Chillagoe Gold v Weil & Stein
[2008] QLC 161
•14 August 2008
LAND COURT OF QUEENSLAND
CITATION: Chillagoe Gold v Weil & Stein [2008] QLC 0161
PARTIES:Chillagoe Gold Pty Ltd
(applicant)
v
Anthony John Weil
(first respondent)
and
Graham Michael Stein
(second respondent)
FILE NO: CAV00259/2007
PROCEEDING: Application to remove caveat
DELIVERED ON: 14 August 2008
DELIVERED AT: Brisbane
MEMBER:Mr BR O’Connor, Judicial Registrar
ORDER:1. Caveat No. 1011136 to be removed from the relevant Registry.
2.No order as to costs.
CATCHWORDS: CAVEAT – EXPLORATION PERMIT FOR MINING – Whether caveat should be continued – Factors relevant
Mineral Resources Act 1989, ss 152, 154
Arthur v Department of Natural Resources and Mines [2003] QLRT 100
Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 202 CLR 351
K.C. Park Safe (Brisbane) Pty Ltd v Cairns City Council (1997) 1 Qd.R.497
APPEARANCES: Not applicable – Heard on the Papers
The present issue for determination is whether caveat no. 1011136 lodged on 23 January 2008 under section 152 of the Mineral Resources Act 1989 over exploration permit EPM11442 by Graham Michael Stein should be removed or allowed to continue in force.
An earlier caveat no. 101495 lodged by Anthony John Weil lapsed on 28 January 2008 and, despite Court permission for Weil to lodge a further caveat, none was so lodged. An initial application dated 21 December 2007 by the applicant, Chillagoe Gold, to remove the caveat by Weil is thus now not strictly relevant.
By Court order of 13 February 2008, Stein was joined as a party to the proceeding between Weil and the applicant. Stein and Weil claim similar interests in an action against the applicant. Stein had lodged his caveat in similar terms to Weil. Such a caveat lodged by Stein remains in force until an order of the Court to remove it.
Although affidavit evidence and submissions by the parties may strictly relate to the initial defunct application to remove the caveat of Weil, it is my view that such material can be properly considered when determining whether the current Stein caveat should remain. Under the 13 February 2008 Court order, the Stein caveat can be removed if so ordered by the Land Court. I do not consider it necessary for the applicant to make fresh application to now have the Stein caveat removed.
It should be stated at the outset that the ultimate question of whether Weil and Stein have any legally enforceable interest in respect of EPM11442 is not at this point before the Land Court. The present question is solely whether there is a sufficient interest established under s. 152 to warrant the continuation of the Stein caveat. Separate legal criteria govern the determination of this latter issue. In broad terms, the caveator must establish that there is a serious question to be tried and satisfy the balance of convenience test.
Background facts
After considering the affidavit and submissions from both sides, a brief chronology of the key background facts and claims relevant to the current caveat issues are as follows:
1. In March 1996 the Saul parties (comprising Capricorn, Saul, Stein and Weil) agreed to grant an option (the ‘Wandoo’ option) in certain mining interests to Barramundi, a Canadian company then registered in Australia.
2. The term of the option agreed to was 3 years from 5 December 1995 but provision was made to alter the term, subject to agreement.
3. From about 20 November 1996, EPM11442 became subject to the Wandoo option although such EPM was not acquired by Weil or Stein.
4. The Wandoo option agreement was extended by agreements dated 22 October 1997, 1 July 1998 and August 1999. The last of these extended the Wandoo option agreements to 31 December 2004 but subject to a proviso that payments be made in accordance with an agreed schedule. It is not clear whether necessary payments were made.
5. The applicant claims that, if the option had not expired on 5 August 2002, it would have finally expired on 31 December 2004.
6. The applicant claims that, at least since 1 July 1998 the end of the option period has been defined by a specific date and not by a period of time.
7. The last extension would have been to 31 December 2004 based on this time calculation.
8. On 25 September 2000, for a consideration of some $30,000 from Kagara Zinc Ltd (Kagara), Barramundi agreed to temporarily or permanently forego the exercisability of its option. The applicant claims that there was never any suggestion that Barramundi would receive from the Saul parties a variation to the agreed expiry date of its option to additionally compensate Barramundi for the exercisability that it effectively sold to Kagara.
9. The applicant states whether the suspension was temporary or otherwise is a distinctly different question from whether or not there had been any agreement that the expiry date would be varied. It claims that there was no such agreement.
10. Kagara entered into a further option agreement with the Saul parties in 2005 to extend its option to 2007. Barramundi was party to this agreement.
11. Barramundi no longer exists as a registered company in Australia (doubts exist as to its status in its native Canada).
12. Barramundi is not a party to current proceedings.
Parties’ submissions
The respondent argues that Stein and Weil were parties to the Wandoo option agreement with Barramundi in 1995 and that the option for Barramundi to purchase their interests was merely “suspended” during the term of the later option to Kagara. The Kagara option having now expired, the Barramundi option is claimed to have been “reinvigorated” for the length of time it had to run when the Kagara option was first made – that is, it has some three years further to run from 2007. The “caveatable” interest claimed by Stein and Weil is that Barramundi may exercise that option and the former may subsequently financially benefit from that possibility.
The applicants’ case is that the Barramundi option expired at December 2004 and that only its exercisability, and not its term, was suspended during the Kagara option (at the latest). Further, Barramundi’s current status of not being registered in Australia would not enable it to be the holder of an exploration permit in Queensland anyway, even if the option had continued. The fact that Barramundi was a party to the 2005 Kagara option extension is not relevant as the Barramundi option had previously expired. There was no such intention in the 2005 agreement to vest fresh rights in Barramundi.
The applicant claims that it is now anxious to proceed with mining developments under the EPM and other related tenures and that refusal to transfer the relevant titles to it under an agreement with the Saul parties is impeding such development plans.
The relevant Law
Section 152 of the Mineral Resources Act 1989 enables a person who claims a right or interest in or in respect of an exploration permit may by caveat in the approved form, forbid the approval of any assignment in respect of the exploration permit. It is noted that the section includes the term “in respect of” which has been interpreted to cover interests of very wide range.[1]
[1] See Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] 202 CLR 351.
With respect to the application for caveats, there is clear authority that the proper way to proceed is analogous to that of an application for an interlocutory injunction. This was the test applied by the President of the Land and Resources Tribunal in Arthur v Department of Natural Resources and Mines.[2] The test there applied was whether there is a serious question to be tried and whether the balance of convenience favours the caveat remaining whilst the question in dispute is determined.
[2] [2003] QLRT 100.
Consideration of issues
Given the use of the term “in respect of” in s. 152 and the wide meaning that has been attributed to this term, I am satisfied that the interest claimed by Stein and Weil are sufficient to come within this expression and establish a caveatable interest.
As for the serious question to be tried, the evidence presently before the Court in affidavit and submission form points strongly to the exercisability of the Barramundi option terminating in December 2004. It is unlikely that it could be held to be “reinvigorated” at the termination of the Kagara option in 2007. However, in this proceeding it is not necessary to finally determine this issue. It is still arguable that there is a serious question to be tried as to the meaning of the term “suspended” in the first Kagara option agreement. Although unlikely, it may be that Barramundi could somehow be resurrected to argue and enforce its option.
It then comes to apply the balance of convenience test. The applicant, Chillagoe, claims that it is anxious to proceed with mining developments of which the EPM now in dispute is a integral part. It is noted that the current caveat has been in force under one guise or another since December 2007 and that neither Stein or Weil have taken any action to substantiate the interests claimed, other than the lodgement of the caveat.
Should the existing caveat be removed and the interest in the EPM transferred to Chillagoe, such action may inhibit any possible future action that Barramundi may take to enforce its option. Stein and Weil claim they would benefit financially from the possible exercise of that option. However, in my view, any damage that Stein and Weil may suffer by such course of action could be adequately compensated by an award of damages. See the discussion on this aspect in K.C. Park Safe (Brisbane) Pty Ltd v Cairns City Council.[3]
[3] 1997 1 Qd.R. 497 at 506.
In view of the above, my conclusion is that the balance of convenience is met by an order that the caveat should be removed.
Orders
1.The caveat no. 1011136 should be removed from the relevant registry.
2.In all the circumstances of the current case, I make no award as to costs.
BR O’CONNOR
JDUCIAL REGISTRAR
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