Boral Resources (SA) Ltd v Matthews

[2006] SASC 121

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

BORAL RESOURCES (SA) LTD v MATTHEWS

Judgment of The Full Court

(The Honourable Chief Justice Doyle, The Honourable Justice Bleby and The Honourable Justice White)

28 April 2006

MINING LAW - LEGISLATION RELATING TO MINING FOR MINERALS - MINERS' RIGHTS AND MINING LICENCES, TENURES AND INTERESTS - MINING TENURES AND INTERESTS - ACQUISITION IN FIRST INSTANCE OF MINING CLAIMS AND INTERESTS - MARKING OUT

Appeal to the Full Court of the Supreme Court from a decision of Environment, Resources and Development Court pursuant to s 30(1)(e) and s 30(2) of the Environment, Resources and Development Court Act 1993 (SA) - matter considered on first instance by a Warden of the Wardens Court - a mining claim made by Boral Resources (SA) Ltd declared invalid pursuant to reg 100 of the Mining Regulations 1998 (SA) - whether a mining claim pegged out by Boral Resources (SA) Ltd may be declared invalid pursuant to reg 100 of the Mining Regulations 1998 (SA) for failure to peg claim in accordance with the Mining Regulations 1998 (SA) - statutory interpretation of the application of reg 100 of the Mining Regulations 1998 (SA) - no error made out - appeal dismissed.

Mining Act 1971 (SA) s 20, s 22(1), s 23, s 24(1), s 24(3), s 24(5), s 25, s 64, s 69; Mining Regulations 1998 (SA) reg 12, reg 13, reg 13(1), reg 14, reg 14(2), reg 14(4), reg 14(5), reg 14(6), reg 14(7), reg 14(8), reg 15A, reg 17(3)(a), reg 17(3)(b), reg 17(3)(c), reg 17(4), reg 20(1), reg 20(2), reg 100; Environment, Resources and Development Court Act 1993 s 30(1)(e), s 30(2); Native Vegetation Regulations 2003 (SA), referred to.
Pacminex (Operations) Pty Ltd v Australian (Nephrite) Jade Mines Pty Ltd (1974) 7 SASR 401; Anisimoff v Fraser (No 2) (1983) 33 SASR 458, discussed.
Project Blue Sky Inc v Australian Broadcasting Authority [1998] 194 CLR 355, considered.

BORAL RESOURCES (SA) LTD v MATTHEWS
[2006] SASC 121

Full Court:  Doyle CJ, Bleby and White JJ

1. DOYLE CJ: The Warden’s Court, established by s 64 of the Mining Act 1971 (SA) (“the Act”) heard a suit in which Mr Matthews claimed the forfeiture of a mineral claim registered in the Mining Register, in the name of Boral Resources (SA) Limited (“Boral”) under the Act. The Court declared the mineral claim invalid, basing its decision on certain breaches of the Mining Regulations 1998 (SA) (“the Regulations”) in the pegging of the mineral claim.

2. The Court’s decision was upheld on appeal to the Environment, Resources and Development Court. Boral now appeals to this Court under s 30(1)(e) and s 30(2) of the Environment, Resources and Development Court Act 1993 (SA).

3. The appeal raises the proper application of reg 100 of the Regulations, under which the Warden’s Court made its decision. Regulation 100 provides:

   100    Declaration

   If application is made to the Warden's Court for a declaration of invalidity of a mining tenement on the grounds that the tenement has not been lawfully acquired in accordance with these regulations, the declaration must not be made unless the Court is satisfied that a breach of these regulations is a breach in a material respect and that the matter is of sufficient gravity to justify the making of the declaration, but the Court may order the rectification of any non-compliance with these regulations.

   In particular, the appeal raises the question of whether the power of the Warden’s Court to make a declaration under reg 100 is conditioned on a finding by the Court that the pegging of the claim is invalid because of a failure to comply with the Regulations. And, if the power of the Warden’s Court is so conditioned, how does one determine whether a failure to comply with the Regulations results in the invalidity of the mining tenement in question?

4. I would dismiss the appeal.  No material error by the Warden’s Court has been demonstrated.  My reasons for so deciding follow.

   Facts and legislation

5. In what follows I have omitted a number of matters that have no bearing on the ultimate outcome.

6. In February 2004 Boral instructed a surveyor to peg a mineral claim over a Water and Stone Reserve known as the former Mount Monster Quarry. Boral held a miner’s right issued under s 20 of the Act.

7. Section 22(1) of the Act provides:

   22    Rights attaching to miner's right

   (1)     A miner's right shall, subject to this Act, authorise the holder to prospect for minerals and to peg out a mineral claim in accordance with the regulations.

   Section 24(1) requires an application for registration of a mineral claim to be lodged with the Mining Registrar within 30 days of the claim being pegged out. Section 24(3) requires a mining registrar to register a mineral claim upon receipt of “due application for registration of the claim”, but subject to “this Act and any order of the Warden’s Court”.

8. The reserve in question is a four-sided area.  Its north side is bounded by the Mount Monster Road, which runs roughly north-west/south-east.  So the reserve is an irregular shape, not a rectangle.

9. Regulations 12, 13 and 14 of the Regulations govern the pegging of a mineral claim. They provide as follows:

   12    Size (section 23)

   The maximum permissible area of a mineral claim that can be pegged out is 250 hectares.

   13    Shape of claim

   (1)     Subject to these regulations, the shape of a mineral claim must, as far as practicable, approximate a rectangle, the length of the longer side of which must not exceed five times the length of the shorter side.

   (2)     The length of the longest side of a mineral claim must not exceed 2 kilometres.

   (3)     If it is not practicable to comply with subregulation (1) because of the position of adjoining boundaries for other areas, or natural features, an intervening or irregularly shaped piece of land may be pegged out as a mineral claim.

   14    Mode of taking possession

   (1) This regulation sets out the requirements for a valid pegging of a mineral claim under the Act.

   (2)     A post must be securely placed in the ground at each corner of the relevant area.

   (3)     Each post must—

   (a)     be devoid of marks or writing that refers to a previous pegging; and

   (b)have a cross-sectional dimension equal to or exceeding 7 centimetres; and

   (c)     project at least 75 centimetres above the ground; and

   (d)clearly show the number (or numbers) of the miner's right (or rights) by virtue of which the claim is pegged out, together with the date of pegging (either by direct markings on the post or by the secure attachment of a notice to the post), as near to the top of the post as practicable; and

   (e)if the person is pegging out more than one claim on the same parcel of land on the same day, clearly show the number of the claim, as pegged out on that land on that day, using consecutive numbers starting with the number 1.

   (4)     The direction of the boundaries of the claim must be clearly indicated by trenches, piles of stones, or substantial indicator markers fixed to each post.

   (5)     If it is impracticable to comply with a preceding subregulation, a person may peg out a mineral claim in some other manner but, in such a case, the person must lodge a notice of the manner of pegging at the nearest office of the Mining Registrar to the area that has been pegged out.

   (6)A notice under subregulation (5)—

   (a)must be in writing; and

   (b)must be given within seven days after the pegging.

   (7)     If the Mining Registrar, or a person authorised by the Mining Registrar for the purposes of this regulation, considers that the method of pegging out an area is unsatisfactory, he or she may order that a different method be used.

   (8)     A person to whom an order is directed under subregulation (7) must immediately comply with the order.

10. Mr Whitney, a surveyor, pegged Boral’s claim on 26 February 2004.  He put one post at the north-west corner.  He put another post on the western side of the reserve boundary, but about 54 metres north of the south-west corner.  He did not put a post at the south-west corner of the reserve.  He put three posts along the southern boundary of the reserve, but no post at the south-eastern corner.  The three posts were respectively about 97 metres, 250 metres and 397 metres from the south-west corner.   There was no post at all on the eastern boundary, or at the north-eastern corner of the reserve.  Mr Whitney put a post on the prolongation or product of the eastern boundary, about 48 metres north of the north-eastern corner.

11. Mr Whitney said in evidence before the Warden’s Court that scrub on the land prevented him achieving a line of sight to the corners. The surveying method he was using required or relied on him achieving a line of sight between two points. The scrub, he said, was native vegetation, and he did not think it was appropriate to clear it to achieve a line of sight. He said that as a general rule it was not surveying practice to clear native vegetation in such a case. His evidence suggests that he did not consider exercising the power conferred by reg 5(1)(zc) of the Native Vegetation Regulations 2003 (SA), which permits the clearance of native vegetation “incidental to exploratory operations authorised under the Mining Act 1971”.

12. Mr Whitney made no attempt at all to indicate the directions of the boundaries as required by reg 14(4). His explanation for that [AB 335] was that he did not consider directional markers, taking the view that they would not “tell the story” and it was the plan (presumably the plan lodged with the Mining Registrar) which “tells the story of what was intended”.

13. Boral lodged an application to register its claim on 17 March 2004. The accompanying plan showed the boundaries of the reserve and the position of the posts on the reserve. The application asserted that the claim was properly pegged. No notice was given under reg 14(5).

14. On 15 March 2004 Mr Matthews pegged a claim over the same reserve.  He had seen Mr Whitney’s posts, and realised that someone had probably attempted to peg a mineral claim over the reserve.  However, there was some uncertainty about this because of the positioning of the posts.

15. Mr Matthews used a handheld global position system. He pegged each corner and dug trenches to indicate the direction of the sides. There is no suggestion that he failed to peg the claim as required by the Regulations, except that, assuming he followed the reserve boundaries, the claim that he pegged did not approximate a rectangle. Mr Matthews had no significant difficulty reaching each corner. He agreed that the scrub prevented a line of sight to each corner.

16. Mr Matthews then applied to register his claim on 15 March 2004. 

17. Initially the Registrar declined to register either claim, both the Registrar and the Director of Mines having a mistaken belief that, for reasons that need not be detailed, the claim could not be pegged unless the Minister’s consent was first obtained.  Mr Matthews was directed to remove his posts and did so.

18. In early June the Mining Registrar informed Boral and Mr Matthews that the consent of the Minister was not required before the mineral claim could be pegged.

19. On 10 June 2004, on application by Boral, a mining warden ordered that Boral’s application for a mineral claim, lodged on 17 March 2004, be registered by the Mining Registrar “nunc pro tunc”.  The mineral claim was registered on 11 June 2004.

20. Mr Matthews promptly re-pegged his claim.  On 21 June 2004 he applied to register his mineral claim, alleging that Boral’s pegging of its claim was invalid.  The Mining Registrar rejected his application.

21. In his later evidence before the Warden’s Court Mr Whitney gave evidence that on 24 June 2004, at the request of Boral, he returned to the reserve and put directional markers on the posts that he had put on the land.

22. The absence of the directional markers had come to the attention of the Department some time before this. On 29 June 2004 the Acting Director of the Department wrote to Boral requesting Boral to ensure that the posts complied with the requirements of subregs (3)(a), (b) and (c) of reg 17, and with reg 17(4). This letter was treated by the parties as a direction by the Director under reg 20 of the Regulations, which provides as follows:

    20    Insufficiently defined claims

    (1)     If a mineral claim is not defined by posts and boundary markers in accordance with the requirements of these regulations, a person authorised by the Director for the purposes of this regulation may, by notice in writing to the owner of the claim, require the owner to rectify the situation within a specified period (of at least seven days).

    (2)     If a notice under subregulation (1) is not complied with within the time specified by the notice, the Director may apply to the Warden's Court for an order cancelling the claim and for appropriate consequential orders (and the Warden's Court has jurisdiction to make those orders).

23. The effect of Mr Whitney’s evidence before the Warden’s Court was that when this direction was received, he had already remedied the failure to comply with reg 14(4). The other matters raised by the Acting Director’s letter were not raised on appeal, and I proceed on the basis that for one reason or another they are no longer relevant.

    Proceedings in the Warden’s Court

24. On 16 July 2004 Mr Matthews filed a plaint note in the Warden’s Court. He claimed that Boral had not complied with the requirements of regs 13(1) and 14(4). His Plaint does not refer specifically to the failure to comply with reg 14(2), but the case has been argued on appeal, and before the Warden’s Court, on the basis that complaint was made of that failure. Mr Matthews claimed the forfeiture of Boral’s mineral claim. The warden treated the plaint as falling under reg 100 of the Regulations, which is set out above.

25. The Warden’s Court found that the pegging of Boral’s mineral claim did not comply with the Regulations. There were no posts at three of the four corners: reg 14(2). The directions of the boundaries were not indicated when the claim was pegged: reg 14(4). The mineral claim was not rectangular in shape: reg 13(1).

26. Boral’s failure to give a notice under reg 14(5) was considered to be a further departure from the Regulations: at [32].

27. The Warden’s Court found that it was not impracticable to comply with the requirement of the Regulations that a post be placed at each corner of the claim. The Warden said that Mr Whitney could have pegged each corner, “it is just that with the survey equipment he had he may not have been able to define precisely on a plan where he had placed the posts”: at [21]. In any event, Mr Matthews had demonstrated that it was not difficult to peg each corner using a global position system. The real problem was Mr Whitney’s insistence on pegging the claim in the particular manner in which he approached the pegging. As the Warden said at [21]: “His supposed impracticability was self imposed”. The Warden made the further point that although it was not necessary to clear the scrub to peg a claim, had Mr Whitney wished to do so he could have done so, relying on the regulation earlier referred to.

28. The Warden concluded, not surprisingly, that the breaches of the Regulations were “a breach in a material respect”. He considered whether “the matter is of sufficient gravity to justify the making of the declaration”. In that respect he referred to observations by Wells J in Pacminex (Operations) Pty Ltd v Australian (Nephrite) Jade Mines Pty Ltd (1974) 7 SASR 401 at 412. There Wells J first made the point that the “matter” was not equivalent to the breach proved. The reference to “the matter” required the Court to consider:

    … not only the breach and the facts directly bearing upon it, but also the events leading up to the breach, the conduct of the parties and the actual and potential consequences of the breach and of the forfeiture sought, having regard, throughout, to the object and policy of the Act.

    The Warden made the point that there was no excuse for the breach other than ignorance. The breach of the Regulations was substantial. There was no reason to protect Boral on the basis that it had pegged the claim first, Mr Matthews being described by Boral as “an opportunist”. The Warden said that the Court “should not be reluctant to ensure compliance by upholding a plaintor”: at [28]. The Warden made the point that there had been no attempt to get permission, as a result of a notice under reg 14(5), to depart from the normal rules. The Warden’s Court made the declaration of invalidity that Mr Matthews sought.

29. The Warden appeared to treat the later placing of directional markers by Mr Whitney as relevant to a forfeiture application under s 69 of the Act, and as not assisting in Boral’s case on a challenge to the initial registration of its claim.

    Issues on appeal

30. The issue on appeal is whether the Warden’s Court erred in applying reg 100 and in finding that the Regulations were breached in a material respect and that “the matter” was of sufficient gravity to justify making a declaration of invalidity.

31. Mr Henry, counsel for Boral, does not submit that reg 100 is invalid. In my opinion that regulation is supported by s 22 of the Act. That section contemplates regulations that prescribe the manner in which a claim is to be pegged, and that prescribe the consequence of failure to comply with the requirements of the Regulations. In any event, I consider that s 92, which authorises “such regulations as are contemplated by this Act”, also supports reg 100: see Anisimoff v Fraser (No 2) (1983) 33 SASR 458 at 468-471.

32. Mr Henry accepts that the Warden’s Court had jurisdiction under s 67(1) of the Act to determine the matter raised by Mr Matthews’ plaint, applying reg 100 to the case.

33. Boral did not peg the claim as required by reg 14(2) and as required by reg 14(4). There was a breach of the Regulations. Nor did it give notice under reg 14(5).

34. The Warden’s finding that it was practicable to comply with reg 14(2) was soundly made. No error has been shown. Mr Whitney’s reasons for not placing a post at each corner of the mineral claim do not demonstrate that it was impracticable to do so. They merely demonstrate that his preferred method of surveying gave rise to a difficulty, but even that difficulty could have been resolved by clearing the scrub. In any event, Mr Matthews’ evidence demonstrated that it was not difficult to put posts at the corner, using a global position system.

35. No error in these findings has been shown. The Warden rightly found that the Regulations were breached in a material respect. The breach was not a trifling one. The regulations breached are important provisions.

36. I put to one side the failure to peg a claim of a rectangular shape. As I understand the facts, Mr Matthews also failed to comply with the requirement of reg 13(1). As the reserve itself was not rectangular, a decision to follow the boundaries of the reserve does not seem to me to be a matter of sufficient gravity to warrant a declaration of invalidity, even in combination with the other matters.

37. Boral’s later placing of directional markers is, I consider, a matter that goes to the gravity of the matter for the purposes of reg 100. The breach of reg 14(4) was remedied, but not until almost four months after the initial pegging.

38. When considering the gravity of the matter as a whole, it is relevant to bear in mind that there was no excuse for the failure to comply with the Regulations. Mr Whitney’s explanation is unpersuasive. In my view he appears to miss the point. The policy of the Regulations, as the Warden indicated, is that the posts on the ground should “tell the story” as far as possible. It is no answer to say that a person who searches the Register and finds the plan will understand what is intended.

1. In my opinion it was relevant, when considering the gravity of the matter, that there was no sufficient or good explanation for the failure to comply with the Regulations, and it was relevant to consider that the manner in which Mr Whitney pegged the land would not have indicated, to anyone other than a person of the sort of knowledge that Mr Matthews had when he went to the land, the boundaries of the claim being made. There is good reason, as the Warden said, to apply the Regulations strictly. There is no reason to think that by this the Warden meant “strictly and literally”.

2. In my view, taking all relevant matters into account, it was open to the Warden to conclude that the matter was of sufficient gravity to justify the making of a declaration of invalidity. In any event, the Warden’s Court is a specialist court, which can be expected to acquire an understanding of the workings of the Act, and of what is required in the sound administration and application of the Act. On a matter like this I would be slow to depart from the opinion of the Warden’s Court. But, quite apart from that, in my opinion no error has been demonstrated.

3. Mr Henry submits that neither the Mining Registrar nor the Director of Mines raised any objection to the failure to put posts at each corner of the claim. He also makes the point that ultimately the Mining Registrar registered Boral’s mineral claim. On this basis he suggests that one should infer that the Mining Registrar had taken the view that the method of pegging was satisfactory, or at least not “unsatisfactory” for the purposes of reg 14(7). By a similar process of reasoning he submits that one should infer that the Director did not consider that the failure to put posts at each corner was a matter that should be rectified under reg 20.

4. I reject that submission. An affirmative decision by the Mining Registrar or by the Director cannot be inferred simply from the failure of either of them to take action, particularly bearing in mind, in the case of the Mining Registrar, that notice was not given under reg 14(5). In any event, an administrative decision in the course of considering an application to register a mineral claim cannot bind the Warden’s Court when it exercises its statutory jurisdiction to consider a claim under reg 100.

5. Mr Henry’s main submission is that reg 100 is not enlivened unless there is a failure to comply with the Regulations as to pegging that invalidates the mineral claim. Only if that finding is first made can there be a finding of a breach in a material respect. He then invokes the reasoning of the High Court in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 to argue that, having regard to the purpose of the Regulations, “strict and literal” compliance with reg 14 is not required, and a failure to comply strictly and literally with the requirements of reg 14 does not lead to invalidity of the claim in question. He submits that the purpose of the pegging requirements is to enable the identification of the land claimed, and that in this case it was clear enough that the land claimed was the reserve in question. Accordingly, there was substantial compliance with the requirements of reg 14, the pegging was not invalid, and reg 100 was not enlivened.

6. That submission fails at each step.

7. There is no reason to read reg 100 as containing an unstated major premise. That is, that reg 100 applies only to a breach of reg 14 that invalidates the pegging of the claim or the claim in question. Regulation 100 is clear. It deals with breaches of the Regulations, which are breaches “in a material respect”. If the drafter of the Regulation had intended that consideration be given as well to the difficult concept of the effect of a breach on the validity of a mining tenement, the drafter would surely have said so. Indeed, the reference to a breach that is a breach in a material respect indicates, clearly enough, that that was not the intention, and that what the drafter intended was that the Warden’s Court would consider the materiality of a breach. In short, the concept of a breach of the Regulations going to the validity of the pegging of a claim is not raised by reg 100. It is not surprising that the drafter of the Regulations would not take this approach. It would introduce an unwanted element of complexity.

8. In any event, this is not a case in which Boral failed to comply with the Regulations only if they are applied strictly and literally. The departure from the requirements of reg 14 was substantial.

9. Moreover, Mr Henry’s statement of the purpose of the Regulations as to pegging is correct, but too general. It is understandable that the Regulations would require that a claim be pegged in a manner that will clearly and with reasonable accuracy identify the boundaries of the claim, and will do so in such a manner that the boundaries will be apparent to land owners, holders of miner’s rights and others coming on the land. An inspection of the land and the posts should indicate the boundaries of a claim. It should not be necessary for a person to inspect the register kept under s 15A of the Act. Boral’s claim was not pegged in a manner that achieved the object of the Regulations. In any event, even in terms of Mr Henry’s submission, it was not “clear enough” to anyone other than an informed observer like Mr Matthews (who knew about the reserve and knew its boundaries) what were the boundaries of the claim pegged by Boral. Even to Mr Matthews, who was aware of the existence of boundaries of the reserve, and who had an interest in pegging, there was an element of uncertainty as to Boral’s claim. An uninformed observer would not have known from an inspection of the land what the boundaries of the claim were.

   Conclusion

10. I reject the submission for Boral.  No error by the Warden’s Court has been demonstrated.  I would dismiss the appeal.

11. BLEBY J:             I agree with the order proposed by the Chief Justice and with his reasons.  I merely add a few further remarks of my own.

12. That the breaches of the Regulations by Boral were breaches “in a material respect” is reinforced by the intention manifested by ss 22-24 of the Mining Act 1971 (“the Act”).

13. Section 25 of the Act prescribes the rights which attach to a mineral claim. Section 22(1) confers the right on the holder of a miner’s right to peg out a mineral claim in accordance with the Regulations. Section 23 limits the maximum area of a mineral claim. Section 24 provides for registration of the claim. Sub-section (5) of that section provides:

    If application for registration of a mineral claim is not made as required by this section, or if the mining registrar lawfully refuses to register the claim, the claim shall lapse.

14. It follows that the rights created by s 25 arise on pegging out the mineral claim but may lapse if no application for registration is made within the prescribed time or if the Mining Registrar refuses to register the claim. The rights conferred by s 22 do not depend, initially, on registration.

15. In those circumstances it is fundamentally important that the pegging out process prescribed by the Regulations be observed in order that, pending registration, and indeed thereafter, a person can tell from the position of the pegs on the ground and from the direction indicators what area has been pegged and who has pegged it.

16. Boral’s non‑compliance with the Regulations in this case must also be held to be material because it was not possible, from the pegs placed on the land, to tell what area was the subject of the mineral claim and of the rights then claimed to be exercised by Boral.

17. Regulation 14 of the Regulations contemplates that it will sometimes be impracticable to comply in all respects with the Regulations. Sub-regulations (5) to (8) of reg 14 provide a summary remedy by which the claim, although the pegging may not comply with the letter of the Regulations, may nevertheless be recognised, provided that the appropriate application is made to the Mining Registrar within seven days after the pegging. That is an application quite independent of an application for registration of the claim. The course provided by reg 14(5) was not followed by Boral, and so it was not able to take advantage of that provision.

18. The Warden was correct in declaring the mineral claim invalid.  The appeal must be dismissed.

19. WHITE J: I agree with the order proposed by the Chief Justice and with his reasons.