the time of hearing and lengthening costs for all parties in circumstances where the actual quantum that is being dealt with is in relative terms small.
15.It would be remiss of me to not refer to the case of Edwards v. Calmsden & Ors.[8] That was a determination of compensation by myself in a mining lease access matter. Where the matter is of particular interest is found in paragraph [3] of the decision as follows.
[8] [2007] QLRT 118.
"The miner has submitted that there should be no or minimal compensation as the access is an ungazetted mining road which has been in existence for at least 40 years; the landholders conduct low intensity grazing; no grazing land will be impacted on by the road usage; and that the existing access is poor, with any upgrading work undertaken by the miner improving not diminishing the value of the land."
16.Unfortunately in that case the miner's submissions did not include any details of the length of access over the landholders' property which is indicative of many cases which I have had to determine compensation, particularly in my days in the Land and Resources Tribunal where the emphasis was almost always on compensation for the mining lease disturbed actual area and not for access. Having no idea of the size of the actual access in the case I have just quoted from, in that case I came to the conclusion that I could only award a nominal amount given that I had no idea if the access was 180 metres or 100 kilometres. The amount awarded in that case was $5 per annum for the term of the lease which equated to $100.
17.In other cases there have been similar difficulties in determining the quantum of compensation. For instance, in the matter of White v. Warner & Anor,[9] there was also scant evidence as to what the actual access to be dealt with was and in that matter the award that was made for access which was across a property was again a nominal amount of $10 which led to a total compensation of only $310. I hasten to add that did not concern a mining lease application in this area of Queensland, but it does show the difficulties with determining the quantum of compensation for access and in this matter for variation of access. The competing issues that I have to take into account are these. On the one hand there are numerous miners using a road not unlike the circumstances in the matter I referred to where there had been an ungazetted road with mining access for 40 years and therefore leading to a nominal amount of compensation. The important point though is that compensation was awarded in that case, not no compensation as the miner had sought. The difficulty arose that I had no idea as to the length or width of that access.”
[9] [2007] QLRT 53.
Determination
Having considered the limited evidence in this matter, and taking into account my decision in Fitzgerald, I see no reason to depart from my determination of compensation in Fitzgerald. That is, the sum of $5 per hectare per year for access.
As the total area concerned in this matter is under 1 hectare, and the period of the mining lease is for 5 years, rounding the area up to 1 hectare (which is being generous to the landholder) the compensation for access is $25.00, to which I award the additional sum of $2.50 under s.281(4)(e) of the MRA to reflect the compulsory nature of the grant of the mining lease. This results in total compensation under all heads in the sum of $27.50.
Due to the very small amount of compensation involved, I order that the miner pay the total compensation of $27.50 to the landowners within a period of three months from notification of grant of the mining lease by the Mining Registrar.
General Observations
Given that the miner has indicated that he was prepared to pay the landholders the sum of $75.00 per annum for the access, making a total of $375.00, it might appear unfair that I have determined that the landholders only receive the total sum of $27.50 for access. In this regard, the landholders have no one to blame but themselves. Prior to the court making an award of compensation, the parties are free to make a compensation agreement (provided that it complies with the MRA) which best suits them. There is nothing stopping such agreement being for a higher sum than that which the court would award. That clearly could have been the case in this matter. However, once the matter is before the court, it is my obligation to access compensation according to law. In the circumstances of this matter, any award above $5 per hectare per year would be quite contrary to the body of precedents built up by the Land Court for the Palmerville area, and not supported by any evidence before me.
Costs
Neither party has sought an order for costs and in this matter it is not appropriate that costs be awarded.
Orders
1.Total compensation awarded under all heads in the sum of $27.50.
2.The miner pay the total compensation of $27.50 to the landowners within a period of three months from notification of grant of the mining lease by the Mining Registrar.
HIS HONOUR PA SMITH
MEMBER OF THE LAND COURT
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