Creasy v Hot Holdings Pty Ltd
[1999] WASC 69
•23 JUNE 1999
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: CREASY & ORS -v- HOT HOLDINGS PTY LTD & ANOR [1999] WASC 69
CORAM: HEENAN J
HEARD: 26 MAY 1999
DELIVERED : 23 JUNE 1999
FILE NO/S: CIV 1088 of 1999
BETWEEN: MARK GARETH CREASY
ARIMCO MINING PTY LTD
ORESEARCH NL
ApplicantsAND
HOT HOLDINGS PTY LTD
First RespondentMINISTER FOR MINES
Second Respondent
Catchwords:
Prerogative writs - Order nisi for writs of prohibition, mandamus and certiorari - Determination by Minister for Mines to grant application for exploration licence - Requirement for service of notice of application - Effect of non-compliance - Procedural fairness - Bias or reasonable apprehension thereof - Consideration of merits of competing applications - Right in priority afforded by ballot - "All things are equal"
Legislation:
Mining Act 1978 s 59, s 105A and s 118
Result:
Application granted in part
Representation:
Counsel:
Applicants: Mr M J McCusker QC & Mr C P Stevenson
First Respondent : Mr C L Zelestis QC & Mr C G Colvin
Second Respondent : Ms C F Jenkins
Solicitors:
Applicants: Mallesons Stephen Jaques
First Respondent : Lawton Gillon
Second Respondent : State Crown Solicitor
Case(s) referred to in judgment(s):
Ex parte Hot Holdings Pty Ltd v Creasy & Ors, unreported, FCt SCt of WA; Library No 940576, 21 October 1994
Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
R v Hendon Rural District Council; Ex parte Chorley [1933] 2 KB 696
Webb v The Queen (1994) 181 CLR 41 at 53
Case(s) also cited:
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Builders Registration Board of Queensland v Rauber (1983) 57 ALJR 376
Craig v South Australia (1995) 184 CLR 163
Director of Public Works v Ho Po Sang & Ors [1961] AC 901
Ex parte Hot Holdings Pty Ltd v Creasy & Ors, unreported, FCt SCt of WA; Library No 960568, 27 September 1996
Hannam v Bradford Corporation (1970) 1 WLR 937
Hunter Resources Ltd v Melville (1988) 164 CLR 234
La Macchia v Minister for Primary Industry (1986) 72 ALR 23
Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70
Livesey v New South Wales Bar Association (1983) 151 CLR 288
Maxwell v Murphy (1957) 96 CLR 261
Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24
Minister for Mines Ex parte Roberts (1997) 18 WAR 408
Nicholas v The Queen (1988) 151 ALR 312
Pancontinental Goldmining Areas Pty Ltd v Minister for Mines [1989] WAR 169
R v Masters (1992) 26 NSWLR 450
R v Watson; Ex parte Armstrong (1976) 136 CLR 248
Re Capobianco, Ex parte Castelli; unreported; SCt of WA (Parker J); Library No 980567; 25 September 1998
Re Finance Sector Union of Australia; Ex parte Illaton Pty Ltd (1992) 66 ALJR 583
Re JRL: Ex parte CJL (1986) 161 CLR 342
Re Polites; Ex parte Hoyts Corporation Pty Ltd (No 2) (1991) 173 CLR 78
S & M Motor Repairs Pty Ltd v Caltex Oil (Aust) Pty Ltd (1988) 12 NSWLR 358
Talbot v Lane (1994) 14 WAR 120
R v Cawthorne; Ex parte Public Service Association (SA) Inc (1977) 17 SASR 321
Wardley Australia v Attorney-General (WA) (1991) 5 WAR 453
Webb v The Queen (1994) 181 CLR 41
HEENAN J: In October 1992 some land in the East Murchison Mineral Field which had been the subject of a mining tenement was released for mining or exploration. Two applications for mining leases and eight for exploration licences were lodged at the office of the Mining Registrar at Meekatharra on 15 October, the day on which the land became available. Another three applications for exploration licences were lodged at or about the same time.
For three days in March 1993 the warden dealt with the applications and heard objections in relation to them. On 2 June 1993, having found that several of the applicants had complied with the necessary requirements at the same time, he decided that pursuant to s 105A of the Mining Act 1978 a ballot should be held to resolve which of them had priority for the purposes of that section. He delivered written reasons for his decision.
The applicants in these proceedings joined with others in seeking writs of certiorari to quash the decision. Orders nisi were granted but on 21 October 1994 each was discharged by the Full Court on the ground that certiorari was not available in the circumstances. On 27 February 1996, in Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149, having declared that certiorari lies to challenge a decision by a warden to conduct such a ballot, the High Court set aside the orders discharging the orders nisi and remitted the matter to the Full Court to consider whether certiorari should issue. On 27 September 1996 the Full Court disallowed the inclusion of two candidates in the ballot but discharged the orders nisi insofar as they challenged the decision of the warden to hold the ballot.
On 15 December 1997, after the High Court had refused special leave to appeal, the warden conducted the ballot. The first application drawn was that of Hot Holdings Pty Ltd for an exploration licence, the second was that of Mark Gareth Creasy, also for an exploration licence, and the third was that of Robert Wilmot Creasy for a mining lease. On 8 January 1998 the warden reported to the Minister for Mines, recommending the application of Hot Holdings "in priority" to the others. On 10 August 1998, after receiving submissions from various applicants and having had the benefit of advice from officers of the Department of Minerals and Energy, the Minister informed interested parties that he had decided to grant that application.
Now three of the unsuccessful applicants have moved for orders nisi for writs of prohibition, mandamus and certiorari. In doing so they seek orders to prohibit the Minister from proceeding with his decision to grant the application of Hot Holdings, to direct him to consider the other applications in accordance with the law and to quash his decision. They seek also a declaration that his decision is void.
There are three main, alternative, grounds upon which the motion is based. In summary, it is said first that Hot Holdings failed to comply with s 118 of the Act and that compliance is a necessary pre-condition to the grant of an exploration licence. Secondly, it is said that, by reason of implications arising from the pecuniary interest of an officer of the Department in the success of Hot Holdings, the applicants have been denied procedural fairness. Thirdly, it is said that the Minister failed to consider the merits of the competing applications and to determine whether, in his opinion, as between the competing applicants, "all things were equal" before he afforded priority pursuant to s 105A.
I shall deal with those grounds in turn.
Non-compliance with s 118
At all relevant times s 118 provided that when the land comprised in an application for a mining tenement "is held subject to a pastoral lease" then "the applicant shall within 14 days of the lodging of the application, post a copy of the application together with a map … by registered post or certified mail to the holder of that lease at his usual or last known place of abode or business." The land comprised in the application of Hot Holdings included an area which was part of Yandal Station and which was held subject to a pastoral lease by Arimco Mining Pty Ltd and Oresearch NL, two of the three applicants in these proceedings. It is common ground that Hot Holdings posted notice of its application to Mr and Mrs Boladeras, the occupiers of the station, within the specified time but that it did not post the documents mentioned in the section to either of the holders of the lease within that time. Thus, although it is admitted that Arimco and Oresearch became aware of the application shortly after it was lodged and were not materially prejudiced by the failure of Hot Holdings to post the documents to them, it is contended on their behalf that, as Hot Holdings did not comply with the section, the Minister could not lawfully grant its application.
In the 1994 proceedings (Ex parte Hot Holdings Pty Ltd v Creasy & Ors, unreported, FCt SCt of WA; Library No 940576, 21 October 1994), having referred to s 59(4) of the Act (which then provided that the Minister was empowered to grant or refuse an exploration licence "whether the warden recommends the granting of the licence or the refusal thereof"), Malcolm CJ expressed the view that nevertheless "compliance with the Act appears to be a pre-condition of the grant or refusal of the exploration licence." Rowland and Nicholson JJ, the other members of the Full Court, agreed with that view. However, by amending Act No 58 of 1994 (which came into effect on 14 October 1995) s 59 was repealed and a new section was inserted. The relevant provisions of the old section were replaced by the new s 59(6) which provides that on receipt of a report from the warden the Minister may grant or refuse the exploration licence as the Minister thinks fit, and irrespective of whether (a) the report recommends the grant or refusal of the exploration licence and (b) the applicant has or has not complied in all respects with the provisions of the Act.
In a minute dated 30 June 1998 the Director General of the Department advised the Minister that the amendment had overtaken the opinions expressed in the obiter dicta of the members of the Full Court to the effect that compliance with s 118 must be a condition of the grant of an exploration licence. The Director General went on to state that in his view it was open to the Minister "to accept that the service effected by the parties amounts to service for the purpose of the Act" and that s 59(6) enabled the grant of an exploration licence irrespective of any non-compliance with the provisions of the Act.
In his letter of 10 August 1998 to the solicitors for Mr M G Creasy, one of the present applicants, the Minister referred to the submissions and comments which he had received relating to s 118 and to "the effect that any purported non-compliance with that section might have on the application by Hot Holdings". Having said that he accepted the warden's "recommendation" that the sort of notice contemplated by the provisions of the Act was given, he went on to say,
"However, in view of the claims made regarding non-compliance by Hot Holdings Pty Ltd with the provisions of s 118 and of the advertising requirements I have also considered these matters in the light of s 59(6) of the Mining Act which I am advised applies in this matter and I would inform you that my decision to grant the exploration licence to Hot Holdings Pty Ltd is made irrespective of whether that Company has complied in all respects with the provisions of the Act."
On behalf of the applicants counsel submitted that they had a legitimate expectation that the competing applications lodged on 15 October 1992 would be determined and dealt with by the Minister in accordance with the law as it then was, and that if they complied with s. 118 as the law required them to do, and Hot Holdings did not, then the Minister could not make a grant to the party who had not complied with the Act's requirements. He argued that there is nothing in the amendment to s 59 which would suggest that its provisions were intended to operate retrospectively with respect to the exercise of the power to grant.
On behalf of Hot Holdings counsel submitted that the provisions of the new s 59(6) do have retrospective effect and therefore empower the Minister to grant the application notwithstanding non-compliance with s 118. Counsel argued that the amendment came into operation before the applications were considered by the Minister and that the latter was entitled to apply the law as it stood then in deciding whether or not to grant any particular application. In doing so, he was entitled to regard compliance with s 118 as no longer being "a necessary pre-condition" to the grant of an application.
In my opinion it is arguable that s 59(6) does not have retrospective effect and, therefore, that the Minister did not and does not have the power to grant an exploration licence in response to an application which was lodged prior to the coming into operation of the amendment and in respect of which there was non-compliance with s 118. In other words, it is arguable that the Minister has made an error of law in deciding to grant the application of Hot Holdings.
In relation to this ground there is a further matter to be mentioned. Pursuant to the provisions of s 59, as it was prior to the amendment and as it has been since then, the warden was required to "transmit" or "forward" to the Minister his report recommending the grant or refusal of the exploration licence and setting out the reasons for his recommendation. Although in no way bound by the recommendation, the Minister was bound to consider it (Hot Holdings Pty Ltd v Creasy (supra) at 166 per Brennan CJ, Gaudron and Gummow JJ). In this case, because there was an issue as to whether or not Hot Holdings had complied with s 118, the warden was obliged to deal with the matter in his report. Meanwhile, in the reasons which he delivered on 2 June 1993, when showing how he had chosen the participants in the ballot, he expressed his finding to the effect that, on a true construction of the section, Hot Holdings had complied with its provisions. Arimco and Oresearch sought to make absolute an order nisi in relation to that part of his decision but, as we have seen, the Full Court held that certiorari was not available and it did not make any finding as to whether there had been compliance with the section. Arimco and Oresearch did not appeal against the discharge of the order nisi by the Full Court.
Counsel for Hot Holdings contended that the issue as to whether there had been compliance with s 118 could and should have been raised before either the High Court or the Full Court in 1996 and that, as it had not been raised then, the finding of the warden should stand. He submitted that, for the reasons stated in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, it would be quite wrong now to re-submit this matter for decision by the Full Court. In my opinion the contention must fail. Although the warden had expressed his finding on the issue when he decided to hold the ballot, it was not until 8 January 1998 that he reported to the Minister as to what he saw to be "the final situation". Only then did he recommend the application of Hot Holdings in priority to the others. As counsel for the applicants pointed out, until then it was not known what he might ultimately recommend. Meanwhile, his finding of compliance with s 118 had to be provisional only. There was no basis upon which to challenge it before either the High Court or the Full Court. The decision in Port of Melbourne Authority v Anshun Pty Ltd (supra) has no application in these circumstances.
Bias
In deciding to grant the application of Hot Holdings the Minister adopted a recommendation in the Director General's minute of 30 June 1998. Reference was made to the minute earlier in these reasons. Mr Victor Miasi, the Manager Tenure Branch of the Department, was involved in its preparation. At all material times he was a substantial shareholder in Audax Resources NL, a company which in November 1993 entered into an option agreement to purchase the exploration licence in question from Hot Holdings. As at 30 June 1998 he was the holder of 40,000 fully paid shares in Audax. It seems that his shareholding in that company never was disclosed to the Minister.
In the motion filed on behalf of the applicants it is said that the decision of the Minister "was in effect the adoption of a recommendation in the … minute, of which a senior officer of the Department of Minerals and Energy was a co-author, and who had, at the relevant time, a direct pecuniary interest in the subject matter of the Minister's decision." It is contended that the decision was affected by bias or at least gives rise to a reasonable apprehension of bias and that the Minister failed to take the pecuniary interest of Mr Miasi into account when adopting the recommendation, as a consequence of which the applicants were denied procedural fairness.
Mr Roy Burton is the General Manager, Policy and Legislation, in the Mineral Titles Division of the Department. Mr William Phillips is the Director of that Division. The evidence presently available shows that, after the warden had delivered his report and the Minister had received submissions from interested parties, Mr Burton discussed the report with Mr Phillips. They agreed that there was no compelling reason to depart from the recommendation made by the warden. Mr Phillips then requested Mr Miasi to prepare a draft minute "to reflect this tentative position". In his affidavit Mr Burton says, "I believe that Mr Miasi was present when Mr Phillips and I discussed the matter and decided that the draft minute should support the Warden's recommendation. However Mr Miasi did not influence our decision."
Mr David Hicks, another officer in the same Division of the Department, has sworn an affidavit in which he says that in either February or March 1998 Mr Miasi requested him to draft a minute supporting the recommendation made by the warden. In his affidavit Mr Hicks says that Mr Miasi supplied him with a handwritten draft which set out the history of the application, the litigation in the Warden's Court, the Supreme Court and the High Court culminating in the ballot held by the warden. As the handwritten draft had been destroyed, Mr Hicks reproduced in his affidavit terms which, he says, are very similar to those of that draft. The reproduction includes the following passage:
"The process that you are now required by the Mining Act to follow involves your consideration of the Hot application which has priority and should you decide to grant this application the issues in relation to the remaining competing applications as to their merit become irrelevant due to no ground then being available for these.
This matter has now been the subject of litigation for almost six years and a significant body of information has been received on the various issues during that time, however the matters that you are required by law to take note of are the Warden's recommendation and any Superior Court direction and you may of course take into account any other matter you choose in exercising your discretion including the submissions before you in determining the applications.
There is no compelling reason why you should not follow the Warden's recommendation in this matter.
The issue of whether Hot has fully complied with section 118 of the Act was the subject of consideration in the Warden's Court where the Warden found as a matter of fact that all parties including Hot had complied with this provision.
The Warden's ruling on this issue has not been overruled in any other Court."
Having completed his draft early in May 1998 Mr Hicks gave it to Mr Burton. In his affidavit he said, "I cannot recall handing the draft back to Mr Miasi to check before submitting it to Mr Burton." In his affidavit Mr Burton has sworn that from the time when the draft minute was completed by Mr Hicks and then passed to him he knew that Mr Miasi "did not have any involvement in the preparation or content of the final minute to the Minister … as I was responsible for the preparation and content of that minute." Mr Miasi's initials appear with those of other officers at the foot of the document, as Mr Burton explains, "because of his contribution to the draft minute".
Mr Burton has concluded his affidavit by saying,
"The final minute and attached documents were submitted to and signed by the Director General. They were then considered by the Minister over a 6 week period from 30 June 1998 to 10 August 1998. During this period I met with the Minister on two occasions, 16 and 17 July 1998, for extended periods of time whilst he considered all the documents forwarded to him including all submissions received from the competing applicants. Neither Mr Miasi nor Mr Hicks were present during either of these meetings. Senior Assistant Crown Solicitor, Robin Griffiths, attended the first of these meetings and met separately with the Minister on 7 August 1998."
Neither Mr Miasi nor Mr Phillips has provided an affidavit. One might well infer from the evidence which is before the Court that Mr Miasi had a direct pecuniary interest in the outcome of the application of Hot Holdings.
Counsel for the applicants readily acknowledged that it would be outrageous to suggest that the Minister decided as he did in order to benefit Mr Miasi or that the Minister personally was biased. Instead counsel contended that the decision was biased in that it was influenced by a recommendation originating from Mr Miasi who, without the knowledge of the Minister, had a pecuniary interest in the outcome. As I understand it, his main submission was to the following effect. In making a decision such as that which now is in question the Minister relies upon the advice which he receives. In this instance, one of his advisers had an interest in the matter which was the subject of the advice. The advice given was that the Minister should decide the matter in a way which, as it happened, was likely to benefit the adviser. Those circumstances, counsel submits, give rise to a reasonable apprehension that the decision was biased. The submission was developed in two stages.
First, relying upon R v Hendon Rural District Council; Ex parte Chorley [1933] 2 KB 696 counsel argued that the decision of the Minister was tainted by the pecuniary interest of Mr Miasi, even though the latter might not have taken an active part in the decision, and that the taint is not removed by lack of knowledge on the part of the Minister of that pecuniary interest. However, the evidence which now is available shows that Mr Miasi did not play any part in forming the decision of Messrs Burton and Phillips that the draft minute should support the warden's recommendation. To that extent this case is quite different from the Hendon District Council case, where the councillor actually voted on a decision as to a matter in which he had a pecuniary interest
Secondly, counsel argued that Mr Miasi put forward a line of thinking which was adopted by the Director General in support of the warden's recommendation. In his draft of the minute Mr Miasi wrote that the process which the Minister was required by the Act to follow involved consideration of the application of Hot Holdings "which has priority". In the final minute, when recommending the grant to Hot Holdings, the Director General placed "the outcome of the ballot conducted by the Warden" first among the matters to which he had regard when making the recommendation. Counsel argued that the Minister approached his decision-making task by giving primary consideration to the "priority" attaching to the application of Hot Holdings by reason of "the outcome of the ballot" and in that way Mr Miasi played a significant role in the success of the application.
In my opinion, the line of thinking identified by counsel was marked out by the warden six years ago when he proposed that five of the applications be granted, subject to the holding of a ballot to determine priority. As his report of 8 January 1998 shows, he recommended then that three applications have priority according to the order in which they were drawn from the ballot. Once that is appreciated, it is clear that the only contribution by Mr Miasi to the preparation of the final minute was to express in writing the decision of Messrs Burton and Phillips to adopt the recommendation – that is, that priority be given to the application of Hot Holdings by reason of the result of the ballot.
I conclude that, from the perspective of a fair minded and informed member of the public (see Webb v The Queen (1994) 181 CLR 41 at 53 per Mason CJ and McHugh J and at 67 - 68 per Deane J) the relevant circumstances are not such as to give rise to a reasonable apprehension or suspicion of a lack of impartiality on the part of the Minister or, indeed, on the part of any of those officers of the Department who decided what advice should be given to him.
It seems quite clear that, when adopting the recommendation of the Director General, the Minister did not take the pecuniary interest of Mr Miasi into account. As mentioned already, there is no suggestion that he was aware of that interest or that there was any reason for belief, or even suspicion, on his part that any of officers involved in preparing the minute was not entirely independent and disinterested. In those circumstances, there is no basis upon which one could argue reasonably that the Minister was bound to take the pecuniary interest of Mr Miasi into account.
In my opinion, there is no basis for an arguable case in relation to this ground.
Section 105A priority
The relevant provisions of s 105A read as follows:
" (1) …. where more than one application is received for a mining tenement (other than a miscellaneous licence) in respect of the same land or any part thereof, the applicant who first complies with the initial requirement in relation to his application has, subject to this Act, the right in priority over every other applicant to have granted to him in respect of that land or part the mining of tenement to which his application relates.
(2) In subsection (3) "applicant" means an applicant for a prospecting licence, exploration licence, mining lease or general purpose lease.
(3) Where in respect of any land the warden is satisfied that 2 or more applicants complied with the initial requirement in relation to their applications at the same time, priority shall, unless written agreement is concluded by the applicants and lodged at the office of the mining registrar within the prescribed time, be determined by ballot conducted by the warden in open court on a date to be determined by the warden and notified to the applicants.
(4) In this section a reference to compliance with the initial requirement in relation to an application is a reference –
(a)in this case of an application for an exploration licence, to lodging that application at the office of the mining registrar;"
In Hot Holdings Pty Ltd v Creasy (supra) at 169-170 Brennan CJ, Gaudron and Gummow JJ expressed a preference for the view that the priority right in s 105A is, as a matter of construction, no more than a right to grant if there are competing applications and "all things are equal". Their Honours did not decide upon the nature of the "right in priority" but commented that the Minister "is not bound to grant the application of the first in time, or the winner of the ballot".
On behalf of the present applicants it is submitted that a reading of the letter of 10 August 1998 in which the Minister advised them of his decision leads to the inference that the Minister did not weigh up or consider the merits between the competing applicants but read the minute from the Director General and simply approved the recommendation, "rubber stamping" the outcome of the ballot without having regard to the question of whether "all things are equal".
The submission of the applicants is quite contrary to the statement of the Minister, in the second paragraph of his letter, that his determination to grant the application of Hot Holdings had been made "after consideration of the Warden's notes of evidence, his recommendations and all of the submissions and comments lodged". Further, the papers before the Court show that the Minister gave ample opportunity for the provision of submissions, that the issue as to whether all things in respect of the competing applicants were equal was canvassed at length in the submissions and that the minute of the Director General referred to those issues. In those circumstances, there is no basis for concluding that the Minister failed to take all relevant matters into consideration before deciding to grant the application of Hot Holdings.
In my opinion, there is no basis for an arguable case in relation to this ground.
Conclusion
My consideration of the matter has left me far short of finding that the decision of the Minister is void. I do not propose to grant the declaration sought. However, I am satisfied that there is an arguable case as to whether the Minister has made an error of law in deciding to grant the application of Hot Holdings notwithstanding its non-compliance with s 118. I conclude that an order nisi should be granted for each of the three writs of prohibition, mandamus and certiorari and that the claim for declaratory relief made in the amended summons should be referred to the Full Court for determination on return of the order or orders nisi.
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