Carter v Minister for Resources

[2019] NSWLEC 83

Land and Environment Court

New South Wales

Medium Neutral Citation:	Carter v Minister for Resources [2019] NSWLEC 83
Hearing dates:	12 June 2019
Date of orders:	12 June 2019
Decision date:	12 June 2019
Jurisdiction:	Class 8
Before:	Preston CJ
Decision:	The Court: (1)   Declares that mining lease no 1763 dated 4 October 2017 granted by the Minister for Resources to EMC Metals Australia Pty Ltd is invalid and of no effect. (2)   Orders the first and second respondents to pay the applicant's costs of the proceedings.
Catchwords:	MINING – mining lease – grant in breach of statutory provisions – agricultural land objection made to granting mining lease – objection not determined before mining lease granted – mining lease invalid – whether declaration of invalidity needed – costs – whether indemnity costs warranted
Legislation Cited:	Mining Act 1992 s 63, Sch 1 cl 22
Category:	Principal judgment
Parties:	Owen Bernard Carter (Applicant) Minister for Resources (First Respondent) Secretary of the Department of Planning and Environment (Second Respondent) EMC Metals Australia Pty Limited (Third Respondent)
Representation:	Counsel: Mr M Seymour (Applicant) Mr G Craddock SC (Respondents)   Solicitors: Nelson Keane & Hemingway (Applicant) Maddocks Lawyers (Respondents)
File Number(s):	2019/40046
Publication restriction:	Nil

Judgment

1. The Minister for Resources (“the Minister”) granted mining lease no 1763 on 4 October 2017 to EMC Metals Australia Pty Ltd (“EMC Metals”) to extract by open cut methods scandium and its ores over an area of 874.3 hectares of land in the Nyngan area. Part of the land the subject of the mining lease is a rural property owned by Mr Carter.

2. As events happened, the mining lease was granted in contravention of the Mining Act 1992 (“Mining Act”). As was statutorily required, Mr Carter was sent notice of the mining lease application by EMC Metals on 28 July 2016. Mr Carter sent an objection to the grant of the mining lease on the ground that his property is agricultural land (under cl 22 of Sch 1 of the Mining Act). On receipt of the objection, the Secretary of the Department of Planning and Environment was required to determine the objection in accordance with Sch 2 of the Mining Act (see cl 22(5) of Sch 1 of the Mining Act). Schedule 2 defines what land is "agricultural land".

3. Unfortunately, Mr Carter's agricultural land objection was overlooked and was not determined before the Minister granted the mining lease on 4 October 2017. The Minister's grant of the mining lease under s 63(1) of the Mining Act was thereby not in accordance with Part 2 of Sch 1 of the Mining Act (cl 22 is within Part 2 of Sch 1). Section 63(4) of the Mining Act provides:

“A mining lease may not be granted under this section otherwise than in accordance with Part 2 of Sch 1.”

4. In these circumstances, the Minister had no power to grant the mining lease.

5. Mr Carter brought proceedings, by summons filed on 6 February 2019, seeking declarations that the Secretary had failed to determine Mr Carter's agricultural land objection, that the Minister's decision to grant the mining lease was not in accordance with Part 2 of Sch 1 of the Mining Act, and that the mining lease is invalid and of no effect.

6. The Minister and the Department, the first and second respondents respectively, initially filed a notice of appearance on 26 February 2019, but subsequently, on 16 April 2019, filed a submitting appearance submitting “to the making of all orders sought, and the giving or entry of judgment in respect of all claims made, save as to costs”.

7. EMC Metals, the third respondent, filed a submitting appearance on 18 April 2019.

8. After the three respondents had filed their submitting appearances, at a directions hearing on 23 April 2019, a Commissioner for Mining, Senior Commissioner Dixon, expressed concern that, as all three respondents had filed submitting appearances, there would be no contradictor to assist the Court regarding Mr Carter's claims.

9. Accordingly, the Commissioner for Mining, pursuant to rule 6.11(2) of the Uniform Civil Procedure Rules 2005, granted leave to the first and second respondents to appear at the hearing to provide the Court with written and orals submissions as to the applicable law and processes, and the declarations sought by Mr Carter.

10. The Commissioner for Mining fixed the proceedings for hearing on 12 June 2019, and directed the applicant to file and serve his submissions by 3 May 2019, the first and second respondents to file and serve their submissions by 31 May 2019, and Mr Carter to file his submissions in reply by 7 June 2019, amongst other directions concerning evidence.    

11. The parties filed and served their submissions in accordance with these directions.

12. The first and second respondents accepted that the Secretary of the Department had failed to determine Mr Carter's agricultural land objection as required before the Minister purported to grant the mining lease, and that, accordingly, the mining lease was granted in breach of s 63(4) of the Mining Act. The first and second respondents accepted that this breach of the Mining Act was vitiating; the mining lease is invalid and of no effect.

13. The point of difference between the first and second respondents and the applicant was what order, if any, should be made to address this breach of the Mining Act. The applicant, Mr Carter, submitted that a declaration should be made that the mining lease is invalid and of no effect. Such a declaration would have a constitutive effect, causing the mining lease to become invalid.

14. The first and second respondents submitted that a declaration need not be made because the mining lease, granted in breach of s 63(4) of the Mining Act, is void ab initio. The first and second respondents relied on the High Court's decision in Minister for Immigration v Bhardwaj (2002) 209 CLR 597; [2002] HCA 11, particularly the decision of Gaudron and Gummow JJ at [51], that there is “no reason in principle why the general law should treat administrative decisions involving jurisdictional error as binding or having legal effect unless and until set aside” and that “[a] decision that involves jurisdictional error is a decision that lacks legal foundation and is properly regarded, in law, as no decision at all.”

15. The first and second respondents argued that in the present case, the grant of the mining lease not in accordance with cl 22 of Sch 1 of the Mining Act (which required the agricultural land objection to be determined before the mining lease could be granted) involved jurisdictional error. The decision of the Minister to grant the mining lease was thereby “no decision at all”. In these circumstances, the first and second respondents argued that there is no necessity to declare the mining lease invalid.

16. These were the competing positions of the parties until the hearing of the proceedings today. At the outset of the hearing, I queried why the first and second respondents were opposed to the grant of the declaration that the mining lease is invalid and of no effect. I noted that a declaration with respect to an administrative decision can have either of two effects: a constitutive effect (whereby the declaration causes the administrative decision to become invalid) or a declaratory effect (whereby the declaration recognises the existing validity or invalidity of the administrative decision).

17. On the argument of the first and second respondents, the Minister's decision to grant the mining lease was void ab initio. But even if this were to be correct, a declaration that the mining lease is invalid and of no effect would have a declaratory effect. This could still have utility by pronouncing to the parties, and publicly, that the mining lease is invalid and of no effect.

18. After consideration, the first and second respondents accepted that there could be utility in making a declaration that the mining lease is invalid and of no effect, and consented to the Court making such a declaration. I propose to do so.

19. The next question to be determined is costs. The first and second respondents accepted that in Class 8 of the Court's jurisdiction, the usual order for costs is that costs follow the event. The applicant will have been successful in obtaining a declaration that the mining lease is invalid and of no effect, and hence should be awarded costs. But the first and second respondents submitted that this order for costs should be on the usual basis.

20. The applicant applied for an order for costs on an indemnity basis. The reason given was that the first and second respondents’ conduct was said to be unreasonable in two respects: first, the first and second respondents delayed in consenting to the Court making a declaration of invalidity of the mining lease until the day of the hearing, and secondly, the first and second respondents’ argument that there was no need for a declaration of invalidity, based on the Bhardwaj decision, was itself unreasonable.

21. The first and second respondents contested that their conduct was unreasonable in either respect.

22. I am not satisfied that the applicant has established a basis for an order for costs on an indemnity basis. The two respects advanced as establishing unreasonableness turn on the same point: the argument that the Minister's decision, involving jurisdictional error, was not a decision at all, and hence that no declaration of invalidity was needed. I do not consider the first and second respondents acted unreasonably in raising this argument.

23. The first and second respondents made submissions on “the applicable law and processes and the declarations sought by the applicant” as directed by the Commissioner for Mining in order to assist the Court at the hearing. The first and second respondents did so in accordance with the timetable set. The first and second respondents’ submissions were directed to the applicable law and processes and the declarations sought by the applicant as required by the Commissioner for Mining. There was therefore nothing unreasonable in the first and second respondents’ conduct leading up to the hearing.

24. It is true that the first and second respondents accepted, in response to my query as to their position, that a declaration of invalidity could be made consistent with their position. That is to say, a declaration having a declaratory effect could be made that the mining lease is already invalid. This did not involve recanting on their submitted position that the mining lease was void ab initio, and that a declaration was not needed in order to cause the mining lease to become invalid. I do not consider the first and second respondents’ proper concession that a declaration of invalidity could still have utility to constitute unreasonable conduct.

25. The first and second respondents’ position that the mining lease was void ab initio was reasonably arguable. It is not necessary for me to decide whether I would have upheld the argument had the point still been made. As the applicant submitted, there are counter indications in the statutory scheme of the Mining Act that support a mining lease, once granted, being effective and operative unless and until set aside by this Court. But this is simply to say that the applicant's position is equally reasonably arguable. I do not consider that the first and second respondents’ submitted position was so unreasonable as would found an order for costs on an indemnity basis.

26. For these reasons, I reject the applicant's application for an order for costs on an indemnity basis.

27. The Court:

1. Declares that mining lease no 1763 dated 4 October 2017 granted by the Minister for Resources to EMC Metals Australia Pty Ltd is invalid and of no effect.

2. Orders the first and second respondents to pay the applicant's costs of the proceedings.

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Decision last updated: 14 June 2019