Salmon v Richardson

[2014] QLC 9

LAND COURT OF QUEENSLAND

CITATION:

Salmon v Richardson & Anor  [2014] QLC 9

PARTIES:

Gavin Keith Salmon
(applicant)

v

Raymond Edward Richardson and Glenda Joyce Hoare
(respondents)

FILE NO:

MRA645-13

DIVISION:

General Division

PROCEEDING:

Application for determination of compensation

DELIVERED ON:

12 March 2014

DELIVERED AT:

Brisbane

HEARD ON:

Heard on the Papers
Decision reserved on 24 February 2014

HEARD AT:

Brisbane

MEMBER:

WA Isdale

ORDERS:

1. Compensation is determined in the amount of $2,000 per annum in accordance with s 281 of the Mineral Resources Act 1989.

2.    The applicant shall pay the respondents the total compensation of $2,000 per annum in advance of the year to which it relates with the first payment being made within 30 days of the renewal of the mining lease.

3.    The parties are to bear their own costs of the present proceedings.

CATCHWORDS:

Mineral Resources Act 1989, s 279, s 281

Mining Lease – renewal – determination of compensation

Mitchell v Oakhill and Mitchell (unreported, Land Court of Queensland, 10 March 1998)
Shaw v Heritage Holdings Pty Ltd (1992-1993) 14 QLCR 139
Smith v Cameron (1986-1987) 11 QLCR 64

APPEARANCES:

The parties made written submissions and requested that the Court determine the matter on those papers.

Background

1. On 5 November 2013 the Mining Registrar at Emerald referred to the Land Court the matter of the compensation which the miner (the applicant) must pay to the landowners (the respondents) in regard to the renewal for a proposed five year period of Mining Lease (ML) 70213 for sapphire. The Mineral Resources Act 1989 (the Act) requires that compensation be determined before the lease is renewed. The parties have been unable to agree on the compensation payable so the matter has been referred to the Court to determine compensation as required by the Act. The parties have provided the material upon which they wish the Court to make its determination.

The legal framework within which the Court must act

1. Section 279 of the Act provides that a mining lease shall not be 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. The matters which must be considered by the Court are set forth in s 281(3) of the Act. While s 281 sets out the matters to be considered, it does not define any precise method of assessment. In Smith v Cameron (1986) 11 QLCR 64, the Land Court said 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. …”

1. 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. …”

1. In Mitchell v Oakhill and Mitchell (unreported, Land Court of Queensland, 10 March 1998), the President of the Land Court, referring to s 281(3) of the Act, said:

   “… the latter section does not prescribe a method of valuation. 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 respondents’ submissions

1. The respondents own a property called “Gemsetta” which has an area of about 1,000 ha and is situated on Rubyvale-Sapphire Road, Rubyvale. The property has primarily been used for grazing. Up to the present, the applicant has been paying $2,000 per annum compensation for ML 70213. The respondents have now purchased a 150 acre centre pivot irrigator intended for use in crop production. This cost $120,000 and they have invested $140,000 in dam construction. To operate the irrigator on tillable land “will take in part of” Mr Salmon’s lease. Cultivation of the leased area would, they declare, return about $90,000 from sorghum. They believe that compensation should be payable at the rate of $50,000 per annum. The renewal of the lease would restrict agricultural activity on the leased land. They see the present level of compensation, $2,000 per annum, as a token amount which does not adequately compensate them for loss of use of their land. The respondents state that they are aware that compensation payments for other leased areas in the locality are substantially higher but provide no specific instances.

Observations on the respondents’ submissions

1. The land is presently used for grazing. There is no evidence put forward of a certain profit per hectare from growing sorghum on any of the land on this property which could be said to indicate a like potential for the lease area. There is no evidence of how a figure of $90,000 for production of sorghum on the lease area would be arrived at. There is no evidence of how the figure of $50,000 per annum for compensation was arrived at.

The applicant’s submissions

1. The applicant’s submissions address the matters to which the Court must have regard in accordance with s 281(3) of the Act. The applicant states that the area of the lease is 53.4 ha which is unfenced and only about 2 ha is disturbed. A copy of an article in the Rural Weekly, Central Queensland edition of 7 September 2001 is provided in support of the proposition that the best practice safe stocking rate in this area is one breeder to 8.9 ha. A letter dated 10 December 2013 to Mr Salmon from Michael Maquire and Company Pty Ltd states that the current agistment rate would be around $3.50 plus GST per week for long term agistment. This company operates at Emerald. Although only 3 ha is utilised at any one time and grazing will be available for the benefit of the respondents on the rest of the lease, the applicant is willing to pay $2,000 per annum disturbance. He calculates that the disturbance for one breeder at $3.50 + GST for 260 weeks would be $1,001. The applicant states that there are no improvements by the respondents on the surface of the lease area or near it that would be affected. The closest residence is more than 5 km from the lease. The 1,014 ha property has an unimproved valuation of $129,000 as at 1 October 2012, according to a copy of the Queensland Government QVAS property details report, a copy of which the applicant provided. The applicant submits that the balance of the land may be used for normal pastoral operations and there is no severance of any part of the land. There are no surface rights of access. The access is by way of a public track. The status of the land and the use currently being made of the land is not such, the applicant submits, that a premium would be payable. The land use, it is submitted, appears to be in transition from grazing to mining. The applicant submits that the additional amount required under s 281(4)(e) of the Act should be 10%. The applicant submits that the total compensation for five years, calculated from the agistment figure referred to and including GST and the 10% referred to in s 281(4)(e) should be $1,287 after adding $117 (10%) to the agistment figure of $1,170 which he ultimately allowed for one breeder and in regard to which GST was included. The allowance proposed, it is submitted, is proper compensation. There is no need for the respondents to obtain other land. Although arriving at a total figure of $1,287 for compensation for a five year period, the applicant is prepared to pay $2,000 per annum.

Observations on the applicant’s submissions

1. The applicant has provided evidence of the stocking rate applicable to this land and the agistment rate. This evidence is uncontradicted and the Court must accept it. The use of the land allowed for is the present use rather than a, for instance, intended use. The QVAS report shows that the primary land use is “cattle grazing and breeding”. The applicant points out in his submissions that the landholders have shown no evidence in support of the figure quoted. The statutory declaration of the respondents states that:

   “To operate the centre pivot on tillable land will take in part of Mr Salmons (sic) lease. Cultivation of the leased area would return about $90,000 from production of sorghum …”

However, whilst this is the subject of a statutory declaration, there is no basis provided for how that estimate could be arrived at.

1. In view of the evidence which has been provided to the Court, the Court must accept the evidence provided by the applicant as the use of the land, the best practice safe stocking rate and the agistment rate are supported by evidence. The Court is unable to accept the asserted level of compensation for which the respondents contend as the respondents have not provided any evidence in support of the asserted return from the hypothetical cultivation of a sorghum crop on this land.

2. Although the applicant’s evidence supports a much lesser sum, the applicant is willing to pay $2,000 per annum.

3. Section 281(4)(e) provides that an additional amount, not less than 10% of that determined for compensation, is to be payable. This is to reflect the compulsory nature of the lease process. The evidence which the applicant provided and which the Court has accepted would lead to $117 being the amount of a 10% allowance, on the applicant’s calculation. It is clear that the offer of $2,000 per annum is intended to include the amount referred to in s 281(4)(e). Since the offer of $2,000 per annum is well in excess of the evidence of the quantum of the loss for which compensation is being determined the Court is satisfied that the allowance required by this provision is satisfied within the sum of $2,000 per annum.

Orders

1. Compensation is determined in the amount of $2,000 per annum under s 281 of the Mineral Resources Act 1989.

2.     The applicant shall pay the respondents the total compensation of $2,000 per annum in advance of the year to which it relates with the first payment being made within 30 days of the renewal of the mining lease.

4.     The parties are to bear their own costs of the present proceedings.

WA ISDALE

MEMBER OF THE LAND COURT