The Applicant managed Hail Creek Mine, and the Respondent owned a mining camp adjacent to the Hail Creek Mine. The parties could not agree on the compensation the Applicant should pay the Respondent for a mining lease over the camp land. The Land Court intervened to determine the amount of compensation payable. Both parties engaged experts to determine a valuation over the camp land, which differed from $530,530 valued by the Applicants’ expert, to around $7,000,000 valued by the Respondent’s expert.
The Court was disturbed with the credibility of the Respondent’s expert evidence, concerned with the expert’s capacity to give independent advice as a result of being influenced to valuate the land at such a high value based off an offer from the previous mine owner, which the Applicants’ expert was not distracted with when formulating their valuation, and a gross overestimation of the premium for alternative use when considering comparable sales. Furthermore, when looking at comparable sales, the Court accepted the Applicants’ expert approach in distinguishing premiums from comparable sales on the bases that the comparable sales sites were superior sites and closer access to the associated towns.
Noting that the Applicants’ expert had calculated their valuation based off the maximum, and not grossly overestimated, premiums of comparable sales, the Court ordered the compensation to be paid by the Applicant to the Respondent be the sum of $530,530, inclusive of the 10% uplift to account for the compulsory nature of the acquisition.
Damian Clothier QC appeared for the Applicants, instructed by Allens.
The judgment is published here.
