Extension Hill Pty Ltd v O'SULLIVAN
[2020] WASC 464
•16 DECEMBER 2020
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 for judicial review of a recommendation made by the mining warden that certain mining leases held by it be forfeited. The warden made the recommendation under s 98(4A) of the Mining Act 1978 (WA) (the Act).
The applicant argues that in reaching the conclusion that its non‑compliance with the applicable expenditure conditions was of sufficient gravity to justify the forfeiture of the mining leases the warden disregarded:
(a)the fact the applicant had paid the annual tenement rent and shire rates for each mining lease; and
(b)that the applicant had incurred significant expenditure on exploration and mining operations on other tenements which, together with the mining leases, formed part of a combined expenditure reporting group.
The applicant contends that by disregarding these matters the warden committed a jurisdictional error by failing to take into account relevant considerations. The applicant contends also that the warden misconceived the question to be determined and misconstrued s 98(5) of the Act.
The warden filed a notice of intention to abide by the decision of the court. The other party, Crimson Metals, which was the applicant in the forfeiture applications, appeared and opposed the application for judicial review.
I will begin by outlining the legislative framework.
The legislative framework
Section 82(1) of the Act provides that every mining lease shall be deemed to be granted subject to the conditions set out in that section. The conditions include that the tenement holder must 'comply with the prescribed expenditure conditions applicable to such land unless partial or total exemption therefrom is granted in such manner as is prescribed'.[1]
[1] Mining Act 1978 (WA), s 82(1)(c).
The term 'expenditure conditions' is defined to mean prescribed conditions that require the expenditure of money on or in connection with a mining tenement or mining operations either carried out or proposed to be carried out.[2]
[2] Mining Act 1978 (WA), s 8(1).
The expenditure requirement for a mining lease is prescribed by reg 31 of the Mining Regulations 1981 (WA) (the Regulations). Regulation 96C contains specific provision relating to allowable and non‑allowable expenditure for the purposes of calculating expenditure under a lease. Regulation 96C(2a) provides that annual tenement rent (including the rent for the first year of the term of the mining tenement) and local government rates relating to land which is the subject of a mining tenement may be used in the calculation of expenditure expended on, or in connection with, mining on the mining tenement.
Tenement holders must lodge, among other things, 'operations reports', sometimes called 'Form 5s' or 'expenditure reports' that record expenditure on a tenement by reference to a number of categories. One such category is expenditure on annual tenement rent and local government rates.[3]
[3] Mining Act 1978 (WA), ss 82(1)(e) and 115A; Mining Regulations 1981 (WA) reg 32 and Form 5.
The Minister may require the holder of a mining tenement to file an audit statement, or cause an audit statement to be filed, for the purposes of verifying the expenditure amount shown in an operations report. If the amount of expenditure shown in an audit statement differs from the amount shown in the operations report, the Minister may determine that the audit amount is to be regarded as the expenditure amount for the period to which the operations report relates for the purposes of the Act.[4]
[4] Mining Act 1978 (WA), s 115B.
The holder of a mining tenement may apply for a certificate of exemption totally or partially exempting the mining tenement from the prescribed expenditure conditions.
Section 102(2) of the Act specifies a number of reasons for which a certificate of exemption may be granted. Section 102(2)(h) provides a reason for granting an exemption when tenements have been combined for reporting purposes. There are two prerequisites. First, the subject tenement must be one of two or more tenements the subject of arrangements approved under s 115A(4) for the filing of combined mineral expenditure reports. Second, the aggregate exploration expenditure for the combined reporting tenements must have been such as to satisfy the expenditure requirements for the mining tenement concerned, had that aggregate exploration expenditure been apportioned between the combined reporting tenements.[5]
[5] Mining Act 1978 (WA), s 102(2)(h).
Section 102(3) of the Act provides that a certificate of exemption may be granted for any other reason which may be prescribed or 'which in the opinion of the Minister is sufficient to justify such exemption.'[6]
[6] Mining Act 1978 (WA), s 102(3).
The effect of an exemption is that the holder of the mining tenement is relieved, to the extent allowed for in the certificate, from the holder's obligations under the prescribed expenditure conditions relating to the mining tenement.[7]
[7] Mining Act 1978 (WA), s 103.
The holder of a mining lease is liable to have the lease forfeited if it is in breach of, among other things, any of the conditions of the lease.[8]
[8] Mining Act 1978 (WA), s 82(1)(g).
Section 98 of the Act allows applications to be made for forfeiture of mining leases where expenditure conditions have not been met. Relevantly, it provides:
(1)Where the requirements of this Act are not being complied with in respect of the expenditure conditions applicable to an exploration licence or a mining lease, any person may apply for the forfeiture of such licence or lease as provided in this section.
…
(3)The application for forfeiture shall be heard by the warden.
(4A)When the warden finds that the holder of an exploration licence or lessee of the mining lease has failed to comply with such requirements as are mentioned in subsection (1), the warden may recommend the forfeiture of such licence or lease, or impose a penalty not exceeding $10 000 as an alternative to the forfeiture or dismiss the application.
…
(5)A recommendation shall not be made under subsection (4A) unless the warden is satisfied that the non‑compliance with such requirements is, in the circumstances of the case, of sufficient gravity to justify the forfeiture.
(6)As soon as practicable after the hearing of the application the warden shall forward to the Minister the notes of evidence, with a report and the warden's recommendation, if any, on the application and the Minister may, before acting on the recommendation, require the warden to take such further evidence or rehear the application as the Minister directs.
After receiving the recommendation from the warden, the Minister may declare the mining lease forfeited, impose a penalty or determine not to forfeit the mining lease or impose any penalty.[9]
[9] Mining Act 1978 (WA), s 99(1).
If the Minister declares the mining lease forfeited, the applicant for forfeiture has a right in priority to mark out and/or apply for a mining tenement upon the whole or part of the land that was the subject of the forfeited lease.[10]
[10] Mining Act 1978 (WA), s 100(2).
Factual background
Crimson Metals applied for the forfeiture of 11 mining leases in the Mt Gibson ranges held by the applicant. These mining leases were referred to as the Gold Tenements to distinguish them from other tenements in the Mt Gibson ranges held by the applicant, referred to as the Iron Tenements. The Gold Tenements and the Iron Tenements had been approved for the filing of combined mineral exploration reports and they formed the combined reporting group numbered C303‑1995.
In 2016 and 2017 the applicant applied for certificates of exemption in respect of the Gold Tenements for three separate reporting years ending 11 November 2016, 3 December 2016 and 15 March 2017. Crimson Metals lodged objections to the applications for exemption.
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].
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's report and recommendation
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].
The warden accorded little weight to the applicant's record of compliance observing:[23]
... so far as past expenditure is concerned, any past compliance on which Extension Hill relies must be questionable given its concession that it adopted a practice of lodging Form 5s on the understanding it did not need to be in a position to prove up or verify its expenditure.
[23] Crimson Metals v Extension Hill [74].
The warden was critical of the applicant's approach to the calculation of administrative expenses, observing that in relation to two of the leases administrative costs amounted to 78% and 120% of the minimum expenditure commitment respectively.[24] His Honour expressed the view that:[25]
... the best that can be said is that whatever steps Extension Hill has implemented since the Exemption Decision, it is yet to iron out all of its problems in calculating expenditure.
[24] Crimson Metals v Extension Hill [77].
[25] Crimson Metals v Extension Hill [82].
The warden expressed his conclusions in the following terms:
83In considering whether the gravity of Extension Hill's non‑compliance is, in the circumstances of the case, of sufficient gravity to justify forfeiture of the Gold Tenements, it is appropriate to have recourse to the objects of the Mining Act.
84While compliance with the expenditure requirements is mandated, the legislature did not contemplate that tenement holders who have defaulted in some minor respect, or because of some circumstance beyond their control should lose their tenements.
85Having regard to Extension Hill's inability to both prove up its expenditure and adequately explain why it is unable to do so, in my view, its non-compliance cannot be characterised as minor. Nor can it be said that it finds itself in this position because of circumstances beyond its control.
86Having regard to the significance of the issues to which I have just referred, none of the matters relied on by Extension Hill are of sufficient weight, when balanced against the seriousness of its non-compliance, so as to produce a different outcome.
87So fundamental is Extension Hill's non-compliance that I have no way of knowing how close Extension Hill came to complying with the expenditure conditions.
88In my view, even taking into account the number of tenements and their potential value, the gravity of non-compliance, in the circumstances of this case, is such that forfeiture is the only appropriate outcome. Accordingly, I recommend that the Hon Minister forfeit the Gold Tenements.
The grounds of review
The grounds were as follows:
1.The Respondent committed jurisdictional error and/or erred in law in considering that the Applicant’s non-compliance with the expenditure condition in respect of the Mining Leases for the Reporting Years was, in the circumstances of the case, of sufficient gravity to justify the forfeiture of the Mining Leases and recommending that the Mining Leases be forfeited, by disregarding two factors which were material to the issue and required to be considered on the proper construction of section 98(5) of the Mining Act 1978 (WA), namely:
a.annual tenement rent and local government rates paid by the Applicant for each of the Mining Leases for the Reporting Years contained in the Form 5 Operations Reports and Tenement Searches (set out in the table below).
[table not reproduced][26]
b. the fact that significant expenditure on exploration and mining operations on the tenements comprising combined reporting group C303-1995 (Project Tenements) of which the Mining Leases were part and which included operations relating to both iron ore and gold, had been incurred by the Applicant and a company authorised to mine some of those tenements, namely Mt Gibson Mining, during the Reporting Years and for the period that the Applicant has held each of the Project Tenements which is to be inferred from evidence as to the nature and general extent of work done on and with respect to the Project Tenements.
2.The Respondent’s omissions constituted jurisdictional errors and/or errors of law in that the Respondent misconceived the question which was required to be determined, misconstrued section 98(5) of the Mining Act 1978 (WA) and failed to take into account relevant considerations referred to in paragraphs (a) and (b) above.
[26] The table set out by reference to each mining lease the minimum expenditure requirement and the expenditure on rent and rates. In each case the expenditure on rent and rates was approximately 47% of the minimum expenditure requirement.
Availability of judicial review
The function of an order in the nature of certiorari is to remove the legal consequences, or purported legal consequences, of an exercise or purported exercise of power which has, at the date of the order, a discernible or apparent legal effect upon rights.[27]
[27] Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4; (2018) 264 CLR 1 [28] (Kiefel CJ, Bell, Keane, Nettle & Gordon JJ); Carnegie Gold Pty Ltd v Maughan [2018] WASC 366 [50] (Archer J).
It was not disputed that the decision of the warden to recommend forfeiture of the tenements was as a step in a decision making process capable of altering rights, interests or liabilities, making it amenable to a writ of certiorari.[28]
[28] See Hot Holdings v Creasy [1992] HCA 44; (1992) 185 CLR 149, 170 - 175 (Brennan CJ, Gaudron & Gummow JJ); Re Heaney; Ex parte Tunza Holdings Pty Ltd v Haoma Mining NL (1997) 18 WAR 420, 428 - 430 (Malcolm CJ, Ipp and Murray JJ agreeing).
The parties' submissions
In outline the applicant's submissions were as follows:
(a)The warden did not make an express finding in relation to the minimum expenditure requirements.
(b)The warden did not make an express finding in relation to the amount expended on rent and rates for each mining lease or even refer to the evidence of such expenditure.[29]
[29] Submissions of the Applicant [65].
(c)It is to be inferred from (a) and (b) that the warden failed to take into account the applicant's expenditure on rent and rates.[30]
[30] Submissions of the Applicant [67].
(d)The applicant's expenditure on rent and rates was a significant proportion of the minimum expenditure requirement for each mining lease and it was thus 'an essential matter for the [warden] to consider' for the purposes of the evaluative judgment he was required to make by s 98(5). Thus, the warden failed to consider a relevant consideration which he was bound to consider and committed jurisdiction error.[31]
(e)The warden was under a statutory duty to make a finding on the quantum of non-compliance with the expenditure requirements for each mining lease. The quantum of non-compliance was a 'threshold question'.[32] This duty to make such a finding arose by implication from the following:[33]
(i)the powers of the warden to dismiss an application or impose a fine;
(ii)the concept of 'sufficient gravity' of non-compliance being central to the warden's enquiry under s 98(5) of the Act; and
(iii)the warden's role in making a recommendation that assists the Minister.
(f)In failing to determine the quantum of non-compliance the warden did not consider all the evidence going to the question of breach or all the circumstances of the case going to the question of sufficient gravity.[34]
(g)Thus the warden misconceived the question he was required to answer.[35]
(h)The warden failed to consider evidence of significant exploration and mining operations on the Iron Tenements.[36]
[31] Submissions of the Applicant [67] - [68].
[32] Submissions of the Applicant [87] - [88].
[33] Submissions of the Applicant [89].
[34] Submissions of the Applicant [92] - [98].
[35] Submissions of the Applicant [81], [99].
[36] Submissions of the Applicant [75] - [80].
In outline Crimson Metals' submissions were as follows:
(a)In determining whether to recommend forfeiture of the mining leases the warden was making an administrative decision.[37] The reasons of administrative decision makers are not to be construed minutely and with an eye attuned to error but are to be understood in the light of the statutory requirements.[38]
(b)There is a distinction to be drawn between a failure to deal with an aspect of the evidence and a failure to address a claim or an integer of a claim.[39]
(c)The warden was required to make two relevant findings: that the requirements of the Act were not being complied with in respect of the expenditure requirements; and that the non‑compliance was in the circumstances of the case, of sufficient gravity to justify forfeiture. The warden made the required findings and explained why he was satisfied that the non-compliance was of sufficient gravity to justify forfeiture.[40]
(d)There is nothing in s 98 of the Act or in any other relevant provision to suggest that rent and rates expenditure is elevated to the status of a mandatory relevant consideration requiring a finding in the warden's reasons.[41]
(e)It cannot be inferred from the warden's reasons that he did not 'appropriately' take into account the claimed expenditure.[42]
(f)Determining whether non-compliance is of sufficient gravity to justify forfeiture is not a matter suited to mathematical precision.[43]
[37] Submissions of the Respondent [2] - [5].
[38] Submissions of the Respondent [6] - [8]; Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 456; (1993) 43 FCR 280, 287 (Neaves, French & Cooper JJ); Mineralogy Pty Ltd v The Honourable Warden K Taverner [2014] WASC 420 [37] - [39] (Allanson J); Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259, 282 (Brennan CJ, Toohey, McHugh & Gummow JJ), 293 (Kirby J); Cox v Corruption and Crime Commission [2008] WASCA 199 [45] - [47], [69]; Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 [5] (Gleeson CJ).
[39] Submissions of the Respondent [9]; LVR (WA) Pty Ltd v Administrative Appeals Tribunal [2012] FCAFC 90; (2012) 203 FCR 166 [143] (North J, Logan & Robertson JJ).
[40] Submissions of the Respondent [12] - [15].
[41] Submissions of the Respondent [16].
[42] Submissions of the Respondent [19].
[43] Submissions of the Respondent [24].
Consideration
Applicable principles
The principles to be applied in determining the existence of jurisdictional error were set out by the Court of Appeal in Forrest & Forrest Pty Ltd v Marmion,[44] the relevant passages of which I set out below:[45]
The concept of jurisdictional error was described in the following terms by Hayne J in Re Refugee Review Tribunal; Ex parte Aala:
There is a jurisdictional error if the decision maker makes a decision outside the limits of the functions and powers conferred on him or her, or does something which he or she lacks power to do. By contrast, incorrectly deciding something which the decision maker is authorised to decide is an error within jurisdiction. (This is sometimes described as authority to go wrong, that is, to decide matters within jurisdiction incorrectly.) The former kind of error concerns departures from limits upon the exercise of power. The latter does not.
This passage was quoted with approval by the plurality in Kirk v Industrial Court (NSW).
It follows from this definition of the concept that, where action taken in the purported exercise of a statutory power is sought to be impugned for jurisdictional error, the only question will be whether what was done was authorised by the empowering legislation. The answer to that question will turn on the identification of the limits of the authority conferred by the relevant statutory provision, and an analysis of the facts to ascertain whether those limits have been exceeded. This may also be described as identifying the conditions for the valid exercise of the statutory power.
The identification of the conditions for the valid exercise of the relevant statutory power is entirely a question of statutory construction. That construction of the relevant statute is 'reached by the application of rules of interpretation accepted by all arms of government in the system of representative democracy'.
Those rules require primary attention to be directed to the text of the relevant provisions. There must be regard to the language of the statutory instrument viewed as a whole, considered in its context. An important part of that context will be the purpose of the legislation, ascertained from what the legislation says (rather than any assumption about the desired or desirable reach or operation of the relevant provisions). Once the purpose of the legislation is established, a construction that would promote that purpose shall be preferred to a construction that would not promote the relevant purpose.
Some rules of statutory construction concern what are often referred to as grounds of judicial review. For example, common law rules of statutory construction will start with the assumption that the rules of procedural fairness condition the valid exercise of certain statutory powers. Grounds of review such as taking irrelevant considerations into account, or failing to take relevant considerations into account, are based on a construction of legislation as either prohibiting or requiring that regard be had to those matters. A ground of review which asserts improper purpose asserts that a power was exercised for a purpose not authorised by the relevant Act. A ground which asserts misapprehension of the nature or limits of the relevant statutory power may be seen to reflect a requirement of the law that a decision-maker understand his or her statutory powers and obligations.
An assertion of jurisdictional error in relation to the exercise of a statutory power therefore involves a contention that the decision-maker has purportedly exercised his or her power otherwise than in accordance with the conditions for the valid exercise of the relevant power. The identification of those conditions which mark the limits of the decision‑maker's authority to decide is purely a matter of statutory construction. Those limits are to be identified by the application of common law and statutory rules of construction to the language which Parliament has chosen, understood in the context in which it appears. (footnotes omitted)
[44] Forrest & Forrest Pty Ltd v Marmion [2017] WASCA 153 (Murphy JA, Mitchell and Beech JJA).
[45] Forrest & Forrest Pty Ltd v Marmion [86] - [92].
Where it is alleged that there has been a failure to take into account a relevant consideration, the decision will only be vitiated by jurisdictional error if, on the proper construction of the Act in question, the decision-maker was bound to take the consideration into account, as a condition of the valid exercise of the power conferred.[46]
[46] Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24, 39 (Mason J)
As to the task of identifying the considerations a decision-maker is bound to take into account, it is sufficient to quote the following statement of Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd:[47]
What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the statute expressly states the considerations to be taken into account, it will often be necessary for the court to decide whether those enumerated factors are exhaustive or merely inclusive. If the relevant factors - and in this context I use this expression to refer to the factors which the decision-maker is bound to consider - are not expressly stated, they must be determined by implication from the subject-matter, scope and purpose of the Act.
[47] Minister for Aboriginal Affairs v Peko-Wallsend, (39).
In the applicant's submissions reference was made to the divergence in authorities in relation to the content of a requirement for a decision-maker to take into account relevant considerations.[48] In Bondelmonte v Bondelmonte,[49] Kiefel, Bell, Keane, Nettle and Gordon JJ, expressed the view that the term 'consider' imports an obligation to give proper, genuine and realistic consideration.[50] That is the approach that appears to be favoured in this jurisdiction,[51] and the approach that I have applied in these reasons.
[48] See the discussion by Pritchard J in Strother v Tavener [2016] WASC 85 [79].
[49] Bondelmonte v Bondelmonte [2017] HCA 8; (2017) 259 CLR 662.
[50] Citing Khan v Minister for Immigration and Ethnic Affairs (Unreported, Federal Court of Australia, 11 December 1987), 11 (Gummow J).
[51] See Re Shire of Carnarvon; Ex parte Humphrey [2005] WASCA 182 [60] (McLure JA, LeMiere AJA agreeing); Hamersley Iron Pty Ltd v James [2015] WASC 10 [58] (Beech J).
It is important however, in the context of this case, not to forget the warning imparted by Basten JA in Swift v SAS Trustee Corporation,[52] and quoted with apparent approval by French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ, in Minister for Immigration and Citizenship v SZJSS, in the following terms: [53]
In Swift v SAS Trustee Corporation, Basten JA (with whom Allsop P agreed) noted Khan’s case and said of the language of 'proper, genuine and realistic consideration':
That which had to be properly considered was 'the merits of the case'. Taken out of context and without understanding their original provenance, these epithets are apt to encourage a slide into impermissible merit review.
The construction of the Act
[52] Swift v SAS Trustee Corporation [2010] NSWCA 182 [45].
[53] Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; (2010) 243 CLR 164 [30].
The text of the Act does not support either of the contentions central to the applicant's argument, those being, first, that expenditure on rent and rates was a mandatory relevant consideration and, second, that the warden's power to make a recommendation under s 98(4A) is conditioned by a requirement for the warden to make specific findings in respect of the quantum of non-compliance.
Two relevant considerations may be identified from the text of the Act. They are:
(a)whether the lessee has failed to comply with the requirements of the Act in respect of expenditure conditions applicable to the lease;[54] and
(b)whether the warden is satisfied that non-compliance with the requirements of the Act in respect of expenditure conditions applicable to the lease is, in the circumstances of the case, of sufficient gravity to justify the forfeiture.[55]
[54] Mining Act 1987 s 98(4A).
[55] Mining Act 1987 s 98(5).
In Forrest & Forrest Pty Ltd v Marmion the Court of Appeal described the objects of the Act as follows:[56]
One of the recognised primary objects of the Mining Act is to ensure, as far as practicable, that land which has either known potential for mining or is worthy of exploration will be made available for mining or exploration subject to reasonably stringent conditions. However, that is not its only object. Other objects or purposes identified by the courts include:
1.identifying circumstances in which a tenement holder will be allowed to hold a mining tenement without mining or giving it up for others who may wish to actively mine the land.
2.protecting tenement holders who have defaulted in compliance with the Act in some minor respect, or because of some circumstances beyond the control of the tenement holder, against loss of the tenement.
3.providing that, in general, the holder of a mining tenement should carry out the relevant mining activity on the tenement. (footnotes omitted)
[56] Forrest & Forrest Pty Ltd v Marmion [96].
The expression 'the circumstances of the case' as it appears in s 98(5) involve a 'broad and comprehensive spectrum of considerations not limited to any one criterion and not identifying any one or other criteria as being determinative'.[57]
[57] Re Warden Calder; Ex parte Brosnan (No 2) [2012] WASC 21 [87] (EM Heenan J).
It is to be borne in mind that the applicant seeks judicial review of the decision to recommend forfeiture of the tenements and has not sought review of the decision not to recommend an exemption from the expenditure conditions.
It may be accepted that expenditure on rent and rates will be, in some instances, one of 'the circumstances of the case' to be considered by a warden. This does not provide a basis, however, for elevating a factual circumstance that may be relevant in some cases to a mandatory relevant consideration in all cases. There is no compelling reason for distinguishing between expenditure on rent and rates and other categories of expenditure and elevating the former to the status of mandatory relevant considerations.
Further, in my view, the subject matter, scope and objects of the Act as explained by the Court of Appeal in Forrest & Forrest Pty Ltd v Marmion do not give rise to the implication that expenditure on tenement rent and shire rates is a mandatory relevant consideration to which the warden must have regard in all cases concerning forfeiture. In order to achieve the objects of the Act it is unnecessary to reinforce the statutory language in s 98(5) by the implication of further mandatory considerations.
Likewise, in my view, the subject matter, scope and objects of the Act do not provide support for the implication into the Act of the imposition of a statutory duty on the warden to make a specific finding in respect of the quantum of the non-compliance with the expenditure requirements. It is unnecessary for a warden to make a precise finding about the quantum of a lessee's non-compliance with the expenditure requirements in order to evaluate whether the non-compliance is minor or of 'sufficient gravity to justify the forfeiture'.
The implication that the warden has a statutory duty to make a finding about the quantum of non-compliance is not supported by any authority nor by any principle derived by analogy with comparable statutory provisions.
Further, the implication of a duty in the terms for which the applicant contends raises but does not answer satisfactorily the question of what a warden is to do when the evidence does not permit a precise finding. In its written submissions the applicant expressed the warden's duty as one 'to determine as far as possible on the evidence before him the extent to which the applicant failed to comply with the expenditure conditions of the Mining Leases'.[58] The necessity to introduce the qualification 'as far as possible on the evidence' counts against the implication of such a duty. Such a qualification is likely to complicate the process of factual finding and give rise to uncertainty.
[58] Submissions of the Applicant [91].
Additionally, it will be the holder of the tenement and not the applicant for forfeiture who is in a position to demonstrate the specific quantum of expenditure in a given expenditure year. It is objectively unlikely that the Act would permit a tenement holder to resist an application for forfeiture by failing to provide sufficient material for the warden to make a precise finding as to the quantum of expenditure.
The proper construction of the warden's reasons
In any event, on a proper construction of the warden's reasons it cannot be inferred that the warden failed to give proper regard to the applicant's expenditure on rent and rates.
The proposition that a reviewing court should adopt a beneficial construction of the reasons of administrative decision-makers is well‑established.[59]
[59] Minister for Immigration and Ethnic Affairs v Wu Shan Liang, 271 (Brennan CJ, Toohey, McHugh, and Gummow JJ), 291 (Kirby J).
The warden concluded that the applicant's non-compliance could not be characterised as minor and was serious.[60] Read in the light of the way in which the application was conducted before the warden, that is:
(a)non-compliance was admitted;
(b)the quantum of expenditure on rent and rates was admitted;
(c)the applicant was unable to 'prove up' its expenditure and explain why it was unable to do so,
the conclusions that the non-compliance could not be characterised as minor, and was serious, are capable of subsuming an implicit finding that expenditure on rent and rates amounted to approximately 47% of the minimum expenditure requirements. Non-compliance to the extent of 53% could certainly not be characterised as minor. Clearly, it was serious non-compliance. Further, as is apparent from reading the warden's recommendation as a whole, the focus of the argument on the forfeiture application was on the extent to which the applicant's non‑compliance could be explained by the 'reasonable expectations' the applicant maintained it was entitled to have and the extent to which it could rely on expenditure on the Iron Tenements. The warden's reasons were formulated to address the controversies aired at the hearing. In that context it is unsurprising that his Honour did not refer to expenditure on rent and rates which was an uncontroversial factor.
[60] Crimson Metals v Extension Hill [85].
The warden said that 'so fundamental' was the applicant's non-compliance that he had 'no way of knowing how close [the applicant] came to complying with the expenditure conditions.' This statement does not imply that the warden disregarded the applicant's expenditure on rent and rates. The applicant claimed it had incurred expenditure over and above the expenditure on rent and rates. In making the statement that he had no way of knowing how close the applicant came to complying with the expenditure conditions, the warden was simply emphasising the impossibility of making precise findings as to actual expenditure in the light of the failure by the applicant to adduce direct evidence of its actual expenditure and because the figures stated in the Form 5s were not reliable.
Further, this is not a case in which it is possible to draw an inference from the decision made by the warden that the statutory power was exercised without reference to the factor contended to be material. The warden's conclusion that the non-compliance could not be characterised as minor and was serious is a conclusion that was not only open when regard is had to the fact that the applicant's expenditure on rent and rates amounted to approximately 47% of the minimum expenditure requirements, but it was the only conclusion open. It could not seriously be contended that non-compliance to the extent of 53% was minor or not serious. It was clearly a non-compliance of sufficient gravity to justify forfeiture.
The distinction between evidence and mandatory considerations
I accept Crimson Metals' submission that the applicant's submissions do not recognise the distinction between a relevant consideration the warden was bound to take into account on the one hand (in this case the considerations summarised at [47]) and evidence on the other. In short, the applicant's submissions elevate a failure to refer to evidence to a ground of jurisdictional error. It is unnecessary for a decision-maker to refer to every item of evidence in reasons; there is a distinction between failure to refer to evidence and failure to address a contention which constitutes a claim or an integer of a claim.[61] As is plain from the report the warden addressed the considerations he was bound to take into account.
[61] LVR (WA) Pty Ltd v Administrative Appeals Tribunal [143].
Furthermore, the weight which is to be given to a relevant factor is generally a matter for the decision-maker, and the preferred ground for setting aside an administrative decision taken without giving adequate weight to a relevant factor is that the decision is unreasonable.[62]
Expenditure on the Iron Tenements
[62] A v Corruption and Crime Commissioner [2013] WASCA 288; (2013) 306 ALR 491 [91] (Martin CJ & Murphy JA).
The applicant submits the warden failed to consider evidence of significant exploration and mining operations on the Iron Tenements. It contends that in failing to give 'some consideration' or 'proper, genuine and realistic' consideration to that evidence, the warden failed to consider a relevant consideration he was bound to take into account. The terms in which the applicant's submission was couched provides the explanation why it cannot be accepted - that is, that once again the applicant's submissions fail to recognise the distinction between evidence and relevant considerations.
The warden's power to recommend forfeiture is not expressly conditioned by a requirement that the warden consider evidence of expenditure on tenements in the same reporting group. It is not possible to construe the Act in a way that makes such expenditure an implied mandatory relevant consideration. The warden was not bound to consider evidence of expenditure on the Iron Tenements. The warden did not make a jurisdictional error by failing to take into account a relevant consideration.
The warden must consider whether the Act is not being complied with respect of the expenditure conditions applicable to the exploration licence or mining lease for which forfeiture is sought. It is the gravity of that non-compliance which must be assessed. It is not possible to import a requirement that the warden must consider the tenement holder's compliance with the expenditure conditions of other tenements not the subject of an application for forfeiture.
In any event, the warden did not ignore the issue of the expenditure on the Iron Tenements but his Honour concluded, in effect, that he could not rely on the applicant's evidence of expenditure on Iron Tenements.[63] That evidence was not direct evidence but relied on inferences drawn as to expenditure from annual technical reports prepared by the applicant in respect of the Iron Tenements.[64]
[63] Crimson Metals v Extension Hill [62] - [63].
[64] ts, 30 July 2019, 29.
For the reasons stated I will dismiss the application and will hear the parties as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AS
Associate to the Honourable Justice Tottle
16 DECEMBER 2020
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