Pastoralist Objects to M over Meaning of ‘Likely’

5 Jun 2020

In the last few years there has been litigation around the mining lease application process.

The latest cases before the Warden’s court demonstrates this will be a continuing thorn in the side of the mining industry, where anyone with a bone of contention will attempt to prevent mining lease applications and the mineral development of the State.

Litigation about this section of the Mining Act, initially commenced with Forest & Forest v Wilson, where the owners of the Minderoo Pastoral station objected against the grant of three mining leases because the mining lease applicant failed to lodge a mineralisation report at the same time as the mining lease application. The case ended up in the High Court who declared the mining leases invalid and as a result invalidated 55 other mining leases.

The High Court relied on case law authority (Cudgen Rutile (No 2) Pty Ltd v Chalk [1973] AC 520) , which they said was overlooked by the Supreme Court, to quote:

“…where a statutory regime confers power on the executive government of a State to grant exclusive rights to exploit the resources of a State, the regime will, subject to the provisions to the contrary, be understood as mandating compliance with the requirements of the regime as essential to making of a valid grant. When a statute that provides for the disposition of interest in the resources of a State “prescribes a mode of exercise of the statutory power, that mode must be followed and observed”. The statutory conditions regulating the making of a grant must be observed. A grant will be effective if the regime is complied with, but not otherwise”.

What a high bench-mark this sets for all tenement managers, leaving no room for any mistakes requiring tenement managers to have a greater understanding of the law than DMIRS.

The High Court said s75(6) and s116(2) of the Act was no defence to the non-compliance.

s75(6) states the Minister can still grant mining lease application whether or not the applicant has complied with all provisions of the Act and s116(2) states I quote:

“Except in the case of fraud, a mining tenement granted or renewed under this Act shall not be impeached or defeasible by reason or on account of any informality or irregularity in the application or in the proceedings previous to the grant or renewal of that tenement and no person dealing with a registered holder of a mining tenement shall be required or in any way concerned to inquire into or ascertain the circumstances under which the registered holder or any previous holder was registered, or to see to the application of any purchase or consideration money, or be affected by notice, actual or constructive, of any unregistered trust or interest any rule of law or equity to the contrary notwithstanding, and the knowledge that any such unregistered trust or interest is in existence shall not of itself be imputed as fraud”. 

The High Court distinguished “informality and irregularity” from non-compliance by the Warden, which happened in the case Forrest & Forrest v Wilson.

In an article “Problems Arising from the Forrest Case and WA’s partial “Legislative Fix” James Hunt et al identified a number of other problems that may arise because the High Court read down s75(6) s116(2), they are:

  • the mining lease applicant must strictly abide by the Act in respect of:
    • payment of rent and application fee accurately and contemporaneously;
    • mineralisation report being signed off by a qualified person;
    • all documents being accurate
  • The High Court’s rationale applying to other tenement applications
  • The High Court rationale applying to other applications that require to be accompanied by other documents or rent.

There have been a couple of Warden Court decisions recently that have contemplated strict compliance.

K Plus S Salt Australia Pty Ltd (‘KPSA’) lodged an objection and interlocutory application against Quarry Parks miscellaneous licence application on the grounds that failure to disclose the purpose of the licence on the application, and not accompanied by the map with the application.

Addressing first issue of the map, KPSA failed to prove that the map was absent from the application, nor was it a requirement to serve the map with the notice of application on the Objector.

On the second issue, Warden O’Sullivan followed the decision of Warden Wilson in Yarri & Ors v Forrest & Forrest [2014] WAMW 6 and said that s37(3), which requires a description of the purpose of the miscellaneous licence application to be supplied on the licence application (eg road, pipeline, water bore etc.), does not cause a miscellaneous licence to be a nullity because of the absence of the licence’s purpose on the application. Warden O’Sullivan distinguished this case from Forrest v Wilson because the High Court did not examine whether it applied to miscellaneous licences and “there is no reason to believe that the mode of exercise of statutory power set down by the legislation has not been followed and observed.”

This is important because basically it states, if the government follows the process, mistakes by the applicant, will not nullify the application.

The latest case, Element 25 Limited v Ridley [2020] WAMW 8, another pastoralist wanting to prevent a mining lease application being granted by quibbling over the meaning of the word ‘likely’, again relying on Forest v Wilson regarding strict adherence to the Mining Act.

Under s74(1)(ca)(ii) of the Mining Act an application for a mining lease shall be accompanied by a statement about the mining operations and a mineralisation report.

The Statement … shall set out information about the mining operations that are likely to be carried out in, on or under the land to which the application relates including information as to

  • when mining is likely to commence; and
  • the most likely method of mining; and
  • the location, and the area, of land that is likely to be required for the operation of plant, machinery and equipment and for other activities associated with those mining operations

The geologist writing the statement and mineralisation report used the word ‘possible’, and the objector argued that this didn’t mean ‘likely’. Warden O’Sullivan applied common sense and said the argument had no merit at all. He when onto say:

“The failure to expressly use the word “likely” is not fatal so long as the form of words used convey the necessary information. Nonetheless adhering to the language used in the statute is desirable as it avoids the sematic exercise which I am require to undertake.”

The statement of adhering to the language of the Mining Act when making submissions, or submissions for any other Act for that matter, can save you a world of pain. It is one of the basics we teach in our Tenement Management Courses.

I also note that DMIRS Guidelines for Mineralisation Report and Supporting Statement for a Mining Lease Application does not stress the use of the Mining Act language.

The important point we can take from this case is that the Wardens will not apply the Mining Act so strictly, as suggested in Forest v Wilson, (that no latitude is possible in process). Though relaxing accuracy in composition and process when dealing with DMIRS is still not an option. Keep in mind the Wardens, decision may not be supported in the higher courts if the decision is appealed, nor are Wardens compelled to follow the precedent of the other Wardens

As an aside, the disturbing thing about Element 25 v Ridley is that under s74(2) of the Mining Act the mining lease applicant when asked by the Warden or the Registrar, is required to provide further information when requested “other than information relating to testing or sampling”.  The defendant, when requested by Ridley’s lawyers, agreed to provide the pre-feasibility study with sensitive commercial information redacted. I suggest this is not a good precedent, and steps over the limitation parliament was attempting to limited when they excluded ‘information related to testing or sampling’.

In conclusion, we should be diligent and conservative when submitting applications that they adhere to the specific requirements of the Mining Act and remove any potential for litigants taking advantage of Forrest & Forrest v Wilson, despite the recent decisions of the Wardens.