Snowmist Pty Ltd v Cantoni
[2011] QLC 52
•19 August 2011
LAND COURT OF QUEENSLAND
CITATION: Snowmist Pty Ltd v Cantoni [2011] QLC 52 PARTIES: Snowmist Pty Ltd
(Applicant)v Diana Cantoni and Elio Cantoni
(Respondents)In the matter of Mining Leases No 4363 and 20018 – Determination of Compensation payable by Snowmist Pty Ltd to Diana Cantoni and Elio Cantoni FILE NOs: MRA881-07 and MRA883-07 DIVISION: Land Court of Queensland PROCEEDINGS: Applications for Determination of Compensation DELIVERED ON: 19 August 2011 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER:
His Honour, Mr WL Cochrane, Member
ORDERS: 1. Compensation in respect of ML 4363 is determined at $190 per annum.
2. Compensation in respect of ML 20018 is determined at $130 per annum.
3. The miner is to pay the said compensation to the landowner in advance with the first payment to be made within two months from notification of renewal of the mining lease by the Mining Registrar and payable thereafter on the anniversary of the granting of the renewal of the mining lease.
CATCHWORDS: Mining lease – determination of compensation – compulsory nature of action - compensation
Mineral Resources Act 1989 ss279A, 281, 363
Re: Wilkins & Mudge [2009] QLC 0075
Smith v Cameron [1986] 11 QLCR 64
APPEARANCES: The matter determined on the papers.
Background
This Court has before it applications to determine compensation with respect to mining leases ML 4363 and ML20018.
Compensation in respect of a renewal of a mining lease must be settled before that renewal can be granted. So much is provided by s.279 of the Mineral Resources Act 1989. In the present instance the mining registrar’s referral has occurred because no agreement has been reached in respect of compensation.
The Mining Registrar’s notice in respect of ML 4363 was sent on the 24th April 2007 to the Land and Resources Tribunal.
The Mining Registrar’s notice to the Tribunal in respect of ML 20018 was sent on the 23rd October 2007. This Court now stands in the shoes of the previous Land and Resources Tribunal.
Snowmist Pty Ltd (the miner) made application for ML 20018 on 11 December 2006 (MRA883-07).
Snowmist Pty Ltd made application in respect of mining lease ML 4363 on 23 March 2006 (MRA881-07).
The intended period of renewal for ML 20018 is for 15 years and in respect of ML 4363 the term sought is for 21 years.
The application for renewal of ML 4363 identifies the surface area required as being 129 ha while in respect of ML 20018 the application identifies an area of 20.69 ha so that in total an area of 149.69 ha is required. The landholders land described as Lot 11 on CWL742 and Lot 191 on SP 179187, Parish of Mullaburra, is located close to Mount Garnet in the Mareeba Mining Registrar’s District. Other land owned by parties identified as Burtenshaw is also involved in the mining lease renewal application but those matters have been resolved by agreement between the landowner and the miner.
Mining Lease number ML 4363 together with ML20018 is considered to be part of the same mining project. ML 20018 lies to the west of ML 4363. It appears from a plan prepared by the Department of Mines and Energy contained in attachment 3 to the correspondence from Hopgood & Ganim of 8 November 2007 that access to ML 20018 is achieved from a public road across ML 4363.
The application in respect of ML 4363 identifies access as being obtained via a dedicated road that is within or rebutting the mining lease area. Question 8 on the Mining Lease Renewal Application which enquiries into the same information in respect of ML 20018 does not really answer the question but simply observes “previously captured” which I assume is a reference to the contiguity between ML 4363 and ML 20018.
While the proposed access to ML 20018 appears to be across ML 4363 that cannot necessarily be assumed to persist forever because, in theory at least, ML 4363 could be either fully or partially surrendered so that access across the Cantoni’s land would be necessary to reach ML 20018. That is a matter which does not appear to be contemplated by either party.
Court Practice Direction
On the 29th October 2007 the Court sent letters to the miner and the landholders bringing the referral of this matter to the Court by the Mining Registrar to their attention and advising them of their obligations under Practice Direction 1 of 2003 and Practice Direction 2 of 2003. Timeframes for the submissions of relevant material were provided to each party. Those directions were not complied with.
By an order made on the 15th February 2010 these matters were directed to be dealt with on the papers unless otherwise ordered by the Court.
By correspondence delivered to the Court on the 20th May 2010 Snowmist Pty Ltd delivered a document which is styled as a lay-witness statement over the signature of Mackenzie Nichols a Director of Snowmist Pty Ltd. In his statement Mr Nichols says as follows:
“1. There are no present plans to conduct mining on the proposed leases.
2. Commencement of mining would require a change to the plan of operation.
3. As such there is no present plan to conduct mining on these leases.
4.Per the Pastoral Lease holders draft Statement of Fact (excerpt below); it is our understanding that there is no pastoral grazing occurring on these Mining Leases at this time perhaps due to the steep, uncleared topographic setting.
’13.The existing fences exclude the grazing of cattle from the surface of the ML’s.’
5.As there would be no present interruption to current pastoral grazing activities and we have no present mining plan we fail to see why any compensation is payable.
6.Please understand that our contract of lease is with the Queensland Dept. of Minerals and Energy, part of this lease defines our annual lease fee.
7.We also pay rates to the Tablelands Regional Council.”
On or about the 12th May 2010 the Court received a document identified as an “Agreed Statement of Facts” from the Cantoni’s. That document is signed by Mr Nichols on behalf of Snowmist Pty Ltd and by Mr & Mrs Cantoni. It is in effect a chronology of dialogue which has occurred between the parties including details of offers and counter offers in respect of compensation.
On or about the 20th May 2010 the Cantoni’s filed their lay witness statement signed by each of them. Relevantly that statement contains the following information:-
“…
4.We have owned Lot 11 on SP218296 formerly Lot 11 on CWL742 since November, 1990.
5.When we first brought this property there was no pasture improvements, no fences, no cattle yards, no sheds, only a run-down dwelling and GHPL title. Since 1990, with a lot of hard work and a large financial commitment we have extensively improved this property.
6.These improvements include – immediately after purchase we aerially seeded entire property with Seca and Verano seed and completely four barbed boundary fenced, fenced entire property into four paddocks for cell grazing with a 5 km laneway linking all paddocks to cattle yards at front of property; every year since we have spread seed i.e. Bisset Blue Grass, Rhodes, Signal, Eurochloa grasses and Wynn Cassia.
7.We have built cattle yards, machinery shed and improved the dwelling.
8.Built stock dams and lick sheds in all paddocks.
9.Installed reticulated water to cattle yards and front paddocks.
10.Bought at considerable expense the Freehold Title to this property (Lot 11).
…
13.Our preference is for Snowmist P/Ltd to retract/redraw the lease to the edge of our boundary.
14.If this is not possible we seek compensation for – overall loss of value and marketability of total property, degradation of good, improved agricultural land, further pollution of creeks and gullies already running red with soil run-off from the minimal mining activity that has already taken place above us and occurs during rain events. Negative impact on native vegetation and wildlife which we have encouraged and fostered. Disruption to our quiet lifestyle i.e. noise, dust, mine traffic.
15We currently value our Freehold property at $1,600,000 and would not consider selling for less than that figure.
16.We estimate that a figure of $1,600,000 divided by 992 hectares (total area of property) = $1,612.90 per hectare.
17.Total area of ML 4363 on our property (16 hectares)
18.Total area of ML 20018 on our property (12 hectares)
19Totalling 28 hectares on our property x $,612.90 per hectare = $45,161 per annum is a fair and reasonable figure for a mining company to effectively have tenure over our small, well developed farm.”
The Cantoni’s have also provided to the Court a valuation prepared by Northern Property Valuers (Mr Max Dickenson) valuing the land as at the 27th March 2010. That valuation which is only of Lot 11 with an area of 992.7125 ha values the property at $1,000,000.
By email on the 17th June 2010 Snowmist Pty Ltd filed a reply to the material from the Cantoni’s.
In those documents the miner contends as follows:
“Ÿ 5.1 There are no present plans to conduct mining on the proposed leases.
Ÿ5.2 Commencement of mining would require a change to the plan of operation.
Ÿ 5.3 As such there is no present plan to conduct mining on these leases.
Ÿ 7.0 – Conclusion
Snowmist Pty Ltd proposes that nil compensation should be paid. The primary reason for this being that the existing agreement attached in Appendix 2 spells out nil compensation.”
The applications for renewal were lodged by Triple Crown Mining Pty Ltd but the Court is in possession of the document dated 1 July 2008 which affirms that Triple Crown Mining Pty Ltd was assigning the existing tenements to Snowmist Pty Ltd. Accordingly Snowmist is the proper party in these proceedings.
Determination of the compensation in this matter has been slow mainly because of correspondence from Hopgood Ganim lawyers then acting for Triple Crown Mining Pty Ltd in November 2007 instructing that an evaluation process for the mining project was expected to take approximately 12 months and requesting the then current matters before the Land Court be adjourned for 12 months. Subsequently the mining leases held by Triple Crown Mining Pty Ltd were transferred to Snowmist Pty Ltd.
The Court was advised of that proposed transfer on the 1st July 2008. In January 2009 Snowmist, by telephone, requested a further extension of time to allow negotiations to continue. Agreement has been reached with the Burtenshaw’s but not with the Cantoni’s.
Section 281 of the Mineral Resources Act 1989 sets out the matters which must be considered by this Court in determining the appropriate compensation.
It has been observed on a number of occasions[1] that although s.281 sets out the matters to be considered in determining compensation it does not, in a statutory sense, define any particular method of assessment.
[1] See, for example, Re: Wallace & Ors & Evans [2006] QLRT 93 and Re Wilkins and Mudge [2009] QLC 0075.
The Court has previously taken comfort from the observations of the Land Court in Smith v Cameron [1986] 11 QLCR 64 where the Court held (at page 74) that:
“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.”
The material which has been placed before the Court in the present case does not seek to identify items of compensation under any of the separate heads identified in s.281 and accordingly will fall to me to make a determination, as best I can, on the material provided to me.
I have been provided with a copy of the compensation agreement entered into in respect of a similar lease between Snowmist Pty Ltd and GF RA & CGF Burtenshaw.
That compensation agreement dated the 27th May 2010 provides that:
“Upon the granting of the renewal of mining leases 4363, 4390 and 20018 the miner will pay to the owner the sum of $12 compensation per ha per annum over the whole of the leased area for the full term of the mining leases. The annual amount due must be paid by the anniversary date each year and CPI will adjusted accordingly. Failure to pay the compensation and subsequent annual payments will render this agreement null and void.”
Notwithstanding some grammatical difficulties with the manner in which that agreement is expressed it is clear that the Burtenshaw’s and the miner Snowmist Pty Ltd have agreed to a figure of $12 compensation per ha per annum.
It must be recognised that the compensation payable upon renewal can sometimes but not always necessarily be related back to the compensation that was paid for a previous lease.
However in circumstances where a landowner at any early time accepts a zero sum for compensation in the past that is no warrant to guarantee that they will continue to accept a zero sum in the future.
Moreover it should be recognised that the existence of a mining lease over the subject land constitutes a blot on the landowner’s title.
The Cantoni property located on the Kennedy Highway at Mount Garnet has an area of 2,636.777 ha, is zoned “Rural” and is used for the dominant use of cattle grazing and breeding.
As noted above the application for renewal of ML 20018 is for a period of 15 years and for ML 4363 is for a period of 21 years and while the miner contends that it presently has no plans to act mining activities such plans and aspirations can change in a very short term. The miner presently contends that the compensation should be nil continuing an agreement for compensation to be in that figure which dates from as far back as 1991.
The miner draws the Court’s attention to the decision of this Court in Re: Wilkins & Mudge [2009] QLC 0075 in that decision the Judicial Registrar Mr O’Connor observed:
“While the Miners claim nil compensation should be awarded at this stage, some allowance must be made for the blot on the landowner’s titles resulting from the existence of the mining lease.”
In that matter neither party had filed any material to assist the Judicial Registrar in his task of assessing compensation.
In the present case however both parties have filed material which is of assistance to the Court.
I am unmoved by the contention by Snowmist Pty Ltd that the primary reason for their capacity to contend that nil compensation should be paid is that the existing agreement provides for nil compensation.
The Cantoni’s in a letter to this Court dated 4th April 2010 observed, with respect to that nil compensation agreement, as follows:
“In 1992 being uninformed and ignorant of the financial implications of a mining lease on our property, we agreed when approached by Mr Chip Nichols to sign an extension to a lease. Since this 1992 lease was signed we have become very aware of the severe impact of mining leases for landholders on small holdings.”
In that correspondence they advised the Court that they seek compensation for : -
a)Overall loss of value and marketability of total property (see enclosed Registered Valuation by Northern Property Valuers).
b) Degradation of good improved agriculture land (see enclosed photos)
c)Further pollution of creeks and gullies (already running red with soil run off from mining activity above us during rain events)
d)Negative impact on native vegetation and wildlife which we have encouraged and fostered
e)Disruption to our quiet lifestyle i.e. noise, dust, mine, traffic.
They contend that compensation should be paid in the sum of $45,161 per annum. The calculation of that is set out in the following final paragraph of correspondence:
“We currently value our freehold property at $1,600,000 and would not consider selling for less than that figure. We estimate that a figure of the value of our land $1,600,000 divided by 992 hectares (total area of the property) $1,612.90 per hectare x 16 hectares (ML 4363) & 12 hectares (ML 240018) totalling 28 hectares = $45,161 per annum is a fair and reasonable figure for a mining company effectively having tenure over our small, well developed farm.”
Notwithstanding the valuation of Rural Lot 11 at $1,000,000 on the 27th March 2010 the Cantoni’s continue to assert that the value of their land is $1,600,000.
That figure appears to flow from correspondence sent by the Cantoni’s to this Court in or about May 2008 in the course of which correspondence they contend for the figure of $1,600,000 for the 992 ha area.
The price per ha relying on the Cantoni’s contention of $1,600,000 calculates to about $1,600 per ha. The price per ha of the Northern Land Valuers valuation of $1,000,000 is accepted is approximately $1,008 per ha. It is difficult to reconcile those freehold land prices with the proposition that for a lease only of the land for a period of either 15 or 21 years the mining company should pay the market value per year for each of those 15 or 21 years. That is to say the landowner contends, in effect, that the mining company should pay the freehold price for the land subject to the lease for each of the years of the lease. Such a proposition has an air of fantasy or unreality about it.
I note the assertions by the Cantoni’s as to the work they have done to improve the property held by them.
However, there is no substantial particularisation of where those improvements lie in relation to the leased area and the balance of the property. Moreover there is no material before me which provides me with any detail as to whether the leased areas are representative of the whole of the lands held by the Cantoni’s or whether, as is often the case with these mining leases, the leases are pegged over less desirable areas of the subject property.
I am entitled to take into account other awards made both by myself and other Members of this Court and am aware that the compensation figures range between $5 and $20 per ha for land in and around the subject land.
I am also somewhat hamstrung insofar as there is no particular detail provided to me outside of the very broad-brush approach adopted in the valuation report of Northern Land Valuers of the carrying capacity of the subject property. I note that in the locality there are established beef cattle breeding properties.
However, I also note that the valuer identifies the subject Cantoni property as being “an irregular shaped bush block currently utilised for hobby farm grazing and is best suited as a lifestyle bush retreat on account of the relatively small land area and the limited grazing land available.”
The property, the valuation report goes on to point out, is improved with a basic cottage, a shed, cattle yards and fencing together with a stock dam and a spring-fed creek through the property.
I am not informed as to how the mining activities will impact upon the lifestyle bush retreat use of the subject land or, indeed, on the grazing activity, limited though it be.
In my mind it is beside the point that the miner contends it does not propose to carry out any mining activities during the life of the lease. It then becomes difficult to understand why they seek to maintain the lease in any event. That is entirely a matter for them, however they cannot expect to have a lease over land which is otherwise held without paying some compensation to the landowner.
In making my determination I have attempted to take into account the only other viable use of the land being for lifestyle purposes and/or for limited hobby grazing if pasture is available.
I have come to the view, on the material available to me that mining operations on this lease, particularly given its size, would have no particular effect on the other operations conducted on the property. There may be some minor effects constituted by the noise of machinery and traffic and the movement of people in vehicles in and about the lease area and along the access ways. The mining activity would, in my opinion, by its pressure have some minor impact on the lifestyle aspect of its current use.
There is no particular evidence that I can rely upon of severance of any part of the property from another part and I make no allowance for injurious affection on the balance of the property there being no evidence provided to me in that respect.
In my view, and having regard to the circumstances of this case and the limited evidence provided to me I consider that the following award will satisfy the requirements of s.281 for the term of the renewed lease. At the end of the renewed leases should Snowmist Pty Ltd have clarified its intentions with respect to utilisation of the lease then both parties can provide additional material to the Court for consideration of compensation upon any further renewal of the lease.
Notwithstanding that the application for ML 20018 of 11 December 2006 identified a lease area of 20.69 ha and also notwithstanding that the application in respect of ML 4363 made on 23 March 2006 identified a lease area of 129 ha (see paras 5, 6, 7 and 8 above) the agreed Statement of Facts signed by both parties identifies the area of mining leases in respect of the Cantoni land as being 11.8 ha in respect of ML 20018 and 17.1 ha in respect of ML 4363. Other documents including a valuation prepared by Mr Dickenson referred to 30 ha and some correspondence from the Cantonis suggesting areas of 12 ha in respect of ML 20018, my inclination is to rely upon the agreed Statement of Facts signed by both parties.
I determine compensation under Part 7 of the Act, to satisfy all the heads of compensation set out in s.281(3) of the Mineral Resources Act should be in the sum of $10 per ha per annum for the term of the renewal on the respective lease areas.
In respect of ML 20018 being 11.8 ha the annual lease fee is $118.
In respect of ML 4363 being 17.1 ha the determined annual lease figure is $171.
I further award the sum of $1 per ha under s.281(4)(3) of the Mineral Resources Act to reflect the compulsory nature of the action taken under this Part generating of precise figure of $11.80 in respect of ML 20018 and $17.10 in respect of ML 4363.
The total in respect of ML 20018 is $129.80 which I round up to an annual figure of $130. Using the same language in respect of ML 4363 is $188.10 which I round up to $190.
Such sums are payable on an annual basis in advance with the first payment to be made within two months from notification of renewal of the mining lease by the mining registrar and are payable thereafter on the anniversary of the granting of the renewal of the mining lease.
Orders:
1. Compensation in respect of ML 4363 is determined at $190 per annum.
2. Compensation in respect of ML 20018 is determined at $130 per annum.
3. The miner is to pay the said compensation to the landowner in advance with the first payment to be made within two months from notification of renewal of the mining lease by the Mining Registrar and payable thereafter on the anniversary of the granting of the renewal of the mining lease.
HIS HONOUR, WL COCHRANE
MEMBER OF THE LAND COURT
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