Palmer Gold NQ Pty Ltd v War (NQ) Pty Ltd

[2014] QLC 42

LAND COURT OF QUEENSLAND

CITATION:

Palmer Gold NQ Pty Ltd v WAR (NQ) Pty Ltd [2014] QLC 42

PARTIES:

Palmer Gold NQ Pty Ltd
(applicant)

v

WAR (NQ) Pty Ltd
(respondent)

FILE NO:

MRA861-12

DIVISION:

General Division

PROCEEDING:

Determination of compensation payable for renewal of mining lease

DELIVERED ON:

26 November 2014

DELIVERED AT:

Brisbane

HEARD ON:

Submissions closed 27 October 2014

HEARD AT:

Heard on the Papers

MEMBER:

PA Smith

ORDERS:

1.    Compensation is determined in the total sum of One Thousand Three Hundred and Twenty Dollars ($1,320).

2.    Palmer Gold NQ Pty Ltd pay the total compensation of $1,320 to WAR (NQ) Pty Ltd within two months of the renewal of ML 40006.

CATCHWORDS:

MINING LEASE – determination of compensation – factors to be considered – limited material from parties – extent to which mining lease within banks of river – calculated guesswork

Mineral Resources Act 1989

Fitzgerald v Struber [2009] QLC 76
Horn v Sunderland Corporation [1941] 2 KB 26
McGrath v Callaghan & Ors [2011] QLC 29
Mitchell v Oakhill and Mitchell (10 March 1998) unreported
Richardson v Barrett [2001] QLRT 89
Shaw v Heritage Holdings Pty Ltd (1992-93) 14 QLCR 139
Smith v Cameron (1986) 11 QLCR 64
Unimin Australia Limited v Maurice and Tricia Freeman (2007) QLC 76

APPEARANCES:

Not applicable

Background

1. The applicant Palmer Gold NQ Pty Ltd (the miner) currently holds Mining Lease (ML) 40006. The miner applied for a renewal of ML 40006 on 1 February 2012 for a period of ten years.

2. The ML is located partly on Unallocated State Land (USL), being the bed and banks of the Palmer River, as well as partly on land which is owned by WAR (NQ) Pty Ltd (the landholder). There is also access to the ML across the landholder’s land.

3. From mapping material provided by the Mining Registrar, Mareeba, the access through the landholders’ property is about 17 km long. ML 40006 has an area of 17.12 ha.

Principles of compensation

1. Section 279 of the Mineral Resources Act 1989 (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 matter, no agreements have been lodged with the Mining Registrar and the matter has been referred to the Court for determination.

2. The issues which must be considered by the Court are set forth in s 281(3) and (4) of the MRA.

3. Although s 281 sets out the matters to be considered, it does not define any method of assessment. In Smith v Cameron,[1] the Land Court held:

   “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.”

   [1](1986) 11 QLCR 64, 74 – 75.

4. In Shaw v Heritage Holdings Pty Ltd,[2] the Land Court 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.”

[2](1992-93) 14 QLCR 139, 146.

1. In considering Mitchell v Oakhill and Mitchell,[3] the then President of the Land Court, referring to s 281(3) of the MRA, 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.”

   [3](10 March 1998) unreported.

2. In determining compensation under s 281 of the MRA, I have adopted the same approach I took in Richardson v Barrett.[4] 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.

   [4][2001] QLRT 89, 9, 10 and 14.

3. 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 leases were not granted.[5] Of course, great care must also be taken to ensure that there is no “doubling up” of compensation.

   [5]Horn v Sunderland Corporation [1941] 2 KB 26, 43 per Jacobs J.

The Evidence

1. Following the procedures set out in Practice Direction 1 of 2011, the Court wrote to the parties setting out a timetable for the delivery of material and submissions.

2. The main material that the miner has provided to the Court has been copies of previous compensation agreements. These are of little assistance to the Court as they do not show how the provisions of the MLA were applied. Further, they were drafted in such a way that payments to the then landholders were only to begin once actual mining commenced. Of course, the parties are able to reach such an agreement by negotiation, but when the matter is determined by the Land Court, the Court can only proceed in accordance with the legislative requirements of the MRA and on the presumption that mining will be undertaken throughout the entire term of the renewal.

3. The miner also made submissions that most of the ML is located within the banks of the Palmer River. By letter dated 17 September 2014, the miner stated that “we cannot clearly identify the property boundary and therefore conclusively ascertain the ML’s are entirely within USL. There is no doubt that the ML’s are situated mostly within USL if not entirely within USL”.

4. It should be noted that the property has recently changed ownership. To ensure that the current owner was aware of all of the circumstances of this matter, the Court wrote to it on 1 October 2014 enclosing copies of all relevant material. No material has been supplied to the Court by either the current or previous the landholder.

5. No valuation evidence has been provided by either party.

6. As I said in McGrath v Callaghan & Ors,[6] 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 North Queensland 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 which followed a formal hearing in Cooktown, with both the miner in that matter and landholder providing sworn evidence to the Court.[7]

   [6][2011] QLC 29.

   [7]See Fitzgerald v Struber [2009] QLC 0076.

7. As Member Jones said in the case of Unimin Australia Limited v Maurice and Tricia Freeman:[8]

   “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 that the Court can do.”

   [8](2007) QLC 76.

Determination

1. Having considered the limited evidence in this matter, and taking into account my decision in Fitzgerald where I allowed the sum of $10 per hectare per year for the area of land covered by the mining lease and $5 per hectare per year for access, it is appropriate that I make a like award for ML 40006 in this matter.

2. Having carefully considered the mapping provided by the Mining Registrar and the submissions of the miner, I agree that the bulk of the ML is located within the banks of the Palmer River on USL. As the miner concedes, it is very difficult to determine what amount of the ML lies outside the USL. Applying the “calculated guesswork” referred to in Unimin, I find that approximately 80% of the ML lies within USL, and 10% outside each bank of the Palmer River. As ML 40006 encroaches into the landholder’s property on both sides of the Palmer River, that equates to 20% of the total area of the ML of 17.12ha, which is 3.424ha, which I round to 3.5 ha. Allowing $10 per hectare per year for the mining land amounts to $35 per year.

3. Assuming that the access is 17 km long and 10 metres wide, that amounts to a total area of 170,000 m² which equates to 17 ha. This amounts to $85 per year for access.

4. Adding together both sums leads to a total amount per year of $120.

5. Taking into account the ten year renewal term of ML 40006, this amounts to compensation of $1200, to which I award the additional sum of $120 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 $1320.

6. Due to the relatively small amount of compensation involved, and in the absence of any submissions to the contrary, I order that the miner pay the total compensation of $1320 to the landowner within a period of two months of the renewal of ML 40006.

Orders

1.     Compensation is determined in the total sum of One Thousand Three Hundred and Twenty Dollars ($1,320).

2.     Palmer Gold NQ Pty Ltd pay the total compensation of $1,320 to WAR (NQ) Pty Ltd within two months of the renewal of ML 40006.

PA SMITH

MEMBER OF THE LAND COURT