Starr v Appleton
[2008] QLC 122
•17 June 2008
LAND COURT OF QUEENSLAND
CITATION: Starr v Appleton & Anor [2008] QLC 0122 PARTIES: Geoffrey D Starr
(applicant)v. Victor JE Appleton and Janet A Appleton
(respondents)FILE NO: MLC00028/2008, MCC00254/2007, MLC00253/2007, MLC00029/2008 and MLC00252/2007 DIVISION: Land Court of Queensland PROCEEDING: Application for determination of compensation DELIVERED ON: 17 June 2008 DELIVERED AT: Brisbane HEARD AT: Clermont MEMBER: Mr RP SCOTT ORDER: 1. Compensation is determined in the amount of One Thousand and Forty-Five Dollars ($1,045) per annum.
2. The applicant is to pay compensation of One Thousand and Forty-Five Dollars ($1,045) yearly in advance, with the first payment due within two months from notification of renewal of the mining leases and mining claim by the Mining Registrar.
CATCHWORDS: Renewal of mining leases – determination of compensation – Mineral Resources Act 1989 ss.279 and 281. APPEARANCES: Mr GD Starr in person
Mr D Mayne (as agent) for the respondent
Mr Starr has applied to the Mining Registrar, Emerald Mining District for the renewal of the following mining leases: ML1766, ML7303, ML7292, ML7293 and Mining Claim 70008.
Section 279(1) of the Mineral Resources Act 1989 requires that a mining lease shall not be granted or renewed unless compensation has been determined. Section 85(1) is expressed in similar terms to s.279(1) and applies to mining claims.
Compensation was not settled between the parties within three months after the term of each mining lease and the mining claim ended (s.279(A) and s.85(A). Accordingly, the Mining Registrar referred the issue of compensation to this Court for determination.
The above Mining Tenements are joined in such a way as to comprise a single "block" and are worked as such as an underground goldmining operation. The block is located on "Miclere", a cattle grazing property located north of Clermont and owned by Mr and Mrs Appleton, the respondents. According to Mr Starr who gave evidence, there are 40 mining leases and 5 mining claims in addition to 12 mining lease applications on "Miclere" which adjoin his block of mining tenements, which I will refer to as the subject land. Mr Derek Mayne supplied evidence on behalf of the respondents.
The parties consented to the matters being dealt with en bloc as it were. Compensation with request to a mining lease is determined in accordance with ss.281(3) and (4):
"281 Determination of compensation by Land Court
…
(3)Upon an application made under subsection (1), the Land Court shall settle the amount of compensation an owner of land is entitled to as compensation for -
(a) in the case of compensation referred to in section 279 -
(i) deprivation of possession of the surface of land of the owner;
(ii) diminution of the value of the land of the owner or any improvements thereon;
(iii) diminution of the use made or which may be made of the land of the owner or any improvements thereon;
(iv) severance of any part of the land from other parts thereof or from other land of the owner;
(v) any surface rights of access;
(vi) all loss or expense that arises;
as a consequence of the grant or renewal of the mining lease; and
(b) in the case of compensation referred to in section 280 -
(i) diminution of the value of the land of the owner or any improvements thereon;
(ii)diminution of the use made or which may be made of the land of the owner or any improvements thereon;
(iii) all loss or expense that arises;
as a consequence of the grant or renewal of the mining lease.
(4) In assessing the amount of compensation payable under subsection (3) -
(a) where it is necessary for the owner of land to obtain replacement land of a similar productivity, nature and area or resettle himself or herself or relocate his or her livestock and other chattels on other parts of his or her land or on the replacement land, all reasonable costs incurred or likely to be incurred by the owner in obtaining replacement land, the owner’s resettlement and the relocation of the owner’s livestock or other chattels as at the date of the assessment shall be considered;
(b) no allowance shall be made for any minerals that are or may be on or under the surface of the land concerned;
(c) if the owner of land proves that the status and use currently being made (prior to the application for the grant of the mining lease) of certain land is such that a premium should be applied - an appropriate amount of compensation may be determined;
(d) loss that arises may include loss of profits to the owner calculated by comparison of the usage being made of land prior to the lodgement of the relevant application for the grant of a mining lease and the usage that could be made of that land after the grant;
(e) an additional amount shall be determined to reflect the compulsory nature of action taken under this part which amount, together with any amount determined pursuant to paragraph (c), shall be no less than 10% of the aggregate amount determined under subsection (3).
Section 85(7) and (8) which applies to a mining claim is expressed in similar language to s.281(3) and (4). I will therefore refer to s.281 only below and this should be read also as a reference to s.85(7) and (8).
Mr Starr proposed compensation of $150 per annum, based on $30 per tenement per annum for the deprivation of the use of the subject land. He did not provide details as to the derivation of the $30 figure though said in oral evidence that it was based on the subject land carrying 1 head of cattle. From what I understand, Mr Starr had previously offered compensation of $600 per annum. For their part the Appletons sought a figure of $1,820 per annum made up as follows:
Loss of land value $498 per annum
Maintenance of access $420 per annum
Loss of production $665.76 per annum
Administration $281 per annum
TOTAL $1,820 per annum.
I notice that this amount does not include an "additional amount" under s.281(4)(e).Mr Starr had acquired the mining tenements in 2007 though had previously operated mining activities on the block for the previous holder. Owing to interim legal restrictions on mining activities being carried out on the five tenements after he had acquired them, Mr Starr has not put any mining operations plan into action at the time of hearing.
In company with Mr Appleton, Mr and Mrs Starr and Mr Mayne, I inspected the subject land. Whilst part of the area is untouched, there is obvious intrusion of the goldmining operation in the form of mine shafts, heaps of spoil, some subsidence, an unsightly dam, machinery both useless and decrepit and other forms of minor disturbance. This inspection assisted my understanding of the evidence.
Mr Mayne is an agribusiness consultant and holds a Degree of Bachelor of Applied Science majoring in rural management (Queensland University). He supplied a statement which set out the basis for the compensation figure relied upon by the Appletons. In his evidence Mr Mayne referred to the intrusions noted in the preceding paragraph as being relevant to the assessment of compensation. It results in some deprivation of possession, but Mr Mayne did not place a specific figure on that.
A major component of Mr Mayne's compensation figure comprised an estimated value of loss of production on the subject land dealt with by Mr Mayne under the heading "Diminution of Use" – an apparent reference to s.281. He said that the mining activity on the subject land would generate substantial noise from generators, air compressors, an underground loader, an above ground wash plant and from the use of explosives over a 40 hour week during the year. He said that the noise would frighten cattle away from the area with the result that grazing on the subject land would be virtually nil. From that basic assumption he calculated production and income loss figures.
Mr Starr said that explosives would be utilised underground only with the result that noise would be minimal. He has observed cattle in the area when conducting explosions and noticed them to be little concerned with the noise. He said that cattle sometimes congregate near the machinery to gain the benefit of exhaust fans blowing flies off them. Certainly I noticed evidence of cattle having been quite close to mining machinery and disturbed areas and am aware that cattle will generally become conditioned to accept the interruption of noise such as traffic and the like whilst grazing. Nevertheless I would anticipate some activities on the land would interrupt their grazing and there are certainly areas on the subject land to which they cannot gain access.
Mr Mayne estimated a carrying capacity of 1 beast to 3.2 ha on the basis of an adult equivalent beast of 400 kg and calculated that the total area of 6.1 ha of the subject land would carry the equivalent of 1.9 beast in an average season. Mr Starr said that surface rights amounted to 4.691 ha only and that therefore any calculation would have to be based on that. I accept that this is the correct measurement of surface rights area, but I do not accept that the impact of the mining activities on the cattle would be limited arbitrarily to the area of surface rights. There will necessarily be some physical overlap of activity for example cattle wandering onto the area over which Mr Starr would have surface rights and such things as black plastic blowing off the mining area onto other parts of land.
Mr Starr provided evidence of Department of Primary Industries classification of land on "Miclere" at Class VII and Class VIII as follows:
"CLASS VII
- Land not suitable for cultivation and only careful pastoral use possible.CLASS VIII
- Land is not suitable for agricultural or grazing purposes."Mr Starr said that he had spoken to a Mr Ken Murphy of the Department of Primary Industries who he said provided him with an opinion as to the carrying capacity of the mining lease area. Based on this source and on the supplied land classification, Mr Starr suggested that Mr Mayne's carrying capacity was too high. The classification of lands by the Department of Primary Industries in the evidence provided is broad and general in nature and not specific to the land in question. Mr Mayne presented evidence of his opinion of carrying capacity and his appreciation of the relevant country and it is that opinion which I prefer to hearsay opinion from a person not subjected to cross-examination. In addition to that, I have the advantage of having inspected the land and formed the view that Mr Mayne's estimate of carrying capacity ought to be adopted.
Mr Mayne's calculations of production loss assumed that operations on the mining block would be carried out for 40 hours a week throughout the year. The mining operations plan provided by Mr Starr indicates however that mining activities would be confined to 8 months of the year. For the remaining 4 months, cattle would be able to utilise as much of the area as is available without any form of interruption from the mining activities. Nevertheless, areas of disturbed land and land otherwise occupied by machinery and structures would remain unavailable.
In his calculations Mr Mayne estimated that an average beast would gain 0.6 kg of weight per day equating to 219 kg of beef per year for his estimated 1.9 head. On the basis of a live weight value of $1.60 per kg, the total loss of income for the 6.1 ha area relied on would equate to $665.76 per annum. That figure takes no account of the cost of production which Mr Mayne estimated at $60 per head or $104.50 based on his calculations for a carrying capacity of 1.9 head. I think the correct calculation should be $114. That is, assuming the accuracy of his initial figure of $665.76 per annum, the nett income loss would be $551.76 per annum.
Mr Starr said that the Appletons had purchased "Miclere" in full knowledge of the mining activities being carried out on the property so would have presumably taken into account that issue as part of the original purchase price. I do not accept that as being a complete answer to the question of compensation as, presumably, a prudent purchaser would purchase in full knowledge that compensation would be payable for the mining disturbance. I understood Mr Starr to have accepted that view as the case proceeded.
Under the heading "Diminution of Value" (also an apparent reference to s.281) Mr Mayne estimated a loss in value equivalent to $454 per annum. He said that the mining operations permanently diminishes the value of the land for grazing as there would be sunken mine shafts exposed, the possibility of subsidence and piles of ore left over the surface. He said that the area would need to be fenced off because of the risk of injury to animals and that it would never realise its full grazing potential. He estimated that the area would lose 75% of its value and based on a suggested value of $1,360 per ha, fenced and watered, calculated a loss of $1,020 per ha. Based on an area of 6.1 ha, the total loss would be $6,222 or at an interest rate of 7.3% would equate to $450 per year.
Mr Mayne's calculation proceeds on the basis that the mining area would not be rehabilitated; however, it is clear that there would be an obligation for Mr Starr to either rehabilitate the area or to suffer the loss of a bond to the Environmental Protection Authority for that Authority to arrange rehabilitation. Having said that, I accept that it would not be probable that rehabilitation would return the land to its original condition and potentiality. Some nominal diminution in value would take place. I do not accept that it would be as high as the figure calculated by Mr Mayne and whilst I use the term "nominal" I employ that only for the purpose of indicating that there is no clear basis in evidence for the calculation of a precise amount, not to indicate that the figure should be miniscule. The amount must be selected on the basis of judgment. In selecting that amount I take into account that Mr Mayne has calculated a substantial figure on the basis of "diminution of use" – a figure that on the basis of my view of the evidence overall is somewhat high. Care needs to be taken in matters such as this that there is not duplication in the heads of compensation. Section 281 of the Mineral Resources Act does not provide a cumulative list of heads of compensation but indicates those matters as to which the court is to direct its mind (Wills v Mineva [No.2] (1998) 19 QLCR 297).
Under the heading "Access" Mr Mayne calculated compensation in the amount of $420 per annum on the basis of the Appletons grading the access road to the subject land. There was, however, uncontradicted evidence from Mr Starr that the road in question is a gazetted road and responsibility for its maintenance lies with the local government authority. Any road maintenance carried out by the Appletons, or Mr Starr for that matter, would be entirely voluntary. Apart from that there was evidence from Mr Starr that the Appletons had not graded the road during his period with the mine on "Miclere".
Mr Mayne calculated an amount of $281 per annum under the heading of "Administration" for bookkeeping and site inspections. No evidence of actual costs of administration incurred was provided by the Appletons, though Mr Appleton was in Court. Nevertheless I would expect that there would be some cost involved. Insofar as site inspections are concerned: whilst it may be primarily the responsibility of the Environmental Protection Authority to oversee and monitor mining activities and adherence to that Authority's requirements I would find it unexceptionable that a grazier would wish to keep an eye on mining activity on his property. Nevertheless I would think that such inspections as he might carry out would take place along with the usual property operations. I doubt that inspections would be carried out in the manner calculated by Mr Mayne whereby it was assumed that Mr Appleton would travel from the homestead to the mining leases and back again solely for the purpose of inspecting the various mining areas on "Miclere".
Compensation for the combined mining tenements had been payable at an amount of $1,703.20 per annum at the time when Mr Starr purchased the tenements. That compensation amount was not determined by this Court or by the Land and Resources Tribunal but was an amount agreed between the then miner and the landholder. I cannot assume the correctness of that figure then simply add an allowance for the change in dollar values, but must approach the matter afresh.
I prefer Mr Mayne's approach to the assessment of compensation to that of Mr Starr but consider that Mr Mayne's figures are too high for the reasons already stated. Having regard to those reasons, I have settled on a figure of $950 per annum. In addition to that amount I add 10% under s.281(4)(e). In the result I determine compensation payable in the amount of $1,045 per annum.
ORDER
Compensation is determined in the amount of One Thousand and Forty-Five Dollars ($1,045) per annum.
The applicant is to pay compensation of One Thousand and Forty-Five Dollars ($1,045) yearly in advance, with the first payment due within two months from notification of renewal of the mining leases and mining claim by the Mining Registrar.
RP SCOTT
MEMBER OF THE LAND COURT
0
0
0