Slater & Anor v Appleton & Anor
[2012] QLC 7
•24 February 2012
LAND COURT OF QUEENSLAND
CITATION: Slater & Anor v Appleton & Anor [2012] QLC 0007 PARTIES: Sharyn Patricia Slater and Christopher Ian Slater
(applicants)v. Victor John Edward Appleton and Janet Anne Appleton
(respondents)FILE NOs: MRA018-10
MRA020-10DIVISION: Land Court of Queensland PROCEEDING: Determinations of compensation DELIVERED ON: 24 February 2012 DELIVERED AT: Brisbane HEARD AT: Clermont MEMBER: Mr PA Smith ORDERS: 1. As regards MLA70406, the applicant miners to pay the respondent landholders compensation in the total amount of $13,146.21, payable by way of instalments, with the sum of $796.21 payable within 30 days of the grant of the mining lease, followed by 19 equal instalments of $650 payable on or before each anniversary of the grant of the mining lease.
2. As regards MLA70407, the applicant miners to pay the respondent landholders compensation in the total amount of $13,146.21, payable by way of instalments, with the sum of $796.21 payable within 30 days of the grant of the mining lease, followed by 19 equal instalments of $650 payable on or before each anniversary of the grant of the mining lease.
CATCHWORDS: MINING - COMPENSATION - for effect of mining lease on grazing land - miner only allowed to disturb part of lease area at any one time under environmental authority - compensation calculated on that part only, not lease area - additional compensation for rehabilitation after lease expiry
MINING - COMPENSATION - right to have compensation reviewed if change of circumstances of lease - what can permit review - Mineral Resources Act 1989, s.283B
APPEARANCES: Sharyn and Christopher Slater, self-represented
Mr G Houen, agent for Victor and Janet Appleton
Background
The Court has before it applications requiring the determination of compensation with respect to two mining lease applications pursuant to the provisions of the Mineral Resources Act 1989 (the MRA).
By agreement between the parties, and as a matter of convenience, it is appropriate to deal with the two applications together, although separate determinations for compensation will be made with respect to each mining lease application.
On 14 September 2009 the Judicial Registrar of the Land Court of Queensland made recommendations relevant to the application for grant of Mining Lease no. 70406 (MLA70406) and Mining Lease no. 70407 (MLA70407).[1] Both MLAs are located in the Emerald Mining District at Miclere, which is located approximately 34 km north of Clermont.
[1] See Re Slater [2009] QLC 0133 and Re Slater [2009] QLC 0134.
Both MLAs are located in proximity to each other, and also close to existing mining operations undertaken by the applicants. The MLAs are both wholly located on land owned by the respondents. The respondent landholders undertake grazing operations on their property.
MLA70406 is sought for a period of 20 years over an area of 45.2245 ha.[2] Likewise, MLA70407 is also sought for a term of 20 years, but over an area of 26.3646 ha.[3] For both MLAs, access is minimalistic as the access is predominantly via the applicants’ existing operations and a road. Neither party has specifically sought any amount of compensation with respect to access.
[2] See MLA70406 filed with the Mining Registrar on 9 December 2008.
[3] See MLA70407 filed with the Mining Registrar on 9 December 2008.
The Legislative Requirements
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, no agreement has been lodged with the Mining Registrar and the matter has been referred to the Court for determination.
Although the matters which must be considered by the Court are set forth in s.281(3) of the MRA, s.281 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 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 Hearing
The hearing of this matter was conducted in Clermont. As indicated, the miners self-represented while the landholders were represented by Mr Houen. Mr Houen does not have legal qualifications but has considerable experience in appearing before this Court in mining related matters. A view was also undertaken in the presence of both parties. Specifically, the Court viewed both MLA areas as well as existing operations, including areas of rehabilitation, undertaken by the miners on ML70346, as well as other rehabilitation undertaken on ML1818. It must be noted that ML1818 was not held by the mining applicants in this case at any time, and they were not responsible for its rehabilitation. In the circumstances of this case, I found the view to be highly beneficial. It was particularly helpful in crystallising the issues as regards the evidence relating to rehabilitation.
Both Mr and Mrs Slater gave evidence at the hearing. Mr Houen relied upon an affidavit by the landholder, Victor Appleton. Mr Appleton however did not attend either the hearing or the inspection and was not called to give evidence nor cross-examined. Expert evidence was provided on behalf of the landholders by Mr John Chamberlain who provided both written and oral evidence to the Court and was subject to cross-examination. The landholders also relied upon an affidavit of Mr Derek Mayne.
Assessment of the Witnesses
I was impressed by the honesty and forthrightness of each of the three people who gave oral evidence at the hearing. Mr and Mrs Slater both gave consistent evidence as to their mining methodologies, their future intentions with respect to mining, and particularly with respect to the efforts that they put into rehabilitation.
The question of rehabilitation is often one which causes great differences between landholders and miners. Unfortunately, the rehabilitation processes undertaken on ML1818 are not, in my opinion, up to scratch. This was clearly stated by Mr and Mrs Slater in their evidence, as well as by Mr Chamberlain. Mr Houen’s attempts, however, to translate the rehabilitation on MLA1818 to the Slaters’ mining operations failed, in my view, in cross-examination. Mr and Mrs Slater are not just saying, in abstract terms, that they intend doing a certain level of rehabilitation on the land they mine. What they were able to demonstrate was actual rehabilitation undertaken by them on ML70346 which is in close proximity to the two MLA areas. Indeed, Mr Chamberlain during cross-examination assessed the rehabilitated on ML70346 as falling into either Category A land or Category B land.[4] He also agreed that the rehabilitation on ML70346 was acceptable.[5] Also of note, Mr Chamberlain indicated in his evidence that he did not select ML1818 as an example of rehabilitation. Rather, he viewed the rehabilitation on ML1818 as that is what he was instructed to do.[6]
[4] See Transcript 1-48 at lines 29-30.
[5] See Transcript 1-48 at line 34.
[6] See Transcript 1-45 at lines 47-48.
Mr Chamberlain’s expertise was not challenged by the miners. In fact, the questioning of Mr and Mrs Slater shows that they also sought to engage Mr Chamberlain as an expert witness in this case. Mr Chamberlain has two decades of experience in the Department of Primary Industries, as it then was, working in grazing land management and land monitoring methods. His experience includes methods of assessing pasture and grazing land management packages and stocktake monitoring packages.[7] I accept the evidence of Mr Chamberlain, except where that evidence brings into question the likely rehabilitation outcomes of rehabilitation work to be undertaken on the subject MLAs by the miners given their rehabilitation work on ML70346. In this regard, I prefer the evidence of Mr and Mrs Slater as to the actual rehabilitation work that they have undertaken, and accept that they fully intend to undertake like rehabilitation on the subject MLAs. I notice of course that Mr Chamberlain’s own evidence with respect to rehabilitation on ML70346 is favourable towards the applicant miners. It is also appropriate that I commend Mr Chamberlain for not drawing adverse conclusions directly referrable to the Slaters with respect to ML1818 rehabilitation issues. He conducted himself properly before the Court just as an expert should, providing his honest and fair reasoned opinion, agreeing, as he considered appropriate, with propositions put by the miners.
[7] See Transcript 1-43 at lines 16-32.
A Claim for Loss of Grazing/Grass Only
The claim for compensation as argued in this case is unusual in that the landholders, via Mr Houen, have specifically excluded all of the usual elements under s.281 of the MRA under which they are entitled to seek compensation with respect to each MLA, save for pursuing claims in each matter for loss of grazing/grass. I will let Mr Houen explain this in his own words:[8]
“HIS HONOUR: Mr Houen, you’re not making any claims for deprivation of value, et cetera.
MR HOUEN: No.
HIS HONOUR: You’re only claiming for grass.
MR HOUEN: Yes, your Honour.”
[8] See Transcript 1-58 at lines 48-55.
Mr Houen’s comments at trial were consistent with submissions that he placed before the Court very early in the proceedings. In those submissions, Mr Houen more clearly set out the position of the landholders:[9]
“2. A Deed containing put and call options affecting the subject property ‘Miclere’ was entered into in 1996 with Sedimentary Holdings NL, the then holders of a number of mining tenements.
3. Having regard to that Deed, the Respondents’ claim for compensation is based solely on the loss of grazing which they will suffer if the mining leases are granted, and the value of that loss.”
[9] See Exhibit 10 paragraphs 2 and 3.
As the evidence regarding the carrying capacity of the land, rates of agistment, soil classifications and grossed-up costs of raising cattle have remained relatively undisturbed despite the cross-examination of Mr Chamberlain by Mr and Mrs Slater, one might have expected that the quantum of compensation with respect to each MLA should have been something that could have been easily resolved between the landholders and the miners in negotiations without the need to bring these matters before the Court. However, in assessing the impact on the grazing operations of the landholders by mining on the subject MLAs, the parties have very divergent views.
In the applicant miners’ view, compensation should be based on an actual disturbance of 2 ha per year. They further concede that, taking into account rehabilitation, those 2 ha can properly be doubled to 4 ha per year.[10] I should stress that, in arriving at 4 ha per year for compensation, the miners are referring to the total compensation with respect to both mining leases.
[10] See Transcript 1-56 at lines 51-59.
On the other hand, Mr Houen strongly asserts that the landholders should be compensated for the entire loss of the total area of each MLA for each year of the full 20 year terms, plus a significant additional period during which time the land, in Mr Houen’s view, will be in very poor state at the conclusion of the mining term as a result of poor rehabilitation.
These different approaches lead to significantly different quantums that each party considers should be paid. The applicant miners consider an appropriate award of compensation with respect to the two MLAs combined would be $236 per year for the 20 year term of the leases.[11] When the additional amount of 10% is added pursuant to s.281(4)(e) of the MRA, the total compensation that the landholder says should be payable is $5,192 for both leases combined.[12] On behalf of the landholders, Mr Houen is seeking an annual compensation payment of $2,687.00 per year with respect to MLA70406 for the 20 year term of the MLA, and $1,563.00 per year for the 20 year term of MLA70407. In addition to those amounts, Mr Houen also seeks an allowance, for at least 15 years after the end of the term of each mining lease for diminished carrying capacity of 50%. On Mr Houen’s figures, this amounts to a capital sum of $20,153.00 with respect to MLA 70406, and $11,723.00 with respect to MLA70407.[13] When the two components for each lease are added, and the additional amount of 10% is taken into account, this represents a total of $81,282.30 with respect to MLA70406 and $47,281.30 with respect to MLA70407.[14]
[11] See Transcript 1-57 at line 16.
[12] $236 per year x 20 years = $4,720 plus 10% = $5,192.
[13] See Transcript 1-70 at lines 20-35.
[14] For MLA70406, $2,687 per year x 20 years = $53,740 plus $20,153 = $73,893 plus 10% = $81,282.30. For MLA70407, $1,563 per year x 20 years = $31,260 plus $11,723 = $42,983 plus 10% = $47,281.30.
Analysis of Mr Houen’s contentions
Mr Houen argues that “a hypothetical prudent purchaser would regard the mining leases as effectively depriving the landowners of possession of the surface of all of the … land, even though the stock may graze on that area from time to time.”[15] Mr Houen supports his arguments as follows “See Salmon v. Armstrong [2002] QLRT 55 (6 September 202 (sic)) at [9], where Kingham DP agreed with the reasoning of Mr Smith (sic) in Zimmerebner v Hawkins & Anor [1999] 20 QLCR (sic) 71 at 90.”[16] Mr Houen goes on in Exhibit 10, at paragraphs 10-13, to submit as follows:
“10. A corporation, Tasman Goldfileds (now re-named as BrightStar Resources) continues to hold approximately 17 mining leases in a cluster nearby on ‘Miclere’. Several other entities also hold leases in the same cluster.
11. Once granted, these three subject leases in an established gold mining area will be a tradeable commodity and it cannot be assumed that the Slater family will remain the holders.
12. It cannot be assumed that the Applicants or any other future holders of the leases will work them as code-compliant leases with a Level 2 environmental authority and subject to the restrictions on area disturbed as described in the Applicants’ submissions. Any holder of the leases would have the right to upgrade the environmental authority to Level 1 status for an expanded mining program allowing use of the whole area at the holder’s discretion - as for example a bigger operator or a corporate miner might require.
13. Any holder is entitled to enclose the leases with a fence and utilize the full area. A holder operating on a larger scale than the Applicants suggest they would adopt, would very likely fence the leases, especially as the commodity is gold.”
[15] See Exhibit 10 para 5a.
[16] As found in footnote 1 of Exhibit 10.
Mr Houen’s oral submissions at the hearing maintained his approach as set out above.
Mr Houen relies on a decision of Deputy President Kingham of the Land and Resources Tribunal (as Her Honour then was) in the case of Salmon v Armstrong.[17] In that case, Kingham DP had this to say at paragraph [9]:
“· … I consider a hypothetical prudent purchaser would regard the lease as effectively depriving the landowners of possession of the surface of the land, even though their stock may from time to time graze on that area.”
Kingham DP relied for support on the case of Zimmerebner v Hawkins & Anor[18] where the then President Trickett had this to say:[19]
“… I would think that t is the uncertainty of the extent of the use and of the period of the occupation and of the length of time necessary for effective rehabilitation, which would occupy the mind of a prudent purchaser. In my view, a prudent purchaser would tend to regard the subject leases as effectively depriving the owners of possession of the surface of the land, even though their stock may from time to time graze on that area. However, having regard to the fact that the land will be returned to the owners at the end of the five year term and rehabilitation will be complete in a year or so after that, I think that it would be reasonable for such a purchaser to discount the purchase price for that aspect alone, by 25%.”
[17] [2002] QLRT 55.
[18] (1999) 20 QLCR 71.
[19] At pages 89-90.
What must be borne in mind is that, in making the above comments in Zimmerebner, President Trickett was referring to the compensation head of “blot on title”.[20] Although Mr Houen did concede during oral submissions that the Zimmerebner decision “wasn’t about strictly grazing context as this is”,[21] nevertheless he went on to say that “the principle I think is the same”.[22] It is unfortunate that Mr Houen has chosen to rely upon the summary words of Kingham DP as found in her Salmon v Armstrong decision relating to ML70212. When Kingham DP delivered the decision in Salmon, she in fact delivered a number of decisions between the same parties relating to different mining leases on the same land. Sensibly, what Kingham DP did was write one principal judgment and then other decisions which simply relied upon her conclusions from the principal decision. Unfortunately, the decision that Mr Houen has chosen to quote from is not Kingham DP’s primary decision, as she makes clear in her opening words in paragraph [9] of her decision.
[20] See Zimmerebner at page 89.5.
[21] See Transcript 1-62 at lines 18-19.
[22] See Transcript 1-62 at lines 19-20.
Kingham DP’s primary judgment is Salmon v Armstrong related to ML70240.[23] Under the heading “The area disturbed by mining activities”, Deputy President Kingham had this to say:[24]
[23] It is reported at [2002] QLRT 54.
[24] At paragraphs 22-28.
“[22] Mr Compton assessed the loss in value of the land affected by the mining lease on the assumption that the landowners would be deprived of possession of the entire area for the term of the lease. The miner submitted that compensation should be calculated on the maximum area that can be disturbed. He operates all his leases as a combined mining project, with a limit of 4 ha of disturbance allowed on any one lease at any one time. This limit is currently imposed through the calculation of his security deposit for the project, which forms part of the Environmental Management Overview Strategy (EMOS) lodged with the application for this lease.
[23] Compliance with the EMOS is a requirement of the environmental authority granted in relation to this mine. I am required to act on the assumption that these conditions will be complied with.[11] That authority is a “transitional authority” that must converted by 1 January 2006[12] to an “environmental authority (mining activities)” under the new scheme in the amended Environmental Protection Act 1994 (EP Act). Prior to that date the Environmental Protection Agency (EPA) or Minister for Environment can initiate an amendment, relevantly, when a Plan of Operations is lodged. A Plan of Operations must be lodged after the mining lease is granted and before mining commences.[13] The miner proposes to lodge a Plan of Operations for this lease with the same 4 ha limit. I note that the miner proposes to provide access through this lease to Gavin Salmon’s lease on “Poinsetta”. He will also use it to access his other lease, ML 7012. This access is included in the 4 ha the miner is allowed to disturb.[14]
[24] During cross-examination he conceded that he could amend his environmental authority to enable him to disturb 10 ha. This would involve the transitional environmental authority being converted to a standard authority, such that the standard conditions contained in the Code of Environmental Compliance for Mining Lease Projects would apply.[15]
[25] The landowners submitted that, regardless of the conditions of the environmental authority, the miner is able to exclude the landowners from the lease area. The holder of the mining lease is entitled to enter and be within the land and upon the surface area covered by the lease “for any purpose for which the mining lease is granted or for any purpose permitted or required under the lease or by this Act”.[16] It could also be inferred from s. 403(1) that the holder has the right to exclude the landowner from the lease area. Relevantly, that section provides that it is an offence to enter, use or occupy the surface area of a mining lease. It is a defence if the person is the owner or is authorised by the owner and the person has the consent of the holder of the mining lease.
[26] Whilst it is unnecessary for me to determine this issue in order to determine compensation, it is my view that this section does not confer exclusive rights to possession upon the holder of the mining lease. Section 403(1) has to be interpreted in the light of the purpose of the Act[17] and of other relevant provisions, including s. 235. I do not accept that s. 403 confers on the holder of the mining lease unfettered power to withhold consent.
[27] Nevertheless, I consider a hypothetical prudent purchaser would regard the lease as effectively depriving the landowners of possession of the surface of the land, even though their stock may from time to time graze on that area.[18]
[28] The issue is the effect this would have on the value of the land, given the short term of the lease. In Zimmerebner, President Trickett adopted a discount on the purchase price of 25%. In recent Tribunal decisions on the gemfields, the Tribunal has adopted a figure of 33%, based on valuation evidence.[19] That is the discount rate used by Mr Compton and, as the miner has not persuaded me that this rate is inappropriate, I have adopted it in making my determination.
[11] Smith v Cameron (1986-87) 11 QCLR 64 at 76.
[12] Sections 584, 592, 595 EP Act.
[13] Section 233 EP Act.
[14] Landform management requirement of Land Management Program in EMOS.
[15] Section 603 EP Act.
[16] Section 235(1)(a) MRA.
[17] Section 14A Acts Interpretation Act 1954.
[18] I agree with the reasoning adopted by the Land Court President in Zimmerebner v Hawkins & Anor (1999) 20 QLCR 71 at 90, a case on involving similar operations on a nearby property.
[19] Eg Rechardson v Barrett [2001] QLRT 89, Barry v Barrett [2002] QLRT 2.”
When read in their proper context, it is clear that both President Trickett’s decision in Zimmerebner and Kingham DP’s decisions in Salmon v Armstrong do not relate to a head of compensation claimed with respect to a loss claimed relating to the actual loss of grazing on the subject land. Rather, the comments relate specifically to heads of damage assessed in accordance with valuation evidence and principals in taking account of the impact of the lease on the subject property, from a valuation perspective. This distinction is of heightened importance in the case currently under consideration as Mr Houen on behalf of the landholders has specifically excluded any claim based on valuation heads under the MRA and proceeds with the claim purely with respect to loss of grazing/grass.
As the authorities show, care must always be taken in any determination of compensation under the MRA to ensure that there is not a ‘doubling up’ of compensation over various heads. A classic case where this may occur is where the landholder receives compensation based on the value of the totality of the land the subject of the mining lease (as was the case in Zimmerebner and Salmon decisions) and a case where compensation is claimed purely on the basis of lost carrying capacity. In the latter case, an evaluation is undertaken as to the actual loss in carrying capacity that has occurred taking account of the actual mining impacts on the land, the cost of agistment etc. In that case, it will always come down to a matter of evidence; that is, does the mining lease and environmental authority authorise the total mining of all of the land at one time, such as a large open cut mine, or is mining restricted to a certain number of hectares of significant disturbance at any one time? Evidence as to whether the mining lease is to be fenced or if the landholders’ cattle are to continue to graze on so much of the mining lease not subject to significant disturbance are also relevant.
I should add that I am in agreement with Kingham DP’s observations in her principal Salmon decision, quoted above, where she stated that in her opinion a mining lease does not confer rights of exclusive possession upon the holder of the mining lease and that s.403 of the MRA, in particular, does not confer on the holder of the mining lease an unfettered power to withhold consent.
Mr Houen also relied upon a decision of President MacDonald of the Land Court in Sloan & Anor v Weir & Gregcarbil Pty Ltd.[25] Mr Houen quoted during oral submissions[26] as follows:
“… The landowner is entitled to be compensated for the loss of control over the mining lease area as evidenced, for example, by the fact that the mining area may move from time to time to various parts of the leased area without the consent of the landowner.”
[25] [2009] QLC 0183.
[26] See Transcript 1-62 at line 26.
It is more than a little unfortunate that Mr Houen has chosen to quote from only a part of paragraph 27 of the President’s decision. Even a cursory examination of the paragraphs immediately preceding paragraph 27 reveal that President MacDonald was considering valuation evidence as a means of determining the compensation to be paid to the landholder. However, one does not need to go to even the preceding paragraphs but merely to the full contents of paragraph 27 which are as follows:
“[27] The area of the mining lease is 35ha. Although only a small portion (.60575 ha) of the mining lease will be disturbed from time to time by the mining operations, I have accepted that the loss of value of the land is greater than is reflected by the loss of grazing capacity of that small area. The landowner is entitled to be compensated for the loss of control over the mining lease area as evidenced, for example, by the fact that the mining area may move from time to time to various parts of the leased area without the consent of the landowner. The applicants sought to quantify this loss by a depreciation of 33.3% applied per annum.”
The issue gets worse for Mr Houen. Mr Houen did not take the Court to earlier parts of President MacDonald’s decision in Sloan where Her Honour specifically looked at the various ways of assessing compensation under the MRA in accordance with the evidence provided in differing cases, even when those cases relate to either the same or substantially the same land. President MacDonald had this to say:[27]
[27] At paragraphs [16] - [19].
“[16] Perusal of the decisions of the Land and Resources Tribunal referred to above indicates that the differing amounts of compensation determined in respect of the Barrett lease are attributable primarily to the different evidence before and methodology adopted by Smith DP, the decision-maker in 2001 as compared with the decision made in 2006 by Windridge MR.
[17] In 2001, compensation was determined on an all up basis at $9,900 to which was added 10% (pursuant to s.281(4)(e) of the Act) making a total award of compensation of $10,890.10 In coming to that conclusion, Smith DP took into account the following items -
Impact of the mining lease on the land the subject of the mining lease $3,000
Impact on the balance area of the land - $1,750 p/a for 3 years $5,250
Severance - $225/pa for 3 years $675[18] In the 2006 decision concerning the applicants' land, compensation was assessed on the basis of stocking rates or agistment rates.11 Windridge MR noted that this was a brownfield not a greenfield site and that the lessees sought a short term of renewal. He said that the only viable use of the land was low intensity grazing under favourable pasture and weather conditions. He considered that mining operations confined to 4 ha or less would have no measurable effect on the operations conducted on the property [1,450 ha]. Mr Windridge went on to say that it would be inequitable to require the miner to pay the full (or a discounted) freehold value for every renewal of a short term lease and he considered that the only equitable method of assessing compensation was on an agistment basis. Accordingly, it was not necessary to consider the value of the subject land on a comparative sales per hectare basis. Compensation was determined at $624 (one beast at $4 per week for 156 weeks, the term of the lease). The sum of $10 was awarded for access and a further 10%, that is $63.40, was awarded under s.281(4)(e) to reflect the compulsory nature of the renewal of the lease.
[19] An appeal against that decision was disallowed.12 The appeal panel accepted that the value of the land was probably lessened by the existence of the mining lease but said that the question of quantification must take into account the factors which the Mining Referee had identified and considered. The appeal panel noted that the appellant had not submitted any valuation evidence to the Mining Referee and concluded that there had been no error in the approach of the Mining Referee.13
___________________________
10[2001] QLRT 95.
11Sloan v Weir [2006] QLRT 50.
12Sloan v Weir [2006] QLRT 100.
13At [17] and [18].”
I reject Mr Houen’s assertions that compensation should be paid to the landholders in the case at hand based on a loss of grazing/grass with respect to the entirety of the mining lease area of both MLAs. The authorities above do not support that contention.
Review of Compensation
Mr Houen also relies on his reading of s.283B of the MRA. Section 283B(1) is in the following terms:
“283B Review of compensation by Land Court
(1) This section applies if—
(a)compensation has been agreed under section 279 or 280 or determined under section 281 or 282 for a mining lease (the original compensation); and
(b)there has, since the agreement or determination, been a material change in circumstances for the mining lease.
Example of a material change in circumstances—
a different mining method that changes the impact of mining operations under the lease”
Mr Houen gives an extremely narrow reading to s.283B(1). Mr Houen’s argument runs this way. Under the MRA, certain rights are granted to a miner upon the grant of a mining lease. Irrespective of what the miner says he/she intends to do on the mining lease, the miner can change his/her mind and carry out whatever activities are allowable under the mining lease. Mr Houen then contends that, as the activities are allowed under the mining lease in its original format, one cannot use the provisions of s.283B(1) to have the question of compensation reviewed.[28] Mr Houen asserted, for instance, that the miners in the case at hand could “on the first morning … put fences around the whole areas of those two leases and begin large scale mining and nobody can say they can’t”.[29]
[28] See Transcript generally at pages 1-59 to 1-66.
[29] See Transcript 1-59 at lines 5-7.
There is certainly no doubt that the holder of a mining lease has many statutory rights with respect to that mining lease. Those rights include the right to make application for a change in mining program. However, if such a change in mining program is inconsistent with the environmental authority granted under the Environmental Protection Act 1994, it would be necessary for the miner to have the environmental authority changed. If the change was of the nature of an alteration from small scale mining with a significant disturbance at any one time of no more than 10 ha in accordance with the standard conditions set out in a level 2 environmental authority to open cut mining of the whole area, then it would be necessary for the miner to obtain a level 1 authority and go through a significant statutory process before that level 1 authority could be granted.
I have not the slightest hesitation that a change of mining such as that referred to in the previous paragraph meets the criteria set up by s.283B(1) of the MRA allowing the Court to reconsider the amount of compensation payable by the miner to the landholder. Furthermore, there is nothing in any of the authorities to indicate that an amendment of a level 2 mining authority to change the significant area of disturbance from, for instance, 10 ha at any one time down to 5 ha at any one time, would not also enliven s.283B(1). To the contrary, a plain reading of the words contained within s.283B(1), including those as set out in the example, shows the nonsense in Mr Houen’s argument.
Determination of Compensation
I have previously indicated my acceptance of the evidence of Mr Chamberlain with respect to the carrying capacity of the subject land, classification of the land and agistment rates. I note that Mr Chamberlain relies upon the evidence of one Mr Mayne as set out in Exhibit 9. However, I am not prepared, for the reasons set out above, to accept that the landholders should be compensated for loss of grazing/grass with respect to the entirety of each mining lease.
It was not in dispute that both MLAs are subject to the standard environmental conditions, which permit a significant interference with a maximum of 10 ha at any one time. Surprisingly, what neither the miners nor the landholders’ agent, Mr Houen, seemed sure of was whether or not there were one or two environmental authorities in existence relating to these mining leases.
Material provided by the Mining Registrar to the Land Court as part of the MLA application process, and taken into account by Judicial Registrar O’Connor in each of his recommendations relating to these MLAs, shows that MLA70406 is intended to be subject to environmental authority MIC200850808, and MLA70407 to environmental authority MIC200850908. Accordingly, each MLA is subject to a different environmental authority, and therefore the miner has a legal right to significantly disturb up to 10 ha at any one time on each mining lease area. Although the evidence in this matter is that the miners do not intend to actually disturb this large amount, nevertheless they are legally entitled to such a level of disturbance and it is that legal entitlement, without any necessity for any application for any change of the environmental authority, which I am compelled to take into account. In a limited way, Mr Houen’s submissions are correct that, if the Slaters chose to immediately upon grant sell either or both of the mining leases, then a new owner could immediately conduct mining of a different intensity to that proposed by the Slaters. However, such mining activity could not exceed the total permissible under the current environmental authorities without amendment to the environmental authorities, and my determination of compensation is accordingly so limited.
Calculations
Adjusting the area of loss of grass/grazing to 10 ha with respect to each mining lease, and adopting Mr Chamberlain’s methodology as adopted by him from Mr Mayne, and accepting Mr Chamberlain’s assessment of a loss of grass/grazing as $56.91 GM/ha per year, I assess the compensation for each mining lease as follows:
ML70406
Loss $56.91 GM/ha per year
Area lost 10 ha
Term 20 years
Calculation $59.91 x 10 x 20
Total $11,382.00
ML70407
Loss $56.91 GM/ha per year
Area lost 10 ha
Term 20 years
Calculation $59.91 x 10 x 20
Total $11,382.00
For completeness, I should add that, in the event that the miners at some point in the future amend their environmental authorities such that they only then hold one environmental authority with respect to the two MLA and are thus limited to a maximum disturbance at any one time of 10 ha over both MLAs combined, then in my view the provisions of s.283B(1) of the MRA would apply, allowing this Court to review the compensation payable with respect to both MLAs.
I accept that, at the conclusion of mining at the end of the 20 year lease, there will be some period of time for the rehabilitation works on the last rehabilitated area to re-establish itself back to Category A or B land. I accept the Slaters’ evidence that, depending upon rainfall, the rehabilitation can occur very quickly. Taking all of the evidence into account, and doing the best I can given the great disparity between the evidence of witnesses who I otherwise see as reliable, I am prepared to allow an additional amount of $569.10 (calculated as 10 ha for 1 year at GM/ha of $56.91 per year) for each mining lease for loss of grazing/grass after the mining leases come to an end and whilst final rehabilitation is in progress.
Conclusion MLA70406
In light of my findings above, I make the following determination with respect to loss of grazing/grass with respect to mining lease 70406 for the 20 year term of the mining lease.
Loss of grazing/grass during the term of the lease $11,382.00 Additional amount reflecting rehabilitation of grass following the end of the term of the lease $569.10
Subtotal $11,951.10 Additional amount payable pursuant to s.281(4)(e) of the MRA assessed at 10% $1,195.11
Total $13,146.21
Conclusion MLA70407
In light of my findings above, I make the following determination with respect to loss of grazing/grass with respect to mining lease 70407 for the 20 year term of the mining lease.
Loss of grazing/grass during the term of the lease $11,382.00 Additional amount reflecting rehabilitation of grass following the end of the term of the lease $569.10
Subtotal $11,951.10 Additional amount payable pursuant to s.281(4)(e) of the MRA assessed at 10% $1,195.11
Total $13,146.21
Terms of Payment of Compensation
In light of the quantum of compensation and the submissions of both parties, in my view it is appropriate that compensation for each MLA be paid by way of 20 annual instalments, the first such instalment being payable within 30 days of the grant of the mining lease. Therefore:
With respect MLA70406
$796.21 within 30 days of the grant of the mining lease, and thereafter 19 payments of
$650 on or before each anniversary of the grant of the mining lease
With respect MLA70407
$796.21 within 30 days of the grant of the mining lease, and thereafter 19 payment of
$650 on or before each anniversary of the grant of the mining lease
Orders
1. As regards MLA70406, the applicant miners to pay the respondent landholders compensation in the total amount of $13,146.21, payable by way of instalments, with the sum of $796.21 payable within 30 days of the grant of the mining lease, followed by 19 equal instalments of $650 payable on or before each anniversary of the grant of the mining lease.
2. As regards MLA70407, the applicant miners to pay the respondent landholders compensation in the total amount of $13,146.21, payable by way of instalments, with the sum of $796.21 payable within 30 days of the grant of the mining lease, followed by 19 equal instalments of $650 payable on or before each anniversary of the grant of the mining lease.
P A SMITH
MEMBER OF THE LAND COURT
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