Moreton Dolomite Pty Ltd v McDonough
[2012] QLC 20
•10 May 2012
LAND COURT OF QUEENSLAND
CITATION:Moreton Dolomite Pty Ltd & Anor v McDonough & Anor [2012] QLC 0020
PARTIES:Moreton Dolomite Pty Ltd
and
Trevallyn Enterprises Pty Ltd
(Applicants)
v.
Ian Colin McDonough
and
Lorraine Ann McDonough(Respondents)
FILE NO:MRA948-11
DIVISION:General Division
PROCEEDING: Determination of compensation for mining lease under the Mineral Resources Act 1989
DELIVERED ON: 10 May 2012
DELIVERED AT: Brisbane
HEARD ON: 19 April 2012
HEARD AT:Brisbane
MEMBER:Mr WA Isdale
ORDER/S:1. Compensation is assessed to be $1,793 per year for the first year. The said sum of $1,793 to be paid in advance immediately upon renewal of the lease.
2.In the case of the second and all subsequent years of the lease the compensation is to be paid yearly in advance and is to be the amount calculated by increasing the sum of $1,793 by the percentage necessary to reflect any increase in the All Groups Consumer Price Index applicable to Brisbane for the preceding year.
CATCHWORDS: Mineral Resources Act 1989 ss 279A, 281
APPEARANCES: Mr Max Chandler, by telephone, for the applicants
Mr and Mrs McDonough, the respondents
Background
On 1 December 2011 the Mining Registrar at Brisbane forwarded to the Land Court the matter of determining the compensation for renewal of Mining Lease (ML) 50015. Under s.279A of the Mineral Resources Act 1989 (the Act) the Mining Registrar has referred the matter to the Court since the parties have not been able to reach agreement.
The Land Court required the parties to provide to the Court the material which they wished to rely on in support of their positions and some material was received from them. Unfortunately, there was no evidence from, for instance, registered valuers which might have provided expert assessment of the value of the interest in contention so the Court listed the matter for review so as to obtain from the parties statements of whether they intended to produce more material for its consideration and whether they wished there to be any further hearing.
When the matter came before the Court on 19 April 2012 the parties made it clear that they did not wish to have the matter adjourned for the purpose of them providing further material but that they wished the Court to determine compensation upon the material supplied already.
The positions of the parties
In Court, the parties were asked to state, for the benefit of the Court and each other, their present position as to what they respectively wished to pay and wished to receive from the other.
The applicants, represented by Mr Chandler, offered to pay $1,000 per annum. The respondents stated that they are seeking $3,000 per annum plus $1,000 per annum per hectare for the 4 ha project area, plus GST. This would be $7,700 per annum in total. They point out that on average 1,342 tons per year of material has been extracted over the last 12 years. In written submissions the figure of 1,381 tons per year during the term of the previous agreement was given. Under s.281(4)(b) of the Act the Court is not permitted to make any allowance for any minerals that may be on or under the surface of the land so cannot set compensation on the basis of tonnage of material extracted. Section 281 sets out the matters in respect of which compensation may be awarded and, as a matter of construction, the Goods and Services Tax (GST) is not included. Accordingly, the Court does not have the power to make allowance for GST in the present case.
The evidence
There is no valuation evidence before the Court so this is not a case where there is a professional assessment or competing professional assessments of value. The parties have been offered the opportunity to provide such evidence and have declined to do so. In the circumstances the Court can only do its best with the material which has been provided.
The respondents provided to the Court an extract from a well known weekly publication “Queensland Country Life”. It is a graph entitled “Cattle Market Index” and was published on 12 April 2012. From the same publication they provided an advertisement published on 8 March 2012 for the auction of a rural property. This was to illustrate that on the advertised property it was stated that an Optus communications tower returned $214,000 with CPI increases over a 20 years period. While this is indicative of such matters there is no suggestion of such a tower on the lease area in the present case or that there is any proposal that there be one.
In written submissions the respondents state that “we are losing an amount of $1,130 per year for loss of grazing area of 4 ha contained in the project area”. This has been calculated on the basis of a stocking rate of 1 bullock per 1.2 ha, the bullocks having a weight gain on average of 180 kg per year and using a live weight price of about $1.90 per kg, which is $340 per year each.
Mr Chandler was sceptical of the stocking rate claimed by the respondents but I accept this evidence from the respondents as it is within their specialist knowledge as beef producers and Mr Chandler’s expertise as a miner is less persuasive on this point. He did not, in any event, suggest a different figure.
The respondents point out that they have incurred costs to control weeds and noxious plants which are a concern and are related to disturbance of the site as a result of the mining. They have also incurred expense due to silt washed off the lease area including the costs of having to employ contractors to remove silt and to raise fences by approximately 60 cm. In addition, chemicals and lubricating oil are a hazard to their cattle. These aspects were not challenged by the applicants but unfortunately the respondents have not provided specific costings in respect of them. It is nonetheless clear that definite costs would be attributable to these aspects and I am satisfied that the Court should do its best to make some monetary allowance.
The respondents also point to the valuation of their land being reduced by the presence of the mining operations upon it. There was no evidence of the monetary amount of this and insufficient information upon which the Court could place an estimate.
The compulsory nature of the process
It is clear that the mining tenement process is a compulsory one and the landowners are unable to simply turn the miners away and avoid the inconvenience associated with mining. In many cases 10% per annum is allowed pursuant to s.281(4)(e) of the Act as suitable compensation for the compulsory nature of the process and in particular cases greater allowances may be justified. In this case no extraordinary circumstances have been shown to exist so a 10% allowance in recognition of the compulsory nature of the process is appropriate.
Conclusion on compensation
On the material before the Court compensation is assessed as follows:
·$1,130 per year for loss of grazing capacity
·$500 per year for costs associated with weeds, noxious plants, silt and dealing with the effects of chemicals and oils
·An additional 10% allowance in recognition of the compulsory nature of the process
·In order to maintain the real value of the compensation from year to year it should be adjusted in accordance with the Consumer Price Index.
Calculation of compensation
Orders
1. Compensation is assessed to be $1,793 per year for the first year. The said sum of $1,793 to be paid in advance immediately upon renewal of the lease.
2. In the case of the second and all subsequent years of the lease the compensation is to be paid yearly in advance and is to be the amount calculated by increasing the sum of $1,793 by the percentage necessary to reflect any increase in the All Groups Consumer Price Index applicable to Brisbane for the preceding year.
WA ISDALE
MEMBER OF THE LAND COURT
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