Milner v Gossow
[2008] QLC 7
•11 January 2008
LAND COURT OF QUEENSLAND
CITATION: Milner v Gossow [2008] QLC 0007 PARTIES: Mavis Kathleen Appolonia Milner as Executrix of the Will of William Milner (Dec)
(applicant)v. Athol John and Suellen Jane Gossow & Neville John and Gabrielle Evelyn Gossow
(respondents)FILE NOS: MLC00113/2007 DIVISION: Land Court of Queensland PROCEEDING: Application for the determination of compensation under the Mineral Resources Act 1989 DELIVERED ON: 11 January 2008 DELIVERED AT: Brisbane HEARD AT: Toowoomba MEMBER: Mr PA Smith ORDERS: 1. I determine compensation under s.281 of the Act in the total sum of Four Thousand and Forty-eight Dollars ($4,048).
2. I order that the miner pay the total compensation of $4,048 to the landholders within two months from notification of the renewal of the mining lease by the Mining Registrar.
CATCHWORDS: Mining Lease – Renewal – Determination of Compensation – Lack of Valuation evidence –Mineral Resources Act 1989 APPEARANCES: Ms P T Greenland, agent for the applicant
Mr A J Gossow in person for the respondents
Background
By letter dated 28 March 2007 Mavis Kathleen Appolonia Milner (“the miner”) wrote to the Mining Registrar, Brisbane Mining District, requesting the Land and Resources Tribunal determine compensation with respect to Mining Lease 5973. The miner had previously lodged an application on 29 March 2007 for Mining Lease 5973, which expired on 30 September 2007, to be renewed for a period of 21 years. Mining Lease 5973 is in the Brisbane Mining District and covers an area of 1.0082ha of land on a property owned by Athol John and Suellen Jane Gossow & Neville John and Gabrielle Evelyn Gossow (“the landholders”).
Mining Lease 5973, applied for in 1980, originally commenced on 1 October 1986 for a term of 21 years. It is a requirement of the Mineral Resources Act1989 (“the Act”) that compensation be agreed between the parties or determined by the Land Court[1] prior to renewal of the mining lease.[2]
[1] Jurisdiction transferred from the Land and Resources Tribunal to the Land Court on 21 September 2007.
[2] See s. 286 of the Act.
The landholders self-represented at the hearing of this matter, although for a period prior to the hearing they did have the benefit of legal representation. The miner was represented by an agent, Ms P T Greenland. Submissions and evidence were provided by the parties to the Court. Neither party relied upon expert evidence from a valuer. In the presence of the parties, the Court received considerable benefit from a view undertaken of the Mining Lease.
In determining compensation, I have taken into account all the evidence provided by the parties, together with material forwarded by the Mining Registrar, Brisbane. These reasons refer to the salient points but not all the evidence that I have relied upon in making my decision.
The Principles of Compensation
The landowners’ entitlement to compensation is detailed in s.281(3) and (4) of the Act. In determining compensation, I have adopted the same approach I took in Richardson v. Barrett.[3] This means that the matters set out in the section are concepts to be taken into account in determining compensation, not a notion of separate heads of compensation requiring separate and discreet treatment to arrive at an accumulated figure. 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 renewed.[4] Of course, great care must also be taken to ensure that there is no “doubling up” of compensation.[5]
[3] Richardson v Barrett [2001] QLRT 89 at paragraphs 9, 10 and 14.
[4] Horn v Sunderland Court [1941] 2 KB 26 at 43 per Jacobs J.
[5] See, for instance, Richardson v Barrett [2001] QLRT 89 at 30.
The Claims for Compensation
The parties have both approached this matter from opposite ends of the spectrum. They see the property through markedly different eyes. The miner views the property as a marginal primary producing property, at best, and considers the land of poor quality, unable to sustain pasture. She gains support for this position through a soil analysis report. It is also highly apparent that, at least for the last few years, the land has been ravaged by severe drought conditions. In the miners eyes, the subject land is foremost a supply of a much needed mineral resource, required for continuance of her business operations which are third generation users of the resources at this site. This approach has effectively clouded the views of the miner and her agent in submitting that compensation should be determined in the sum of $6.02 per annum, based on her view of stocking rates.
For their part, the landholders, whilst acknowledging the current condition of the property due to the effects of the drought, have given evidence that very successful pasture has grown on the mining lease land in pre-drought conditions, and that the land is economically productive for primary production. Expressing views opposite to the miner, the landholders refer with considerable emotion to their 5 generations of primary production in the district, and clearly resent the undertaking of mining on their land. It should be noted that the mining lease was in existence at the time of purchase of the property by the landholders at auction, although I accept their evidence that they were not aware of the existence of the mining lease at time of purchase, and that at that time the land disturbed by mining gave the appearance of being an abandoned mining lease, mining not having occurred for many, many years.
The landholders argue that their losses as a result of the renewal of the mining lease for 21 years will be in the sum of $40,000. This assessment is as unrealistic as that of the miner.
Determination
It was only during closing submissions that any details of “valuation type” “evidence” was referred to by both parties. While such statements were not sworn testimony, there were some common elements which assist the Court. Further, both parties contributed to the “evidence” during submissions equally. Due to the total lack of any other valuation evidence to assist the Court, I am prepared to adopt the unusual course of accepting what was said during submissions by the parties as to details of value as if it had been sworn evidence.
Ms Greenland stated that the mining lease land is valued, for rating purposes, in the sum of $2,000. Although this would ordinarily be viewed as a conservative valuation, the miner’s agent indicated that she understood that the area had been rounded up to 2ha for rating valuation purposes, which is, in real terms, an effective doubling of the lease area (leaving aside access). Of course, the landholders are entitled to compensation for access, which is through their property, as well as for the impact that the mining operations will have on the balance land.
During submissions, the landholders said that they believe similar land to theirs is currently being sold for $5,000 per acre, while Ms Greenland for the miner said that she understood that the going rate for such land was about $1,000 per acre.
As the mining lease renewal is for the term of 21 years, applying standard principles, the mining lease land is to be treated as a total loss to the landholders. There is simply too great a variance in the statements of value of $1,000 vis $5,000 per acre as between the parties. Accordingly, in the circumstances I accept the rates valuation of $2,000 for the mining lease land. In my view, the likely conservative nature of this valuation is offset by the “rounding up” of the mining lease area to 2 hectares for the purposes of the rating valuation. I consider this sum to adequately take account of the impact on the balance land caused by the mining lease.
Doing the best I can with the question of access, and accepting the landholders evidence that they use for their own purposes the gate used as mining access but not the access track of the mining operation, and taking into account the increased mining activity proposed by the miner under the renewed mining lease, and the comparatively short distance of the access, I assess compensation for access in the sum of $50 per annum, which amounts to $1050 for the term of the renewal.
Compensation relating to severance does not appear to be relevant to this matter. As regards blot on title, whilst I accept the evidence of the miner of the very limited impact of the previous mining activities on the property as a whole and the disruption caused to the miner by fencing across the mining lease undertaken by the landholders, it is not my task to review the mining activities already undertaken on the property, but to access compensation on the basis of the mining proposals of the miner under the renewal. I find that the proposed mining operations under the renewal, of extraction of approximately 30 tonnes per month for 21 years, while certainly not large, are also, given the previous mining activity, not insignificant either, and I access compensation for blot on title in the sum of $500.
The landholders have made a claim for management time and associated costs. The authorities make it clear that an owner may recover an amount for management time incurred as a consequence of the grant. I should make it clear what is meant by management time. This management time relates to the time taken by the owners of the property in managing the property as a consequence of the mining tenements’ existence. For instance, in Sullivan v Oil Company of Australia Limited and Santos Petroleum Operations Pty Ltd, an expert, Mr Brown, gave the following evidence as to how management time is assessed.
“Well, I assess the extra management time as being the ongoing regular management of a property over a period of time, in other words on a regular basis… . So I’m looking at an average working day as it were and I don’t think there’s a great deal of management time needed by the landowner in this instance… it’s a difficult calculation because it may vary from time to time. I’ve tried to take an average on an average working week or month or year at that amount of $12 per annum and I think that had capped – capitalised at five percent for nine years working on about $100.00 an hour roughly equates to be $16,000.00 as claim as a diminution between my before and after valuation”.[6]
[6] Sullivan [2003] QLRT 2 pt para 88.
In Sullivan, I expressed the view that I found great difficulty in properly assessing the value for management time. Such a claim is fraught with danger of a doubling up.[7] On its face, I consider the claim by the landholders for management time to be ill defined. In the face of little useful evidence by the landholders and no evidence by the miner, and given the relatively small scale of mining operations, I consider it appropriate to allow only a small sum for management costs of say $30 per annum, which equates to $630 for the term of the renewal.
[7] See Sullivan [2003] QLRT 2 at para 92.
Taking into account all heads of compensation in subsection 3 of s.281 of the Act, I assess compensation in the sum of $3,680 ($2,000 + $1,050 + $630). Pursuant to s.281(4)(e) of the Act, I award the additional sum of $368, making a total of $4,048.
Taking all relevant factors into account, I order that the miner pay to the landholders the total compensation in the sum of $4,048 within two months from notification of the renewal of the mining lease by the Mining Registrar. As neither party has substantially succeeded with their claims before the Court, I make no award for costs.
Orders
1.I determine compensation under s.281 of the Act in the total sum of four Thousand and Forty-eight Dollars ($4,048).
2.I order that the miner pay the total compensation of $4,048 to the landholders within two months from notification of the renewal of the mining lease by the Mining Registrar.
P A SMITH
MEMBER OF THE LAND COURT
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