Unimin Australia Limited v Freeman
[2007] QLC 76
•23 October 2007
LAND COURT OF QUEENSLAND
CITATION: Unimin Australia Limited v M and T Freeman [2007] QLC 0076 PARTIES: Unimin Australia Limited
(applicant)v. Maurice Freeman and Tricia Freeman
(respondents)FILE NO: MLC00138/2007 PROCEEDING: Application for determination of compensation. DELIVERED ON: 23 October 2007 DELIVERED AT: Brisbane MEMBER: Mr RS Jones ORDERS: 1. Unimin Australia Limited is to pay to Maurice Freeman and Tricia Freeman compensation in the amount of $2,500 per hectare (or part thereof) for that part of Lot 71 on Plan FY17 Parish of Booneene unable to be used by them as a consequence of Unimin's mining operations on or concerning Mining Lease 5687.
2. The payment of such compensation is to be paid annually in arrears for the twelve months ending 31 December for each year after the commencement of any mining operations on Lot 71 and any such payment of compensation is to be paid to Maurice Freeman and Tricia Freeman by no later than 1 March of each year.
3. The above mentioned rate of $2,500 per hectare is to be adjusted annually for the following calendar year by the corresponding percentage increase (if any) in the Consumer Price Index in the December Quarter All Groups CPI value applicable to Brisbane as published in the Australian Bureau of Statistics. However, in circumstances where the index decreases, the rate of $2,500 per hectare will not be adjusted.
CATCHWORDS: Renewal of mining lease – determination of compensation – Mineral Resources Act 1989 ss.279 and 281. APPEARANCES: Not applicable – Heard on the Papers
Mr and Mrs Freeman are the owners of land described as Lot 71 on Plan FY17, Parish of Boonenne which lies in the Brisbane mining district of Queensland. Unimin Australia Limited seeks the renewal of an existing mining lease (ML5687) which affects Lot 71. The area of the mining lease is identified in the application for renewal dated 5 June 2006 as 24.78 hectares. The reason for the mining lease is described in the application for renewal in the following terms:
"To enable resource to be adequately defined and recovered"
The original lease expired on 31 March 2007. The renewal application is for a term of twenty one years.
Some Relevant Legislation
Section 279 of the Mineral Resources Act 1989 (MRA) requires compensation for a mining lease to be settled before the grant or renewal of the lease. Compensation may be agreed upon by the parties or determined by the Court. In this instance, as no agreement has been reached between the parties, the determination of compensation has been referred to the Court.
In cases where compensation is referred to the Court pursuant to s.279 of the MRA, as is the case here, the owner of the land affected by the granting or renewal of the mining lease is entitled to compensation pursuant to s.281(3)(a) for:
"(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."
The Conduct of the Proceedings and Evidence
On 24 July 2007 the Land and Resources Tribunal (LRT), as it then was, wrote to Unimin and Mr and Mrs Freeman enclosing copies of Practice Directions 1 and 2 of that Tribunal. That correspondence and the Practice Directions were to the effect that the determination of compensation would be dealt with on the papers and without an oral hearing unless either party made a written request for such a hearing or, where it was considered that a hearing was otherwise necessary. No party has made a request for an oral hearing. Practice Direction 1 also provides for the filing of material by the parties in support of their respective positions concerning compensation. In this case the only material of any significance forwarded to the LRT was the material accompanying the renewal application forwarded by the Acting Deputy Mining Registrar to the Registry of the LRT on 24 July 2007 together with copies of some correspondence and a draft compensation agreement which is undated.
None of the information contained in the public mining lease report and/or the application for renewal is of any real assistance in assessing compensation in this case. However, in the draft compensation agreement referred to above, compensation is specifically addressed at page 2 of that document where it is said:
"Compensation of $2,500 per hectare (or part thereof) of Disturbed Land will be payable for every year (commencing on the date of commencement of mining operations) or part thereof which is used by Unimin, to the Owner.
Any such payments will be made annually in arrears for the twelve months ending 31 December each year after the commencement of mining operations, with any such payments to be made to the Owner by 1 March each year.
The above sum of $2,500 per hectare of Disturbed Land will be adjusted annually for the following calendar year by the corresponding percentage increase if any in the Consumer Price Index in the December Quarter All Groups CPI value applicable to Brisbane as published by the Australian Bureau of Statistics. (If) such index decreases, the above sum will not be adjusted."
The document goes on to identify various obligations of Unimin and Mr and Mrs Freeman pursuant to the agreement and under the heading Definitions "Disturbed Land" is defined to mean:
"… that part of the Mining Lease Land that is unable to be used by the Owner due to Unimin's mining operations."
As the draft compensation agreement is undated and unsigned it would not ordinarily be considered to provide any meaningful evidence of an appropriate level of compensation. However, it appears that the terms of the draft compensation document is the product of some negotiations between the parties and, in particular, as a consequence of matters raised by the solicitors acting for Mr and Mrs Freeman in correspondence dated 28 June 2007. As a consequence of that letter Unimin wrote to the solicitors on 10 July 2007 addressing the matters raised by them in their correspondence of 28 June 2007 and on 19 July 2007 the solicitors replied to Unimin stating in part:
"We have referred the amended agreement to our client for approval and subject to their instructions anticipate that the terms will be acceptable.
We have made some minor amendments to the Compensation Agreement most of which are not of a substantial nature. We now attach this document in Word format showing the marked up changes. Please confirm if they are acceptable.
Once we have your response and pending our client's instructions we will arrange for the agreement to be signed."
On 20 July 2007 Unimin wrote to the solicitors saying that it was prepared to accept the amendments. For reasons which have not been explained to me the agreement was never executed. On 10 August 2007 Unimin wrote to the registry of the LRT advising that negotiations where still continuing.
As unsatisfactory as it is, the draft agreement and the correspondence surrounding it provides the only evidence of what might constitute a reasonable level of compensation. It appears that the agreement proposed was acceptable to Unimin as at 20 July 2007 and by the solicitors for Mr and Mrs Freeman as at 19 July 2007. In circumstances where there is no other material to assist me I propose to order compensation generally in accordance with the terms set out in the draft agreement. Accordingly, I order as follows:
Orders:
1. Unimin Australia Limited is to pay to Maurice Freeman and Tricia Freeman compensation in the amount of $2,500 per hectare (or part thereof) for that part of Lot 71 on Plan FY17 Parish of Booneene unable to be used by them as a consequence of Unimin's mining operations on or concerning Mining Lease 5687.
2. The payment of such compensation is to be paid annually in arrears for the twelve months ending 31 December for each year after the commencement of any mining operations on Lot 71 and any such payment of compensation is to be paid to Maurice Freeman and Tricia Freeman by no later than 1 March of each year.
3. The above mentioned rate of $2,500 per hectare is to be adjusted annually for the following calendar year by the corresponding percentage increase (if any) in the Consumer Price Index in the December Quarter All Groups CPI value applicable to Brisbane as published by the Australian Bureau of Statistics. However, in circumstances where the index decreases, the rate of $2,500 per hectare will not be adjusted.
The correspondence by Unimin dated 10 July 2007 also indicates that it would, as a part of the overall compensation settlement, be prepared to pay the legal costs incurred by Mr and Mrs Freeman apparently as a consequence of the settlement negotiations.
In a previous decision[1] I expressed the view that it was not open to me to order compensation for professional fees incurred in the preparation of a claim for compensation following the decision of the Court of Appeal in Sullivan v Oil Company of Australia Ltd (No. 2)[2]. In the circumstances of this application I am also of the opinion that I am not able to order Unimin to reimburse Mr and Mrs Freeman for legal costs they incurred as a consequence of settlement negotiations. However, if it has been separately agreed between the parties that Unimin would pay such fees I would expect that agreement to be honoured.
[1] Matrix Metals Limited v The North Australian Pastoral Company Pty Ltd [2007] QLC 0075.
[2] (2004) 2 QdR 105 at paras [36] – [37].
Having regard to the way in which compensation has been assessed in this case and, in particular, where there is in reality no "aggregate amount determined"[3] I do not propose to make any orders concerning compensation in recognition of the compulsory nature of these proceedings.
[3] s.281(4)(e).
I realise that my determination of compensation in this case is the 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.
R S JONES
MEMBER OF THE LAND COURT
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