Weiben v Great Southern Cattle Holdings Pty Ltd
[2008] QLC 141
•16 July 2008
LAND COURT OF QUEENSLAND
CITATION: Weiben & Ors v Great Southern Cattle Holdings Pty Ltd [2008] QLC 0141
PARTIES:Sydney Weiben (25%), Jeffrey Sydney Weiben (25%), Ken Leon Sutherland (25%) and Robert James Wiltshire (25%)
(Applicants)
v
Great Southern Holdings Pty Ltd
(Respondent)
FILE NO:MLC00256/2007
PROCEEDING: Application to determine compensation
DELIVERED ON: 16 July 2008
DELIVERED AT: Brisbane
MEMBER:Mr FW Windridge, Judicial Registrar
ORDERS:1. Compensation determined at $100.00 for the term of the renewal.
2.Such compensation to be paid by the miner to the landowner in the sum of $100.00 within 2 months of notification of the renewal of the mining lease.
3.The miner pay the sum of $20.00 to the landowner for the second and subsequent years each and every year in arrears until such time as an alternate access is finalised.
4.No order for costs.
CATCHWORDS: Compensation – mining lease – grazing property – new access – injurious affection
Mineral Resources Act 1989, s. 281
Smith v Cameron [1986-1987] 11 QLCR 64
Shaw v Heritage Holdings Pty Ltd (1992-93) 14 QLCR 139
Mitchell v Oakhill and Mitchell (10 March 1998) unreported
APPEARANCES: Mr S Weiben (principal applicant) for miners
Mr J Minchinton of Clayton Utz for landowners
This is an application under s. 281 of the Mineral Resources Act 1989 (MRA) for the determination of compensation for the effect upon the respondent landowners (Great Southern Cattle Holdings Pty Ltd) of the proposed renewal of mining lease number 7525 in the Charters Towers District.
The lease is located on Lot 3 on CP846344 for mining and access. Compensation to be determined is that part of the mining lease and access that is on land held by the respondent landowners. The actual area of the lease is 2.00 ha, and the renewal sought is for a period of five (5) years.
The parties have been unable to resolve the issue of compensation, and the matter has been referred by the principal applicant to the Land Court for determination. Whilst it is within the power of the parties to come to agreement on any issues, the power of the Court (as it now is), is limited to s. 281 of the MRA.
The Land Court has given directions in relation to submissions, and this matter has been dealt with on the papers, with supplemental submissions from Mr Weiben by telephone and an appearance of Mr Minchinton solicitor of Clayton Utz for the respondent landowner, on 1 July 2008. The landowners have lodged a written submission through their legal advisors. The applicant miner has lodged a short written submission in which he refers to a number of matters. The short and general submission of the miner made reference to some other leases in the area. These leases are not under consideration here and I have restricted this determination to ML 7525 only. No site visit has been conducted.
Compensation
Relevantly, s. 281(3)(a) requires the Court to settle the amount of compensation an owner of land is entitled to as compensation 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”.
Section 281(4) enables various additional factors to be included in the compensation determination. In the present case, only paragraph (e) is relevant. It provides as follows:
“(4) In assessing the amount of compensation payable under subsection (3)—
…(e)an additional amount shall be determined to reflect the compulsory nature of action taken under this part which amount … shall be not less than 10% of the aggregate amount determined under subsection (3).”
The matters which must be considered by the Court are set forth in s. 281(3) of the Act. Although s. 281 sets out the matters to be considered, it does not define any method of assessment. Whilst the Court is only bound by the relevant legislation (ie s. 281), the following past appeal cases offer some guidance as to methodology to be used in arriving at a determination. In Smith v Cameron [1986-1987] 11 QLCR 64, the Land Court held at p. 74…
“The section in my option 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 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 assessment. 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.:
In this instance, the parties have each arrived at a quantum by reference to what is in their opinion the value of the land. It appears from maps and diagrams provided that the lease of 2 ha is located in an isolated position on the southern boundary of the property at or near where the property abuts the Stalwell River. It appears this river is the boundary between Chudleigh Park and other properties to the south, Maiden Springs and Dutton River Holding being, in the main, the major properties that abut Chudleigh Park near the lease areas.
There are some issues with access to this lease and other leases held by the miner in the same are, but we are dealing only with ML 7525 at this hearing. The other leases referred to are not before this Court and this Court therefore has no jurisdiction to deal with those leases at this point in time.
Deprivation of possession: Technically, grant of the lease does in law deprive the owner of the use of that surface area that is within the lease boundary. I am bound to take note that the lease area is in a remote part of the property and therefore I consider deprivation of possession would be of a nominal effect on the operations of the property.
Diminution of value: There is no valuation evidence to consider from a registered valuer. The landowner puts forward a figure based on the improved capital value, plus certain costs. The miner refers to the low carrying capacity and the unimproved value. In such instances of conflict, the unimproved value is usually taken as more reliable start point with the emotion of valuation of improvements taken out of the equation.
Diminution of use: There is evidence of diminution of use. The miner states the lease area is unsuitable for grazing. The landowner relies on an overall valuation figure. Care must be exercised to ensure there is no “double dip” on this point.
Severance: There is no evidence that the renewal of this lease will cause severance of one part of the property from any other part of the property, given the location of the lease on the southern boundary of the property.
Surface rights of access: Normally, there would be some loss due to the previously nominated access. However, I take into account that the principal applicant has lodged a new description for access through another property which adjoins Chudleigh Park on the southern boundary. Once this access is finalised, access through Chudleigh Park is no longer required for ML 7525. A miner may access one lease through another abutting lease. There is no evidence of any loss of land in the surface right of way except that in law it technically occurs until the new access referred to in the application for renewal is finalised. This loss is technically part of a compensation award even if the nominated access has not been used. Because the alternate new access will in all probability be registered before the expiry of the renewed term, a yearly pro-rata award is warranted. I award the sum of $100.00 for access for the 5 year term of the renewal ($20.00 per year) to be paid yearly in arrears after the initial payment, and subject to registration of the new access wherein this access will be effectively terminated (for ML 7525). In other words, access for 7525 will be at the rate of $20.00 per year until a new substituted access is registered, but the first year’s payment is included in the quantum of this compensation order.
Loss or expense: The landowner seeks recovery of what is classed as costs of managing the entry of the miner on and/or through the property. The miner has an “as of right” entry by virtue of the grant of the lease. The mining lease tenure gives the miner these rights of entry to the granted lease area and such tenure is of a higher grade than fossicking licences referred to by the landowner as coming under some management plan. There is no evidence of any need to proceed through Chudleigh Park if the new access is being utilised.
Additional 10%: In respect of s. 238(4) (e), no detailed submissions were made. There does not appear to be any reason or special circumstance why the premium should be increased, and therefore no more than the statutory 10% should be added to the general award. The miner made no direct submission on this point. The landowner submits it does apply. It does apply because of the provisions of the legislation and will therefore form part of the award.
Injurious affection: I am of the opinion that no award for injurious affection is warranted in this instance. I consider that a prudent purchaser at arm’s length, and fully appraised of the facts and circumstances, would not seek any reduction in the purchase price because of the existence of this lease, taking into account the size of the lease, the location of the lease, and the zero effect of the mining operation on the general management of the property on a day to day basis.
Determination:
An “en globo” award will sufficiently encompass any award under diminution of value, deprivation of use, and deprivation of value (s. 281(3)(a)(i), (ii), and (iii)). The submission of the miner refers to an unimproved valuation of $6,300,000 over the 177400 hectares of the property, giving a net valuation of $35.5129 per hectare. The landowner through their legal representative submits the valuation is $157.00 per hectare based on an area of 182,000 hectares with the purchase price being $28,500,000. The purchase was about 2 years ago, and the open market price may well be higher than this figure. In my opinion, there will be a negligible effect, if any at all, on the management of the pastoral holding. I am satisfied that an award other than a nominal award is justified, given the area of the lease, the location of the lease, and the proposed change of access. I accept that property values may have increased, although there is always the possibility of a turn-a-round and sudden decline. For a 20 year lease, compensation would be awarded on a total value basis, a term of 20 years being regarded as akin to total acquisition (Smith v Cameron). Normally a five year lease would incur a reduction of 75% of the total value. In this instance the value per hectare put forward by the miner as the unimproved value is accepted, but due to the quantum of the total order, I decline to apply the reduction in value that would normally be awarded for a five year lease. In effect the miner is paying for the unimproved value of the land for five years. Should the lease be terminated before expiration of the full term, the landowner has the financial benefit of some overpayment. This compensates for other factors and any increase in market value. Having regard to the foregoing, I determine compensation at the rate of $35.5129 per hectare for a term of 5 years on 2 hectares.
(a) Award under s. 281(3) (a) (i), (ii) and (iii))
2 ha @ $35.51 per ha for term $71.02
(b) Access (s.281 (3) (a) (v) $20.00
(c) Additional 10% (s.281 (4) (e)) $9.10TOTAL: $100.10
I round off this determination to $100.00. There was no submission in relation to the times, terms and manner of payment from the miner. The landowner seeks payment in full. Due to the quantum involved, I consider that payment of compensation should be in full within 2 months of notification by the Registrar that the lease has been renewed.
Access for the first 12 months has been incorporated into this order. I further order that the sum of $20.00 per year in respect of ML 7525 is payable yearly in arrears until such time as the change of access of registered and the current nominated access is rendered null and void in respect of this lease.
I make no order for costs.
FW WINDRIDGE
JUDICIAL REGISTRAR
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