Extension Hill Pty Ltd v O'SULLIVAN - [2020] WASC 464

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   EXTENSION HILL PTY LTD -v- O'SULLIVAN [2020] WASC 464
CORAM:   TOTTLE J
HEARD:   26 NOVEMBER 2020
DELIVERED          :   16 DECEMBER 2020
FILE NO/S:   CIV 1517 of 2020
BETWEEN:   EXTENSION HILL PTY LTD
Applicant
AND
WARDEN JOHN FRANCIS O'SULLIVAN
Respondent
CRIMSON METALS PTY LTD
Other Party

Catchwords:

Mining law - Judicial review - Application for forfeiture of mining leases under s 98 Mining Act 1978 (WA) - Whether failure to consider mandatory relevant consideration - Where mining warden did not make specific statement about quantum of non-expenditure in reasons - Whether precise quantum of non‑expenditure a mandatory relevant consideration - Where extent of non‑expenditure agreed by parties - Where warden gave proper consideration to non-expenditure in any event - No jurisdictional error

Legislation:

Mining Act 1978 (WA), s 8, s 82, s 98, s 99, s 100, s 102, s 103, s 115A, s 115B
Mining Regulations 1981 (WA), reg 31, reg 32, reg 96C

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant	:	Mr M Gerus
Respondent	:	No appearance
Other Party	:	Mr D Chandler

Solicitors:

Applicant	:	DLA Piper Australia - Perth
Respondent	:	No appearance
Other Party	:	All Mining Legal Pty Ltd

Case(s) referred to in decision(s):

A v Corruption and Crime Commissioner [2013] WASCA 288; (2013) 306 ALR 491
Bondelmonte v Bondelmonte [2017] HCA 8; (2017) 259 CLR 662
Carnegie Gold Pty Ltd v Maughan [2018] WASC 366
Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 456; (1993) 43 FCR 280
Cox v Corruption and Crime Commission [2008] WASCA 199
Crimson Metals Pty Ltd v Extension Hill Pty Ltd [2019] WAMW 16
Extension Hill Pty Ltd v Calegari [2016] WAMW 18
Extension Hill Pty Ltd v Crimson Metals Pty Ltd [2017] WAMW 22
Forrest & Forrest Pty Ltd v Marmion [2017] WASCA 153
GMK Exploration Pty Ltd v Morgan [2016] WAMW 14
Hamersley Iron Pty Ltd v James [2015] WASC 10
Khan v Minister for Immigration and Ethnic Affairs (Unreported, Federal Court of Australia, 11 December 1987)
LVR (WA) Pty Ltd v Administrative Appeals Tribunal [2012] FCAFC 90; (2012) 203 FCR 166
Mineralogy Pty Ltd v The Honourable Warden K Taverner [2014] WASC 420
Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24
Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; (2010) 243 CLR 164
Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259
Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323
Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4; (2018) 264 CLR 1
Re Shire of Carnarvon; Ex parte Humphrey [2005] WASCA 182
Re Warden Calder; Ex parte Brosnan (No 2) [2012] WASC 21
Strother v Tavener [2016] WASC 85
Swift v SAS Trustee Corporation [2010] NSWCA 182

TOTTLE J:

Introduction

The applicant has applied…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] WASC 464
Decision Date: 16 DECEMBER 2020

CaseChat Overview and Summary

Extension Hill Pty Ltd sought the forfeiture of mining leases held by Crimson Metals Pty Ltd under section 98 of the Mining Act 1978 (WA). The dispute centred on whether the mining warden had erred in recommending the Minister to forfeit the leases due to Crimson Metals' failure to meet the minimum expenditure requirements. The primary legal issue was whether the warden's failure to explicitly mention the quantum of non-expenditure in his reasons constituted a jurisdictional error, particularly as the precise quantum of non-expenditure was considered a mandatory relevant consideration. The court also examined whether the warden had adequately considered the non-expenditure despite not specifically quantifying it.

The court held that the warden did not commit a jurisdictional error by not explicitly stating the quantum of non-expenditure. The court reasoned that the extent of non-expenditure was agreed upon by both parties and that the warden had properly considered the issue of non-expenditure in his decision. The court found that the warden had indeed considered the non-expenditure, even if not explicitly quantified, and thus no jurisdictional error occurred. The court further determined that the warden's decision to reject the argument that the proposed sale of the Gold Tenments justified exemptions was also correct.

The court concluded that the warden's decision to recommend the forfeiture of the leases was valid and upheld the warden's recommendation. No appeal was allowed against the warden's decision, and the mining leases were forfeited as recommended by the warden.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In addition, the warden rejected an argument that a proposed sale of the Gold Tenements was a sufficient reason to justify the grant of exemptions.[17][17] Exemption Decision [96] - [97]. On 30 July 2018 the Minister refused to grant certificates of exemption. The forfeiture applications were heard by the warden in July 2019. At the hearing of those applications it was accepted by Crimson Metals that the applicant had paid the rent and rates in respect of each of the mining leases. The rent and rates expenditure amounted to approximately 47% of the minimum expenditure requirement for each lease. Rather surprisingly, the applicant did not modify its approach to establishing expenditure, that is, it maintained its reliance on the statements as to expenditure in the Form 5s and did not adduce direct primary evidence of its expenditure. On 20 December 2019 the Warden published his report and recommendation that the Minister forfeit the Gold Tenements. The warden commenced his report by stating some general principles governing the power to recommend forfeiture. The warden recorded that the applicant's non-compliance with the expenditure conditions was not in dispute.[18][18] Crimson Metals v Extension Hill [10]. The warden referred to the basis upon which the applicant had made its unsuccessful applications for certificates of exemption and stated that had the applicant been able to prove that it met the minimum expenditure commitment for the combined reporting group in accordance with the Guidelines, he would have recommended the Minister grant the exemptions.[19] His Honour observed that the method the applicant had employed to calculate its expenditure (that is in accordance with the Guidelines) had no part to play in explaining why it could not 'prove up its expenditure'.[20] [19] Crimson Metals v Extension Hill [24].[20] Crimson Metals v Extension Hill [34]. The warden rejected the applicant's contention that it was reasonable for it to expect that its Form 5s would be accepted at face value and gave seven cogent reasons for doing so. The warden rejected the applicant's contention that expenditure on one tenement in the past could be considered expenditure on another tenement simply because they were in the same reporting group. His Honour went to observe that:[21]... if, as Extension Hill asserts, the practice it followed in relation to the reporting years the subject of these proceedings is representative of the way it approached its obligation to complete Form 5s in the past and in seeking exemptions under s 102(2)(h), which appears to be the case, there must be some doubt it could ever have verified its past expenditure had it been called upon to do so. Accordingly, even if the historical expenditure on the iron tenements could be called upon in aid of the Gold Tenements, there must now be some doubt as to the veracity of the expenditure claimed.[21] Crimson Metals v Extension Hill [62] - [63]. The warden considered that the applicant's 'proven financial capacity to develop the Gold Tenements, its exploration plan and the potential sale of these tenements' were of limited weight because expending money on a tenement in the year or years following the subject reporting year, the tenement holder is simply doing what the Act requires and, as a matter of general principle, the emphasis should be on the nature and extent of the non-compliance and not on future proposals.[22][22] Crimson Metals v Extension Hill [71] - [72].

Ratio Decidendi

Legal Principle Established

Initially, the applicant contended that the aggregate exploration expenditure for the reporting group tenements apportioned over the tenements in the group satisfied the Gold Tenements' expenditure requirements. On that basis, the applicant relied on s 102(2)(h) as the basis for its exemption applications. The applicant amended its applications for exemption to rely on s 102(3) ('any other reason ... which in the opinion of the Minister is sufficient to justify such exemption'). It did so because it accepted that following decisions in unrelated wardens' court proceedings published in July and September 2016 concerning the method of calculating aggregate expenditure,[11] it would be ineligible for an exemption for the s 102(h) reason. This was so even though it had calculated its aggregate exploration expenditure in accordance with guidelines published by the Department of Mines and Petroleum (the Guidelines). The applicant contended it had a reasonable expectation that it would have been granted certificates of exemption under s 102(2)(h) had it not been for the decisions, and that reasonable expectation was a reason sufficient to justify the grant of exemptions.[11] GMK Exploration Pty Ltd v Morgan [2016] WAMW 14; Extension Hill Pty Ltd v Calegari [2016] WAMW 18. The warden heard the applications for exemption on 18 July 2017 and on 6 November 2017 delivered his report and recommendation to the Minister. His Honour recommended the Minister refuse to grant the applications.[12] The warden accepted it was not unreasonable for the applicant to have held an expectation that, having calculated its aggregate expenditure on the basis of the Guidelines, it would have been granted certificates of exemption under s 102(2)(h).[13] The warden found, however, the applicant could not prove the expenditure it claimed to have incurred and was thus not persuaded to recommend the grant of exemptions on the basis of the applicant's 'reasonable expectation'.[14] In his reasons for decision in the forfeiture application which followed the exemption application, the warden commented that if the applicant could have proved during the exemption proceedings that it met the minimum aggregate expenditure in accordance with the Guidelines he would have recommended the Minister grant certificates of exemption.[15] A notable feature of the way in which the applicant conducted the exemption application is that it contended it was entitled to rely on the statements contained in its Form 5s to establish expenditure and that, when challenged, it was not required to adduce primary evidence to prove the expenditure. [12] Extension Hill Pty Ltd v Crimson Metals Pty Ltd [2017] WAMW 22 (Exemption Decision).[13] Exemption Decision [36].[14] Exemption Decision [36] - [41].[15] Crimson Metals Pty Ltd v Extension Hill Pty Ltd [2019] WAMW 16 [24] (Crimson Metals v Extension Hill). The warden rejected an argument to the effect that because the applicant had spent substantial amounts on the combined reporting group tenements it would be 'unfair' to expose the Gold Tenements to the possibility of forfeiture.[16][16] Exemption Decision [62] - [85].