A recent judgment of the Land Court of Queensland is a sad reminder to landholders that the weight of the legislation is against them in litigation with mining and gas companies.
The Mineral and Energy Resources (Common Provisions) Act 2014 (MERCPA), requires mining and gas companies to attempt to negotiate compensation with landholders before commencing exploration activities. However, if negotiations fail then the tenement holding can refer the compensation determination to the Land Court and exploration works can commence in the meantime.
In Horizon Minerals Ltd (Miner) & Anor v Stacey [2021], the miner and the landholder failed to reach agreement on the compensation payable for the miner’s exploration activities on part of “Lilyvale”, a breeding, backgrounding and fattening property in the Richmond district.
The miner held an exploration permit over a part of “Lilyvale” that was divided into six paddocks for rotational grazing. The exploration activities on “Lilyvale” involved drilling 333 holes on part of the land that were 10-15cms in diameter and 20-30ms in depth.
The miner proposed compensation of $56,825.50, which included an allowance for loss of productivity, labour for moving cattle and the landholder’s time.
The landholders sought compensation of just over $723,000. Of this amount, $654,000 was for lost productivity alone, with the landholder taking the view that the property needed to be completely destocked for 24 months in order to satisfactorily rehabilitate the feed paddocks.
The Court heard submissions from both parties and their agronomists, who disagreed on the level of destocking required to suitably rehabilitate the land. The Court determined that the landholder and its expert relied on assumptions about stock numbers which could not be proven.
Ultimately, the Court agreed with the miner and determined that the area actually affected by the drilling equated to only 0.4% of the land, and it was therefore only necessary to destock 2.4 head a year (worth around $1,478 per annum in lost income). The Court awarded the landholder total compensation of $56,825.50, including $18,177.50 for expert and legal fees.
The decision is a reminder that Queensland’s land access laws leave landholders with inferior bargaining power in negotiations with mining and gas companies.
Thynne + Macartney continues to advocate for landholder’s interests.
Butch Walker Photography
Author: Harriet Adcock (Lawyer)
