Wallace v Wright

[2009] QLC 176

LAND COURT OF QUEENSLAND

CITATION:  Wallace v Wright [2009] QLC 0176

PARTIES:In the matter of Mining Lease No 4971 – Determination of compensation payable by Raymond Cedric Wallace to Ian Wright

FILE NO:MRA1348-08

PROCEEDING:  Application for determination of compensation

DELIVERED ON:  24 November 2009

DELIVERED AT:  Brisbane

MEMBER:Mr BR O’Connor, Judicial Registrar

ORDER/S:1.       Compensation determined at $55.

2.     The miner pay the total compensation of $55 to the landholder within two months from notification of the renewal of the mining lease by the Mining Registrar.

3.     Claims for survey costs and legal fees by the landowner are dismissed.

CATCHWORDS:  MINING LEASE – DETERMINATION OF COMPENSATION

Mineral Resources Act 1989 s.281

APPEARANCES:  Not applicable – Heard on the Papers

Background

[1]Mining Lease 4971 is currently held by Raymond Cedric Wallace (the miner). An application to renew this lease was lodged with the Mining Registrar, Mareeba on 18 October 2006.

[2]There remains outstanding the issue of compensation to be awarded for part of the access route to this lease. This access route is over part of a former Special Lease owned by Mr Ian Wright (the landowner). Subsequent dealing with this Special Lease is dealt with in more detail below. The miner and landowner have been unable to agree on the appropriate compensation and have referred the determination to the Court to be dealt with on the papers. Both parties have made detailed written submissions through their solicitors or agents.

Submissions of the Parties

[3]The landowner’s solicitor’s submission of 14 September 2009 outlines the background to the dispute and the landowner’s claim. The letter reads (with omission of certain references to schedules):

“…

1.Ian Wright is the registered proprietor of land described as Lot 159 on SP 219762 Parish of Dynes County of Hodgkinson. This land is presently crown leasehold land, being special lease 47276.

Ian Wright has been the owner of this land as leasehold for sometime, and applied to freehold this land approximately two years ago.

…

2.Mr Wright’s Application to freehold Lot 159 was approved by the Department of Natural Resources, subject to conditions, on 23^rd September 2008. …

3.One of the conditions of Freeholding that was imposed by DNR&W was the requirement to excise an area of approximately 1.22 hectares at the northern end of lot 159, to be opened as a road. Enquiry with DNR&W has revealed and DNR&W’s own investigation showed this area as being identified on tenure maps as an access for an adjacent mining lease ML4971.

4.Mr Wright, in meeting the conditions of the freeholding approval subsequently engaged a private surveyor to resurvey the northern boundary of lot 159 excising the area stipulated by DNR.

It is important to note that all other boundaries of lot 159 had previously been surveyed and pegged. The work undertaken by the Surveyor was only to realign the northern boundary and to peg the area to be dedicated as new road, as required by DNR&W as a condition of the freeholding process.

…

5.The imposition by DNR&W of the condition to excise the area at the northern area of lot 159 and to survey that area to be opened as a road, has arisen because, and only because of the existence of mining lease 4971, and the identification of that area of land as being required as an access for that mining lease.

It is understood by Mr Wright that the holder of the mining lease had identified to the Department of Mines that this area of land would be available as an access point for the mining lease, and Mr Wright had some years ago been approached by Mr Wallace and asked whether he could identify the area of land as an access way for the mining lease.

6.The inclusion of that area of land on DNR&W tenure maps as a mining access is a matter that has arisen only as a result of the existence of the mining lease and the submission of the mining lease holder that the land was available for access.

7.Whether or not the miner has actually used this land for access purposes, whether it would be economical or practical for the miner to do so, are not issues within the control or interest of Mr Wright.  Similarly, it is not relevant whether or not the holder of the mining tenement was aware of Mr Wright’s freeholding application. The only relevant factor is why the DNR&W condition to excise this area of land was imposed, and the only reason that condition was imposed, was because of the identification of this area as an access for the mining lease.

Mr Wright has obtained no benefit whatsoever (and has lost an area of his lease, though no compensation is sought in respect of that loss of that area) out of this process of surveying the access for the mining lease.

The compensation that is sought only reflects the actual cost to Mr Wright of ensuring this access is available for the mining lease in perpetuity for the future. There is no ongoing cost to the mining lease holder that would arise on each renewal of the lease or the expiry of any compensation agreement.

8.It would be unjust and inequitable for Mr Wright as the owner of his land to have to meet the significant survey costs for which the mining lease holder is the only beneficiary.

The only equitable determination is that the mining lease holder should indemnify the landholder for the survey cost that has been incurred, together with a contribution to the landowner’s legal costs necessarily incurred in pursuing this compensation, given the mining lease holders refusal to agree to pay.

9.The Landholder claims as compensation:-

(a)sum of $4,356.00 on account of the Surveyor’s fees; and

(b)sum of $1,500.00 as a contribution to the legal costs incurred in pursuing this compensation, and in meeting the directions and requirements of the Land Court in the course of this matter.”

[4]Agents for the miner, Hughes Consulting Group, have also made written submissions on behalf of their client on 28 September 2009. Key aspects of their claim are as follows:

“1.Mr Wallace has held ML 4971 for some 30 years. The licence expired in 2007 and a renewal application was duly lodged. In 2007 Mr Wallace negotiated and agreed compensation for access via the Kimalo station and this agreement was subsequently registered with the Mines department.

2.The formal access area to ML 4971 as designated by the Registrar has historically been over a small portion of the land leased by Mr Wright. The access way, subject to the survey, passes across an area of Mr Wright’s land that could only be used for casual grazing and is not planted.

3.Mr Wallace has not utilised this area and was not involved in the Mr Wright’s decision to apply for freehold of this property or for that matter the decision to excuse the area subsequently surveyed from the leased area Mr Wright wished to freehold. …

4.…

5.Mr Wallace cannot be the beneficiary of the excised area since the land would revert to Crown ownership. He simply has right of access and would consider any arrangement for compensation with any new land owner. In fact, it is Mr Wright solely who benefits as the excise of the land allows him the freehold he seeks. …

6.Mr Wright assumes that Mr Wallace would not have considered applying for alternative access or indeed relinquishing the lease application. …

7.Mr Wright has not made his intentions to freehold his property and, perhaps more importantly the requirement to survey, known to my client at any time and therefore removed my client’s ability to mitigate any cost of a survey or have input into the extent of land required for the access. As a consequence, Mr Wallace was deprived of the opportunity to find more suitable access and apply to the Mines Department for a variation of this access.

…

8.We are not aware of any compensation paid to Mr Wright or any other party in relation to the Barbetti Road access in the 31 years Mr Wallace has held the lease. If Mr Wright is relying on Section 262 he would need to show that he has suffered or will suffer some form of hardship or loss as a consequence of the mining lease access.

9.…

10.Whether or not Mr Wright may be due compensation for loss of the land is not relevant to the question of the arrangement or cost of the survey carried out by Mr Wright for Mr Wright’s purposes. There was no written or oral communication with Mr Wright. The lack of any discussion or agreement in place prior to Mr Wright either executing the survey or paying for it has had the effect of removing any opportunity Mr Wallace may have had to mitigate the costs or have any involvement in any decision Mr Wright has made. Mr Wright made the decision to freehold his property and Mr Wright made the decision on choice of surveyor.

… ”

[5]A subsequent response was invited from the landowner and the key elements of that response are as follows:

“ …

The progression by Mr Wright of this land to freeholding, and the compliance with the DNR imposed condition to excise the access area, has now placed Mr Wallace in a superior position to that where he stood before, in that he now has a gazetted road abutting the mining lease area and as such will at no future time be required to enter into an access agreement/compensation agreement in respect of the access area. Whether or not Mr Wallace has in the past or would in the future actually use this area is immaterial to the current consideration.

2.     Whilst Mr Wallace may not become a registered proprietor of the excised land, there is no doubt that he gains a significant and tangible benefit from the excision of the land to be dedicated as a road, as that then provides an access to the mining tenement secure into the future without the need to negotiate or enter into compensation or access agreement with any other landholder. It is an incorrect assertion to suggest that Mr Wright benefits from the excision of land. Ideally Mr Wright would have wanted to retain ownership of this land however he has been deprived of approximately 1.11 Ha of his former leasehold for the sole purposes of ensuring the uninterrupted access to the adjacent mining tenement.

3.     The suggested mitigation argument does not arise. There was no suggestion, proposal or negotiation of the condition of excision imposed by DNR, until notice of its imposition was given to Mr Wright in the freeholding offer letter. In the absence of any prior intimation of the imposition of this condition, there was no opportunity for either the applicant or the respondent to take steps to mitigate the impact of this condition.

…

4.     The Applicant’s argument is that he has suffered loss as a consequence of the mining lease access in so far as the preservation of that access by DNR has cost Mr Wright the price of the survey. This is the amount of compensation presently sought.

… ”

Consideration of Submissions

[6]I have considered the various competing arguments presented in the parties’ written submissions. However, in my view, the outcome is governed by the relevant provisions of the Mineral Resources Act 1989 (MRA), in particular s.281 headed “Determination of Compensation by Land Court”. Subsection 3 states:

(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;

[emphasis added]

[7]There is no real dispute that an amount should be awarded for the miner’s access, even if not used as such over that part of the Special Lease surrendered to road for the period before it was surrendered, that is, for the period 31 March 2007 to 17 April 2009 – 2 years (rounded). I note that this is access compensation only and not for use of the mining lease area as such. I award a nominal sum of $50 under this head, together with an additional amount under s.281(4)(e) to reflect the compulsory nature of the taking. The total amount under this head is $55.

[8]The substantial part of the landowner’s claim is for survey costs ($4,356) and legal costs ($15,000). Whether either or both of these are claimable depends on whether they can be properly classed as loss or expenses that arise as a consequence of renewal of the mining lease.

[9]In my view, the survey costs (and the resultant legal costs) are costs arising as a result of the freeholding application. If such application had not been made, the Special Lease would have remained until expiry and no survey costs incurred. DNR correspondence with Mr Wright indicates that he should perhaps consult with the Tablelands Regional Council for a contribution to the survey costs, as they may have been a beneficiary of the new road also.

[10]While Mr Wallace, the holder of the mining lease, may have had indirect benefit, the new road, once gazetted, became a public road open to the wider community to use. It is certainly not some sort of separate easement arrangement benefiting Mr Wallace.

[11]Mr Wallace’s agents make the valid point that their client did not require the road and has some form of alternate access to the mining lease.

[12]Although Mr Wallace is to an extent a beneficiary of the new road, he cannot be liable for the survey costs (or associated legal costs) under the MRA provisions.

[13]Two further points should be made:

·Had no road been required under the Special Lease freeholding conditions, Mr Wallace could have got access over Mr Wright’s land at vastly less cost that is now sought by Mr Wright.

·There was no compulsion on Mr Wright to freehold his land. Once he did, it was a DNR requirement to surrender and survey the road area, but arguably that was to rationalise the freehold area and provide for a future road system.

Order

1.Compensation payable for access across the Special Lease area until freeholded is determined at $55. Such shall be payable within two months of the renewal of the freeholding lease.

2.The costs for survey and legal costs are disallowed.

BR O’CONNOR

JUDICIAL REGISTRAR