Hot Holdings Pty Ltd v Creasy

Link copied
Case Copied 81 min read

HIGH COURT OF AUSTRALIA

GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

HOT HOLDINGS PTY LTD  APPELLANT

AND

MARK GARETH CREASY & ORS RESPONDENTS

Hot Holdings Pty Ltd v Creasy [2002] HCA 51

14 November 2002
P58/2001

ORDER

1.   Appeal allowed.

2.   Set aside the whole of the order made by the Full Court of the Supreme Court of Western Australia on 4 August 2000 dealing with the appeal to that Court and in place thereof order that the appeal to that Court is dismissed with costs.

3.   Set aside paragraphs 2, 3, 4 and 5 of the order made by the Full Court on 4 August 2000 dealing with the return of the order nisi and in place thereof order that:

a)   the order nisi granted by Heenan J on 23 June 1999 is discharged;

b)   the applicants in the Full Court pay the respondents' costs in that Court.

4.   The first named first respondent pay the costs of the appellant and the second respondent of the appeal to this Court.

On appeal from the Supreme Court of Western Australia

Representation:

M J Buss QC with C G Colvin SC for the appellant (instructed by Lawton Gillon)

M J McCusker QC with C P Stevenson for the first named first respondent (instructed by Mallesons Stephen Jaques)

No appearance for the second and third named first respondents

G T W Tannin with J C Pritchard for the second respondent (instructed by Crown Solicitor's Office for the State of Western Australia)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Hot Holdings Pty Ltd v Creasy

Administrative law – Procedural fairness – Minister of Crown – Apprehension of bias – Ministerial decision pursuant to Statute – Content of duty of procedural fairness in administrative decision-making – Pecuniary interest of an officer in Minister's Department – Whether apprehension of bias on account of pecuniary interest – Whether fact that final decision made by Minister personally cures appearance of bias in officials – Relevance of Codes of official conduct – Whether certiorari should lie to quash Minister's decision.

Mining Act 1978 (WA), s 57.

  1. GLEESON CJ. Section 57 of the Mining Act 1978 (WA) ("the Act") provides that the Minister for Mines ("the Minister") may, on the application of any person, and after receiving a recommendation of a mining warden, grant to that person an exploration licence on such terms and conditions as the Minister may determine. In the exercise of that power, after receiving a recommendation of a mining warden, the Minister granted an exploration licence to the appellant.

  2. The proceedings before the mining warden were held in public.  The warden heard argument from the competing applicants, and published his recommendation, and the reasons for it.  One of the main issues concerned the priority to be accorded to the various applicants.  The warden conducted a ballot, in which the appellant was successful.  The warden recommended that…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Hot Holdings Pty Ltd v Creasy and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2002] HCA 51
Decision Date

CaseChat Overview and Summary

The High Court of Australia heard an appeal concerning the application of procedural fairness rules, specifically the apprehension of bias, in administrative decision-making. The dispute arose from applications for an exploration licence under Western Australian legislation, where a public servant involved in preparing a ministerial minute had a pecuniary interest that could be affected by the decision. The primary parties were Hot Holdings Pty Ltd (appellant) and Mr M G Creasy (first respondent), with other parties involved in the underlying litigation.

The central legal issue before the High Court was whether the Minister's decision to grant an exploration licence should be quashed on the grounds of apprehended bias. This question arose because a public servant, Mr Miasi, who had a shareholding in a company with an option to purchase a significant portion of the licence sought by Hot Holdings, was peripherally involved in the preparation of the minute presented to the Minister. Another public servant, Mr Phillips, whose son held shares in the same company, also had knowledge of this interest. The court had to determine if the involvement of these officials, despite their pecuniary interests or associations, vitiated the decision-making process, even if the Minister made the final decision personally and was unaware of these interests.

The High Court allowed the appeal, setting aside the orders of the Full Court of the Supreme Court of Western Australia. The Court reasoned that while the involvement of Mr Miasi and Mr Phillips in the preparation of the ministerial minute was peripheral and the Minister was unaware of their interests, the appearance of bias was sufficient to undermine the integrity of the process. The Court emphasised that in decisions involving the creation of valuable assets, such as mining licences, pecuniary interests carry special relevance, and a lack of disclosure raises suspicion. The Court noted that the rules on apprehended bias should be applied prophylactically, and the perception of bias from an informed, fair-minded observer is paramount, irrespective of whether the interest actually influenced the decision.

Consequently, the High Court ordered that the appeal to the Full Court be dismissed with costs, and the order nisi for certiorari be discharged, with the applicants in the Full Court to pay the respondents' costs in that Court. The appellant was also awarded costs of the appeal to the High Court.

Orders

Orders of the court

1. Appeal allowed.

2. Set aside the whole of the order made by the Full Court of the Supreme Court of Western Australia on 4 August 2000 dealing with the appeal to that Court and in place thereof order that the appeal to that Court is dismissed with costs.

3. Set aside paragraphs 2, 3, 4 and 5 of the order made by the Full Court on 4 August 2000 dealing with the return of the order nisi and in place thereof order that:

a) the order nisi granted by Heenan J on 23 June 1999 is discharged;

b) the applicants in the Full Court pay the respondents' costs in that Court.

4. The first named first respondent pay the costs of the appellant and the second respondent of the appeal to this Court.

Background

Background to the litigation

The issue in this appeal was said to relate to the application of rules of procedural fairness, and in particular the aspect of the rules which concern bias on account of interest, when a public servant "involved" in the preparation of a minute to be considered by a Minister making a decision under statute had a pecuniary interest that may be affected by the Minister's decision. In fact, the "involvement" of the public servant in the preparation of the minute in this case was, at most, peripheral. For that reason, there was no sufficient factual basis for the submission that certiorari should issue to quash the Minister's decision. Whether, or how, the rules concerning bias (whether as bias on account of interest or association, or in some other way) could be engaged if the person having a financial interest in the decision had played a greater role in preparing material to be considered by the decision‑maker raises questions which were not the subject of detailed argument on the hearing of this appeal. These reasons, therefore, do not examine the validity of some of the assumptions that underpinned the submissions that were made.The facts and the Act Several applications for an exploration licence under the Mining Act 1978 (WA) ("the Act") and two applications for a mining lease were lodged within less than one minute, each of them relating to substantially the same area. The appellant, Hot Holdings Pty Ltd ("Hot Holdings"), applied for an exploration licence; Mr M G Creasy, the first of the respondents in this Court, made five applications for exploration licences. Others (not party to the present appeal) applied for exploration licences or mining leases. Some days later, Arimco Mining Pty Ltd ("Arimco Mining") and Oresearch NL ("Oresearch") (respondents to the appeal in this Court who took no active part in the argument) applied for an exploration licence. A mining warden concluded, under s 105A(3) of the Act, that there should be a ballot to determine priority between the various applicants for the form of mining tenement which each sought. Considerable litigation ensued, of which the appeal to this Court is the latest chapter. It is not necessary to describe more than a few aspects of the history of the litigation. Several of the applicants for mining tenements, including both Hot Holdings and Mr Creasy, made separate applications for certiorari to quash the decision of the mining warden to hold a ballot. The applications relied on various grounds but it is not necessary to notice them now. The Full Court of the Supreme Court of Western Australia held that certiorari would not go to quash a mining warden's decision to hold a ballot. On appeal to this Court, it was held that certiorari did lie to challenge the warden's decision[8]. The matter was remitted to the Full Court. On remitter, the Full Court discharged the orders nisi in so far as they challenged the decision to hold a ballot but made an order absolute for certiorari to quash a decision by the warden to include in the ballot some applicants who are not parties to the present appeal[9]. A ballot was held, and Hot Holdings, being drawn first, was determined to have priority.[8]Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149.[9]Ex parte Hot Holdings Pty Ltd; Hot Holdings Pty Ltd v Creasy (1996) 16 WAR 428.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GLEESON CJ GAUDRON, GUMMOW AND HAYNE JJ HUGH J KIRBY J CALLINAN J
The appearance of integrity has been undermined, whatever may have been the actuality. That is enough to require that the process be performed again, excising the participation of officials who had known but undeclared personal interests. As Sedley J remarked in R v Higher Education Funding Council; Ex parte Institute of Dental Surgery[124]: "In the modern state the decisions of administrative bodies can have a more immediate and profound impact on people's lives than the decisions of courts and public law has since Ridge v Baldwin[125] … been alive to that fact". The same is truer still of ministers and senior administrators engaged in the exercise of the powers conferred on them by Parliament in this case.[124][1994] 1 WLR 242 at 258; [1994] 1 All ER 651 at 667.[125][1964] AC 40.The nature of the decision required a high standard The Full Court was correct to take into account the nature of the administrative decision involved in this case and particularly as it related to circumstances giving rise to the possible appearance of bias. The officials and the Minister were participating in a decision to grant mining and exploration licences. Such decisions involve the creation of valuable assets virtually out of nothing. In the context of the exercise of such powers, pecuniary interests take on a special relevance. Unavoidably, lack of disclosure raises a high level of suspicion. It is therefore important to apply the rules of apprehended bias prophylactically. A number of the authorities make reference to the fact that the rules on apprehended bias should be capable of being applied before the decision-making process takes place[126]. In Vakauta v Kelly[127], Brennan, Deane and Gaudron JJ observed that if the issue of the apprehension of bias were raised prior to the hearing and the making of a decision, "the judge may have been able to correct the wrong impression of bias which had been given or alternatively may have refrained from further hearing". These observations illustrate the importance and utility of prior disclosure that this Court should also reinforce and require in applicable administrative circumstances.[126]See Livesey v New South Wales Bar Association (1983) 151 CLR 288 ("Livesey") at 293-294 per Mason, Murphy, Brennan, Deane and Dawson JJ.[127](1989) 167 CLR 568 ("Vakauta") at 572. Such considerations are specially relevant to the decision-making process impugned in these proceedings. Both of the decision-makers in question had the capacity to influence the Minister's decision. Each of them had an interest (Mr Miasi) or an association (Mr Phillips) that was capable of influencing their approach to the process of deliberations and the recommendation made[128]. This is so at least in so far as the perception of an informed, fair-minded observer is concerned, irrespective of whether or not the interest or association in fact influenced, or could be proved to have influenced, such deliberations once the officials embarked upon them. Self-interested denials of actual influence can only take the matter so far. They do not answer the issue of appearances[129].[128]IOOF Australia Trustees Ltd v Seas Sapfor Forests Pty Ltd (1999) 78 SASR 151 at 180-181 [181].[129]cf R v Bow Street Metropolitan Stipendiary Magistrate, Ex parte Pinochet Ugarte (No 2) [2000] 1 AC 119 at 132 per Lord Browne-Wilkinson, at 139 per Lord Goff of Chieveley.

Ratio Decidendi

Legal Principle Established

Established by: GLEESON CJ, GAUDRON, GUMMOW AND HAYNE JJ, HUGH J, KIRBY J, CALLINAN J

Throughout the period from January 1998 to August 1998, Mr Miasi had a shareholding in AuDAX, a publicly listed company that had an option to purchase 80% of the exploration licence that Hot Holdings was seeking. During the same period, Mr Phillips knew that his 27 year old son, who was not living with him, had purchased shares in AuDAX. Neither the Minister nor the Director General were aware of Mr Miasi's shareholding or that of Mr Phillips' son.Preparation of the Minute and the role of Mr Miasi and Mr Phillips After the decision of the mining warden, Mr Burton and Mr Phillips discussed the preparation of a Minute for the Minister's assistance in accordance with the usual practice. They concluded that, subject to issues raised in the submissions and legal advice, the Minute should support the warden's recommendation. They also decided that Mr Miasi should be responsible for preparing the draft Minute. Mr Burton said in evidence that they agreed that there "was no compelling reason to depart from [the warden's recommendation]". Mr Miasi was present during the discussions between Mr Burton and Mr Phillips, but he did not influence their decision in any way. Mr Miasi then arranged for Mr Hicks, an officer in the Mineral Titles Division, to prepare the draft Minute. Mr Hicks prepared the draft in consultation with Mr Burton and then passed it on to Mr Burton. Mr Miasi's involvement ceased at this point. He had nothing further to do with the preparation and content of the final Minute that was given to the Director General. Mr Phillips reviewed the draft Minute and made amendments, before Mr Burton prepared the final Minute, which had little resemblance to the draft. A number of the amendments made by Mr Burton were brought about as a result of legal advice, comments from Mr Phillips and consideration of fresh submissions from the competing applicants. The final Minute contained the initials of Mr Miasi along with Mr Burton, Mr Phillips and Mr Hicks. However, Mr Burton said that this was done not because Mr Miasi made any contribution to the final Minute but because it was the practice of the Mineral Titles Division for the initials to be recorded of the writers on any Minutes including and preceding the final Minute. As Gleeson CJ points out in his judgment[15], the decisions below refer to the decision of Mr Burton and Mr Phillips. However, that is misleading. No person, other than the Minister, had to decide anything. The Departmental officers had to provide the Minister with the relevant material, and the Director General had to make a recommendation to assist the Minister. There was no evidence that suggested that the Minister did not turn his own mind to the matters relevant to determining the grant of the mining tenement. At first instance there was a claim made that the Minister did not weigh up or consider the merits of the applications but rather simply "rubber stamped" the recommendation of the Director General. Heenan J dismissed this submission. It was not pursued on appeal to the Full Court or in this Court.[15]Reasons of Gleeson CJ at [11].Was there an apprehension of bias?