The Facts

Farmer sells land to mining company to build haul road

In March 2007, a farmer sold his rural property near Gunnedah in NSW to a mining company. The mining company used the land to build a haul road for its mining operations. The same lawyer acted for both the mining company and the farmer on the property sale.

A clause in the contract for sale allowed the farmer to remain in his home on the land for no more than one year from 6 March 2007.

Farmer fails to vacate land one year after sale

When the year was up, the farmer failed to vacate the property. The mining company did not attempt to remove him for a further year.

In April 2010, the mining company served a notice on the farmer to vacate the property by 31 May 2010. The farmer refused, saying that the mining company had agreed that he could live on the property indefinitely.

In September 2010, the mining company again served notice on the farmer and the farmer again refused to vacate the premises.

Mining company takes legal action to remove farmer from land

After this refusal, the mining company commenced proceedings in the Consumer, Trader and Tenancy Tribunal (now known as the NSW Civil and Administrative Tribunal or NCAT) to remove the farmer from the land.

The initial application failed on jurisdictional grounds and the matter came before the Supreme Court of NSW, where the farmer represented himself.

It was up to the court to decide whether the farmer had been granted a perpetual lease by the mining company, or whether he should be ordered to vacate the property.

case a - The case for the mining company

case b - The case for the farmer
  • Under the written contract for sale, we granted the farmer a licence to occupy the property for one year only after the sale.
  • That one year period has expired and so the farmer no longer has a right to occupy the property.
  • The farmer claims that we had previously agreed to a perpetual lease and so the contractual one year term does not apply. We did not agree to a perpetual lease, but even if we did, the farmer was correctly advised by his solicitor that the terms of the contract superseded any previous negotiations between us.
  • We were more than accommodating to the farmer. We allowed him to stay in occupation much longer than he was entitled to, although we were not required to do so. We offered him $4,000 towards moving and clearance sale costs, and we even offered him a licence for a further six months, but he refused.
  • The court must now grant us possession of the property and require the farmer to vacate.
  • Even though it has been more than one year since completion of the property sale, I still have the right to occupy the property.
  • I have a verbal agreement with the mining company granting me a perpetual lease at no rental cost. The mining company's community liaison officer told me that it was common practice for mining companies to allow the former owner to stay on the property as long as the mining company's requirements were met (in this case, to build the haul road). We agreed that after the sale I would be entitled to remain in occupation of the property indefinitely and to continue my farming activities, including running stock. It is only on this basis that I relinquished my title to the property.
  • The mining company asserts that this verbal agreement was superseded by the licence provision in the contract of sale. But that provision was never intended to be operative. As my solicitor explained to me, it had just been included in the contract as a tax planning device. By including the provision, the mining company would not have to pay GST because the property would be seen as a continuing rural operation.
  • The mining company let me continue living on the property for more than a year following the end date of the licence in the contract for sale, which is evidence that the provision in the contract was not operative.
  • The court must dismiss the mining company's application for possession of the property.

So, which case won?

Cast your judgment below to find out

Madison Burns
Disputes and litigation
Stacks Law Firm

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