Haoma Mining NL v Tunza Holdings Pty Ltd
[2001] WASCA 123
•24 APRIL 2001
HAOMA MINING NL -v- TUNZA HOLDINGS PTY LTD & ANOR [2001] WASCA 123
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASCA 123 | |
| THE FULL COURT (WA) | |||
| Case No: | CIV:1007/2000 | 4 DECEMBER 2000 | |
| Coram: | MALCOLM CJ PIDGEON J WALLWORK J | 24/04/01 | |
| 20 | Judgment Part: | 1 of 1 | |
| Result: | Order nisi made absolute Decision of Warden quashed | ||
| PDF Version |
| Parties: | HAOMA MINING NL TUNZA HOLDINGS PTY LTD MINISTER FOR MINES |
Catchwords: | Mining Prospecting licences Expenditure requirements Applications for exemption Objections Whether grounds of applications for exemption fully considered Whether dispute with joint venturer a relevant consideration Whether previous exemptions relevant |
Legislation: | Mining Act 1978, s 102(2)(a), s 102(2)(b), s 102(3) |
Case References: | Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 Re Heaney SM; Ex parte Haoma Mining NL v Tunza Holdings Pty Ltd & Anor, unreported; FCt SCt of WA; Library No 980738; 18 December 1998 Re Warden Heaney; Ex parte Tunza Holdings Pty Ltd (1997) 18 WAR 420 Craig v South Australia (1995) 184 CLR 163 Ex parte M J Edmonson (1984) Pty Ltd v W J Flint, unreported; SCt of WA; Library No 980361; 24 June 1998 Re G N Calder; Ex parte St Barbara Mines Ltd [1999] WASCA 25 Re Plutonic Operations Ltd; Ex parte Robert [1999] WASCA 133 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : HAOMA MINING NL -v- TUNZA HOLDINGS PTY LTD & ANOR [2001] WASCA 123 CORAM : MALCOLM CJ
- PIDGEON J
WALLWORK J
- Applicant
AND
TUNZA HOLDINGS PTY LTD
First Respondent
MINISTER FOR MINES
Second Respondent
Catchwords:
Mining - Prospecting licences - Expenditure requirements - Applications for exemption - Objections - Whether grounds of applications for exemption fully considered - Whether dispute with joint venturer a relevant consideration - Whether previous exemptions relevant
Legislation:
Mining Act 1978, s 102(2)(a), s 102(2)(b), s 102(3)
(Page 2)
Result:
Order nisi made absolute
Decision of Warden quashed
Representation:
Counsel:
Applicant : Mr C G Colvin & Mr G H Lawton
First Respondent : Mr M J McCusker QC & Mr M P Workman
Second Respondent : No appearance
Solicitors:
Applicant : Lawton Gillon
First Respondent : Michael Workman
Second Respondent : No appearance
Case(s) referred to in judgment(s):
Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149
Re Heaney SM; Ex parte Haoma Mining NL v Tunza Holdings Pty Ltd & Anor, unreported; FCt SCt of WA; Library No 980738; 18 December 1998
Re Warden Heaney; Ex parte Tunza Holdings Pty Ltd (1997) 18 WAR 420
Case(s) also cited:
Craig v South Australia (1995) 184 CLR 163
Ex parte M J Edmonson (1984) Pty Ltd v W J Flint, unreported; SCt of WA; Library No 980361; 24 June 1998
Re G N Calder; Ex parte St Barbara Mines Ltd [1999] WASCA 25
Re Plutonic Operations Ltd; Ex parte Robert [1999] WASCA 133
(Page 3)
1 MALCOLM CJ: This is the return of an order nisi made by Templeman J on 8 May 2000, by which it was ordered that Warden P M Heaney SM sitting as the Warden of the Mount Margaret Mineral Field do show cause before the Full Court of this Court why a writ of certiorari should not be issued against him to remove into this Court, for the purpose of being quashed, the decision of the Warden made on 21 May 1998 with respect to Applications for Exemption 17, 18 and 19/956 by Haoma Mining NL ("Haoma") and Objections 6, 7 and 8/956 by Tunza Holdings Pty Ltd ("Tunza") concerning Prospecting Licences PL39/2974, 2975 and 2976 ("the Prospecting Licences"), P39/2974 and 2975 and P39/1970, whereby the Warden recommended that the applications for exemption be refused. The ground on which the order nisi was granted was that the Warden erred in that, by his report and recommendations made on 11 October 1999, he recommended to the Minister that the applications for exemption in respect of Prospecting Licences 39/2974, 2975 and 2976 pursuant to s 102(3) of the Mining Act 1978 should be refused.
2 The ground as specified in the order nisi was that:
"… the Warden failed to give any or any proper consideration to the question whether the dispute between Haoma and its joint venture partner was a good and sufficient reason for granting exemptions having regard to the evidence and submissions previously adduced by Haoma in support of applications for exemption pursuant to s 102(2)(a); and relied upon the failure of Haoma to meet expenditure obligations in respect of which exemptions had been granted, the Warden's error in that regard being an error appearing on the face of the record or, alternatively, being a jurisdictional error."
3 The order nisi sets out a number of particulars. In 1993 Haoma became entitled to exercise an option to purchase the interest of a joint venturer in certain mining areas. A dispute arose regarding the value of the subject area and other property of the joint venturers. On 7 July 1995 Haoma applied to the Warden for exemptions pursuant to s 102(2)(a) and (b) and s 102(3) of the Act on the basis that it should not be required to incur expense until the dispute was resolved. Tunza lodged objections to the application on 21 July 1995. The Warden previously made recommendations on 9 May 1997 in favour of the grant of exemption upon the basis that there was a "dispute as to title" within the meaning of s 102(2)(a). In Re Warden Heaney; Ex parte Tunza Holdings Pty Ltd v Haoma Mining NL (1997) 18 WAR 420, on 18 December 1997, this
(Page 4)
- Court quashed a previous decision of the Warden to recommend to the Minister that exemptions be granted on the ground that, where a party has exercised an option to purchase a prospecting licence and the price is to be determined by agreement of the parties or, failing agreement by arbitration, a dispute as to price is not "a dispute as to title" within the meaning of s 102(2)(a) of the Act.
4 The solicitors for both Haoma and Tunza then made submissions to the Department of Minerals and Energy regarding what steps should then be taken by the Warden. Haoma contended that the Warden should receive whatever additional submissions and evidence that was necessary to enable him to make a valid recommendation to the Minister. Counsel for Haoma, however, took the position that the evidence already filed was sufficient for the Warden to determine the objections on the basis that it had been made clear that there should be no further evidence and the matter should be determined by the Warden on the basis of hearing further submissions. At that stage, it was clear that s 102(2)(a) could not be relied upon.
5 Tunza's solicitors were opposed to this approach. Their submission was that the matter should be listed for further hearing on the basis that the Warden transmit to the Minister the notes of evidence and other documents referred to in s 102(6) of the Act, including the original report of the Warden, together with advice that, by reason of the order of the Full Court, the recommendation to grant the exemption be quashed.
6 At that stage, somewhat surprisingly, by letter dated 8 June 1998, the Director of Mineral Titles at the Department informed the solicitors for Haoma that the Crown Solicitor had advised that the matter should go back to the Warden to obtain a recommendation to replace that which had been quashed. In the meantime, according to the letter, the matter had been referred to the Warden "in Chambers" for further consideration, as a result of which the Warden provided a further report from the Minister. The solicitors for the parties were apparently not notified of this development until after the event and had no opportunity to be heard.
7 Subsequently, the Warden made recommendations that exemptions pursuant to s 102(2)(a) and s 102(2)(b) should be refused. The Warden also held that he did not have the capacity to make recommendations to the Minister pursuant to s 102(3) as he was of the opinion that it was:
"… inappropriate and, what is more, futile for Wardens to be making recommendations in this area where the evidence which
(Page 5)
- came before them, may only be a fraction of the material which the Minister may have before him when he exercises his discretion within his extended scope."
8 In Re Warden Heaney; Ex parte Haoma Mining NL v Tunza Holdings Pty Ltd & Anor (No 2), unreported; FCt SCt of WA; Library No 980738; 18 December 1998 Murray J held that the Warden's decision and recommendation was affected by error of law patent on the face of the record, but that there had been no breach of the rules of natural justice by reason of procedural unfairness. There was no obligation on the Warden to conduct a further hearing. The obligation to hear the matter in open court under s 102(5)(a) of the Act had been performed: see per Murray J at 13 - 15 (with whom Kennedy and Wallwork JJ) agreed).
9 Murray J went on to find at 15 that the Warden appeared to take the view that, as his finding that there was a dispute as to title had been revised by the Full Court, he should revise his decision to recommend that the application for exemption be granted and, instead, recommend that the application be refused. Further, the Warden also appears to have considered that if it was not possible to consider the reasons advanced by Haoma in the context of s 102(2)(a) of the Mining Act, there was no need to consider them in the context of s 102(2)(b) and there was nothing to be said by him about s 102(3). Hence, for this additional reason, the application for exemption should be refused. As Murray J said at 15:
"Clearly that does not follow and that his Worship so concluded in my opinion reveals a fundamental misunderstanding of the section and his obligation under it to make a recommendation. The section as a whole is framed in such a way as to make it clear that the Warden's attention was required to be given to the merits of the reasons put forward by Haoma to justify the grant of a certificate of exemption and this his recommendation expressly does not do."
10 The Warden also considered that because the second limb of that subsection gave a wide discretion to the Minister, it gave the Minister:
"… a wider scope to operate in than the Warden. Within the scope of the Warden the Warden recommends to the Minister but where the scope of the Minister exceeds that of the Warden the Warden has no capacity to recommend for the simple reason that the Warden may not be aware of what factors are influencing the Minister's opinion."
(Page 6)
11 As to this, Murray J said:
"In my opinion, again, the Warden is revealed to be labouring under a fundamental misunderstanding of law as to the structure and effect of the section and the Warden's role within it. Apart from any reasons additional to those specifically adverted to in subs(2) which, under subs(3), may be prescribed (and we were told there were none), all subs(3) does is to make it clear that the Minister has a general discretion fettered only by the question whether the reasons which seem to him or her to be sufficient have a reasonable relationship to the question of exemption and the grounds upon which he may properly act in granting a certificate of exemption.
Nonetheless the Minister is entitled to have before him the expression of view by the Warden upon the grounds which have been advanced in the hearing or the papers before him. It is the Warden's responsibility in every case to make a recommendation having regard to the merits of what is put before him. That involves no exercise of attempting to second guess the Minister. However, the Warden's view in this case resulted in his recommendation not being of the kind contemplated by the section. He seems not at all to have addressed the merits of the case put before him."
12 Wallwork J agreed with Murray J. Kennedy J, however, at 6 - 7, considered that it would have been desirable for the Warden to have conducted a further hearing in open court to enable the parties to make further submissions which might have arisen out of the earlier decision of this Court, but without taking further evidence or making any submissions about the matters which had been the subject of evidence and submission at the earlier hearing. I must say that I agree with Kennedy J on this point, although the parties would have been limited to making submissions concerning s 102(2)(b) and (3) about which the Warden had previously found it unnecessary to make a recommendation. As it happened, it was not suggested that anything did arise out of the Warden's approach to the matter which warranted further argument. The Warden had already heard evidence and submissions about s 102(2)(b) and (3). Consequently, there was no adverse consequence for the parties from the failure to conduct an additional hearing.
(Page 7)
13 The Warden then proceeded to reconsider the matter for a third time. It is in this context that the decision the subject of the current order nisi was made.
14 Section 102(2) of the Mining Act provides that:
"A certificate of exemption may be granted for any of the following reasons —
(a) that the title to the mining tenement is in dispute;
(b) that time is required to evaluate work done on the mining tenement, to plan future exploration or mining or raise capital therefor;
(c) that time is required to purchase and erect plant and machinery;
(d) that the ground the subject of the mining tenement is for any sufficient reason unworkable;
(e) that the ground the subject of the mining tenement contains a mineral deposit which is uneconomic but which may reasonably be expected to become economic in the future or that at the relevant time economic or marketing problems are such as not to make the mining operations viable;
(f) that the ground the subject of the mining tenement contains mineral ore which is required to sustain the future operations of an existing or proposed mining operation;
(g) that political, environmental or other difficulties in obtaining requisite approvals prevent mining or restrict it in a manner that is, or subject to conditions that are, for the time being impracticable; or
(h) that the mining tenement is comprised within a project involving more than one tenement, and that expenditure on a tenement or tenements comprised in that project would have been such as to satisfy the expenditure requirements in relation to the tenement concerned had that aggregate expenditure been apportioned in respect of the various tenements comprised in the project."
(Page 8)
15 Section 102(3) of the Mining Act provides that:
"Notwithstanding that the reasons given for the application for exemption are not amongst those set out in subsection (2), a certificate of exemption may also be granted for any other reason which may be prescribed or which in the opinion of the Minister is sufficient to justify such exemption."
16 The application under s 102(2)(b) was based on the ground that:
"… time is required to evaluate work done on the mining tenement, to plan future exploration or mining or to raise capital therefor."
17 In respect of that ground the Warden held that counsel could not argue that ground because of what counsel had said about s 102(2)(b) being dependent upon the outcome of the application under s 102(2)(a).
18 As to the ground under s 102(3), the Warden referred to a submission by counsel for Haoma that, having regard to the history of the way the tenement holders had dealt with the tenements, it was just and reasonable that an exemption be granted. The details are set out in the reasons to be published by Wallwork J. Suffice it to say that I agree with the comments made by Wallwork J concerning the acceptance by the Warden of the contention on behalf of Haoma that it was relevant that, with respect to some of the tenements in the project, the expenditure had been in excess of the minimum expenditure requirements. These included tenements which were the subject of the dispute between the parties. The Warden took the view that as the Full Court had held that there was no dispute as to title, but a dispute as to value of the tenements, he no longer accepted the contention that excess expenditure on other tenements included in the project was of relevance. On the contrary, the Warden concluded that:
"There being no dispute as to title, not only was Haoma required to spend money in respect of other tenements, it was also required to spend money in respect of the three tenements with which we are concerned and its failure to do so was a breach of its obligations to do so."
19 In my view, the existence of a dispute about valuation was a relevant consideration in relation to the subject tenements and it was not appropriate to conclude that it necessarily followed that Haoma was in breach of its obligations. The Warden's contention did not dealt with the ground of the application under s 102(b) in terms of time "required to
(Page 9)
- evaluate work done on the tenement, to plan for future mining, or raise capital therefor". It also did not deal with the ground under s 102(3) in terms of:
"… any other reasons … which in the opinion of the Minister is sufficient to justify such exemption."
21 For these reasons, as well as for the reasons stated by Wallwork J, I consider that grounds (a), (b) and (c) of the order nisi (as amended on 4 December 2000) have been made out. So far as the remaining ground (d) is concerned, I agree with Wallwork J. The errors so identified were all errors on the face of the record constituted by the reasons for decision of the Warden as expressed in his report to the Minister.
22 In my opinion, the order nisi should be made absolute and the Court should also direct under O 56 r 13 of the Rules of the Supreme Court 1971 (WA) that the decision of the Warden be quashed without further order.
23 PIDGEON J: I agree with the reasons of the Chief Justice and of Wallwork J and the orders proposed.
24 WALLWORK J: The applicant seeks a writ of certiorari to quash a decision made on 21 May 1998 by a Warden sitting as the Warden of the Mount Margaret mineral field.
25 On 6 July 1995, the applicant had applied for exemptions from the prescribed expenditure for three prospecting licences for the year ending May 1995. The relevant sums were $5,800, $6,640, and $4,360
(Page 10)
- respectively. Those sums do not indicate the importance of the tenements to the applicant, as the three relevant tenements form part of a larger joint venture holding.
26 The applicant's partner had defaulted under the joint venture agreement, and the applicant and the partner were engaged in arbitration proceedings to determine the value of the partner's interest which the applicant would then be entitled to purchase at that value.
27 After the applicant had applied for the exemptions on 6 July 1995, the first respondent lodged objections on 20 July 1995. At the same time, it lodged plaints against each of the three prospecting licences seeking the forfeiture of them.
28 The applications for the exemptions and the forfeitures were heard at the same hearing before the Warden. The applications for exemption were based on s 102(2)(a), s 102(2)(b) and s 102(3) of the Mining Act 1978 ("the Act").
29 The relevant provisions of s 102 are as follows:
"102 (1) …
(2) A certificate of exemption may be granted for any of the following reasons —
(a) that the title to the mining tenement is in dispute;
(b) that time is required to evaluate work done on the mining tenement, to plan future exploration or mining or raise capital therefor;
…
(3) Notwithstanding that the reasons given for the application for exemption are not amongst those set out in subsection (2), a certificate of exemption may also be granted for any other reason which may be prescribed or which in the opinion of the Minister is sufficient to justify such exemption.
(Page 11)
- (4) When consideration is given to an application for exemption regard shall be had to the current grounds upon which exemptions have been granted and to the work done and the money spent on the mining tenement by the holder thereof.
(5) …
(6) …
(7) … "
30 At the hearing of the applications before the Warden, the primary contention for the applicant was that the exemptions should be allowed because it was in dispute with its co-venturer concerning the title to the relevant tenements. The view was asserted by counsel for the applicant that the question raised under s 102(2)(b) was a subsidiary matter and that if the Warden was not satisfied with the applications for exemption under s 102(2)(a), then it was highly likely "as a logical consequence as night follows day" that the Warden would not be satisfied with the applications which were reliant on s 102(2)(b).
31 The submission of counsel for the applicant concerning the effect of s 102(3) was that it was generally "the catch-all. We possibly find it a little difficult to put into words, but it is really a matter of saying to all this, 'look here is the history of the way this tenement holder has dealt with his tenements and this area and in those circumstances it is only just and reasonable that the exemption be granted.' It is really to cover the situation where if for some technical reason you decide that s 102(2)(a) is not made out, the same facts and circumstances justify the Minister, on the basis of reasonableness, in granting the exemption given the event. It is not a separate discrete ground in the sense of seeking to raise any new fact or any new issue."
32 The applicant maintained before the Warden that the titles to the three relevant mining tenements were in dispute concerning their value, which dispute was the subject of an arbitration pursuant to the joint venture agreement of 1984.
33 On 9 May 1997, the Warden recommended to the Minister that the applications for exemption be granted on the ground that there was a dispute as to title. He made no recommendations concerning the effect of s 102(2)(b) due to the way the applicant's submissions (referred to above) had been made.
(Page 12)
34 On 18 December 1997, the Full Court of WA quashed the Warden's decision on the ground that the title to the tenements was not in dispute within the meaning of s 102(2)(a) - Re Warden Heaney; Ex parte Tunza Holdings Pty Ltd (1997) 18 WAR 420.
35 The Warden subsequently recommended to the Minister that the applications for exemption pursuant to s 102(2)(a) and s 102(2)(b) should be refused. He also took the view that he did not have the capacity to make recommendations to the Minister pursuant to s 102(3) as he was of the opinion that it was "inappropriate and, what is more, futile for Wardens to be making recommendations in this area where the evidence which came before them, may only be a fraction of the material which the Minister may have before him when he exercises his discretion within his extended scope."
36 Following that decision, the matter was taken back to the Full Court. A further decision in the matter was given on 18 December 1998 - Re Heaney SM; Ex parte Haoma Mining NL v Tunza Holdings Pty Ltd & Anor, unreported; FCt SCt of WA; Library No 980738; 18 December 1998, with Murray J giving the reasons for judgment of the majority of the Court. In the course of his reasons, Murray J related the earlier history of the applications and discussed the procedure for the consideration of an application for exemption pursuant to s 102(5) - (7) of the Act. His Honour stated that in the course of the original application before the Warden, counsel for the applicant had asserted that a consequence of the dispute between the applicant and its joint venturer pursuant to the 1984 agreement was that it would not be reasonable to require the applicant, as the holder of the prospecting licences, to spend money on them whilst the dispute remained unresolved; that only after the dispute was resolved would it be appropriate for the applicant to evaluate what work had already been done, to plan future operations and to consider capital-raising - hence, the reliance upon s 102(2)(b). His Honour said that counsel had submitted before the Warden that if for some technical reason the grounds upon which it sought exemption did not fit within s 102(2)(a), there were nonetheless good grounds which might constitute a reason which in the opinion of the Minister would be sufficient to justify the exemption sought pursuant to s 102(3). Murray J also referred to the December 1997 decision of the Full Court where it was held that the dispute between the applicant and the joint venturer was properly characterised as a dispute about price as distinct from a dispute about title - Re Warden Heaney; Ex parte Tunza Holdings Pty Ltd (supra) per Malcolm CJ, with whom Ipp and Murray JJ agreed at 426.
(Page 13)
37 Murray J said that following the quashing of the decision of the Warden on 18 December 1997, the Warden had made a further report to the Minister in which he had stated:
"My recommendation to the Minister that there was a dispute as to title was based entirely on my belief that there was a dispute as to title. Having been corrected by the Full Court my recommendation to the Minister is that the applications for exemptions be refused.
In respect of the application pursuant to s 102(3) the Full Court's decision has no impact, and no further consideration is required by myself as a result of the Full Court's decision. It has been suggested that this matter should come back before me for further submissions, particularly in respect of the application for exemption pursuant to s 102(3) of the Act. I disagree with this suggestion for two reasons.
Firstly, at the trial both parties made submissions in respect of the application in its entirety including s 102(3). The appeal court decision does not require that the parties be given the opportunity to make further submissions in respect of s 102(3).
Secondly, I do not consider that I have any capacity to make recommendations to the Minister in respect of s 102(3) to the extent that subsection applies to the Minister."
38 His Honour stated that there was no contention between the parties at that time that the Warden's report constituted part of the record of the proceedings before him, having regard to the terms of the Act, s 102(6). He said that neither could there be any dispute that certiorari would go to quash the recommendation because its provision to the Minister is a condition precedent to the exercise of the Minister's power in a way which will or may affect legal rights. His Honour said:
"The statutory scheme under s 102(7) requires the Minister to take the Warden's recommendation into account when it has been provided. Because the recommendation may in that way have an effect on the exercise of discretion by the Minister it, itself, has a legal effect on rights of a kind sufficient to attract certiorari so as to quash the recommendation if affected by jurisdictional error or error of law on the face of the record: Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149, 164 - 5,
(Page 14)
- 174 - 5; Re Warden Heaney; Ex parte Tunza Holdings Pty Ltd, per Malcolm CJ at 429 - 430."
39 Murray J came to the conclusion that the relevant Warden's decision and recommendation was affected by error of law patent on the face of the record. He stated that the Warden seemed to have taken the view that if it was not possible for him to consider the reasons for exemption advanced by the applicant in the context of s 102(2)(a), there was no need to do so in the context of s 102(2)(b) and he had further considered that there was nothing to be said by him in the context of s 102(3). His Honour stated that s 102 as a whole was framed in such a way as to make it clear that the Warden's attention was required to be given to the merits of the reasons put forward by the applicant to justify the grant of a certificate of exemption and that his recommendation expressly did not do so. Further, with respect to the questions under s 102(3) and the Warden's opinion that he had no capacity to make a recommendation under that provision because he might not be aware of what factors were influencing the Minister's opinion, Murray J came to the conclusion that the Minister was entitled to have before him the expression of view by the Warden upon the grounds which had been advanced in the hearing or the papers before him. His Honour said:
"It is the Warden's responsibility in every case to make a recommendation having regard to the merits of what is put before him. That involves no exercise of attempting to second-guess the Minister."
40 His Honour came to the conclusion that the Warden did not seem to have addressed the merits of the case put before him.
41 Murray J, speaking for the majority of the Court, stated that the effect of the Court's decision in that case would be that the Warden would be required to review the material presented to him at the hearing and consider the submissions made at that time. He would be required to present his report anew, including in it his recommendation as to the grant or refusal of the application and giving his reasons for his conclusion. In so doing, he would be required to address the merits of the case, although, no doubt, he would add an observation as to whether or not he saw the case as one falling within s 102(2)(b) to any degree.
42 The Warden then reconsidered the matter and in his reasons for decision, which decision is the subject of the present application for a writ of certiorari, the Warden referred to the fact that counsel for the applicant
(Page 15)
- had originally argued that "were you not to be satisfied with 102(2)(a) then it is highly likely that you would not be satisfied with 102(2)(b) as a logical consequence as night follows day", and further in his final submissions had said "I have openly said in relation to 102(2)(b) that it is not a matter for evidence, it is a matter for common sense. That is certainly a separate matter to our application under s 102(2)(a) and if 102(2)(a) falls away then 102(2)(b) will naturally fall away because one is dependent upon the other." The Warden said that counsel had not produced "one scintilla of evidence pursuant to 102(2)(b); he made no submissions in respect of 102(2)(b) except as I have indicated above and more significantly, by presenting his application in that manner Mr Workman did not respond to 102(2)(b) and in fact had nothing to respond to. He said "Mr Lawton cannot now argue that even though the Full Court has now said that it was not a dispute as to title (s 102(2)(a)) 'that time is required to evaluate work done on the mining tenement to plan future exploration or mining or raise capital therefor' (s 102(2)(b)). The application under s 102(2)(b) was not an independent and discrete application at the trial and it cannot become so now. Mr Lawton chose to conduct his case in the manner that he did. He is stuck with that."
43 The Warden then said, "In respect of the application pursuant to sections 102(2)(a) and 102(2)(b) I will be recommending to the Minister that the application for exemption in respect of prospecting licences 39/2974, 39/2975 and 39/2976 be refused."
44 In my opinion, having regard to the background of these applications, the Warden did not deal with the merits of the applications under s 102(2)(b) which were based on the ground "that time is required to evaluate work done on the mining tenement, to plan future exploration or mining or raise capital therefor." All he said about that was that counsel could not argue that ground because of what he had said about s 102(2)(b) being dependent upon the finding concerning s 102(2)(a).
45 With respect to the applications for exemption pursuant to s 102(3), in his reasons for decision the Warden referred to counsel for the applicant's original words, including "it is really a matter of saying to all this, look here is the history of the way this tenement holder has dealt with these tenements and this area, and in those circumstances it is only just and reasonable that the exemption be granted."
46 The Warden referred to what he had said in his first recommendation to the Minister concerning the three tenements for which exemption was sought, those being part of a larger body of tenements which were subject
(Page 16)
- to the joint venture agreement between the applicant and CGMA. He referred to the fact that with respect to some of the other tenements the subject of the agreement, no application for exemption had been made because expenditure on them had been in excess of the minimum requirement. He reported to the Minister that the applicant's counsel had argued that the fact that his client had been prepared to spend money on the other tenements, even though the title of those tenements was in dispute, was an indication that it had a genuine interest in obtaining the exemption in respect of the project. At the time of his first recommendations, he had accepted the applicant's counsel's argument on that point. He said that his acceptance had then been premised on his belief that the applicant had a "dispute as to title", but that having been corrected by the Full Court he no longer maintained that position.
47 Importantly, the Warden said:
"There being no dispute as to title, not only was Haoma required to spend money in respect of the other tenements, it was also required to spend money in respect of the three tenements we are concerned with and its failure to do so was in breach of its obligations to do so. Evidence was put before the court that applications for exemption were made by Haoma in respect of these same three tenements and for the same reasons in respect of the previous year's expenditure. There was no objection to these applications and accordingly they were granted. Further, evidence was adduced by Mr Workman that for the previous 7 years before 1988 and 1995, Haoma has spent only 8.5 per cent of its expenditure over that ground. That 8.5 per cent represents $22,500 out of a minimum requirement of $268,000. Because of this lack of expenditure by Haoma over an extended period of time in respect of the applications for exemption pursuant to s 102(3) I will be recommending to the Minister that these applications for exemption from expenditure be refused."
48 There are two aspects to the above conclusions of the learned Warden, the first being that as there was no dispute as to title, the applicant was required to spend money in respect of the three tenements and its failure to do so was in breach of its obligations to do so. That proposition does not deal with the merits of the applications under s 102(2)(b) "based on time being required to evaluate work done on the mining tenement, to plan future exploration or mining or raise capital
(Page 17)
- therefor" or under s 102(3) "for any other reason … which in the opinion of the Minister is sufficient to justify such exemption".
49 The second reason given by the Warden for refusing the applications pursuant to s 102(3) in the above statement is that there had been a lack of expenditure by the applicant over an extended period of time. No mention is there made as to whether or not there might have been good reasons for that lack of expenditure, for example, previous exemptions, the dispute between the joint venturers, the fact that in 1988 there had apparently been the sum of $360,346 spent on the areas covered by the agreement when the minimum requirement had been only $67,500, or the fact that, apparently, between 1988 and 1993, there had been $371,046 outlaid in connection with the area of the joint venture, when the minimum requirement had been $293,800.
50 In the words of Murray J, the learned Warden "seems not to have addressed the merits of the case put before him." Murray J had also said: "The Warden would be required to review the material presented to him at the hearing and consider the submissions made at the time."
51 It was submitted at the hearing of this application that an important consideration for the applicant, in spending money and applying for exemptions with respect to the three tenements, was that it did not know how much it would have to outlay pursuant to the joint venture agreement to acquire the approximate 40 per cent interest of its partner under that agreement. Any moneys expended before the arbitration was finalised would mean that the applicant would be spending 100 per cent of the required expenditure, when it was only entitled, pursuant to the joint venture agreement, to 60 per cent of the value. It was submitted that the learned Warden had not dealt with those propositions; further that there was commercial uncertainty surrounding the outcome of the joint venture agreements. It was contended that, as appears in ground 2(a) of the grounds for this application, "The Warden failed to give any or any proper consideration to the question whether there was a good and sufficient reason for granting the exemptions."
52 Ground 2(b) of the application is really a repetition of the above propositions.
53 Ground 2(c) of the application relies on the proposition that the Warden erred in law in having regard to the expenditure by Haoma on the tenements in previous years without considering the sufficiency of that expenditure or having regard "to the current grounds upon which
(Page 18)
- exemptions have been granted" as he was required to do pursuant to s 102(4) of the Act.
54 In previous years exemptions had been granted. It was contended that under s 103 of the Act, where a certificate of exemption had been granted pursuant to s 102, the holder of the tenement was deemed to be relieved, to the extent and subject to the conditions specified, from his obligations under the prescribed expenditure conditions. It was submitted that the Warden had not dealt with this aspect of the matter and had, in effect, treated the exemptions as if they had had no effect and as if there had been some form of continuing expenditure obligations which had not been honoured. It was argued that the Warden had disregarded the significance of the prior exemptions from expenditure and had not complied with the words of s 102(4) that "when consideration is given to an application for exemption regard shall be had to the current grounds upon which exemptions have been granted … ".
55 It was said that the mining lease M39/105, on which $360,346 expenditure had been claimed in the year 1998 had been voluntarily surrendered and had become the three prospecting licences the subject of these relevant applications for exemption. It was contended that the learned Warden had erred when he had stated that, over the previous seven years between 1988 and 1995, the applicant had spent only 8.5 per cent of its expenditure over that ground and that "because of this lack of expenditure by Haoma over an extended period of time in respect of the applications for exemption pursuant to s 102(3), I will be recommending to the Minister that these applications for exemption from expenditure be refused"; that the learned Warden had looked at only part of the picture and had not taken into account the words of s 102(4), including "the work done and the money spent on the mining tenement by the holder thereof".
56 In my view, the history of the expenditure and the prior exemptions granted may have been important considerations in considering the applications. Those matters were not sufficiently referred to by the learned Warden in the context of "the merits of the case put before him" or "the material presented to him at the hearing and … the submissions made at that time", to use the words of Murray J in the earlier decision.
57 As counsel put it at the hearing, ground 2(d) of the application for the writ is "a slightly different way of articulating the same point". The complaint was that when the Warden said, towards the end of his reasons: "There being no dispute as to title not only was Haoma required to spend
(Page 19)
- money in respect of the other tenements, it was also required to spend money in respect of the three tenements we are concerned with, and its failure to do so was in breach of its obligations to do so," the Warden had not taken in to account the "current grounds upon which exemptions have been granted" within the meaning of s 102(4), or all the circumstances surrounding the history of the tenements as required by s 102(4). There had been no inquiry by the Warden into the relevant background of the tenements or into the reasons for which exemptions had been granted over a sustained period.
58 In Re Warden Heaney; Ex parte Tunza Holdings Pty Ltd (supra) Malcolm CJ said at 430:
"In my opinion, the statutory framework in relation to an application for exemption is not capable of being distinguished from the statutory framework in relation to other applications. The remedy of certiorari is available in each case. The grant or refusal of an application for exemption affects rights in that it protects the right of the holder to retain the tenement notwithstanding non-compliance with the expenditure conditions. It also affects the right of an objector who was also an applicant for forfeiture. If successful and an order for forfeiture is made, s 96(4) provides that the applicant: ' … shall have for a period of 14 days after the date of the order, a right in priority to any other person to mark out or apply for or both, a mining tenement upon the whole or part of the land that was the subject thereof.' It follows that a recommendation made by the Warden that the application for exemption not be granted in a context where forfeiture is ordered, or a recommendation that an application for exemption be granted where forfeiture is applied for, has the capacity to affect the rights of the applicant for forfeiture."
59 The Chief Justice referred to the dicta of Brennan CJ, Gaudron and Gummow JJ in Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149 at 174 where their Honours said that the Warden's decision has a discernible legal effect upon the Minister's exercise of discretion.
60 In my opinion, the applicant's contentions which have been referred to in these reasons are correct and there are relevant errors of law in the Warden's decision in this case. Those errors constitute an error of law on the face of the record, the record being the reasons for decision which constitute the Warden's report.
(Page 20)
61 In my view, the order nisi should be made absolute and the order of the Court should include a direction under O 56 r 13 of the Rules of the Supreme Court 1971 (WA) that the decision of the Warden be quashed upon the return without further order.
3
7
1