Wills v Minerva Coal Pty Ltd [No.2]
[1998] QLC 149
•27 November 1998
|
BRISBANE
27 NOVEMBER 1998
In the matter of an appeal against the determination of the Mining Warden's Court, Emerald, of compensation payable in terms of Section 282 of the Mineral Resources Act 1989 in respect of Mining Lease No. 70145 in the Emerald Mining District. (A97-63)
Michael J Wills
Appellant
v.
Minerva Coal Pty Ltd
Respondent
J U D G M E N T
On 3 September 1996 the respondent made application under Part 7 of the Mineral Resources Act 1989 (referred to hereafter as the MRA) for a mining lease for the purpose of conducting an open-cut coal mine. The lease application area covered 930.75 ha of the appellant's land and sought a lease term of 30 years. The application was considered by the Wardens Court as required by the provisions of the MRA and it was recommended to the relevant Minister that the application for lease be approved subject to compensation being settled by the parties or determined by the relevant Court: a proviso contained in s.279 MRA. The parties failed to reach a settlement and the matter of compensation therefore came before the Wardens Court. That Court determined compensation under all heads in the amount of $941,813 made up as follows:
Diminution in value of land and structures $807,000
Costs of acquiring replacement land $20,123
Legal fees $5,691
Valuation fees $23,380
$856,194
Plus 10% "additional amount" $85,619
Total $941,813
It is from that determination that Michael John Wills appeals to this Court on the following grounds:
1. The Warden erred in holding that the potential of land could not be taken into account in the determination of compensation under Section 281.
2. The Warden erred in holding the family history or family connection could not be taken into account in the determination of compensation under Section 281.
3. The Warden erred in holding that the appellant's preparations for irrigation of his property 'Lexington' was not a use of the property, within the meaning of section 281 of the Act, and/or in holding that such potential and such preparations could not be taken into account in determining compensation under Section 281.
4. The Warden erred in holding that the Valuer, Mr Compton's break up of various uses of various classes of land over a variety of tenures was of assistance in determining compensation under Section 281.
5. The Warden erred in rejecting as not relevant a comparable sale contended for by the appellant's valuer Mr Todd that was some years old, and/or in holding that he could not take into account in relation to the market value a sale from some years ago.
6. The Warden erred in not placing any weight on prior 'mining sales'.
7. The Warden erred in holding that, in relation to the issue of the purchase of replacement land, there were too many possibilities and variables to arrive at any definite outcome, and in not granting any compensation in relation thereto.
8. The Warden erred in holding that "the status and use" within the meaning of section 281, unless it is some particular outstanding feature, is taken into account when an assessment is made on the 'before and after' basis.
9. The Warden erred in holding that in the present case there was not anything relating to 'status and use' that had not been taken into account in the 'before and after approach and in not allowing a premium under Section 281(4)(c)'.
10. Abandoned during hearing of appeal.
11. Abandoned during hearing of appeal.
12. Abandoned during hearing of appeal.
13. The Warden erred in holding that any award of compensation will not attract a capital gains assessment as the underlying asset is not being sold or disposed of by the owner.
14. The Warden erred in holding that any liability to CGT was (sic) the appellant may incur either now or in the future is not a 'loss or expense that arises' from the grant or renewal of a lease, and or in holding that such a liability to CGT is not compensible under Section 281.
15. The Warden erred in declining to make any order in relation to capital gains tax liability or to order an indemnity for capital gains tax liability.
16. The Warden erred in allowing only 50% of the claim of the sum of $14,500 for disturbance for the valuer Mr Todd's 'attendance at conferences, accommodation and travelling', and the disallowing the other 50% thereof.
17. The Warden erred in disallowing as an item of disturbance the fees and costs of Mr George Houen's consulting company Landholder Services Pty Ltd, of $15,407.
18. The Warden erred in holding that the consultant Mr George Houen stands in the place of the land owner, and, for that reason, that his costs and fees are not allowable as disturbance items for compensation.
19. The Warden erred in not being satisfied that there are grounds on which an additional amount of compensation more than the 10% minimum could be awarded.
20. The Warden erred in failing to give reasons, or adequate reasons, and, in breach of section 360(1) of the Act, failed to set out fully the facts found by the Warden, and failed to set out decisions on relevant questions of law raised during the hearing of the matter.
21. The Warden erred in not accepting, in its entirety, the evidence of the appellant's valuer Mr Todd, and, in its entirety, the evidence of appellant's tax accounting and capital gains tax expert Mr West, the evidence of the Appellant's other witnesses.
Mr Wills owns the property known as "Lexington" (also called the subject property or similar in these reasons) which he cultivates for grain production in part and carries out the breeding and fattening of beef cattle both on improved pastures and on crop stubble when available. "Lexington" is situated in the Bauhinia Shire and is found about 48 km south of Emerald and 25 km north of Springsure. Access is off Mt Helmet Road only a short distance from the bitumen connector road between Springsure and Emerald.
The property comprises an aggregation of titles, the following summary of which is taken from the valuation prepared by Alan George Todd, registered valuer, which was tendered before the Wardens Court:-Freehold Lots 13 and 14 on Plan DN 40170
Lots 20 and 21 on Plan DN 40156
Lot 47 on Plan DN 40203Leasehold GHPL 37/3292
Lots 10 and 11 on Plan DN 401216
Special Lease 200635
Reserve 16 Lot 15 on Plan DN 40203
The area in respect of each title is:
Freehold Lots 13 and 14 626.72 ha
Lots 20 and 21 105.22 ha
Lot 47 517.998 haGHPL Lots 10 and 11 3415.0 ha
Special Lease 200.3 ha
Total 4865.2 ha
I will use the term "mining lease area" or similar in these reasons to refer to the area of 930.75 ha of the subject property over which the Warden has recommended the lease be granted. The mining lease area is situated on the GHPL which is located in the northern part of the "Lexington" aggregation, abutting Mt Helmet Road. The learned Warden wrote in his Determination that the "lease application area takes a considerable 'bite' out of Lot 10 and takes a smaller portion out of Lot 11" of the GHPL. Whilst the lease has not yet been granted, compensation is to be assessed on a prospective basis on the assumption that the lease is in place. There is, therefore, in these reasons use of both the future and present tenses when reference is made to the mining lease.
Mr Todd provided valuation evidence on behalf of Mr Wills. Valuation evidence from the respondent was presented before the Warden from John Christopher Compton, registered valuer, and whilst there is a slight variation in the areas included in Mr Compton's valuation from those set out by Mr Todd, there is no substantial discrepancy which merits my attention.
Other witnesses called before the Warden were: John Gerard Twyford, B.Ag.Sc and MSc in Economics, probably described as an Agricultural Economist, who gave evidence concerning the future operation of "Lexington"; Mark Anthony West, a practising accountant, who provided a report on the topic of Capital Gains Tax (CGT) and also made reference to his agreement with evidence on CGT given by a Mr Newby, also an accountant, in an earlier matter; Andrew Palmer, Solicitor, who gave evidence in support of the appellant's claim in relation to legal fees incurred in the preparation of the claim; Dennis Brown-Kenyon, manager exploration and development of the respondent company, who gave evidence none of which appears to have been relevant to this appeal; and Wesley David Weedon, a contract harvester who gave evidence concerning his experience in carrying out harvesting on "Lexington". His evidence was relevant to the issue of stone present on the cultivation land on the subject property In short, it was his evidence that with appropriate equipment, including a laser-controlled levelling device, harvesting of a range of crops would be possible on "Lexington" without the presence of stone becoming an impediment. The appellant gave evidence on his own behalf and I refer to relevant parts of that in these reasons. George Tenant Houen, principal of Landholder Services Pty Ltd, gave evidence in support of the appellant's claim for disturbance in relation to Mr Houen's costs and fees.
InspectionI was requested by the appellant to inspect his property as part of my consideration of this appeal. It was said that I should carry out such an inspection both because it would assist me to understand the evidence; and an inspection is required because it is the task of this Court in an appeal to consider those things that the Warden was required to consider under s.281. I find below under the heading "Nature of Jurisdiction" that this second proposition puts the task of this Court too highly. In any event, there is nothing in the statute or in the general law which would make an inspection obligatory. I note that at first instance the Warden did carry out an inspection and I infer that this assisted him in settling the issue of stone on the property in favour of the appellants.
Counsel for the respondents did not support the request to inspect, submitting that there is no ground of appeal directed towards this issue, and that it was not articulated by the appellant what evidence might be better understood by the conduct of an inspection. In my view there is no need for an express ground of appeal on such a matter as an inspection is evidential in nature, not substantive and a request to inspect may arise out of any ground of appeal which raises an issue concerning the attributes of the land in question. By saying this, I do not, of course, mean that an inspection comprises evidence as it clearly does not (Scott v. Numurkah Corporation (1954) 91 CLR 300), therefore s.282(7) MRA regarding the admission of further evidence does not come into play.
My decision on the application to inspect came down to the question of whether I considered that an inspection of the subject property would assist in my consideration of the appeals. During the hearing I reserved my decision on the application on the basis that I would decide the issue based on my study of the relevant evidence in the record. In the instant case there are three matters which I have encountered which I have determined would be better understood following an inspection: the physical description and overall value of the appellant's land; the claimed tourism potential of the appellant's property and the claim that the viability of the property will be so affected by the mining lease that a "premium" should be awarded under s.281(4)(c) MRA. I therefore carried out an inspection of the appellant's property in company with the respondent's solicitor and a representative of the appellant. The respective valuers did not accompany me during the inspection but were available to the parties during the inspection. The inspection did assist me in my understanding of the evidence in the record.
Nature of JurisdictionThis appeal comes before this Court pursuant to s.282 MRA and is concerned with compensation to be awarded to the appellant landholder in circumstances where it is anticipated that a mining lease is to be granted to the respondent mining company. Section 282 provides for the usual requirements of a time limitation for the lodgment of the appeal and the service of notices (subsections (1) and (2)) and such like, and it is subsections (4), (5), (6) and (8) which make reference to the jurisdiction of the Land Court in such appeals:
" (4) The Land Court shall have jurisdiction to hear and determine an appeal under this section.
(5) In deciding an appeal, the Land Court must consider the things relevant to the appeal that the Wardens Court was required to consider when making the decision appealed against.
(6) Upon hearing an appeal under subsection (1) the Land Court may -
(a)vary the determination of the Wardens Court in such way as it thinks just; or
(b)disallow the appeal and confirm the determination of the Wardens Court;
and may make such order as to costs of the appeal as it thinks fit.
.......
(8) The determination of the Land Court on appeal shall be final and conclusive."
The matter the subject of this appeal was at first instance heard before the Wardens Court, that Court and its constitution being the subject of Division 2 of Part 10 of the MRA.
As a threshold matter, Mr Batch SC, Counsel for the appellants, initiated debate on the topic of the nature of an appeal of the type before me. In dealing with this question, I should first of all make mention of s.282(7) MRA which provides:
" (7) A Land Court shall not admit further evidence upon an appeal from a determination of a Wardens Court under subsection (1) unless -
(a) it is satisfied that admission of the evidence is necessary to avoid grave injustice and there is sufficient reason that the evidence was not previously adduced; or
(b) the appellant and the respondent agree to its admission."
Applications were made by the appellants pursuant to subsection (7) to adduce further evidence and those applications were allowed in part, the issue being dealt with in reasons published separately. The matters were, however, largely conducted before me on the record and, given the rigour and standard of the tests provided by subsection (7) which need to be satisfied for further evidence to be allowed, it will frequently be the case that appeals of this type are heard in this way. Nevertheless, an appeal to the Land Court in such matters is not an appeal stricto sensu as it is open to this Court to vary the determination of the Wardens Court (s.282(6)(a)). Such variations may be supported by different conclusions of fact or law from those drawn by the Warden but need not comprise express findings that the Warden was wrong on any particular point. Nevertheless, a finding of the Warden not challenged or complained of on appeal will generally be allowed to stand and conclusions of fact by the Warden which appear to have benefited from an observation of the witnesses at first instance, will not be disturbed except for good reason. (Discussed generally in Warren v. Coombes (1979) 53 ALJR 293). An appeal of this type might be described as a re-hearing, the incidents of which can be understood by reference to the statutory provisions. (For a useful and expansive discussion of the notion of a rehearing see Bignell v. Chief Executive, Department of Lands (1995) 15 QLCR 528 at 533-534).
One such provision is s.282(5) and this provides that the Land Court "must consider the things relevant to the appeal that the Wardens Court was required to consider when making the decision appealed against". Sections 281(3) and (4) provide the matters which form the basis of compensation and therefore lead to the "things" which the Wardens Court is required to consider when settling on a compensation figure. Consideration of the statutory provision as such would be an arid exercise, thus the "things" would include the evidence which would be material to the statutory provisions; that is "things" that the Wardens Court "was required" to consider. I have underlined the words "relevant to the appeal" to draw attention to the point that s.282(5) is not a direction to the Land Court to consider the matter in the light of all of the matters that the Wardens Court considered or, if it did not, ought to have, but only those that are agitated by the appeal. To put the proposition at its crudest: it would not be enough for an appellant to lodge an appeal expressed in general but comprehensive terms and to refer the Appeal Court to the record, then await an outcome. "Things" that are "relevant to the appeal" need to be made relevant. Relevance cannot be assumed and where a matter decided upon by the Wardens Court is not made relevant directly by the appellant or by implication from a directly relevant matter, it will not be a "thing" that the Land Court "must consider" and will remain unaffected by the appeal.
Now making something relevant does not simply mean including it as a ground of appeal, however clearly expressed. A ground of appeal is akin to a complaint that the Court below was in error and that the error influenced the final result. An appellant needs to take the ground of appeal; point to and contextualise the claimed error in the words of the judgment appealed against; possibly suggest by reference to the record how the Court may have been led into error; and by reference to the evidence and to the law, submit how the result should be changed. In the case of the type before me where a compensation figure is arrived at following consideration of a range of matters, it may not be possible to be precise about the change sought flowing from each ground; however, the nature of the change needs to be made clear.
Mr Batch SC, submitted at one stage, and I do not think I am selective in referring to this quotation, that "because of the nature of the appeal the Land Court must consider the things that the Warden was required to consider". It will be understood from what I have said above that this describes the role too highly, for the task of the Court is qualified by the words "the things relevant to the appeal". Section 282(5) is simply concerned with drawing into the appeal process all of those matters expressed in ss.281(3) and (4) and the relevant evidence to the extent that they are raised by the appeal.
I discuss the matter of the nature of an appeal of this type first because, as I have said, Mr Batch SC raised the issue and, second because he expressed concern about the difficulty in conducting an appeal of this nature where the Court, which could decide an important question of fact, does not have the advantage of having heard the witnesses. Certainly I agree that the matter is not without its difficulty, however, that is the nature of the jurisdiction conferred, a jurisdiction similar in many respects to that conferred upon the Land Appeal Court. It can pose difficulties for counsel in conducting an appeal and for the Court in forming a view on some of the evidence, however, those difficulties do not outshine the types of challenge frequently confronting counsel and the Bench. It is important at the threshold to understand the nature of the appeal. Based on my view of that matter I will, later in these reasons, point to certain factual conclusions of the Warden which I will adopt for the reasons discussed above. I will also make reference to the difficulties visited upon me by the approach to the appeal employed by the appellants' side.
Mr Batch SC raised a further aspect of the nature of an appeal before the Land Court and that related to this Court's jurisdiction as provided in the Land Act 1962, s.41(5a):
"(5) Court to be guided by equity and good conscience. Notwithstanding anything in this Act or in any other Act, or in any rule, process or practice of law --
(a) the Court in the exercise of any jurisdiction, duty, power or function conferred or imposed upon it shall be governed in its procedure and in its decisions by equity, good conscience, and the substantial merits of the case, without regard to technicalities or legal forms or the practice of other courts;"
I find no equivalent provision in the MRA, though I note that s.43IA(5) of the Mining and Other Acts Amendment Act 1982 (the 1982 Act) provided that "... the Wardens Court in making a determination pursuant to subsection (4) may inform itself in such manner as it thinks fit ... ." Subsection (4) was concerned with the determination of compensation. Equivalent language to s.431A(5) did not find its way into the MRA, the only provision appearing to touch on the topic being s.362(1) which provides, subject to certain exceptions none of which is relevant here, that the Rules of Evidence in the Supreme Court apply.
I see no need to decide the matter in the present case, however, would express the view that it would be a peculiar feature of the appeal process if the Appeal Court exercised a jurisdiction which differed from the Court at first instance in respect of matters not connected with the appellate task imposed upon the Court. I am aware of what was said in Smith v. Cameron (1986) 11 QLCR 64 at 69 to 70 on this matter, but point out that the Court there was dealing with the 1982 Act, not the MRA.
Mineral Resources Act and Acquisition of Land Act
It is s.281 MRA with which I am concerned in assessing compensation and detailed consideration of that provision appears later in these reasons. I need to first deal with a more general point.
The appellant was concerned that the respondent's approach to the compensation provisions in s.281 MRA was influenced too greatly by the law relating to compensation flowing from the compulsory acquisition of interests in land. In Queensland the Acquisition of Land Act 1967 (AOL Act) is the relevant statute, though aspects of compensation considered under that Act are frequently identified in other jurisdictions, though expressed in a range of different language in the corresponding statutes. It was suggested by counsel for the appellant that it was not appropriate to "shoe horn" into s.281 MRA concepts derived from a quite different statutory source, that is the AOL Act. The argument leads to the point that s.281 MRA is unique in a substantive sense and gives rise to items of compensation not contemplated in the AOL Act.
Counsel went so far as to suggest that given that "the mining company … is a private commercial interest and … a commercial competitor for land use", whereas acquisitions under the AOL Act are for public purposes, "all of the propositions in the cases about land being taken for public purposes … are inapplicable".
In support of his broad submission concerning the unique nature of the MRA, Mr Batch SC said that whereas the AOL Act is frequently referred to in statutes as the source of the statutory guidelines in the assessment of compensation the MRA is not similarly identified as a statute of general application. He provided me with a list of 35 such statutes, however, I will not include that list here. Reference was also made to the Central Queensland Coal Associates Agreement Act 1969 in which it was pointed out that Parliament had selected the AOL Act as the relevant statute for certain actions under the Act and the MRA for others. I take him to refer to Clauses 2 and 3 of Part VIII as providing the reference to the AOL Act and Clause 6 in Part III as being the reference to the MRA. The purpose of the selection by Parliament of the two different statutes is clear. In the first instance Parliament is concerned with the process of acquisition of land and that occurs generally under the provisions of the AOL Act or the Land Act 1994, whilst in the second case Parliament is concerned with the relevant mining company extending the surface area of an existing Special Coal Mining Lease and thus would be concerned with the MRA as it is that statute which supplies the relevant procedure. The question as to why Parliament decided that the extension of a mining lease under that Act would not be by compulsory acquisition is the real question that arises and is not one that is answered on the face of the statute.
Mr Batch SC also referred, in support of his thesis, to the Land Court case of Smith v. Cameron where at p.82 the learned Member said, "Anticipated losses are not compensable in addition to land and I will follow that principle here." In the introduction of the MRA in 1989, the pre-existing compensation provisions were amended to include, amongst other things, s.281(4)(d) which deals with the topic of loss of profits. It was submitted for the appellant that one can infer that this provision was included in response to the quoted words from Smith v. Cameron and that impliedly the provision was included to reverse the proposition outlined by Mr White and to, therefore, preserve a clear distinction between MRA and AOL Act matters. There are two things that I say about this. First: there is a so-called rule of statutory interpretation which says that re-enactment of a provision after a judicial decision as to its meaning may be taken as an indication by the legislature of approval of the interpretation of the Court. The "rule" is often sourced from Ex Parte Campbell (1870) LR 5 Ch App 703 an authority approved of by the House of Lords in Barras v. Aberdeen Steam Trawling and Fishing Co Ltd [1993] AC 402. It is also said that the reverse of this rule also applies (Statutory Interpretation in Australia" Pearce and Geddes 3rd ed. Pp.56-61). Not only, however, is this reverse rule not applied universally (for example, Timothy v. Munro [1970] VR 528), but the initial rule has also been referred to more as a guide than a command (see Flaherty v. Girgis (1987) 71 ALR 1 at 14). I do not see a statutory initiative seven years after the utterance of such an important principle in a decided case as being an example of a response on the part of the legislature. After all, the 1989 amendments introduced a range of changes to the compensation regime. Second: I do not read s.281(4)(d) as disagreeing with anything that Mr White said. The principle that the Court was referring to on that occasion is explained by the Privy Council in Pastoral Finance Association Ltd v. The Minister [1914] AC 1083at p.1088/89:
"Now it is evident that no man would pay for land in addition to its market value the capitalised value of the savings and additional profits which he would hope to make by the use of it. He would no doubt reckon out these savings and additional profits as indicating the elements of value of the land to him, and they would guide him in arriving at the price which he would be willing to pay for the land, but certainly if he were a business man that price would not be calculated by adding the capitalised savings and additional profits to the market value."
Now it was suggested by Mr Batch SC that in saying what he did about loss of profits in Smith v. Cameron Mr White was simply repeating a principle arising under the AOL Act, however, the words of the Privy Council clearly point to the principle as being one that arises from the essential notion of what comprises compensation, based on general principle. Section 281(4)(d) did not emerge as an issue in the appeal before me other than in the way that I discussed it, therefore I will not dwell on it further, except to say that it is a provision which may well be applicable in, for example, a situation where the grant of the mining lease directly interferes with the opportunity for an owner to harvest a standing crop or in some such similar factual situation.
It may be of assistance if I list now a brief chronology of the statutes which are referred to in these reasons:
"Mining Act 1968"
"Mining Act Amendment Act 1982"
"Mineral Resources Act 1989"
Mr Batch SC provided an interesting summary of the development of the compensation provisions in these statutes and I deal with certain aspects of these developments later in these reasons. Counsel was concerned that I appreciated that whilst s.20 of the AOL Act was enacted in 1967, it remains unchanged and was not selected by Parliament as the basis of compensation assessment for any of the various compensation formulations found in, what I will call, the Mining Acts.
Given counsels' submissions, I have searched for relevant differences between the AOL Act and the MRA as the start point of my discovery of the relevant law. I will now set out the part of s.281 MRA relevantly under consideration.
Section 281 (excluding sub-s. (3)(b)) provides as follows:
" 281.(1) At any time before an agreement is made pursuant to section 279 or 280, a person who could be a party to such agreement may apply in writing to the mining registrar to have the Wardens Court determine the amount of compensation and the terms, conditions and times of payment thereof.
(2) The Wardens Court is hereby authorised to hear and determine matters referred to in subsection (1).
(3) Upon an application made under subsection (1), a Wardens 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
(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 lodgment 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 not less than 10% of the aggregate amount determined under subsection (3)."
Given the discussion that I am about to embark on, it will be useful if I now set out the compensation provision of the AOL Act, that is, s.20:
"20.(1) In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also to the damage (is any) caused by either or both of the following, namely -
(a) the severing of the land taken from other land of the claimant;
(b) the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other land.
(2) Compensation shall be assessed according to the value of the estate or interest of the claimant in the land taken on the date when it was taken.
(3) In assessing the compensation to be paid, there shall be taken into consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken.
(4) But in no case shall subsection (3) operate so as to require any payment to be made by the claimant in consideration of such enhancement of value."
There is a number of differences between the provisions of the AOL Act and the MRA, not only in form but in substance. Let me simply list some for illustrative purposes without detailed discussion:
CSection 281(3)(a) MRA is concerned with the entitlement of an "owner of land". The definition of "owner" supplied by s.5 of the Act provides:
"'owner', of land, means -
(a) for a reserve (other than land that is a reserve merely because it is in the Wet Tropics Area) -
(i)if the reserve is vested in a trustee - the trustee; or
(ii)if the reserve is a road - the entity responsible for its maintenance or in which it is vested; or
(iii)if subparagraph (i) and (ii) do not apply - the person in whom it is vested or, if it is not vested in anyone, the Minister responsible for administering the Act under which it is a reserve; or
(b) for freehold land - the registered owner of the land; or
(c) if a person is, or will on performing conditions, be entitled to a deed of grant in fee simple for the land - the person; or
(d) if an estate in fee simple of the land is being purchased from the State - the purchaser; or
(e) for a State forest or timber reserve under the Forestry Act 1959 - the Primary Industries Corporation; or
(f) for a person who holds land under a lease from the State under the Aborigines and Torres Strait Islanders (Land Holding) Act 1985 for land excised from land granted in trust for Aboriginal or Torres Strait Islander purposes under the Land Act 1994 - the trustees of the land; or
(g) for a person who holds land from the State under an Act (other than an Act about mining or petroleum) under another kind of lease or occupancy (other than occupation rights under a permit under the Land Act 1994) of the land - the person;
and includes, in addition to an owner mentioned in paragraphs (a) to (g) -
(h) for a forest entitlement area under the Forestry Act 1959 - the Primary Industries Corporation; and
(i) for land in the Wet Tropics Area - the Wet Tropics Management Authority."
In contrast with this s.12(5) of the AOL Act provides:
" On and from the date of the publication in the Gazette of the Proclamation or, in the case of Brisbane City Council, the date of the publication in the Gazette of the Notification of Resumption of the land thereby taken shall be vested or become Crown land as provided by the foregoing provisions of this section absolutely freed and discharged from all trusts, obligations, mortgages, charges, rates, contracts, claims, estates, or interest of what kind soever, or if an easement only is taken, such easement shall be vested in the constructing authority or, where the proclamation so prescribes, in the corporation requiring the easement; and the estate and interest of every person entitled to the whole or any part of the land shall thereby be converted into a right to claim compensation under this Act and every person whose estate and interest in the land is injuriously affected by the easement shall have a right to claim compensation under this Act.
(5A)The amount of such compensation may be agreed upon between the constructing authority and the claimant subject, however, to the consent of any mortgagee of the land taken. (5B) Failing such agreement every such claim may be enforced against the constructing authority concerned under, subject to and in accordance with this Act and that constructing authority shall be liable accordingly." (the underlining is mine)
Section 18(1) and (3) of that Act provides:
" (1) Subject to subsections (2), (3), (4A) and (5) of this section compensation whereto a right is had under section 12 may be claimed from the constructing authority under, subject to and in accordance with the provisions of this Part."
" (3) Compensation shall not be claimable by or payable to a person who is lessee, tenant or licensee of any land taken if the constructing authority upon written application allows the person's estate or interest to continue uninterrupted."
Thus, under the AOL Act, a person who holds a lease over fee simple land has a right to claim compensation, but there is no similar provision in the MRA, given the definition of "owner" that I have set out above.
CThe AOL Act provides for a claim for compensation to be made (s.19), whereas there is no similar provision in the MRA. This difference is not simply a matter of form as, whereas the AOL Act provides for procedures for the referral of a matter to the Court, including the power to order a claimant to enter an appearance, there is no equivalent provision in the MRA. The Wardens Court, presumably, relies on s.367 which deals with Rules of Court. Importantly, the obligation in the claimant to make a claim under the AOL Act gives rise to a right to claim such expenses as legal and valuation fees associated with the making of the claim. This is a matter I discuss elsewhere in these reasons, together with the issue of the connection between such expenses and costs of the action.
CThere is a date certain provided in the AOL Act as at which compensation is to be determined (see s.12(5) above), but no similar provision in the MRA.
CThe AOL Act (s.32) provides a form of protection for mortgagees, however, under the MRA there is no similar express provision.
CWhereas under s.20 AOL Act, that is the compensation provision, each clause provides a distinct head of compensation, that is value of land, severance and injurious affection; under the MRA treatment of each item under s.281(3)(a) separately can result in a doubling-up of compensation. I discuss this later under the heading "Value of Land, Severance and Injurious Affection".
C"Special value", so called, is dealt with differently in the MRA from its treatment in the AOL Act. Again, this is discussed later.
CThere is no equivalent of s.281(4) MRA in the AOL Act, and I refer in particular to sub-s.(4)(e) MRA relating to the determination of an additional sum, such sum being at a minimum of 10% of the aggregate figure arrived at under s.281(3)(a), subject to an important qualification which I will not discuss at this point.
CThere is no equivalent in the AOL Act of s.281(4)(d) either, though I doubt that Parliament would have intended that an owner under the MRA would receive both a capital sum for land whose production has ceased or reduced and a loss of profits in a way that resulted in a doubling-up of compensation.
CSection 20(3) AOL Act provides for a set-off of compensation flowing from enhancement, but there is no equivalent expression in s.281 MRA.
CThere are certain differences between the AOL Act and the MRA which would appear on first blush to be justified, based on the latter statute's dealing with the specific topic of mining (see s.281(3)(a)(i) regarding possession of the surface and (5) with respect to surface rights of access), though these are matters that can arise in, for example, the resumption of an easement under the AOL Act.
CThere are other fundamental differences between the two legislative frameworks, including the procedure leading up to the loss occasioned by the landholder; the fact that under the MRA a private entity is the intended beneficiary of the imposition on the owner's land, not the public or a section of it; and that the property law effects of each process differ in outcome.
Notwithstanding the differences that I have set out above, and noting that I have not attempted to be exhaustive in selecting these, this is not to say that in forming an understanding of s.281 MRA and in considering its application regard may not be had to the ways in which similar issues have been dealt with in other relevant areas of law. I must proceed on the basis that the statute in question is the expression of Parliament and that any connection that does exist between two bodies of law generated by the statutory provisions recognises the relevant statute as the primary source. Some of the submissions from counsel for the respondent, Mr Ambrose, were contained in a paper he co-authored, entitled, "the 10% Solution - Understanding the Compensation Provisions of the Mineral Resources Act": a paper which seems to me to identify compensation principles under the AOL Act and then searches s.281 MRA for language which might be identified with those principles. In matters of compensation arising under s. 281 MRA, it is to that provision that a Court must first turn, however, as is the practice of Courts in all jurisdictions: in searching for principle or the conceptual treatment of an issue, assistance may be sought from other relevant areas of law including in the present case that involving the question of compensation flowing from the compulsory acquisition of land to the extent that there is no inconsistency with s.281 MRA. There are broad similarities between the compulsory acquisition of an interest in land and the imposition of a mining lease over land. It follows that even without detailed analysis of s.281 MRA one could anticipate benefit from consideration of the law of compensation for compulsory acquisition. There is a natural and understandable similarity. It was said in Smith v. Cameron that the grant of a mining lease may be likened "to a compulsory acquisition of land for a limited period" (at 73). (Similar language is found in Warwick Brick Works Pty Ltd v. Muriel M Dollar (Land Court, unreported, 26 August 1994). Both the MRA and the AOL Act authorise an imposition on the land of a private individual and each provides for compensation flowing from that imposition. In view of this, and taking notice of what I write later in these reasons, I must say that I consider it unfortunate that Parliament in enacting s.281 MRA did not make greater use of the body of settled law available in the land acquisition area and simply adjust that to the extent needed to cater for the topic of the grant of mining leases and any policy differences thought to be appropriate. It is neither helpful to litigants nor to a Court to have to forensically analyse all but intractable legislation to discover what the rights of the parties might be. Nevertheless, I have decided that I should, given the detail and nature of the submissions of the appellant, consider s.281 afresh.
Some of the debate on the issue of the relationship between the two bodies of law centred on the decision of this Court in Smith v. Cameron and the concern by Mr Batch SC that that case was sought to be relied upon by the respondent as authorising a greater reliance on land acquisition compensation principles than the Court had intended. In Smith v. Cameron this Court had before it an appeal relating to compensation under the Mining Act 1968 to 1983. Section 43HA of that Act provided:
"43HA(1) Compensation is not payable under Section 43GA for the right to take up and occupy or work a mining claim or mining lease situated on Crown land where the mining claim or mining lease does not include an area of surface of the land concerned.
(2) Subject to subsection (1), compensation is payable under section 43GA in respect of all or any of the matters referred to in Section 43IA.
(3) In no case shall allowance be made, in the assessment of compensation, for any minerals that are or may be on or under the surface of the land concerned."
Section 43IA relevantly provided:
"43IA(1) The applicant for a registration of a mining claim or renewal thereof or for the grant or renewal of a mining lease in respect of Crown land may agree with a lessee or owner as to the payment of compensation payable under section 43GA.
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(4) If the applicant and the person or persons entitled to compensation payable under section 43GA are unable to agree as to the amount of compensation or are unable to agree within the time prescribed, the applicant or any of the persons entitled may apply to the Wardens Court to have the amount determined by that court.
(5) Subject to section 43HA, the Wardens Court in making a determination pursuant to subsection (4) may inform itself in such manner as it thinks fit and shall take into consideration
(a) deprivation of possession of the surface of the land or any part thereof;
(b) diminution of the value of the lands of the lessee or any improvements thereon;
(c) diminution of the use made or which may be made of the lands of the lessee or any improvements thereon;
(d) damage caused or likely to be caused to any improvements thereon or thereunder;
(e) severance of any part of the land from other parts thereof or from other lands of the lessee;
(f) surface rights of way;
(g) all damage, loss or expense that arises or is likely to arise as a consequence of any matter referred to in provision (a), (b), (c), (d), (e) or (f); and
(h) if the court is satisfied that it will be necessary for the lessee or owner to obtain replacement land of a similar nature and area or to resettle himself or relocate his improvements, livestock or other chattels on other parts of his land or on the replacement land, all reasonable costs (including legal costs) likely to be incurred by the lessee or owner in obtaining replacement land and his resettlement or relocation of improvements, livestock or other chattels as at the date of the court's determination.
The Wardens Court shall give written notice of its determination to all parties and may make such order as to costs between the parties to the determination as it thinks fit."
At p.73 of the Court's judgment in Smith v. Cameron the following words appear:
"In the end result Mr Todd's valuation of the property at $266,750 was accepted by the Warden and depreciated by him by one-sixth after finding that he had cause to consider matters listed in paragraphs (a) to (f) of Section 43IA(5) and that there was no evidence to enable him to make any specific finding in relation to paragraphs (g) and (h) of the subsection. In doing so he likened, rightly in my opinion, the use of the land for mining purposes to a compulsory acquisition of land for a limited period which in my view opens the door for the application of the various principles and practices of valuation applied in determining compensation for the taking of limited rights over land for public purposes. In particular I see an affinity and similarity between the imposition of an encumbrance on the appellants' land by means of the grant of a mining lease and that of the compulsory taking of an easement over land for public purposes." (the underlining is mine)
It is important that I make the observation that the learned Member was not saying that one simply supplants the provisions of the Act there under consideration with the provisions of the AOL Act, together with all of the relevant case law decided under that statute, and its counterparts in other jurisdictions. I apprehend that Mr White was simply conveying that the similarities between compensation flowing from compulsory acquisition of land and compensation under the Mining Act are such that there will be opportunity to make reference in a mining matter to the way in which similar issues have been approached in cases arising under land acquisition legislation. The head note to the reported case includes:
" (iii) That the various principles and practices of valuation applied in determining compensation for the taking of limited rights over land for public purposes are applicable in the assessment of compensation."
A reading of this head note point may lead one to the view that the decision of the Court on that occasion established a principle much wider than the Court intended. It is beyond question as I have written above that the primary source of law is the statute under consideration and it seems to me that the learned Member acknowledged this when he said:
"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."
Section 281 MRA neither prescribes nor suggests a method of assessment or valuation either. The selection of an appropriate method is a matter for the relevant expert, however, there is one warning that I should post. If the expert was to approach the assessment of compensation by simply accumulating figures assessed independently under each of the items listed in s.281(3)(a)(i) to (vi) and without regard to the prospect of a matter being dealt with under more than one item, the chance that there will be a duplication of items assessed will be high. It is quite clear when one considers the construction of s.281; and I address this later; that Parliament did not intend that there be any duplication in items comprising compensation. I discuss this further under the heading "Value of Land, Severance and Injurious Affection", but will first deal with the concept of compensation.
What is Compensation?
Both s.279(1) and s.281(3) MRA refer to "compensation", yet the statute does not provide a definition. The term compensation therefore takes its meaning largely from the items listed in ss.281(3)(a) and (4) of the Act which point to the matters that make up the monetary sum. A study of those provisions reveals that whilst s.281(3)(a)(ii) speaks of compensation for "diminution of the value" of land or improvements and s.281(3)(a)(vi) refers to "loss or expense", the other items do not use similar benchmark language, that is language which connotes a measure of some recognisable type. Let me provide by way of example how s.281(3)(a)(v) is to be read:
"(3) Upon an application made under subsection (1), a Wardens Court shall settle the amount of compensation an owner of land is entitled to as compensation for -
(v) any surface rights of access:
as a consequence of the grant … of the mining lease."
Now leaving aside the somewhat truncated form of expression, it is quite clear that Parliament has placed considerable emphasis on the word "compensation" in conveying the meaning of what is intended by s.281(3)(a)(v), for it is compensation with respect to "any surface rights of access" that is to be settled. Similarly, it is compensation which is the critical concept with regard to understanding items (i), (iii) and (iv) and of overriding importance with regard to items (ii) and (vi). There is, therefore, benefit in directing consideration to the nature of "compensation" in gaining an understanding of s.281. I will consider this question by making reference to three cases with quite different backgrounds.
In the context of the then National Security (Wheat Acquisition) Regulations made under the authority of the Natural Security Act 1939 the High Court considered the meaning of "compensation" in Nelungaloo Pty Ltd v The Commonwealth (1948) 75 CLR 495 and Dixon J (as he then was) said this at 571:
"Compensation is a very well understood expression. It is true that its meaning has been developed in relation to the compulsory acquisition of land. But the purpose of compensation is the same, whether the property taken is real or personal. It is to place in the hands of the owner expropriated the full money equivalent of the thing of which he has been deprived. Compensation prima facie means recompense for loss, and when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. As the object is to find the money equivalent for the loss or, in other words, the pecuniary value to the owner contained in the asset, it cannot be less than the money value into which he might have converted his property had the law not deprived him of it."
In Re Melden Homes No. 2 Pty Ltd's Land (1976) QdR 79 the Supreme Court had to consider the meaning of "compensation" found in s.32A of the Encroachment of Buildings Act 1995 and held that for the purpose of that Act the ordinary meanings of "recompense" or "amends" were appropriate. That is, the statute was concerned with the loss to the owner of the land encroached upon, not the gain to the encroacher. The Privy Council was concerned with a consideration of s.10 of the "Crown Lands Resumption Ordinance" (Hong Kong) in Director of Buildings v. Shun Fung Ironworks Ltd [1995] 1 All ER 846 and Lord Nicholls said this about the matter:
"The purpose of (the compulsory acquisition provisions) is to provide fair compensation for a claimant whose land has been compulsorily taken from him. This is sometimes described as the principle of equivalence. No allowance is to be made because the resumption or acquisition was compulsory; and land is to be valued at the price it might be expected to realise if sold by a willing seller, not an unwilling seller. But subject to these qualification, a claimant is entitled to be compensated fairly and fully for his loss …" (at 852)
It is also instructive to consider other branches of law and the basis for awarding what I will neutrally call "recompense" in such cases. Under the law of contract the fundamental principle which governs an award of damages for breach of contract is derived from Robinson v. Harman (1848) 1 Ex 850:
"Where a party sustains loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same position with respect to damages, as if the contract had been performed" (at 855).
Whilst there are important differences between the law of contract and the law of tort in so far as the assessment of damages is concerned, tort damages are also concerned with the question of loss from the perspective of the injured party. That is, the award of damages to the injured party is based on his loss (see BTC v. Gourley [1956] AC 185).
I do not intend taking the comparisons further as it is clear that there are important differences between the law relating to damages under tort and contract and the law which governs the assessment of compensation under other branches of law, in particular that created by a statute such as the MRA. It is clear, however, that the concept of compensation under the statute has not, on my reading, been given a character which is different from that which applies in other areas of law. That is, s.281 MRA is concerned with the loss occasioned to the owner by the grant of a mining lease and consideration of the individual aspects of ss.281(3)(a) and (4) needs to be considered within that paradigm.
Structure of Compensation Provisions
It may be of benefit if I first of all provide a brief discussion on the statutory framework within which the issue of compensation has a place.
Section 245 MRA provides for the application for the grant of a mining lease to be lodged with the relevant mining registrar who, upon being satisfied that the applicant is eligible, is required to prepare a "Certificate of Application" and set the date by which any objection must be made (s.252). Section 260 provides for the lodgment of objections with the mining registrar and s.268 provides for the Wardens Court to consider the application for the mining lease and any objection thereto. Following the hearing, the Wardens Court is required, amongst other things, to make a recommendation to the Minister concerning the application and this may include, as in the instant case, a recommendation that the application for the mining lease be granted. The Minister may, in turn, recommend to the Governor-in-Council that the mining lease be granted. Section 270 MRA provides for a shortened procedure where objections are not lodged.
Section 279 provides that a mining lease shall not be granted or renewed unless compensation has been determined by agreement or by the Wardens Court, or, where it is relevant, following the determination of an appeal. Section 281(1) provides that "a person who could be a party to an agreement for compensation under section 279 may apply to the mining registrar to have the Wardens Court determine the amount of compensation and the terms, conditions and times of payment of compensation". If compensation has not been agreed between the miner and the land owner and has not been referred to the Wardens Court within three months from the date on which the Wardens Court recommended the grant of the mining lease, the mining registrar is required by s.279 to refer to the Wardens Court the question of the "amount of compensation payable". I revisit this phrase later in these reasons when I discuss the question of the jurisdiction of either this Court or the Wardens Court to order the grant of an indemnity with respect to an anticipated Capital Gains Tax liability. I note that either a miner or an owner may apply to the mining registrar to have the matter heard by the Wardens Court and that such application may be made at any time after the Wardens Court makes a recommendation for the grant of the mining lease. This observation is relevant with respect to the question of legal and valuation fees and such like which often form part of the claim for compensation and which I discuss later under the heading "Disturbance".
My focus throughout these reasons will be on s.281(3)(a) and (4) of the MRA, provisions concerned with compensation involving a proposed mining lease over the surface of the land of the owner. Section 281(3)(b) is concerned with those instances where no part of the surface area of the land is included in the lease and where damage, however, is "caused to the surface of the land" (s.280(1) refers). It may be the case that what I have to say about ss.281(3)(a) and (4) is relevant to s.281(3)(b), however, I have not directed my mind to any distinctions that may exist between these provisions.
What might be called the "charter" provision is s.281(3) whilst the introductory words to subsection (4) indicate that the various items listed in subsection (3) are to be considered having regard to subsection (4) to the extent that what is said there may be relevant. Thus, for example, in considering "all loss or expense that arises" (s.281(3)(a)(vi)), s.281(4)(a) relating to costs associated in obtaining replacement land is to be taken into account where there is relevant evidence. Such costs are compensable only to the extent that they are "reasonable" and only where the acquisition of replacement land is "necessary". The word "all" in s.281(3)(a)(6) is therefore qualified by subsection (4)(a) to that extent. I will not deal with subsection (4) exhaustively at the moment, however, will return to consider particular aspects of it in due course.
I will now begin to focus more closely on the provisions of s.281(3)(a) and (4) and in so doing will bear in mind both the submissions made in this matter and issues raised in two other appeals and a cross-appeal heard conjointly with the present matter. I have decided to do this in order that all of what I have to say about S.281 MRA is collected in the one judgment. I will, to a large extent, separate my general discussion on the statutory provisions from the facts and issues of the appeal.
Value of Land, Severance and Injurious Affection
Section 281(3)(a)(ii) speaks of diminution of "the value of the land of the owner or any improvements thereon". Counsel for the respondent drew my attention to the point that the reference was to land of the owner not to the value of land to the owner, therefore attempting to draw a distinction between those authorities which have found that the phrase "value to the owner" extends the concept of value to include what has been called "special value". Section 20 of the AOL Act does not, however, employ the term "value to the owner" but speaks of "value of land taken" and s.124 of the Public Works Act 1912 New South Wales, the statutory provision being considered in the leading special value case (Pastoral Finance Association Limited v. The Minister) provided: "... the value of the land to be purchased or taken ...". The Pastoral Finance principle has been recognised in Queensland (see, for example, Thirty-fourth Philgram Pty Ltd v. The Crown (1993) 14 QLCR 13) with respect to the award of compensation under s.20 of the AOL Act. If it is the case then that the words in that provision "value of land taken" are sufficient to extend to the concept of "value to the owner" and therefore to embrace the principle of special value, then the term contained in s.281(3)(a)(ii) MRA "value of the land of the owner" would, by itself, be considered to extend in a similar way. Counsel's argument appears to be based largely on the use of the word "of" in the MRA formulation and I think suggests that not only does it not say "to", but that it places the emphasis on the word "value". That is, to paraphrase, it is the value of the land, which happens to belong to the owner, which is to be sought. I can have no argument with that, however, the use of the word "value" does not by itself suggest market value, nor, even if it did, that such market value is based on the price that the landowner might be expected to receive if the land is assumed to be sold to an anxious mining company on the one hand or to another farmer/grazier on the other. The phrase "value to the owner" is not simply a convenient form of judicial creativity to ensure that the dispossessed landholder obtains adequate compensation and I say this for two reasons. First, it is obvious that the phrase owes its genesis to a consideration of the fundamental notion of compensation as was discussed in Nelungaloo Pty Ltd v. The Commonwealth. Second, it will frequently be the case that quite disparate figures will represent the value of land to the owner or the value to the mining company. There is a necessity then where terms such as "the value of land" appear that a question at the threshold arises: "value to whom?"
"I would therefore say that the ,241/10/ld which has been expended and is the direct consequence of the freeholder being turned out of her house, is properly to be regarded as compensation for disturbance. I would not, however, like this to be taken too far. Cases were put in the course of the argument. Supposing a man did not occupy a house himself but simply owned it as an investment. His compensation would be the value of the house. If he chose to put the money into stocks and shares, he could not claim the brokerage as compensation. That would be much too remote. It would not be the consequence of the compulsory acquisition but the result of his own choice in putting the money into stocks and shares instead of putting it on deposit at the bank. If he chose to buy another house as an investment, he would not get the Solicitors costs on the purchase. Those costs would be the result of his own choice of investment and not the result of the compulsory acquisition. Another case was put in the course of the argument. If an elderly man and wife owned and occupied a house which was compulsorily acquired and they thought to themselves: 'We do not think we need to get another house; we will go into a guest house', they would not get the costs of moving into a new house when they had not incurred them. Nor would they be able to claim the cost of living in a boarding house for the rest of their days. They would only get the market value of their former home. These illustrations show that the owner only recovers costs of the present kind in a case where a house is occupied by an owner, living there, who is forced out and reasonably finds a house elsewhere in which to live. If he pays a higher price for the new house, he would not get compensation on that account, because he would be presumed to have got value for his money: but he does get the costs that he has to pay a surveyor and lawyer to get it. The costs are then the subject of compensation under the heading of 'disturbance' as specified in S.2 (6)."
I draw attention to his Lordship's focus on the word "consequence" and to the significance of this word in s.281(3)(a)(vi) MRA. There is therefore a limit to what can be claimed under s.281(3)(a)(vi). Such limit is further explained in another disturbance case that it is those matters that are the "natural and reasonable consequence" of the compulsory action which are compensable. (See Universal Sands and Minerals Pty Ltd v. Commonwealth (1980) 30 ALR 637 at 640). Although I see an advantage in making reference to these general principles contained in the cases, the language of s.281 also points to the nature of the limitation of compensation under s.281(3)(a)(vi) and in this regard I have under the earlier heading "Capital Gains Tax" already noted how subsection (4)(a) gives some indication of the limit which must be placed on s.281(3)(a)(vi). Section 281(4)(a) and therefore s.281(3)(a)(vi) reflect what the case law says about disturbance compensation in cases arising under the branch of law concerned with compensation resulting from the compulsory acquisition of land. There is nothing in the language of this statutory provision which extends the notion of what is compensable for professional fees beyond that which has been acknowledged by this Court on numerous occasions. If a party elects to conduct negotiations in respect of a matter of the type before me, then that is a matter for him and is a matter of his choice, not a "consequence" of the grant of the mining lease, whether the party assisting or carrying out negotiations is a solicitor, a valuer of someone like Mr Houen. This conclusion is consistent with a number of authorities (Shann v. The Commissioner of Water Resources (1987) 11 QLCR 194 at 224-225; Lincoln Park Pastoral Co Pty Ltd v. Minister (1980) 44 LGRA 48; Gumsert Pty Ltd v. Commissioner of Main Roads (1981) 8 QLCR 181 at 193; and most recently, Thirty-Fourth Philgram Pty Ltd v. The Crown (1993) 14 QLCR 13) with no distinction being drawn in these cases between whether the Court was concerned with the time lost by the owner, an employee or a representative. These cases confine disturbance compensation to professional fees incurred in the preparation of the claim for compensation and I see no warrant for extending this head of compensation under the MRA in the manner sought in Appeal Grounds 17 and 18. I have mentioned earlier that the additional amount calculated under s.281(4)(e) is based on the aggregate amount determined under s.281(3)(a) including disturbance. This factor, as well as the fact of the additional amount under subsection (4)(e), can be taken to have been considered by the legislature as being sufficient to compensate for such things as the loss of owner's time, or that of his agent.
I was referred by the appellant to Smith v. Cameron where it was suggested that Mr White implied that owner's time could be the subject of compensation if evidence was available.
"There is then a claim which appears to cover losses by the owner in meeting with mining personnel and in engaging a valuer, and members of the legal profession. On the basis of what follows in respect of the claim for valuation fees incurred in the preparation of the application for compensation I would allow legal fees so incurred but I have no proof of the expenditure. Other losses or expenditure would appear to be compensated for in the service obtained. However without attempting to suggest whether they are or are not compensable I reject the claim through lack of proof." (at 82)
I do not read this heavily qualified language of extending to an inference that owner's time, or that of an agent such as Mr Houen, is compensable. Indeed, what Mr White said may be taken to be a reference to legal fees, only.
Replacement Land - Determination
This issue is raised by Appeal Ground 7. John (Jack) Twyford gave evidence before the Mining Warden, both orally and in the form of a document entitled "Future Operations of 'Lexington'". That report was constructed in two parts, the first of which presented a scenario purporting to show the loss of profit on "Lexington" in a before and after mining lease basis, assuming the same total land area was available, but located on properties some 80 km apart. This scenario assumed that the owner would purchase replacement land this distance away and would replace the estimated 620 ha of cultivation land mentioned in Mr Todd's valuation. On the basis of the various assumptions and calculations carried out by Mr Twyford, he concluded that the owner of "Lexington" would run his business at a reduced profitability of around $70,000 per annum in such circumstances.
The second scenario reasoned that if the owner was compensated with an additional 742 ha of cultivation in addition to replacing the 931 ha subject of the mining lease, in an average year he would expect to obtain the same profit as that achieved before the mining lease grant.Mr Wills said in evidence that he would like to acquire replacement land close to "Lexington" but would purchase land up to 80 to 100 km away if that was needed. He did express a firm intention to purchase replacement land though had not initiated any action prior to the date of hearing. This is understandable, given the uncertainty surrounding the quantum of compensation and the fact that payment had not yet been made, together with a natural reluctance to advertise in the local area an anxiety to purchase suitable replacement land nearby. Costs are, as required by s.281(4)(a) therefore "likely to be incurred by the owner in obtaining replacement land in my view". There was no debate in the Court below as to whether acquisition of such replacement land was "necessary"; however, given that both Mr Compton and Mr Todd made allowance for the factor of purchase of replacement land, I will proceed on the assumption that this particular element of the statutory provision has been satisfied. It follows then that "all reasonable costs" should be considered and made the subject of compensation.
Mr Todd had included an amount of $41,000 in his valuation based on his diminution in value of the subject land and on the basis that the area the subject of the mining lease only would be replaced. Based, however, on Mr Twyford's second scenario which I have described above, Mr Todd increased this figure to $44,725. Both Mr Todd's and Mr Compton's figures included allowances for stamp duty, legal expenses and out-of-pocket expenses for the owner and in Mr Compton's case these figures totalled $50,123, which figure was accepted by the learned Warden. Mr Compton had added to his base figure an allowance of $30,000 on the basis that Mr Wills would probably have to purchase freehold land rather than a leasehold property, however, the Warden made no allowance for this factor, reasoning, as I have also in these reasons, that there is no clear evidence in the marketplace that freehold land attracts higher prices than comparable leasehold land. I will, in addition, approach the matter from a more general perspective and in so doing to draw into my approach both Mr Compton's additional $30,000 for freehold land and Mr Todd's extra allowance for the purchase of additional land to maintain the profitability of "Lexington".
If I direct my view towards the assumed replacement land: it may be the case that Mr Wills purchases land near the balance of "Lexington" or some distance away, and that the land may be either leasehold or freehold. It may be, given the opportunities that present themselves in the land market, that the nature of the business operation conducted by Mr Wills will change. For example, it may be that he purchases either full cultivation land or perhaps a mixed block and that the separate blocks can be operated in tandem, providing even greater flexibility to the business enterprise. All of these things are matters of conjecture, however, one principle remains clear and that is that the assumption must be made, unless it is rebutted, that whatever land Mr Wills purchases he will have obtained value for money in that purchase.
In Service Welding v. Tyne & Wear C.C. (DA) 77 LGR 647 (UK), the Court said at p.652:"What the authorities (to which I need not refer in detail) very clearly establish, however, is that when an occupier whether residential or business, does, in consequence of disturbance, rehouse himself in alternative accommodation prima facie, he is not entitled to recover, by way of compensation for disturbance or otherwise, any part of the purchase price which he pays for the alternative accommodation to which he removes, whether that accommodation is better or worse than, or equivalent to, the property from which he is being evicted. The reason for that is that there is a presumption in law albeit a rebuttable presumption - that the purchase price paid for the new premises is something for which the claimant has received value for money. If he has made a good bargain and acquired premises which have a value in excess of what he has paid for them, that is not something for which the acquiring authority is entitled to any credit. If the claimant has made a bad bargain and has paid a great deal more for the new premises to which he is moving than they are really worth, that is not something for which the acquiring authority can be properly be charged."
Now the presumption referred to in Service Welding is rebuttable, however, there is nothing in the evidence, nor in the submissions, which provides any basis for such rebuttal. The evidence is directed towards not the value of the replacement land, but towards the value of the enterprise on "Lexington". I should add that the proposition put by Mr Todd, and to some extent this is also reflected in Mr Compton's inclusion of the additional $30,000, the compensation claim has in it features of what is commonly referred to in the cases as "reinstatement" (see Birmingham City Corporation v. The West Midland Baptist Association (1969) 3 All ER 172) and the present case is not one that falls for consideration under that measure of compensation. This is particularly so, given that the before and after valuation of "Lexington" takes into account the value of the mining lease area as part of the whole and that the depreciation in value of the balance land on a per ha basis reflects the resulting severance and injurious affection flowing from the presence of the mining lease. Each of the valuers pointed to the reduced viability of "Lexington" stemming from the grant of the mining lease and the development of the mine, and chose to reflect this reduced viability and profitability in the capital figure determined as the value of the property after the grant of the lease.
In the result, I will allow compensation for the anticipated costs associated with the purchase of land to replace the area to be subjected to the mining lease, however, the measure of that will be based on the diminution in value of the appellant's land that I have determined. I will, therefore, increase the figure determined by the Warden to $25,000 to cater for the higher figure I have attributed to compensation for the loss of land under s.281(3)(a)(i) to (iii).
Conclusion
I will record by way of summary that I intend to allow the appeal and to determine compensation as follows:Value of land, severance and injurious affection $895,000
Valuation fees $23,380
Legal fees $5,091
Costs of acquiring replacement land $25,000
Plus additional amount
In addition, I invite submissions on the question of my jurisdiction to determine the additional amount under s.281(4)(e) MRA by having regard to the conclusions that I have drawn with respect to exposure to a CGT assessment. I also invite submissions on the form that final orders should take.
RP SCOTT
MEMBER OF THE LAND COURT
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